Swayne and Holme

FEDERAL CIRCUIT COURT OF AUSTRALIA

SWAYNE & HOLME

[2013] FCCA 2193

Catchwords:
FAMILY LAW – Property – de facto relationship – relationship seventeen years in duration – relationship produced one child now fourteen years of age – both parties in employment during relationship – applicant self-employed – respondent public servant – applicant diagnosed with debilitating illness in 2004 – applicant acknowledges problem gambling from 2004 onwards – dispute regarding level of gambling losses – applicant’s business now sold leaving significant debts – add backs – waste – negative contributions – just and equitable – assessment of contributions – assessment section 90SF(3) factors.

Legislation:

Family Law Act 1975, ss.4(1); 75(2); 79; 90RD; 90SF; 90SL; 90SM

Evidence Act 1995 (Cth), s.140(2)

C & C (2005) FLC 93-220
Pierce & Pierce (1999) FLC 92-844
Waters & Jurek (1995) FLC 92-635
D & D [2003] FamCA 473
Robb & Robb (1995) FLC92-555
Kessey & Kessey (1994) FLC 92-495
D & D [2005] FamCA 356
C & C (2006) FLC 93-269
Briginshaw v Briginshaw (1938) 60CLR 336
De Angelis & De Angelis (1993) FLC 93-133
Stanford v Stanford [2012] HCA 52
Watson & Ling [2013] FamCA 57
AJO & GRO (2005) 33 Fam LR 134
In the Marriage of DJM and JLM (1998) 23 Fam LR 396
In the Marriage of Townsend (1994) 18 Fam LR 505
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Browne & Green (1999) 25 Fam LR 482
In the Marriage of Spiteri (2004) 33 FamLR 109
Clauson & Clauson (1995) FLC 92-595

Applicant:

MR SWAYNE

Respondent:

MS HOLME

File Number:

CAC 516 of 2013

Judgment of:

Judge Brown

Hearing dates:

11, 12 & 13 November 2013

Date of Last Submission:

13 November 2013

Delivered at:

Adelaide

Delivered on:

19 December 2013

REPRESENTATION

Counsel for the Applicant:

Mr Hodgson

Solicitors for the Applicant:

Nicholl & Co

Counsel for the Respondent:

Mr Jones

Solicitors for the Respondent:

Jones Law Co

ORDERS

In full and final settlement of all claims for the settlement of de facto property between the parties:-

It is ordered as follows:

