Surridge & Surridge - [2017] FamCAFC 10

FAMILY COURT OF AUSTRALIA

SURRIDGE & SURRIDGE

[2017] FamCAFC 10

FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – where trial judge erred by including debts owed by the husband in the asset pool – where that finding was not open on the evidence – where husband has not made full and frank disclosure – where trial judge made adverse findings regarding credibility of husband and his evidence – where trial judge gave inadequate consideration of these matters in assessment of s 79(4)(e) – where trial judge should not have included hurt on duty pension in the asset pool – appeal allowed.

FAMILY LAW – APPEAL – RE-EXERCISE OR REMITTER – where a rehearing would cause substantial injustice – s 79 discretion re-exercised.

Family Law Act 1975 (Cth), ss 75, 75(2)(o), 79, 79(4)(e), 90MS, 90MT
Police Regulation (Superannuation) Act 1906 (NSW)

Allesch v Maunz (2000) 203 CLR 172
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
Giunti & Giunti (1986) FLC 91-759
Semperton & Semperton (2012) 47 Fam LR 626
Stanford v Stanford (2012) 247 CLR 108
The Queen v Baden-Clay (2016) 334 ALR 234
Weir & Weir (1993) FLC 92-338
Welch & Abney [2016] FamCAFC 271

APPELLANT:

Ms Surridge

RESPONDENT:

Mr Surridge

FILE NUMBER:

PAC

4412

2012

APPEAL NUMBER:

120

2015

DATE DELIVERED:

3 February 2017

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Sydney

JUDGMENT OF:

Murphy, Aldridge and Kent JJ

HEARING DATE:

2 September 2016; Further written submissions filed by the appellant on 11 October 2016; by the respondent on 1 December 2016.

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

29 June 2015

LOWER COURT MNC:

[2015] FamCA 493

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr J Priestley SC

SOLICITOR FOR THE APPELLANT:

Matthews Folbigg Pty Ltd

SOLICITOR FOR THE RESPONDENT:

Tilley Family Law & Mediation

Orders

The appeal be allowed.
The orders made by Foster J on 29 June 2015 be set aside.
That as and by way of settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) orders be made in accordance with the reasons for judgment delivered herewith in a form agreed upon between the parties and filed by email with the Appeals Registrar within 14 days of the date of these orders.
The husband pay the wife’s costs of the appeal in such amount as is agreed in writing or, failing agreement, as assessed with such costs to be paid within 60 days of the date of agreement or assessment as the case may be.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 120 of 2015
File Number: PAC 4412 of 2012

Ms Surridge

Appellant

And

Mr Surridge

Respondent

REASONS FOR JUDGMENT

On 29 June 2015, Foster J made orders for settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) in the wake of the breakdown of the parties’ 16 year marriage. The wife appeals a number of those orders.
We are of the view that the appeal must succeed and his Honour’s orders set aside. In our respectful view, his Honour’s judgment is attended by a number of appealable errors of significance. The result of those errors is, in our view, orders which are manifestly unjust to the wife.
Each of the parties urged upon this Court the re-exercise of the relevant s 79 discretions in the event that we were persuaded of appealable error. As will later be seen we have decided to do so despite significant misgivings. Central to that decision is our conclusion that failing to do so is likely to be productive of much greater injustice if the matter was remitted for rehearing.
His Honour’s findings, and many of our own conclusions, are underpinned by findings very significantly adverse to the honesty of the husband and the reliability of his evidence. As a subset of those findings, further findings are to the effect that the husband failed abjectly to fulfil his duty of disclosure. Yet other findings relate to alleged transactions by the husband that were not supported by evidence, not otherwise explained, or allegedly involving people who could have provided evidence of them if they actually occurred but, without explanation, were not called.
Among many other specific findings, central to issues raised on this appeal, his Honour found for example that “significant distributions from [a trust] in the years from 2008 to 2011 … totalled over $2,000,000” and in addition the parties received “about $98,000 in mid-2011[,] [y]et there is little to show by way of accretion of assets over this period”.[1] Also, his Honour found that withdrawals by the husband from an account totalled $886,000 and that “[t]he source and disposition of these funds is ultimately a matter of conjecture [and] [o]nly the husband is capable of explaining same … [and] [h]e has not”.[2]
[1] Reasons, [84].
[2] Reasons, [82], [83].
The significant findings adverse to the husband, to which further reference will be made later in these reasons, are not challenged on this appeal; there is no cross-appeal and no notice of contention has been filed. Moreover, when discussion ensued as to re-exercise or remitter in the event that we found error, no submission was made on behalf of the husband that there should be a remitter. A re-trial would, of course, have provided the husband with the opportunity to answer (if an answer exists) or explain (if there be an explanation) transactions plainly considered fanciful and dishonest by the trial judge, and to address (if that be possible) the many evidentiary voids in his case identified in the trial judge’s reasons. However the husband urged that we re-exercise by reference to the trial judge’s findings.

The Wife’s Challenges And The Trial Judge’s Errors

The wife asserted at trial that a debt in an amount of $192,000, said by the husband to be owed by the parties to the husband’s parents, did not in fact exist. Ten separate grounds of appeal challenge that finding. His Honour included the debt as a liability of the parties. In our respectful view his Honour’s finding that there was a debt owing to the parents (including the drawing of an inference to sustain that finding) was not open to his Honour on the evidence.
Further, and in any event, his Honour found that “[t]he loan will remain in the pool but the husband will indemnify the wife. It is appropriate that the husband retain sole liability for this loan”.[3] The two findings are in our view contradictory if, as was the case, a net value is used for calculating the parties’ respective entitlements. When his Honour listed the assets and liabilities of the parties, the husband’s alleged loan to his parents was deducted as a liability so as to arrive at a net value of the property, which was then divided in the proportion 62.5 per cent to the wife and 37.5 per cent to the husband. As a consequence, contrary to the apparent finding that the husband would bear “sole liability” for the loan, the wife in fact bore 62.5 per cent of the loan.
[3] Reasons, [141](e).
His Honour found that there was a debt owing to J Repairs in respect of a car in an amount of $36,000.[4] Again, the wife denied that any such debt existed or was owed. In our view there was no proper evidentiary foundation for his Honour’s finding. Moreover, we do not consider that his Honour gave adequate reasons for including the debt in light of the adverse findings made against the husband to which we have earlier alluded; the specific finding that the evidence of the wife was to be preferred over that of the husband when they were in conflict; and his Honour’s expressed need for objective evidence independent of the husband in respect of his assertions.
[4] Ground 12; Reasons, [142].
It is contended by the wife that his Honour’s assessment pursuant to s 79(4)(e) was plainly unjust and embraced an error of fact.[5] In our view, his Honour’s assessment failed to take account of relevant considerations, namely the findings made by his Honour as to unexplained large sums of money in light of the husband’s dishonesty and the impact in dollar terms of the amount of money utilised by the husband to the exclusion of the wife which could be identified, albeit not precisely quantified, because of the husband’s deliberate attempts to mislead the wife (and the court).
[5] Grounds 13, 14, 15.
In addition to the errors just outlined, a number of concessions were made by the solicitor for the husband (with respect, properly in our view) that are also indicative of appealable error:
·His Honour found incorrectly that a child of the parties was aged 15. He was in fact 12. It is asserted by the appellant that this error impacts adversely upon the wife in his Honour’s assessment of s 79(4)(e);
·His Honour failed to include in “the balance sheet” of the property of the parties or either of them an amount of $9,709 owed by the husband’s parents to the parties. (The respondent contends that this error can be cured by reference to the “slip rule”);
·His Honour inferred that the husband had “the benefit of the items purchased with the funds from [the company] [AA Pty Ltd]”[6] and that funds used by the husband in the order of $150,971 were represented by “items purchased [which] remain in his possession”.[7] It is conceded by the husband’s solicitor that no finding indicates what those items are or how, if at all, they are represented by items contained within the balance sheet. (It is contended by the respondent that “by inference they must be items on the balance sheet”[8] but we are unable to see any factual foundation for that inference and all the more so in light of his Honour’s findings as to the husband’s evidence to which we have earlier referred);
·The husband’s solicitor also concedes that the husband was unable to “satisfactorily account for how the funds [allegedly borrowed from his parents] were ultimately applied”[9] and also concedes that there are material inconsistencies between the evidence of the husband and his father “as to how and when the funds [allegedly borrowed] came into the Husband’s hands”;[10]
·The husband’s solicitor also concedes that it was necessary for his Honour to “do the best he [could] on the evidence to try and analyse how the funds were applied”.[11] His Honour’s findings in respect of that “are not supported by all of the evidence”.[12] Although not conceded in such terms, those concessions flow in effect inevitably from the husband’s abject failure to disclose as he was obliged to do and his abject failure to explain the movement of money;
·An absence of reasons on the part of the trial judge makes it necessary to infer, as the husband’s solicitor concedes, that “[h]is Honour must have accepted the unchallenged evidence of the accountant and the [asserted] contemporaneous loan agreement as sufficient evidence to overcome his reservations about the Husband’s credit generally”;[13]
·A similar absence of reasons, and indeed, an absence of evidence by or on behalf of the husband leads to the concession that his Honour “may have speculated on the evidence at Judgment [35] as to the ultimate fate of the funds”. (It should be noted that the husband’s solicitor goes on to submit that this “does not detract from the finding of the existence of the debt”.[14] As will be seen, we disagree);
·It is also conceded that “[n]o reasons are advanced at Judgment [141(e)] as to the finding that funds came from the Husband’s parents” (noting that the husband’s solicitor’s argument goes on to contend that the “genesis of the finding is clearly set out at Judgment [30 to 37]”);[15] As will be seen, we do not consider that there is a proper evidentiary foundation for that finding.
[6]          A company to which reference will later be made.
[7] Reasons, [141](e).
[8]          Respondent Husband’s Written Outline, para 5.
[9]          Respondent Husband’s Written Outline, para 6.
[10]         Respondent Husband’s Written Outline, para 8.
[11]         Respondent Husband’s Written Outline, para 8.
[12]         Respondent Husband’s Written Outline, para 8.
[13]         Respondent Husband’s Written Outline, para 8.
[14]         Respondent Husband’s Written Outline, para 8.
[15]         Respondent Husband’s Written Outline, para 8.
It will be appreciated that many of the concessions just outlined might have formed a challenge to his Honour’s orders on the basis of inadequacy of reasons, however no such ground is pleaded. We feel bound to say that, with all respect to the trial judge, we found the reasons extremely difficult to follow. Disparate findings relevant to the same issue appear at different, and apparently unconnected, parts of the judgment and, in some cases, findings appearing at different parts of the judgment are inconsistent.
In addition to those matters we consider that the approach urged upon the trial judge by each of the parties in respect of the wife’s “hurt on duty” pension, which approach was adopted by the trial judge, was erroneous. No ground of appeal refers to any such error, but it is a matter of significance and is productive of injustice. We consider ourselves bound to correct it.[16]
[16] See, for example, Warren v Coombes (1979) 142 CLR 531.