It is declared pursuant to section 90SL of the Family Law Act 1975 that a de facto relationship existed between the parties and as a consequence the court has authority to make orders altering the property interests of the parties.
Within forty-two days of the date of these orders Ms Holme (hereinafter referred to as the respondent) pay to Mr Swayne (hereinafter referred to as the applicant) the sum of $194,000.00.
Concurrently with the payment referred to in order (2) hereof, the applicant execute a transfer and all necessary documents to transfer all his estate, title and interest in the property and land comprised in block [omitted], section [omitted] of [omitted] and being the whole of the property known as and situate at Property B, in the Australian Capital territory (hereinafter referred to as the former family home) to the respondent.
In the event the respondent fails to comply with order (2) hereof, the former family home is to be placed on the market for sale by private treaty at a price to be agreed between the parties and failing agreement to be $560,000.00 with the selling agent to be agreed between the parties and failing agreement to be an agent nominated by the Secretary of the Real Institute of the Australian Capital Territory or his/her nominee.
Upon settlement of the sale of the property, the proceeds be divided as follows:
(a)To pay all necessary selling costs and agents fees;
(b)To discharge the mortgage secured against the property in favour of the ANZ Bank;
(c)To pay the following debts:
(i)Transact - $1,466.22;
(ii)[K] Accountants - $9,210.00
(iii)ACT Revenue - $6,515.00
(iv)Actew AGL - $7,994.00
(v)Natural Gas account - $6,232.00
(d)As to the remainder fifty per cent to the applicant and fifty per cent to the respondent.
The applicant is to indemnify the respondent and keep her indemnified in respect to all liabilities in his name and in the name of [A] Pty Ltd arising from the operation of the business operated by him and known as [A].
Within thirty-five (35) days of the date of these orders the respondent make the following chattels available to the applicant to collect from the former family home, at his own expense:
(a)Two, two seater leather lounge;
(b)Freedom glass table and six chairs;
(c)Fridge – downstairs;
(d)Three wall units;
(e)Coffee table made of tree stump – a present from the applicant’s sister;
(f)Glass table, laminated with rice paper on top – made as a present for the applicant from a former employee;
(g)Guitar; and
(h)Telescope – a gift.
Within forty-two (42) days of the date of these orders the parties are to do all things necessary to place the 1996 model Ford Falcon motor vehicle, currently in the possession of the applicant, on the market for sale at a price to be agreed between the parties and upon sale of the vehicle the proceeds are to be divided equally between the parties.
Pursuant to section 90MT(4) of the Family Law Act 1975 a base amount of $45,000.00 be allocated to the applicant in respect of the respondent’s superannuation interest in the [P] Superannuation Scheme under membership number [omitted] (hereinafter referred to as “the [P] Superannuation Fund”) and that pursuant to section 90MT(1)(a) whenever a splittable payment becomes payable in respect of that interest, the applicant is entitled to be paid the amount to be calculated in accordance with the Family Law (Superannuation) Regulations 2001 in respect of that base amount and there is to be a corresponding reduction in the entitlement of the respondent.
The trustee of the [P] Superannuation Scheme, the applicant and the respondent, in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all such documents as may be necessary to calculate the payment entitlements of the applicant in accordance with order (9) to have effect from the operative time, which shall be thirty-five (35) days from the date of these orders.
Including but without limiting the effect hereof, the applicant shall retain for his sole use and benefit absolutely, free from any other claim or demand of the respondent:
(a)The 1973 model Jaguar XJ6 motor vehicle currently in his possession;
(b)The Quintrex 16 foot fishabout boat in his possession;
(c)His personal affects and other furniture and furnishings in his possession power and control;
(d)Any other property and or financial resources in the applicant’s name and/or possession not otherwise specified herein.
Including but without limiting the effect hereof and subject to the provisions of order (7) hereof, the respondent shall retain for his sole use and benefit absolutely, free from any other claim or demand of the applicant:
(a)The 2005 model Subaru Outback motor vehicle currently in her possession;
(b)The furniture and furnishings currently in her possession, power and control;
(c)Her personal affects and other furniture and furnishings in her possession power and control;
(d)Any other property and or financial resources in the respondent’s name and/or possession not otherwise specified herein.
In the event that either party refuses or neglects to execute any deed or instrument having been directed to do so by these orders than the Registrar of this court at Canberra shall have the power as prescribed by section 106A of the Family Law Act 1975 to execute such deed or instrument on his or her behalf and to do all acts and things necessary to give validity and operation to such deed or instrument.
The child [X] born [in] 1999 live with her mother and spend time with her father, on terms and conditions to be agreed between the parties, from time to time, but subject to [X]’s wishes.
The mother is to encourage and support [X] to spend time with her father.
All applications be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Swayne & Holme is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

CAC 516 of 2013

MR SWAYNE

Applicant

And

MS HOLME

Respondent

REASONS FOR JUDGMENT

Introduction

These proceedings relate to the settlement of property issues, following the end of a de facto relationship, which lasted approximately seventeen years and produced one child.
The parties to the proceedings are the applicant, Mr Swayne and the respondent, Ms Holme. They are the parents of [X] born [in] 1999.
In many ways, it is a sad and perplexing case. The needs of the parties are significant indeed, but sadly, the financial resources currently available to them, to satisfy those needs, are extremely modest, consisting chiefly of a mortgaged home and defined superannuation benefits. The parties also carry a large burden of debt.
Mr Swayne, who is forty-nine years of age, suffers from a rare condition known as [omitted]. It is a neurological condition, which results in cysts forming within the spinal cord.
In Mr Swayne’s case, it has resulted in him suffering spastic quadriparesis. As a consequence, he is confined to a wheelchair. He falls frequently and is incontinent. He has undergone neurosurgery, on at least three occasions. His condition will not improve. In the past, he has been diagnosed with depression.
Ms Holme is now forty-eight years of age. She left school at year 10, but later matriculated as a mature student. She has no other formal qualifications. She has been a public servant, in the Commonwealth Public Service, for most of her working life. Currently, she is a [occupation omitted]. Her annual salary is $71,465.00. In the jargon of the public service, she is an APS4.
[X] lives with her mother and sees her father rarely, if at all. [X] attends a private catholic school, [omitted]. Her school fees come to around $6,000.00 per annum. Given her age, [X] has many other recurrent expenses.
When the parties began to live together, in 1995, each was in the prime of life and health. They met at [omitted]. Mr Swayne was a [occupation omitted]. Ms Holme was an [occupation omitted]. Mr Swayne has been suffering medical problems of a neurological nature, since early 2000, when he was crushed by a runaway trailer.
It has taken Mr Swayne’s various medical practitioners many years to arrive at a definitive diagnosis of his condition. In 2004, a tentative diagnosis of multiple sclerosis was made, which coincided with the onset of symptoms of visual, motor and sensory impairment, including a facial palsy.
Without doubt, the diagnosis of multiple sclerosis, and the onset of the physical symptoms relating to it, was emotionally devastating for Mr Swayne. Ms Holme too must have been placed under a great deal of stress. For obvious reasons, the relationship between them was not without its difficulties.
Around 2004, in the aftermath of his diagnosis, Mr Swayne concedes that he became depressed. In these circumstances, he does not deny that he began to frequent licensed social clubs, in the Canberra area, where he would gamble on poker machines and drink heavily.
Mr Swayne’s employment background is in the [omitted] industry. In 1995, he was employed by a firm, [W]. However, in 2000, he opened his own business – [A] Pty Ltd. Between 2000 and March 2012,

Mr Swayne was the sole proprietor of [A], although he did employ assistants from time to time.
The business had one bank account, into which the business’ earnings were regularly deposited and from which it was anticipated its outgoings would be paid, as and when they fell due. It was not a complicated business structure and Mr Swayne was the only person, who had access to the business account.
Mr Swayne did not pay himself a regular and fixed wage. Rather, he drew from the business account, from time to time, including regularly at automatic teller machines (ATM’s) located at the licensed premises, which he would frequent and where he would drink and gamble.
The relationship between the parties ended in February 2012, when

Mr Swayne vacated the family home located at Property B. This property had been purchased, by the parties, at the beginning of their relationship in May of 1996.
Ms Holme and [X] continue to live in the property. They have no wish to move. In March of 2012, Mr Swayne sold [A] to his son, Mr S, for the sum of $20,000.00. He has not worked since.
Mr Swayne has re-partnered. He lives with Ms C. She too is a public servant. Currently, Mr Swayne is totally financially dependent upon her. Due to her level of income, he is not entitled to social security payments. As such, he has no capacity to pay child support for [X].
As the above brief description of the banking of [A] demonstrates, Mr Swayne has no great aptitude for keeping financial records. In addition, individuals in the thrall of a gambling addiction, rarely keep records of the amounts wagered by them.
Accordingly, it is impossible to calculate exactly the amount of moneys wagered by Mr Swayne, between November 2004 and the early part of 2012. This poses evidentiary issues for the court, in the context of considering whether any sums of money lost by Mr Swayne, in gambling, are to be regarded as a premature distribution of assets, made in his favour, which can be notionally added back ad valorem into the parties’ pool of assets.
However, as is well known, the use of ATM machines leaves an electronic trail. Accordingly, it is possible to trace cash withdrawals, made by Mr Swayne, from the various ATM’s located at the social clubs frequented by him and make a total of them.
The solicitors for Ms Holme have subpoenaed Mr Swayne’s bank statements. Thereafter, counsel for Ms Holme, Mr Jones has undertaken the laborious task of adding the individually modest withdrawals together and creating a schedule of them.[1]
[1] See exhibit A
Apart from a trivial error, understandable in the circumstances, counsel for Ms Holme, Mr Hodgson and those instructing him, agree the total arrived upon, by Mr Jones, is correct. The sum in question is well in excess of $500,000.00. The period it covers is one of just under eight years.
Mr Swayne has been previously married. Around the time the parties met, he was engaged in a process of separating his finances from those of his former wife. Mr Swayne used funds, released to him through this process, to purchase the land at Property B, on which the former family home was later built. The land cost $62.000.00, in May of 1996.
Thereafter, the parties borrowed $150,000.00, from the ANZ Bank, to purchase their home. In addition, Mr Swayne provided other moneys to complete the fit-out of the bathroom. Ms Holme asserts that she provided moneys for curtains and other furnishings from her savings.
As previously indicated, Property B has been Ms Holme’s home for many years. It is the only place [X] has ever lived. For understandable reasons, Ms Holme wishes to retain the property, which remains subject to mortgage.
From Ms Holme’s perspective, this is the central issue in the case. She and [X] have a pressing need for accommodation. They are happy and comfortable where they are. In addition, it is her case that she has maintained the property, in a financial sense, by the regular provision of her wages, in very difficult circumstances, whilst Mr Swayne has been engaged, outside the household, in activities which have only resulted in waste.
There is no doubt that, as a consequence of Mr Swayne’s gambling and his debilitating ill health, a financial crisis surrounds the parties, which threatens to engulf them. The parties remain mired in debt, some relating to outgoing on the Property B property; some relating to [A].
Set against Ms Holme’s need to maintain accommodation for herself, and support [X], including paying her school fees, which will occur without any on-going assistance from Mr Swayne, are his own significant needs.
Mr Swayne has no recurrent income currently. His ongoing medical needs are significant. He has largely utilised the moneys received by him, from the sale of [A], to purchase a new wheelchair for himself and to pay other medical expenses. Like Ms Holme, his immediate financial future looks dire.
During the parties’ relationship, they had an informal agreement that they would contribute equally to their recurrent expenses, particularly the mortgage on Property B; the outgoings relating to the property; and [X]’s school fees. In addition, it was the agreed practice that