The Interests in Property and The Trial Judge’s Orders

The property of the parties or either of them within the meaning of s 79 of the Act was referenced by the parties and his Honour as consisting of “the primary pool” and the “secondary pool”.
The “primary pool” consisted of real property, chattels and the parties’ respective interests in a self-managed superannuation fund. There were two pieces of real property – the former matrimonial home at Suburb F and a tenanted commercial property at Suburb U. At trial, the Suburb F property had an agreed value of $2.1 million. Secured against it were a mortgage of approximately $372,000 and a line of credit of approximately $297,000. That property was owned by a company (D Pty Ltd) of which the husband and wife are the sole directors and shareholders. It does not appear to have been controversial at trial that the company operated solely at the will of the husband and that he treated the company’s property as if it was his own.
His Honour listed the Suburb U property as having a value of $563,890.[17] For unexplained reasons, that “value” is net of the mortgage secured over it. The Suburb U mortgage was, it seems, in an amount of $311,100. The value of the Suburb U property was, approximately $875,000 at trial. Evidence received by us with the consent of the parties in respect of the re-exercise of the discretion shows that the property has a “long term lease to a major Australian corporation” with a current rental of $82,447 per annum gross less outgoings (“statutory, maintenance & management” of $9,508 annually) producing a net rental of $72,939 per annum.[18]
[17] The “assets and liabilities” of the parties, as found by his Honour, are listed at [142].
[18] Affidavit of single expert valuer, Mr ZZ, filed 14.10.2016, annexed valuation p 5.
Listed as property of the husband in this “pool” were a number of chattels, including cars, boats and three Rolex watches. The total value of those chattels was approximately half a million dollars. The wife’s chattels were valued at approximately $47,000. The superannuation interests of the husband and wife were in the respective amounts of $279,137 and $219,781. In addition to the mortgages and the line of credit earlier referred to, there was an admitted liability to the wife’s parents (in respect of which they had a judgment) of $226,000.
The “secondary pool” consisted of the wife’s “hurt on duty” pension relating to her earlier employment as a police officer. It was included by his Honour in the parties’ “assets and liabilities” at an ascribed capital value slightly in excess of $1 million.
The trial judge’s orders divided the “primary pool” in the proportion 62.5 per cent to the wife and 37.5 per cent to the husband. His Honour ordered that the husband receive five per cent of the capitalised value of the “secondary pool”, that is, the wife’s pension. (Five per cent equates to about $50,000. However, his Honour’s cash adjustment to the husband in this respect was $20,000. No ground of appeal addresses this anomaly).
The broad effect of his Honour’s orders is that the wife retains the home valued at $2.1 million and her superannuation interest and chattels, while she bears liabilities totalling about $895,000. The orders include an order (Order 4) requiring the parties to do all things necessary to discharge the mortgage and the line of credit secured over the former matrimonial home (together totalling about $669,600) in exchange for its transfer to the wife. The wife was ordered to “indemnify and save harmless” the husband from all liability in respect of the debt to the wife’s parents. Thus, after taking account of the cash adjustment of about $129,700 ordered to be paid by the husband to the wife, his Honour’s orders provided for the wife to bear liabilities exceeding three-quarters of a million dollars. Her total income comes from the pension in an amount of about $51,000 per year and, as will be seen, she was responsible for meeting the expenses of the two then teenage children including their private school fees without any financial assistance from the husband. The issue of the wife’s capacity to service debts in this total amount does not appear to have been addressed by the parties or his Honour, but that approach accorded with orders contended for by the wife.
The husband retains commercial tenanted real property at Suburb U (owned by a company controlled solely by him). In addition, the husband retains his superannuation interest in an amount of $279,137, and chattels, totalling approximately $500,000. He was credited with $20,000 representing his assessed five per cent of the ascribed capital value of the wife’s pension.
The husband bears liabilities on his Honour’s findings of about $669,000 inclusive of the Suburb U mortgage and the cash adjustment of the wife. The rental income derived from that property is not referred to at all by his Honour. Included in the husband’s liabilities as assessed by his Honour are the alleged debt to his parents and the J Repairs debt earlier referred to.

The Wife’s “Hurt on Duty” Pension – The “Secondary Pool”

The wife’s “hurt on duty” pension pertains to her previous employment as a police officer which commenced in 1987 (that is about five years pre-marriage) and ceased in 2006 (that is about six years pre-separation). His Honour found that the benefit is payable under the Police Regulation (Superannuation) Act 1906 (NSW). The capital amount accorded to it of $1,022,821 derives from a scheme-specific calculation methodology applicable to it for the purposes of the superannuation splitting regime at the heart of Part VIIIB of the Family Law Act 1975 (Cth).
His Honour found that the wife’s pension was payable in an amount of $50,752 per annum and that it could not be commuted to a lump sum in whole or in part either now or in the future. Neither his Honour, nor the parties in their supplementary submissions, refers to whether the continued receipt of the pension is subject to regular medical assessments and whether, accordingly, the pension is subject to the possibility of cessation in the future.

His Honour recognised that:
148.Notwithstanding the valuation arrived at by applying the provisions of the legislation, the nature, form and characteristics of the wife’s pension needs to be considered in evaluating the parties’ contributions to that pension and in determining what orders are ultimately just and equitable (See Trott & Trott (2006) FLC 93-263; DJ & AJ (2006) FLC 93-289; Wheeldon & Wheeldon [2011] FamCA 40; Semperton & Semperton (2012) 47 Fam LR 626; and Crawford & Crawford (2013) 48 Fam LR 539, Lane & Lemott [2013] FamCA 604).
His Honour also recognised that “[n]o lump sum is payable in the future to the wife” and that the effect of any splitting order applicable to the wife’s pension “is to commensurately reduce the wife’s pension”.[19] His Honour then found (implicitly) that the making of any such order was not just and equitable and adopted “a two pools approach with the wife’s HOD pension being the discrete second pool and the parties’ other superannuation and non-superannuation assets in the primary pool”.[20] His Honour then assessed contributions discretely in respect of “the secondary pool” comprising the capitalised lump sum value of the wife’s pension.
[19] Reasons, [150], [151].
[20] Reasons, [152].
We respectfully agree that it was not just and equitable to make a splitting order in respect of the wife’s pension. Indeed, there was a compelling case for not doing so.
First, and primarily, as his Honour found, the property and superannuation interests of the parties permit justice and equity to be achieved without such an order. Accepting that, it is uncontroversial that the pension is the wife’s only current form of income. It is not suggested that she can be considered as having anything other than a possible residual capacity for some form of future part-time employment.[21] Pension income in the region of $50,000 per annum must be considered modest, a fact exacerbated by his Honour’s unchallenged finding that the wife will have the continuing full-time care of the children “with it appears little prospect of financial support from the husband by way of child support or otherwise”.[22] It is also exacerbated by his Honour’s unchallenged finding that the husband has “chosen not to seek … employment at trial”[23] in the broader context of the husband representing to a finance company that he was capable of earning $340,000 per year.
[21]His Honour found at [167] that the wife “at best may have a modest capacity to contribute to future superannuation in the event of some part time employment”.
[22] Reasons, [168].
[23] Reasons, [166].
However, once his Honour determined not to make a splitting order, a number of important considerations applied to the ascribed capital value of the wife’s pension arrived at by reference to the Act and the relevant superannuation regulatory regime.
A court may, but is not required to, make orders “under section 79 … with respect to the property of spouses … [and] also make orders in relation to superannuation interests of the spouses”.[24] To that end, s 90MT of the Act mandates the determination of the amount of a superannuation interest in accordance with the Regulations or approved scheme-specific methodology which must be taken to be the value of the interest. However, that mandatory requirement applies only where a splitting order is to be made.[25]
[24] s 90MS of the Act; See also s 90MT(1).
[25]s 90MT(2) and (2A); Semperton & Semperton (2012) 47 Fam LR 626; Welch & Abney [2016] FamCAFC 271 at [33]-[35].
Despite the derivation of an amount for the wife’s hurt on duty pension in accordance with the scheme-specific valuation methodology, the treatment of the amount so arrived at remains a matter for the exercise of discretion.
The wife can never receive the calculated lump sum amount in specie. Nor can she commute any part of the pension to a lump sum. Her only entitlement is to an income stream for so long as she remains entitled to receive the pension. If no splitting order is to be made but an assessed percentage entitlement is attributed to the lump sum amount on account of the husband’s contributions (even if those contributions are assessed to be modest as his Honour considered them to be) the husband is receiving a lump sum entitlement from a lump sum that the wife can never receive.
Other issues also intrude. The pension is taxed. The scheme-specific methodology by which the capital sum is calculated is referenced to the gross amount of the pension.[26] Further, if the wife’s pension is to be taken up in the “assets and liabilities” of the parties as his Honour did, then as part of a “holistic” assessment of the parties’ contributions (which, as his Honour recognised explicitly, was the nature of the task at hand)[27] the contribution by the wife of the assessed capital sum must receive recognition as a (very significant) capital contribution by her – even if the capitalised pension was to be treated as forming a “separate pool”. No recognition is given to that contribution by his Honour (or indeed in the approach of the parties urged upon him).
[26]Welch & Abney, above at [47]-[48]; Semperton, above.
[27] Reasons, [153]-[155].
The failure to consider any of these important considerations and, conversely, to take up the gross value of the wife’s pension in the manner in which his Honour did, has resulted in the miscarriage of the trial judge’s discretion leading to orders which are unjust to the wife.

The Trial Judge’s Credit Findings As Context

The specific appealable errors which we have earlier identified need to be seen in the context of the strong adverse findings made in respect of the husband and his evidence and the concessions made by his solicitor on appeal to which we have earlier referred. It is important to set out with more specificity the findings made in respect of the husband and his evidence which, we repeat, are not challenged on this appeal.
His Honour found, central to the specific errors about to be discussed:
123. [The husband] conceded that aspects of his affidavit evidence was false, he departed considerably from his sworn written evidence in cross examination and his oral evidence was deliberately vague and unhelpful particularly in circumstances of this case where the document trail to corroborate his assertions as to many matters was readily available to him.
124.He simply failed to disclose evidence that by inference would have been unhelpful to his assertions.
125. A failure to disclose and to be frank and honest with the Court constitutes a fraud and a miscarriage of justice. He failed to call a myriad of witnesses that his evidence suggests may have helped his cause. The inference is that they would not have done so.
126.There can be no conclusion other than the husband sought to deliberately obfuscate and conceal evidence from the Court. He cannot be heard to complain if the Court makes robust findings against him.
(Emphasis added)
Further, his Honour accepted evidence of the husband’s “mendacity and deliberate attempts to deceive and mislead the wife”. Seventeen separate assertions to that effect were advanced by senior counsel for the wife and accepted by his Honour. In addition to the matters already referred to, they include, for example, “[h]is wilful breach of injunctive and other orders”; [h]is blatantly false assertions to the valuer in relation to the boat “[FF]”; and the “alleged payments in May 2010 totalling $400,000 to the mysterious ‘Mr [OO]’”. [28]
[28] Reasons, [127].
Importantly, particularly in respect of error in his Honour’s s 79(4)(e) assessment, the broader context for those findings is one where the source, destination and disposition of significant sums of money was unexplained. His Honour had evidence from the husband of a number of transactions, but many were never properly particularised or explained and/or involved people who, if they existed, could have provided evidence of them but did not.
Examples of the latter are “[Mr OO]”, who was, allegedly, the recipient of significant amounts of money and “[Mr LL]” (also described by his Honour as “mysterious”) who was the subject of entirely fanciful evidence that saw him as the recipient of $200,000 in cash at a boat ramp in exchange for a boat and a car which, on the husband’s case, never changed hands nor ownership.[29]
[29]Reasons, [70]-[78] and [51]-[54] respectively.
Having traversed the evidence (or lack of evidence) as to a series of transactions, deposits and withdrawals that remained unexplained, his Honour found:
82.The withdrawals by the husband referred to above total about $886,000.
83.The source and disposition of these funds is ultimately a matter of conjecture. Only the husband is capable of explaining same. He has not.
84.The parties received significant distributions from the [V Pty Ltd] trust in the years from 2008 to 2011. These distributions totalled over $2,000,000. In addition they received repayment of loan funds from the sale of husband’s parents’ home of about $98,000 in mid-2011. Yet there is little to show by way of accretion of assets over this period.
85.There is a comfortable inference, as submitted by counsel for the wife, that the funds dealt with by the husband are the parties’ funds from the [V Pty Ltd] franchise operation.
The reference to the “[V Pty Ltd] franchise” is a reference to an earlier business from which the husband was “locked out” in May 2012. His Honour noted that “[t]he husband had procured from the franchise payments for security services that were never provided” [30] and recorded:
44.…These payments were paid into [AA] Pty Ltd by the husband notwithstanding that the company had been deregistered in 2004. There is no documentary evidence as to receipt or expenditure of those funds by [AA], [more accurately the husband] although the husband asserts that funds were used for family and other expenses.
[30] Reasons, [44]; The payments totalled $297,828 – Reasons [45].
None of the specific sums referred to by his Honour was added back to the pool of property as against the husband. Those significant sums of money, seen in the light of his Honour’s findings as to dishonesty and, specifically, findings as to deliberate non-disclosure designed to deceive both the wife and the court were, then, as his Honour found, a matter that fell to be considered by reference to s 79(4)(e).