Mr Swayne would pay Ms Holme $200.00 per week for groceries.
During the period of Mr Swayne’s gambling, it is Ms Holme’s case that responsibility for paying the vast majority of these expenses, if not all, fell onto her shoulders. As such, she was left in a stressful situation of endlessly trying to make ends meet, on her modest wage, through a process of robbing Peter to pay Paul.
In these circumstances, Ms Holme asserts that she was given money regularly by her father, Mr H, to keep her and the family afloat financially. Ms Holme says she used the moneys received, from her father, to prioritise payments of the mortgage and [X]’s school fees, but was unable to pay other outgoing related to Property B, as they fell due, such as land tax; sewerage; and gas.
Mr H estimates that he gave his daughter between $60,000.00 and $65,000.00 in the period of the parties’ relationship. This included the purchase of a car, for Ms Holme, which she still retains. Mr H is a family orientated person and does not seek to be reimbursed for the moneys advanced by him, which he regards as gifts.
Although Mr Swayne acknowledges having regularly gambled, he does not accept that the schedule prepared by Mr Jones and accepted by him as correct, in raw detail, accurately represents his actual financial situation (particularly his level of losses), in the period in question. In particular, he submits that the schedule does not record any moneys won by him, which he then subsequently utilised for joint family purposes.
In addition, Mr Swayne argues that, merely because a withdrawal was made by him at a social club, it would be imprudent for the court to conclude necessarily the moneys released were lost to gambling alone. Mr Swayne asserts that, on occasion, he left the clubs with money in his pocket, which found its way to fund expenses which benefitted not only him, but also Ms Holme and [X].
It is Mr Swayne’s case that, for the court to find, that he wasted $500,000.00, in gambling, would be both simplistic and grossly unfair to him. He asks the court to put his gambling into the context of his depression and extraordinary level of personal difficulty and accept that, although the gambling was obviously a problem, both for him and his family, it was not as ruinous as the raw level of withdrawals would seem to suggest.
Essentially, Mr Swayne argues firstly that he never gambled moneys, which he did not have and, secondly, some of his earnings did return to the family, notwithstanding the fact that he was gambling. Finally, he asserts that he believed that he would ultimately win back everything he gambled.
Mr Swayne continued to work full-time, at [A], both whilst he was gambling and his health deteriorated. As previously indicated, [A] also employed other [employers omitted], from time to time. It is however difficult to gauge, what level of income the business generated over time. In addition, Mr Swayne accepts that the business struck a financial hurdle, in 2004, when it was not listed in the Yellow Pages.
Tax records tendered by Mr Swayne, indicate that he had an income, in the low $30k’s, for tax purposes, for the financial years ending 30 June 2008; 2009; and 2010.[2] These figures are supported by the profit and loss statements, for the business, prepared for the period ending 30 June 2011 and 2012, which show a turnover of $228,024 and $163,824 respectively, which after deduction of expenses, leaves income, for Mr Swayne, in the vicinity of $30k’s.[3]
[2] See exhibit E
[3] See exhibit C