Error As To The Alleged Loan To The Husband’s Parents

In addition to the adverse findings as to the husband’s credit generally, his Honour found in the paragraph of the reasons dealing specifically with the alleged loan asserted by the husband to be owing by the parties to his parents, that “[t]he husband’s evidence is to be treated with great circumspection unless supported by objective documents”.[31] In light of specific findings as to the husband’s deliberate attempts to deceive, including a deliberate failure to disclose in order to deceive the wife and the court, the reference to “great circumspection” might be seen as significantly generous to the husband to say the least. Be that as it may, the “objective evidence”, such as it was, in respect of the loan consisted of an alleged loan agreement and the payment of funds into the trust account of the father’s accountant, Mr S.
[31] Reasons, [141](e).
Among many other things that might be said about the alleged loan agreement, its terms do not on their face require the payment of any money. It might well be arguable that the document is not an agreement for a loan at all, although we observe that this issue does not appear to have been raised before his Honour. In any event, there is no objective or credible evidence that demand has been made, or is likely to be made, for repayment of the alleged loan or any portion of it.
There was conflicting evidence of the husband himself, and conflicting evidence as between the husband and his father (whose credit was, at least implicitly, also subject to adverse comment by his Honour)[32] as to how, when, and by what means the funds were said to find their way to the husband. His Honour’s finding that “[c]learly funds [ie the $192,000] came from his parents”[33] must be seen in that light.
[32] See, for example, Reasons [72]-[78].
[33] Reasons, [141](e), p21.
There was no objective evidence as to what became of the funds after they left the accountant’s trust account.
Under the heading “The loan from the husband’s parents”, his Honour lists, by reference to Exhibit T before him, a number of deposits to a bank account in the name of a company (referred to in the proceedings below and before us as “the [AA] account”). The name refers to AA Pty Ltd which, as we have indicated, was found to have been deregistered in 2004. The deposits to the AA account listed by his Honour were made some seven years later in 2011. The wife asserted, and his Honour accepted, that she believed the AA account had “ceased to operate” some four years earlier “when the parties and the husband’s parents separated their business affairs”.[34]
[34] Reasons, [69].
At [32] of the reasons, his Honour records the husband’s assertion that, of the $192,000 apparently received by him (said in his oral evidence to have been received in cash), “about $20,000 to $30,000 was banked into [AA]” and the balance used for other specified purposes including a payment to the wife “for fences”. She denied the latter.
Despite the reference to the husband’s specific evidence about the amount of the alleged loan that was paid into the AA account, at [35] of the reasons his Honour tabulates a number of “unidentified” deposits revealed by the AA bank accounts in August 2011 “shortly after funds are alleged to have been paid to the husband”, and says:
36.It is to be reasonably inferred that these funds and perhaps some later deposits represented part of the husband’s father’s funds [ie the alleged loan] as represented by the husband’s solicitor in a letter in November 2011.
There is an obvious inconsistency of some magnitude between that finding and the husband’s evidence quoted at [32] which has “about $20,000 to $30,000” being deposited to that account.
If the evidence of the husband has been comprehensively rejected by his Honour (as it plainly has), his evidence in contrast to the bank account records should consequently be rejected unless there was good reason for accepting it. No such reason is evident. The apparent coincidence in time between the date of the loan agreement; the alleged receipt of the money and dates of the deposit provided appear to be the foundations for his Honour’s inference. If that is what his Honour intended as the foundation for the inference it is not made clear. Further, any such foundation for the inference sits in contrast not only to the evidence of the husband earlier referred to, but also to differing versions given by the husband and his father of how, and where, the money was received.
More tellingly, however, the inference does not sit conformably with other findings made by his Honour as to the potential source of funds in the AA account.
First, the amounts referred to by his Honour at [82]-[85] of the reasons earlier quoted are amounts deposited and drawn on the AA account which embrace the alleged deposits in August 2011. Secondly, in referring to the “mysterious Mr [LL]” and the boat and car which were allegedly sold but not transferred, his Honour found later in the judgment:
55.[The husband] says he deposited $100,000 of the cash in about five or six deposits to the [AA] account. The [AA] account was in the control of the husband. Westpac statements for company’s account are Exh T. The account at the relevant time reveals ongoing deposits from the [V Pty Ltd] franchise until termination of the franchise and other significant cash and cheque deposits of various amounts.
56.The husband made unidentified deposits to the [AA] account in the period 15 June to 9 August 2012 totalling $103,226. On 9 August 2012 he drew a company cheque (…76) for $100,000 payable to [Mr LL]. The ultimate recipient of those funds is not known.
57.The husband through his previous solicitor represented, in contrast to the husbands [sic] oral evidence, that the funds were in fact those of his father: a startlingly different contention.
With all respect to his Honour we are unable to see a factual foundation for the drawing of the inference, and consequential finding made, at [36] earlier quoted.[35]
[35]Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152, 169 – 170 per Lord Wright, cited in The Queen v Baden-Clay (2016) 334 ALR 234, 243-244, where the High Court, at 242, said (in the context of a criminal appeal) “for an inference to be reasonable it must rest on something more than mere conjecture”, citing Peacock v The King (1911) 13 CLR 619, 661, quoted in Barca v The Queen (1975) 133 CLR 82, 104.
We consider that his Honour’s finding was not open to him on the evidence. No evidence, much less any objective evidence, supports a conclusion that there was a loan from the husband’s parents either in the amount alleged or at all or that the sum alleged, or any sum, is owing to his parents.
Further and in any event we consider, with respect, that his Honour erred in reflecting his (apparent) findings in respect of the loan in the orders which his Honour made. His Honour’s conclusion in respect of the alleged loan is that:
The loan will remain in the pool but the husband will indemnify the wife. It is appropriate that the husband retain sole liability for this loan. [36]
[36] Reasons, [141](e), p22.
The two sentences are, in our respectful view, contradictory if a net value of property is used for calculating the parties’ respective entitlements (as it was). In any event, as we have earlier pointed out, the terms of the orders made see the wife assuming responsibility for 62.5 per cent of the loan.
The conclusions just expressed lead to the conclusion that there is merit in the appellant’s contentions of error in respect of the alleged loan to the husband by his parents.[37]
[37] Grounds 1 to 8, 10 and 11.

Error As to the J Repairs Debt

In assessing the assets and liabilities of the parties his Honour included a liability described as “[J Repairs] (Car repairs)” in an amount of $36,000.[38]
[38] Reasons, [142].
That debt is said to be in respect of repairs to a red vintage motor vehicle owned by the husband. The wife asserts that the finding as to the existence of this debt – at least insofar as the wife should share in its payment – was not open on the evidence before his Honour. We agree.
In his Amended Response the husband sought no specific order for the payment of the debt and in setting out the assets and liabilities at the date of separation the husband did not include that debt in his trial affidavit.
The significant adverse credit findings made in respect of the evidence of the husband pertain. Given those findings, it can be observed that no documentary evidence in respect to the debt was ever produced by the husband. Noting his Honour’s desire for objective documentary evidence, Exhibit N in the proceedings before his Honour is an application to a finance company completed by the husband on 15 October 2014. That document contains no reference to the debt.
In cross-examination, the husband referred to a bill allegedly given to the wife for a vintage motor vehicle restoration of $31,000. That proposition was never put to the wife when she was cross-examined. The difference between that figure and the figure ultimately taken into account by his Honour should be noted. When asked by his Honour if there was any evidence of an amount outstanding in respect of a vintage motor vehicle[39] the husband responded that it was in his affidavit. There is no invoice in the husband’s affidavit or any other evidence of the debt. Nor is there any evidence of a demand for payment or any objective evidence that, if there was any debt, that it remained outstanding. No evidence from any representative of J Repairs (even hearsay evidence) was led or sought to be led.
[39]In any event there was confused evidence as to whether it was a white vintage motor vehicle or a red vintage motor vehicle, but it is clear that his Honour was, in any event, in error in identifying that the alleged debt belonged to a red motor vehicle.

His Honour gave no reasons as to why he included the debt noting that it was disputed by the wife and that he accepted the wife’s evidence in preference to that of the husband.
In our view, his Honour’s finding that there was a debt of $36,000 owing in respect of a red vintage motor vehicle was not open to him on the evidence before him given the findings made about the husband’s evidence and the absence of any objective evidence independent of the husband. In any event his Honour’s reasons fail to illuminate why the debt was included despite evidence throwing doubt on its existence; the significant adverse credit findings against the husband; and his Honour’s expressed need for objective evidence independent of the husband.
In any event, his Honour found that “[t]his expense was incurred in relation to the red vintage motor vehicle. It is to be included in the pool and be a debt of the party that retains the car and thus the benefit of the work done”.[40] The husband retained the car pursuant to his Honour’s orders yet the debt is included as a joint liability of the parties so as to arrive at a net value of the parties’ property. As with the inclusion of the parents’ loan, the effect of what his Honour did was to attribute 62.5 per cent of the liability to the wife contrary to his Honour’s finding as to what was intended.
[40] Reasons, [141](i).

Error As To The Age of the Parties’ Child

It is conceded that his Honour erred in fact in finding that the parties’ youngest child was 15. The child was born in April 2002 making him not quite 13 when the proceedings were heard.
His Honour found that “the husband has chosen not to work”; that “[t]he wife will have the continuing full time care of the children aged 16 and 15 [sic], with it appears little prospect of financial support from the husband by way of child support or otherwise”.[41]
[41] Reasons, [168].
We are persuaded that the error of fact is material;[42] the child’s age and the support of him is relevant to s 75(2)(c), (d), and (na) which are, in turn, relevant to the overall s 79(4)(e) assessment. We consider that appealable error is made out in respect of this conceded factual error.
[42] See for example de Winter v de Winter (1979) FLC 90-605.

Error As To The s 79(4)(e) Assessment

At [164] and following of the reasons, his Honour sets out the matters considered relevant pursuant to s 75(2) of the Act in respect of “the primary pool”. When his Honour turns to consider the “secondary pool” his Honour assesses that the husband has made a five per cent contribution to it, but makes no further reference to s 75(2) (either as it might apply specifically to that pool or more generally).
His Honour considered an “adjustment of 5% in favour of the wife” in respect of “the primary pool” was called for in regard to a number of matters which his Honour listed.
Separate to those matters, his Honour turned to consider a contention by the wife that “by reference to unexplained funds received and disbursed by the husband as discussed above there should be a further adjustment to the wife of 15% (s 75(2)(o))”.[43]
[43] Reasons, [174].
His Honour records that this would “create a further disparity of about $790,000 between the parties. Such an adjustment is not called for”.[44] His Honour’s reason for that conclusion would appear to be that:
175. … This would in effect pay to the wife a most significant portion of the total of funds dealt with by the husband. On a contributions basis she would have been entitled to only 50% [as his Honour found and is not challenged on appeal].
176.The wife’s contention would lead to an overall division of the primary pool 75%/25% in favour of the wife or a disparity of 50 per cent between the parties or in cash terms of about $1,297,000. Such an adjustment is not called for.
[44] Reasons, [175].
Ultimately, his Honour made an adjustment in favour of the wife “by reason of all s 75(2) considerations of 12.5% thus creating a disparity between the parties of about $648,000”.[45]
[45] Reasons, [177].
The difficulties created for his Honour by the nature of the husband’s evidence and his lack of explanation of transactions and the movement of money should be acknowledged. However, with the greatest respect to his Honour, it is extremely difficult to marry findings made by his Honour to the ultimate conclusions reached. For example, whilst it is apparently central to his Honour’s s 75(2) conclusion that the wife was, on her contention, receiving “a most significant portion of the total of funds dealt with by the husband”, it is by no means clear what “total of funds” his Honour had in mind.
Earlier in the reasons, his Honour had discussed a number of withdrawals from “the [AA] account” and concluded that the “withdrawals by the husband referred to above total about $886,000”.[46] However, his Honour refers immediately thereafter to distributions totalling “over $2,000,000” from a trust which, on his Honour’s findings have not found their way into property available for distribution and are not otherwise explained, and to an additional “$98,000 [received] in mid-2011”. Further, in referring to “the post-separation period” his Honour finds that “the whereabouts” of $100,000 was “not known” and that the date of receipt of those funds “peculiarly coincides with separation of the parties”.[47] Later again his Honour refers to $34,700 withdrawn from D Pty Ltd to pay the husband’s credit card debts and says the amount “will be considered in the context of s 75(2) adjustments relating to funds retained by the husband”.[48] No part of the reasons referring to that issue mentions that amount.
[46] Reasons, [82] (Emphasis added).
[47] Reasons, [87].
[48] Reasons, [141](c).
In short, no amount, or any approximate amount, is referred to by his Honour when considering what “adjustment” should be made in respect of “funds retained by the husband”. On his Honour’s findings, as best as we can discern them, the amount could have been in the region of $3 million. A figure of $886,000 is identified as one total (of unexplained withdrawals) but taking his Honour’s findings as a whole, we are unable to see how this figure could represent the totality of unexplained funds.
Secondly, we consider it erroneous to approach the “adjustment” by reference to the wife’s assessed contributions to unexplained money in a very significant sum. The adjustment should be assessed by reference to what the total assets available for division might have been had the husband not had the exclusive and unexplained use of those funds.
The relevant principles relating to a failure by a party to disclose properly their relevant financial affairs and dealings are well settled and have been repeated frequently. His Honour said that if the husband determined to be deliberately misleading and seek (by both commission and omission) to deceive the wife and the court, he “cannot be heard to complain”. The Full Court has said that a party’s “obfuscation and evasion” should not be permitted to lead to orders that are unjust or inequitable.[49] As a result of the husband’s deliberate conduct his Honour “should not [have been] unduly cautious about making findings in favour of [the wife]”.[50]
[49] Giunti & Giunti (1986) FLC 91-759, at 75,555.
[50] Weir & Weir (1993) FLC 92-338, at 79,593.
In our view, the s 79(4)(e) assessment did not involve “a consideration of [the] portion of the total of funds dealt with by the husband” by reference to the contributions assessment[51] but, rather, a not “unduly cautious” finding as to the true impact in dollar terms of the potential sums involved in the husband’s deliberate “obfuscation and evasion”. On the trial judge’s own findings, the specific total of $886,000 and the $192,000 said to be a loan which his Honour found emanated from the father’s parents, may yet be part of significantly larger sums utilised by the husband without reference to the wife which, as his Honour found, were “the parties’ funds” but about which there is no proper explanation and no disclosure.
[51] Reasons, [175] quoted above.
With respect, we are unable to see that his Honour took that consideration into account. Our conclusion that his Honour’s s 79(4)(e) assessment is manifestly unjust to the wife is informed by our conclusion that, in the respect just outlined, his Honour failed to take account of a relevant consideration.
Our conclusion is further informed by the fact that this factor is but one of the matters that must be taken into account in assessing s 79(4)(e), including the matters outlined by his Honour at [164]-[172] of the reasons.
The wife is the recipient of a hurt on duty pension, is unable to work remuneratively other than, perhaps, part-time; she had the care of two teenage children, one of whom (aged 12, not 15) had almost the entirety of his secondary education ahead of him at the date of trial. The unchallenged finding made by his Honour was that there “appears little prospect of financial support from the husband” in respect of those children.
His Honour found in addition that “[t]here is no evidence that the husband is incapable of salaried employment” but that he had “chosen not to seek such employment”.[52] While those findings were made, his Honour made no finding in respect of the husband’s current income, received by his alter ego, D Pty Ltd, via rental from the Suburb U property. That income is one and a half times that of the wife.
[52] Reasons, [166].
It might be observed that in making an application for finance to a finance company as earlier referred to the husband represented his taxable income (falsely as his Honour found) at about $340,000 per year. His Honour found that, by comparison, the wife might expect some “part time employment” which might result in a “modest capacity to contribute to future superannuation”.[53]
[53] Reasons, [167].

Re-exercise of the Discretion

At the conclusion of the hearing of this appeal, we invited submissions from the legal practitioners for each of the parties as to whether, in the event that error was established, we could and should re-exercise the discretion or, alternatively, remit the matter for rehearing. As we have said, each of the parties contended that we should re-exercise the discretion.

Should this Court Re-Exercise the s 79 Discretions?