However, although Mr Swayne asserts that he continued to make regular financial contributions, which benefited the family overall, during the relationship, it is also his case that [A] was on a downward trajectory, largely due to his deteriorating health. This situation led him to selling the business for $20,000.00, which sum only reflected the value of its stock and trade, as by this stage, the business had no other worth.
In these circumstances, Mr Swayne’s son was willing to take on the business. However, for obvious reasons, he was unwilling to take on its accumulated debt, up to the date of sale.
As at the date of the hearing, [A] has debts of around $136,000.00. The most significant component of this debt is GST and personal tax owed by Mr Swayne to the Australian Taxation Office.
In addition to these business debts, the parties jointly own significant sums, which relate to the Property B property. These amount to approximately $175,000.00. The most significant component of this sum is the amount owed on the relevant mortgage to the ANZ Bank. Currently this amounts to $143,336.00.
Both Mr Swayne and Ms Holme agree that they should be jointly responsible for the debts relating to the Property B property. However, they are in fundamental disagreement regarding how the debts of [A] should be approached.
It is Mr Swayne’s position that, as Ms Holme benefited, from time to time, from the income generated by [A], so now she should share equitably in its liabilities.
Ms Holme does not agree. It is her case that she has benefited little, if at all, from [A]. In these circumstances, she argues that considerations of fairness dictate that Mr Swayne should bear responsibility for the business debts, particularly as it her view that his negligent management of [A] brought it to its current parlous financial state.
As a consequence of her long term employment, as a public servant, Ms Holme has been able to accumulate a significant level of superannuation, in [P]. At present, the value of her superannuation is slightly over $181,000.00.
This superannuation has accumulated gradually during Ms Holme’s employment through a process of compulsion. It was neither open to Ms Holme not to make the superannuation contributions in question nor possible for her to access her superannuation, until she retires permanently from the workforce.
Due to his self-employment, Mr Swayne is not in the same happy position. He has failed to make regular provision for his retirement. Currently, he has accumulated superannuation, in a privately administered scheme, to the value of approximately $45,000.00.
Given his current circumstances, he will be unlikely to contribute any further sums to his superannuation, as the time of his permanent retirement from the workforce is now upon him, as a consequence of his serious level of disability.
Clearly, the sum of $45,000.00 will not go a long way to provide financial security, for Mr Swayne, in his retirement. On the other hand, Ms Holme enjoys good health. As such, she can expect to work for some years to come and so will be able to make further provision for her retirement.
The parties agree that the Property B property is worth $560,000.00[4], leaving a net equity of around $417,000.00. Ms Holme is a modest income earner, with a limited capacity to borrow – perhaps up to $380,000.00. Questions arise as to her capacity to manage such a large level of debt, particularly when her other recurrent expenses, including those relating to [X], are taken into account.
[4] See affidavit of Ms M, Registered Valuer, filed 30 October 2013. She valued the property in October of 2013.
The focus in Ms Holme’s case is on salvaging as much as she can, for herself and [X], from the financial quagmire, which she says Mr Swayne has created for the family through his negligent waste of its resources.
She would characterise it as being fundamentally unfair to her, if she was unable to retain the Property B property, given her significant contributions, both financial and in the form of parenting and homemaking, to the family as a whole, which stand in marked contrast to those of Mr Swayne, which have only eroded the family’s level of financial backing and left her to fill the void left by him, in respect of the parenting of [X].
On the other hand, Mr Swayne points to his initial injection of capital, into the relationship, which enabled the Property B property to be purchased in the first place. In these circumstances, he asserts that he is entitled to some portion of the property’s increase in value, over the significant period of time, during which the parties have owned it.
Whilst acknowledging that his gambling was not helpful to the family, Mr Swayne argues that it should not be allowed to overwhelm his other significant contributions, made in psychologically trying circumstances, over the lengthy period of the relationship between the parties. In particular, he would place significant emphasis on his own financial future which, given his severe ill health, is uncertain indeed.
As this brief recitation of the facts shows, the case raises complex legal and equitable issues. The parties currently confront a financial catastrophe, following seventeen years of life together. By dint of their respective circumstances now, each can claim a significant portion of what property is presently left to them, but this can only occur to the detriment of the other, whose future needs will remain unmet.
These proceedings are designed to resolve the various disputes between the parties and, as far as possible, finalise their financial relationship with one another, so that each may move on in life.
There is one other significant aspect of the case. It concerns [X]. At this point, Mr Swayne wishes orders be made that would enable him to spend regular and defined periods of time with [X].
The last time Mr Swayne spent time with [X] was on Father’s Day in 2013. He concedes that [X] chooses to spend time, with him, irregularly. By necessary implication, he accepts that there are currently some problems arising in his relationship with [X].
In these circumstances, he concedes that any formal order, for [X] to spend time with him, should be subject to [X]’s wishes. However, he would want the court to specify a regular period, perhaps during the day on alternate Saturdays, for [X] to spend time with him. This would emphasise to Ms Holme the importance of [X]’s paternal relationship and assist her to encourage [X] to spend time with her father.
In general terms, Ms Holme is not adverse to [X] spending time with Mr Swayne. However, underpinning her position, is her view that currently [X] does not wish to do so. As such, Ms Holme is not in favour of there being any specific times specified for [X] to spend time with her father. Certainly Ms Holme views it as being essential that any order relating to [X] should be dependent on her wishes.
Issues to do with [X], who is fourteen years of age, were not the main focus of the proceedings before me. In particular, there has been no independent canvas of [X]’s views, in the form of a family report.
Accordingly, whilst recognising the emotional potential of the issue, particularly for Mr Swayne, whom I accept loves and cares about [X] greatly, the issues relating to her care are difficult to resolve in the context of the current proceedings. I am loathe to make an order which may lead to contravention proceedings. Equally, I am concerned at the potential for making an order, which to all intents and purposes, is unenforceable and, may as such, be meaningless in practice.