Both parties were anxious to avoid a remitter of the matter in the event that we found error. We repeat that a consequence of the husband’s submissions in that respect is that he eschewed the opportunity to make good at a re-trial the absence of discovery and evidentiary voids that founded his Honour’s adverse findings.
Submissions that this Court should re-exercise the discretion so as to avoid the stress and expense of a re-trial are almost ubiquitous. Yet, as this Court has said on many occasions, we are bound to apply principle in reaching that conclusion. In particular, any such decision must take into account the fact that if this Court is to re-exercise, it must do so by reference to the facts and circumstances existing as at the date of the hearing.[54] Axiomatically, we must have a proper evidentiary foundation for doing so.
[54] Allesch v Maunz (2000) 203 CLR 172.
Almost always, relevant facts and circumstances will have changed between the date of trial and the hearing of the appeal. Reference to s 75(2) exposes readily examples of the types of issues likely to have changed. So, too, the period of time over which post-separation contributions will have been made by both parties will have increased. Matters of significant contention cannot be heard and determined by a bench of three within an appeal setting.
Thus, a submission that this Court should re-exercise for itself the relevant discretions must be accompanied by submissions (effectively agreed to by both parties) as to the basis upon which this Court can do so. Here, that is sought to be achieved by the parties agreeing to a single expert re-valuing two pieces of real property and a joint submission that the court should otherwise accept the findings of the trial judge that are not the subject of challenge and interference by this court. The parties filed, in addition, further written submissions, the wife on 11 October 2016 and the husband on 1 December 2016.
Understandable though the desire for re-exercise may be, difficulties remain because this Court’s task is to decide for itself whether it is just and equitable to make any orders adjusting the parties’ existing interests in property and, if so, to then determine what adjustment is called for if justice and equity is to be achieved.
While the value of the two properties has been re-determined, other potential issues emerge. What s 75(2) factors have altered and how should they be seen in terms of the overall assessment of that issue and the overall result more broadly? How is the court to assess the post-separation contributions of the parties given that, now, more than four and half years have passed since that event? Despite the parties’ apparent agreement as to the basis upon which this Court might re-exercise, doing so on the basis of facts and findings pertaining at the date of trial, albeit by consent, creates significant unease on our part.
However, despite that unease, upon the urging of the parties, we will do so because, primarily, we are concerned about even greater injustice occurring if we do not. We particularly have in mind the trial judge’s strong undisturbed findings about the manifest inadequacies in the evidentiary foundations for the husband’s case, his manifest lack of disclosure and the considerable expense for the wife that is likely to be involved in re-litigating those issues if confronted with similar attitudes on the part of the husband. His opposition to a retrial gives us no confidence that his attitudes would change.
The parties each filed written submissions, the wife on 11 October 2016 and the husband on 1 December 2016. The single expert valuations were annexed to Mr ZZ’s affidavit as earlier referred to. Neither party sought to place any other evidence before the Court relevant to the re-exercise of the discretion.

The Parties’ Interests in Property

The trial judge set out the property of the parties or either of them within the meaning of s 79 of the Act at [142] of the reasons and we have earlier outlined them. The single expert’s valuations have seen each of the pieces of real property increase in value. Otherwise, the parties through their respective representatives have agreed that, save where we have found error, this Court should adopt the interests in property and values as found by his Honour.
That agreed position also pertains to the liabilities (save for errors found by us) existing as at the date of trial. As a consequence of the errors found by us, the alleged loan of $192,000 to the husband’s parents and the alleged J Repairs debt of $36,000 will be removed as liabilities in which the parties should share. The error conceded by the husband sees the $9,709 owed to the parties by the husband’s parents included in the parties’ property.
The parties’ interests in property and their value together with their liabilities derived by the application of those matters and, otherwise, the parties’ agreed position is as follows, recognising that B Pty Ltd and D Pty Ltd were, and are, treated as the alter egos of the parties.

The Parties’ Joint Property

Value

Home at Suburb F

$2,200,000

Rental Property at Suburb U (D Pty Ltd)

$970,000

B bank account (B Pty Ltd)

$1,620

D Pty Ltd account

$7,748

Money owed to parties by husband’s parents

$9709[55]

Total

$3,189,077

The Husband’s Property

Value

New boat shell

$36,000

Boat “FF”

$100,000

Boat “VV”

$40,000

Car parts

$3,000

Boat equipment

$1,290

Utility motor vehicle

$90,000

Vintage motor vehicle 67 Convertible Red

$29,000

Vintage motor vehicle 67 Aqua

$32,500

Vintage motor vehicle 67 Fastback

$21,000

Vintage motor vehicle 67 White shell

$4,800

Motor Bike 1

$3,200

Motor Bike 2

$15,200

Motor Bike 3

$21,000

Watch (Swiss)

$4,000

Watch (Gold)

$10,000

Watch (Stainless Steel)

$7,500

Bank of America account

$350

German motor vehicle

$80,000

Total

$498,840

The Wife’s Property

Value

4WD Motor vehicle

$20,000

Horse float, horses and equipment

$12,000

Ladies watch

$4,000

Jewellery

$11,390

Total

$47,390

Total Property

$3,735,307

[55] Results from the husband’s concession as to ground 9.

The Parties’ Joint Liabilities

Amount

(CBA mortgage Suburb F)

($372,123)

(Mortgage Suburb U)

($311,100)[56]

(Line of credit)

($297,481)

(Loan from wife’s parents)

($226,000)

The Husband’s Liabilities

Amount

Nil

Nil[57]

The Wife’s Liabilities

Amount

Nil

Nil

Total Liabilities

$1,206,704

[56] The trial judge included the Suburb U property at its net value at [142] of the Reasons.
[57]The asserted loan to the husband’s parents and the alleged J Repairs debt have been removed in accordance with our earlier findings.

The parties’ net assets are in the amount of $2,528,603. In addition, the husband and wife have superannuation interests totalling $498,918 within a self-managed superannuation fund with current member benefit entitlements in the respective amounts of $279,137 and $219,781. Together, the net property and superannuation interests total $3,027,521.

Section 79(2) and the Nature, Form and Characteristics of the Parties’ Relationship

Nothing to which we have been taken suggests that any formal or informal agreements were reached between the parties governing how their property interests might be acquired or held. It appears that “unstated assumptions” governed the parties’ property interests which proceeded on the basis that, “whatever they are [they are] sufficient for the purposes of that husband and wife during the continuance of their marriage”.[58]
[58] Stanford v Stanford (2012) 247 CLR 108, 122.
In particular, of course, as his Honour found, the receipt and distribution of large sums of money remain unexplained despite the husband’s obligation of disclosure within these proceedings.
The parties’ supplementary submissions before us, as did the parties’ respective submissions before his Honour, each suggest that it was just and equitable that an order altering the interests in property of the parties should be made. Those submissions reflect the shared view of the parties, which we also share, that the “unstated assumptions” which were sufficient in respect of their property interests when married came to an end upon the cessation of the relationship.
The husband’s lack of disclosure and the consequent lack of accounting for large sums of money that, absent cogent alternative explanation, might be expected to be reflected in whole or part in the current interests in property of the parties, is of itself indicative of the need to alter existing property interests so as to achieve justice and equity between the parties.

Nature, Form and Characteristics of the Parties’ Property

The supplementary submissions of each of the parties urge an approach that implicitly concedes that the nature, form and characteristics of the wife’s hurt on duty pension are markedly different to those of the parties’ property interests and respective interests in superannuation. Each submit, as they did at trial, an approach (a “two pools approach”) that sees the pension forming one “pool” and the property and superannuation interests the other.
For the reasons we have earlier given, we will not treat the capitalised value of the wife’s pension as an asset in that amount. Nor, as a result, will there be a separate “pool” comprising the wife’s pension. Her pension falls to be considered pursuant to s 79(4)(e), that is as income in the hands of the wife.

The lump sum calculation of that income stream might be seen as providing an indication of the “value” of the income stream to the wife (subject to the caveats we have earlier expressed). But, by way of contrast, no comparable calculation is done by way of an actuarial estimate of the “value” of a projected income stream of the $340,000 per annum that the husband represented to a finance company he could earn nor, for example, to any projected income based upon an average earned during the time he chose to work or, for that matter, based on the rental income from the Suburb U property.
We respectfully agree with his Honour that the nature, form and characteristics of the parties’ respective contributions to the property and to their interests in the self-managed superannuation fund should be seen to be similar. We approach the assessment of contributions globally to both property and the remaining superannuation interests.