The orders sought by each party

a)The applicant

Mr Swayne seeks the immediate sale of the Property B property.[5] Once the property has sold, he proposes that the proceeds be distributed as follows:
a)To pay all costs, commissions and expenses relating to the sale;
b)To adjust outstanding rates and charges relating to the property;
c)To discharge the mortgage to the ANZ Bank;
d)To pay the debts relating to [A], which at the outset of the case, he calculated to be $167,460.01.
[5] See minute of orders sought by the applicant presented to the court on 11 November 2013
Thereafter, it is Mr Swayne’s position that any remaining proceeds arising from the sale should be divided 60/40 percent in his favour.
In terms of the parties’ various items of personal property and furniture, Mr Swayne proposes that Ms Holme deliver to him a number of items, including a two-seater leather lounge; a glass table and chairs; a fridge; three wall units; a coffee table gifted to him by his sister; a glass table, made by one of his former employees; a guitar; and a telescope.
Thereafter, Mr Swayne proposes that each party should retain the items of property in their respective position. To her credit, Ms Holme agrees to transfer the specified items of property, sought by Mr Swayne.
In terms of the parties’ respective superannuation accounts, Mr Swayne proposes that he should receive half of Ms Holme’s current entitlements. This would necessitate a splitting order, in the sum of $90,655.28 being made from Ms Holme’s [P] fund, which would be rolled over into his superannuation holding.
b) The respondent
On behalf of Ms Holme, Mr Jones submitted a draft of the orders sought by his client. These focus on Ms Holme’s desire to retain the Property B property.
In this context, Ms Holme seeks an order, in the nature of an indemnity, which would require Mr Swayne to assume responsibility for all debts and liabilities, currently standing in his name, relating to [A] Pty Ltd. Thereafter, she proposes that the parties’ assets (not including superannuation) be divided so that she receives 65% and Mr Swayne receives 35 %.
The overall uncertainty of the situation does not allow her to calculate a sum, which would be due to Mr Swayne, to achieve such an outcome, in exchange for the transfer to her of his interests in the Property B property.
However, Ms Holme recognises that there is a significant probability that the Property B property will have to be sold. Again, in these circumstances, after payment of the selling fees; the discharge of the mortgage; and adjustment of all charges and levies, relating to the property; the proceeds should be divided 65/35% in her favour.
In terms of the parties’ other assets and financial resources, it is

Ms Holme’s position that there should be no split made, from her [P] superannuation in Mr Swayne’s favour. In addition, she proposes that she and Mr Swayne should retain the motor vehicles currently in their possession, and in addition, Mr Swayne should retain a Quintrex boat.
As previously indicated, during the course of the hearing, the parties were able to reach some accommodation, with one another, regarding some items of furniture.
In addition, it was agreed that a Ford motor vehicle, currently in

Mr Swayne’s possession, should also be sold and its proceeds divided in the same proportions, which the court regards as appropriate for the larger pool of joint assets.

The applicable legal principles

As the parties have never been married to one another, before the court can exercise its power to alter property rights between them, it must declare that a de facto relationship existed between them, at a time after the commencement of the applicable Commonwealth legislation, which is contained in Part VIIIAB of the Family Law Act 1975.
The power to make a declaration, as to the existence or otherwise of a de facto relationship, arises pursuant to section 90RD(1) of the Act. Pursuant to the section, if an application is made for the alteration of property interests [section 90SM], following the breakdown of a de facto relationship: “the court may, for the purpose of those proceedings … declare that a de facto relationship existed, or never existed [between the applicant for such a declaration and another specified person]”.
In this case, there is no controversy between the parties that a de facto relationship existed between them, which is recognised by the relevant provisions of the Family Law Act and which therefore engages the court’s jurisdiction to alter proprietorial interests between them.
Pursuant to section 90SM, the court is authorised to make such order as it considers it appropriate in order to alter the interests of the parties to a de facto relationship.
The expression “property” is defined in section 4(1) in relation to the parties to a de facto relationship as meaning “… property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.” Accordingly, the definition of property is a wide one.
Pursuant to section 90SM(3), the court is actively prevented from making an order altering the interests, in property, of the parties to a de facto relationship, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
In all the circumstances of this case, the condition that it is just and equitable to make a property order is readily satisfied, as it is clear that, as a result of choices made by each of them, the de facto relationship between them, has now come to an end. As a consequence, it is necessary for the court to end the previous arrangements arising from their ownership of commonly held property, particularly the Property B property.
That being so, it appears to me that the applicable legislation provides a pathway to be followed in order to arrive at an alteration of de facto property interests, which is just and equitable and otherwise appropriate. It is essentially a four step process.
Firstly, I must ascertain what are the parties’ assets and liabilities, as at the date of trial. This step creates an area of contention, between the parties, in the following areas:
·At present, Mr Swayne has a personal liability, in respect of the various debts arising from [A], particularly taxation debts, which amount to somewhere in the vicinity of $165,000.00.
·It is his position that these debts should be regarded as a joint de facto relationship debt, because he operated the business in question, during the parties’ relationship and some of the income produced by it went to joint purposes.
·Ms Holme does not agree. It is her case that Mr Swayne largely wasted the resources of [A], through gambling. As such, it would be unfair to sheet home to her, a significant proportion of these debts.
During the course of the hearing, the parties were able to agree on the value and extent of their other assets and liabilities. They agree that;
·The B property is worth $560,000.00 and is subject to a mortgage, in favour of the ANZ Bank in the sum of $143,336.00.
·The parties agree that Mr Swayne’s motor vehicle is worth $3,000.00; and Ms Holme’s is worth $11,300.00.
·The parties agree that the Quintrex boat, currently in Mr Swayne’s possession is worth $4,500.00.
·Given the concessions made by Ms Holme, regarding the transfer of specified items of property, to Mr Swayne, it is not necessary for the court to make any findings as to the value of other items of personal property.
·The parties agree on the extent of their joint liabilities, which relate to the occupation of Property B. These include ACT Revenue (land tax) $6,515.00; ActewAGL $7,994.00; and Natural Gas $6,232.00. This totals $20,74100. There is also an agreed debt to a firm of accountants.
Pursuant to section 90MC of the Family Law Act, superannuation interests are to be treated as property. As such, they specifically attract the provisions of section 90SM of the Act.
In C & C[6], the Full Court of the Family Court has described superannuation as a different “species of asset” from other forms of property.
[6] C & C (2005) FLC 93-220
This is because superannuation, particularly in its accumulation phase, cannot be easily translated into cash, unlike other more “conventional” assets, such as land and personal property, and so its value accurately determined by sale.
In C & C, the majority of the full court of the Family Court held as follows:
“In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
a)value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
b)consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
c)consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
d)ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”[7]
[7] See C & C (supra) at 79,646
The rationale behind the majority’s reasoning in C & C appears to be that, by reason of its special nature, it is often appropriate to assess contributions to superannuation interests separately to contributions made towards other more “conventional” assets.
This is so one or other of the parties’ contributions to that superannuation may be given “proper recognition”. In order to ensure this “proper recognition”, it is necessary for the court to consider what is the “real nature” of the relevant superannuation interest – namely whether it is likely to be received as a recurrent pension or a lump sum or in some other manner.
The comments of the Full Court, in C & C, in my view, are equally relevant to cases involving the alteration of property interests, following the end of a de facto relationship. In this case, Mr Swayne seeks a split from Ms Holme’s superannuation. I can understand why this would be so, given its current value, particularly when compared to the parties asset and liability situation otherwise.
In the difficult circumstances of this case, it appears to me to be appropriate to place the parties’ superannuation assets in a separate pool and assess contributions thereto separately, in order to ensure that any resulting splitting order is just and equitable.
My basic task, in the first step, is to calculate the parties’ pool of assets at the date of hearing. It is not my role to trace every dollar and item of property utilised by the parties, either prior to their separation or after it and make some exact accounting of the various transactions involved. Such a process is likely to be both onerous and impracticable.
This is particularly so in respect of the moneys lost by Mr Swayne through gambling. It is likely to be the position that the exact amount lost to the parties, in this manner, can never be known and, at best, some approximation made.
In these circumstances, the court must be cautious about artificially adding back some notional sum of money, as having been lost by Mr Swayne and thereafter be notionally set off against any other sum, which he would otherwise be entitled to receive.