Assessment of The Parties’ Contributions

The parties were married for about 16 years. There are two children of the marriage who were aged 12 and 16 at trial and are aged 18 and almost 15 now. The husband was born in 1968 and the wife in 1968. The parties were aged 46 at trial and are aged 49 and 48 now. At trial the parties had been separated for about three years. They have now been separated for over four and a half years. (Just those bare facts again illustrate the unease with which we approach the re-exercise in this matter).
The wife submits before this Court that contributions of the parties (to what is there described as “the primary pool” consisting of the assets and superannuation interests separate from the wife’s pension) should be assessed as equal. The husband submits that “contribution should be assessed as favouring the husband by 5-10%”. The trial judge assessed contributions to that “pool” as equal.
As we have earlier said, the findings made by his Honour in respect of contributions, and otherwise, are made against a background of serious findings adverse to the credit of the husband. Those findings also inform our conclusions.
We adopt in summary form the following findings made by his Honour in respect of contributions which are not challenged on the appeal:
8.There is no issue that the wife was the primary carer for the children and primary homemaker during cohabitation and primary carer for the children post separation.
…
10.The husband was formerly a police officer but at the time of marriage he operated a … shop at [Suburb U] with his parents. After the business was sold in 2001 he was employed by [T Pty Ltd]. He had other jobs until 2007 when he and the wife commenced a [V Pty Ltd] franchise at Suburb W …
11.The wife at the commencement of the relationship had:
(a)Savings of about $80,000 in accounts with the [X] Credit Union, National Bank and Westpac;
(b)Superannuation with the NSW Police Service; and
(c)A car.
12.Prior to marriage the wife applied part of her savings to the purchase of a ski boat “[FF]” by the husband and further $60,000 was provided to the husband in relation to the … shop business.
13.The husband at cohabitation had:
(a)A property ... purchased in October 1988 as vacant land for $38,000 with a then mortgage of $24,000. Prior to marriage the husband had erected a cottage on the property and it was tenanted. This property was later sold in 2002 for $380,000. On sale of the property in September 2002 the net proceeds of sale of $340,478 were applied in reduction of the collateral mortgage borrowing that funded the later purchase of the matrimonial home at [Suburb F];
(b)50% interest, with his parents holding the other 50%, in the company [AA] Pty Ltd (“[AA]”) that operated the … shop at [Suburb U];
(c)… motor vehicle;
(d)Ski boat; and
(e)Interest in the self-managed superannuation fund [AA] Superannuation Fund ([BB] Pty Ltd as Trustee). The wife and the husband’s parents were also members of the fund.
…
15.In 1998 [AA] purchased the … shop premises … for $225,000 with a mortgage borrowing of $200,000. The premises were later sold to [D] Pty Ltd (“[D]”) as Trustee of the [Surridge] Unit Trust in April 2002 with an advance from the National Australia Bank of $762,000. The [AA] Superannuation Fund acquired some of the units in the Trust.
16.In 2001 the … shop … was sold to [T Pty Ltd]. The real estate property itself was retained. The … shop trading from these premises is now operated by Coles.
17.From the husband’s ultimate portion of the proceeds of sale of the … shop by [AA] in 2001 he discharged the then mortgage owing on his property at [Suburb Z]. Otherwise the amount of and distribution of the sale funds of the business by [AA] is not the subject of evidence, save that some funds payable to the husband later met the stamp duty of $34,415 on the purchase of the parties’ home at [Suburb F].
18.In 2001 the parties purchased the matrimonial home at [E Street, Suburb F] for $865,000 with a home loan mortgage of $930,000 secured by collateral borrowing over the husband’s [Suburb Z] property. On sale of the husband’s property at [Suburb Z] in September 2002 the net proceeds of sale of $340,478 were applied in reduction of this mortgage. At separation the loan was $365,000 and the wife has serviced the interest on that loan as best she could from her pension payments.
In evidence that is, again, unchallenged, his Honour found in respect of the post-separation period, for example:
112.The husband has travelled overseas and elsewhere since separation. His explanation of how those trips, some with business class airfares, were funded, particularly as his assertion of being refunded significant expenses in cash by others is not corroborated by any evidence at all …
In respect of contributions made to the welfare of the family including in the capacity of homemaker and parent, his Honour found and we adopt:
116.The parties’ children are at private school and the wife has had to meet fees from income and borrowings since separation. The husband had paid a total of $795 in child support since separation to trial notwithstanding significant sums of money passing through is [sic] hands in that period. He estimated his income for the 2014 year at nil for child support purposes.
…
120.The wife has and continues to meet all of the children’s living expenses and extra-curricular expenses from her income and funds provided by her family and friends by way of loan.
…
160.After separation the wife has had essentially the sole care of the children since September 2012 physically, emotionally and financially.
His Honour’s finding that the wife was “the primary carer for the children and primary homemaker during cohabitation” sits with the finding that, between the birth of the first child and her retirement after being hurt on duty in 2006, the wife assumed two roles; that of the producer of remunerative income and as the predominant homemaker and parent.
His Honour considered and gave weight to “the property owned by [the husband which] represented a significant later financial resource to the parties, particularly as to the collateral borrowing of funds to acquire the later home and the later receipt of sale proceeds of the [Suburb Z] property”. However, his Honour noted that “[t]he weight to be attached to this aspect is fettered by the lack of valuation evidence. All that is available is evidence as to the sale proceeds of this property in 2002 and the sale of the … shop at about the same time”.[59] His Honour also recorded that “[t]he wife injected significant cash resources into the relationship”[60] before concluding that “contributions at cohabitation must favour the husband”.[61]
[59]         Reasons, [156].
[60]         Reasons, [157].
[61]         Reasons, [158].
The wife made significantly greater contributions as a homemaker and parent. She made contributions in that role as well as in the role of an income-earner. Post separation she and the children had the use of the former matrimonial home and preserved it. She did so in circumstances where the husband had “chosen not to work” and did not provide financial support for the children despite earning, through D Pty Ltd, an income significantly in excess of the wife’s income. If the husband’s contributions at the commencement of the relationship should be seen as greater than the wife, the wife’s contributions at and after the end of the relationship should be seen as greater than the husband.
Looking at all of the contributions, direct and indirect, made by each of the parties by reference to s 79(4)(a) to (c), in our view contributions should be assessed as equal.

Assessment and Quantification of the Remaining s 79(4) Considerations

Section 79(4) (d), (f) and (g)

Neither party directs any submissions to the balance of s 79(4)’s requirements save for s 79(4)(e).
In our view the orders proposed by either party cannot be seen to have any effect upon the earning capacity of either of them;[62] the husband has chosen not to work and the wife receives a hurt on duty pension. Neither contends in submissions that the orders will affect their position.
[62] s 79(4)(d).
We have not been made aware of any other order affecting the parties or the children that might impact on an assessment of the justice and equity of the property orders.[63] The husband has not been, and is not, paying child support. We adopt his Honour’s finding that, on the evidence before us, the prospect of him doing so appears remote.[64]
[63] s 79(4)(f).
[64] s 79(4)(g).

Section 79(4)(e) – The Relevant Matters Referred to in s 75(2)

Again, we adopt his Honour’s findings in so far as they are unchallenged on this appeal or otherwise accord with our findings.
The husband is aged 49; the wife aged 48. There is no evidence of health concerns on the part of the husband. The wife suffers from the condition which entitles her to her pension. The evidence does not suggest that we should place any additional weight on her health issues separate from them being taken up below in dealing with the wife’s income and earning capacity.
Broadly described, the consequence of our finding that contributions should be assessed as equal would see the parties retaining significant superannuation interests and net assets of about $1,260,000 each. That broad overview embraces, however, well over one million dollars in debt. The wife has a very limited earning capacity and her current income, received entirely by way of pension, is modest. The husband has chosen not to work. He has in the past been a businessman and has represented to a finance company that he can earn $340,000 per annum. Through a corporation entirely controlled by him, he receives annual net rental from the Suburb U property of about $73,000. His income exceeds that of the wife (despite him not engaging in remunerative employment) and his income-earning capacity far exceeds that of the wife.
The wife has the effective care and control of the two children of the marriage, noting that the older of the two children is now an adult. The younger child is aged 14 and has the balance of his education at a private school ahead of him.
The standard of living of the wife and the children is significantly less than that enjoyed during the marriage. The findings made by his Honour as to the husband’s “mendacity”, dishonesty and lack of disclosure pertain, as do his Honour’s finding as to the husband’s overseas travel earlier quoted.
We have already referred to the fact that the husband has not paid child support and is not likely to. The wife has needed to support herself and the children from her modest income and will likely do so into the future.
We consider, as did his Honour, that the “the justice of the case”[65] requires that the husband’s abject failure to disclose financial transactions and the movement of money and his sometimes fanciful explanations, not otherwise corroborated, of transactions said to explain the movement of money bear significant consideration. We reiterate what we have said earlier in these reasons in outlining our reasons why we considered his Honour erred in that respect.
[65] s 75(2)(o).
The sums of money involved in the husband’s dishonesty, lack of disclosure and obfuscation are very large, even on an interpretation generous to him. Again we reiterate what we have earlier said in that respect.
In our view, justice and equity requires the totality of the factors earlier enumerated to impact very significantly upon our assessment of contributions if justice and equity is to be achieved.
We assess that impact in percentage terms at 25 per cent which, in dollar terms, equates to just over three-quarters of a million dollars. That assessment results, of course, in a disparity between the parties’ entitlements of about $1.5 million. That is a considerable sum and represents about half of the known property of the parties or either of them but we consider it just in light of the circumstances of this case including, in particular, the unexplained movements of money and transactions to which we have referred.
The importance of the last mentioned factor can be conceptualised in another way. If a figure of $1 million is attributed to the unexplained money and transactions (which, at least on one view of his Honour’s findings might be seen as generous to the husband) was represented within the existing property and/or superannuation interests of the parties, the net assets and superannuation interests would be over $4 million. That, of course, takes no account of the use that has been, or otherwise might have been, made of that money or the difference in the value of money between the date of expenditure and now. The earlier-identified s 75(2) factors save for the “missing money” would continue to apply: the husband would still have a superior income and far superior earning capacity; no child support was or would be payable; the wife would need to meet her needs and the needs of one child who has the bulk of his private secondary schooling ahead of him.
There is a strong argument that those factors would see the wife receiving an entitlement additional to that which the contributions assessment would produce. Even a modest addition to the wife’s contribution assessment – say 5 per cent – would produce a result akin to our assessment. In addition, of course, the husband would be credited with the money already received of $1 million out of such a notional “pool”.

What Orders Are Just And Equitable?

The division resulting from our assessment would see the wife receiving assets and superannuation in the total net sum of $2,270,640.
In light of the findings made by his Honour as to the husband’s current attitude to remunerative employment and the wife’s receipt of a hurt on duty pension as her only source of income now or likely in the future, consideration needs to be given to how orders might address our assessment so as to best achieve justice and equity.
As can be seen from the tables earlier set out, the parties’ primary assets consist of two pieces of valuable real property. Nearly $500,000 of their interests in property is represented by disposable chattels currently in the husband’s possession. Both parties propose that he retains these items. That seems appropriate. His Honour’s orders include orders by consent whereby any interest and current and future liabilities in respect of two corporations in which the parties are currently involved be transferred to the husband. There is no reason to make any different orders.
His Honour’s orders provide that the husband is to transfer to the wife his interest in the former matrimonial home. As we have said, the wife is to assume sole responsibility for the mortgage and line of credit (which, it might be noted, pertained to an earlier business from which the husband received unexplained and unaccounted-for funds) secured over it. She herself sought an order to the effect (together with an order that she assume sole responsibility for the debt to her parents) despite the resultant total indebtedness. It seems uncontroversial that the wife and the children have lived there since separation and, apparently, met the mortgage. It is the only home that the children have known. It is just and equitable that she should receive the house and take responsibility for the liabilities referred to.
The parties’ superannuation interests pre-existed the relationship. The evidence does not permit of any analysis of the extent to which those interests have built over the course of the 16 years the parties were married or since. The husband has not recently worked and the wife receives a pension. There is unlikely to have been factors of significance individual to either party affecting their superannuation interests since separation. Each of the parties is in their late forties and has a number of years before they can access their superannuation entitlements. Their respective interests represent “nest eggs” for each of them built up during the course of the relationship. Each should retain those interests.
Each of the parties seeks an order that the Suburb U property vest in them with consequential “adjusting orders” to accommodate the different results each contends for. It has a secure tenant and earns rental income. If the husband retains the property (through D Pty Ltd) he will retain the income and equity of more than $600,000 in circumstances where, through his control of D Pty Ltd he can receive dividends or draw down upon D Pty Ltd’s income, all the while eschewing remunerative employment and failing to meet financial responsibility to his children.
If the wife receives the Suburb U property she will receive the income. Her income will be in the region of $120,000 per annum. She will continue to service significant debt but has additional income with which to do so. If the husband is to retain the Suburb U property, the wife’s assessed entitlement would need to be met by him discharging the debts (totalling about $660,000) secured over the Suburb F property which, on his case, he has no capacity to do, or by a combination of re-structuring those debts together with transfers of chattels which represent his interests (for example cars and boat) and/or superannuation splitting order. We are not persuaded either such course is just.
Those considerations sound in the alteration of interests in property that can be represented as follows:

Husband

Wife

B bank account   $1,620

The Suburb F property      $2,200,000

D Pty Ltd bank account            $7,748

The Suburb U property          $970,000

Chattels  $498,840

Chattels            $47,390

Loan parents   $9,709

Superannuation  $279,137

Superannuation   $219,781

Total  $797,054

Total  $3,437,171

(Loan parents)                  ($226,000)

(Mortgage Suburb U)        ($311,100)

(Mortgage Suburb F)          ($372,123)

(Line of credit)                  ($297,481)

(Total)  ($Nil)

(Total)  ($1,206,704)

Net  $797,054

Net  $2,230,467

In order to achieve the assessment earlier mooted, the husband would need to pay a cash adjustment of about $40,000 or effect a superannuation split in that amount. The assessment tabulated above represents the wife receiving 73.7 per cent. We are not inclined to impose the balancing figure in either respect.
We will require the parties to file agreed minutes of order giving effect to this settlement of property within 14 days of the date of the publication of our orders and reasons.

Costs Of The Appeal

The husband has been wholly unsuccessful on this appeal. We have not been made aware of any written offers to settle the appeal. Our comments as to the disclosure by the husband of his financial circumstances pertain. So, too, we reiterate the (proper) concessions made on behalf of the husband before us. We see each as having direct relevance to the wife’s decision to appeal and to the husband’s decision to oppose the appeal. We consider there are circumstances which justify an order for costs.

We will order that the husband pay the wife’s costs of and incidental to the appeal in such amount as might be agreed in writing and, failing agreement, to be assessed. We will allow 60 days from the date of agreement or assessment as the case may be for the payment of those costs.

I certify that the preceding one hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Murphy, Aldridge and Kent JJ) delivered on 3 February 2017.

Associate:

Date: 3 February 2017

The Parties’ Joint Property	Value
Home at Suburb F	$2,200,000
Rental Property at Suburb U (D Pty Ltd)	$970,000
B bank account (B Pty Ltd)	$1,620
D Pty Ltd account	$7,748
Money owed to parties by husband’s parents	$9709[55]
Total	$3,189,077
The Husband’s Property	Value
New boat shell	$36,000
Boat “FF”	$100,000
Boat “VV”	$40,000
Car parts	$3,000
Boat equipment	$1,290
Utility motor vehicle	$90,000
Vintage motor vehicle 67 Convertible Red	$29,000
Vintage motor vehicle 67 Aqua	$32,500
Vintage motor vehicle 67 Fastback	$21,000
Vintage motor vehicle 67 White shell	$4,800
Motor Bike 1	$3,200
Motor Bike 2	$15,200
Motor Bike 3	$21,000
Watch (Swiss)	$4,000
Watch (Gold)	$10,000
Watch (Stainless Steel)	$7,500
Bank of America account	$350
German motor vehicle	$80,000
Total	$498,840
The Wife’s Property	Value
4WD Motor vehicle	$20,000
Horse float, horses and equipment	$12,000
Ladies watch	$4,000
Jewellery	$11,390
Total	$47,390
Total Property	$3,735,307

The Parties’ Joint Liabilities	Amount
(CBA mortgage Suburb F)	($372,123)
(Mortgage Suburb U)	($311,100)[56]
(Line of credit)	($297,481)
(Loan from wife’s parents)	($226,000)
The Husband’s Liabilities	Amount
Nil	Nil[57]
The Wife’s Liabilities	Amount
Nil	Nil
Total Liabilities	$1,206,704

Husband	Wife
B bank account $1,620	The Suburb F property $2,200,000
D Pty Ltd bank account $7,748	The Suburb U property $970,000
Chattels $498,840	Chattels $47,390
Loan parents $9,709
Superannuation $279,137	Superannuation $219,781
Total $797,054	Total $3,437,171
(Loan parents) ($226,000)
(Mortgage Suburb U) ($311,100)
(Mortgage Suburb F) ($372,123)
(Line of credit) ($297,481)
(Total) ($Nil)	(Total) ($1,206,704)
Net $797,054	Net $2,230,467