The second step involves the court ascertaining the contributions which each party has made towards those assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions 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.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contributions made in the capacity of home maker or parent.”[8]
[8] See Family Law Act s.90SM(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The second step occasions controversy between the parties in the following areas:
·When the parties began to live together, in 1995, Mr Swayne was recently divorced. As a consequence, he had access to cash in the sum of $62,000.00, which was used to purchase the Property B property. Later, he used a further sum of $20,000.00 from his divorce settlement, to complete the bathroom at the property.
·In all these circumstances, Mr Swayne contends that his individual contribution of around $82,000.00, in the overall circumstances of this case, is a contribution which merits “special recognition” in his favour, at this point of the court’s deliberation.[9]
[9] See Pierce & Pierce (1999) FLC 92-844 at 85,811
·Mr Swayne further contends that, as he was in employment during the entirety of the relationship, it must be the case that he made significant financial contributions, which benefited the family overall.
·Ms Holme does not agree. She would characterise Mr Swayne’s gambling as being a negative contribution, which has eroded the parties’ overall wealth and, as such, should be a factor taken into account, in her favour, at this stage.
·In order to ensure that the proper economic consequences of the gambling losses are taken into account equitably, in the case, Ms Holme contends that the court should attempt to quantify them, at this stage, and then notionally add them back into the parties’ asset pool so that they can be set off against any other moneys, to which Mr Swayne would otherwise be entitled.
·From Ms Holme’s perspective, the appropriate sum to be categorised as representing the gambling losses is the sum of $500,000.00, which has been demonstrated to have been withdrawn, by Mr Swayne, from the business account, at various licensed establishments, where gaming machines were located.[10]
[10] In a number of reported decisions of the Family Court of Australia the notional adding back of funds recklessly or wantonly wasted by a party to a marriage has been referred to as the Kowaliw Principle from the case of the same name.
·From Mr Swayne’s perspective, such an approach would be fundamentally unfair to him, as he asserts that the sum in question is a raw turnover figure only and makes no allowance for moneys potentially won by him and subsequently used for family purposes.
·In addition, it is his case that some of the moneys withdrawn by him are likely to have been used for purposes other than gambling, such as the purchase of groceries, through the provision to Ms Holme, of regular housekeeping moneys.
·In addition, Mr Swayne urges the court to consider the context, in which the gambling occurred, in order to reach a just and equitable outcome. He was ill and depressed, at the time, and so vulnerable to the depredations of poker machines.
·In the context of Mr Swayne’s gambling, it is Ms Holme’s case that her economic contributions, made in the form of her recurrent wages, must be considered superior to those of Mr Swayne, who channelled what must be regarded as a significant portion of his income away from the family.
·As a consequence, Ms Holme was not able to support the family and was compelled to borrow significant sums from her father, Mr H. Mr H calculates the sums lent to be in the vicinity of $65,000.00.
·Ms Holme contends that the moneys advanced by her father should be accounted a contribution to be attributed to her, at this stage of proceedings.
·In addition, Ms Holme asserts that her homemaking and parenting contributions are far superior to those of Mr Swayne.
·It is her case that she, with the assistance of her father, has paid [X]’s school fees. She would characterise Mr Swayne as largely an absent parent, who did little to assist in the home.
·Counsel for Mr Swayne, Mr Hodgson, acknowledges that the issue of his client’s gambling cannot be ignored. However, he would urge the court to be cautious in respect of the issue, particularly in over emphasising the issue in an unduly arithmetical or mechanical fashion.
·In particular, Mr Hodgson submitted that there was a danger of the court double dipping, if it both added back notional gambling losses and also required Mr Swayne to bear the entire responsibility for discharging the business debts of [A].
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 90SF(3) of the Family Law Act 1975. Pursuant to section 90SF(3), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In a number of cases, it has been determined that it is appropriate for issues of waste or other factors, which have resulted in the depletion of a relevant asset pool, be taken into account in a generic way, at the third step, pursuant to the provisions of section 90SF(3)(r) and its equivalent provision, in respect of married parties, pursuant to section 75(2)(o), rather than through a notional arithmetical add back of the wasted sum, into the parties’ asset pool, and then its attribution to the party who has wasted it.
In my view, which approach is appropriate must depend on what is just and equitable, in the overall circumstances of the particular case concerned.
In this case, the moneys attributable to Mr Swayne’s gambling losses no longer exist, and in my view, cannot be accurately quantified. The notional aspect of the gambling debts, for obvious reasons, poses particular difficulties for the court, particularly in attempting to quantify the sums so lost for the purpose of adding it back.
The underpinning of Ms Holme’s case, for the gambling debts to be taken into account, at the second step, is that they amount to a premature distribution of de facto property assets, in Mr Swayne’s favour, which if they had not been lost by him, would have been available now, to be divided between him and Ms Holme, in whatever proportions the court deemed fair and appropriate.
If, by way of example, Mr Swayne had sold a significant joint asset, such as a motor vehicle for $20,000.00, in the last month of the parties’ relationship and had wagered the entire sum on a losing bet, it is easy to justify the adding back of a sum referable to the prematurely realised asset into the relevant asset pool.
In my view, a similar exercise is not so simply undertaken in this case, given its circumstances. Counsel for Mr Swayne agrees. It is his view that, taking into account the gambling debts, in a generic way, pursuant to section 90SF(3)(r) and applying the cumulative outcome of any section 90SM(4) and section 90SF(3)(r) findings to a smaller depleted asset pool, more properly accords with the requirement, arising under section 90SM(3), that any order altering property interests be just and equitable.
On the other hand, it would appear to be Ms Holme’s contention that given Mr Swayne has so seriously depleted the asset pool, as a consequence of his gambling, it is only by giving the premature distribution its full dollar value that justice can be given and the full economic consequences of Mr Swayne’s actions be properly considered by the court.
Other significant considerations arise at the third step:
·At present, there is a substantial disparity between the respective superannuation holdings of the parties and their recurrent levels of income.
·
At present, Mr Swayne is totally financially dependent upon

Ms C and has no recurrent income to speak of.
·On the other hand, although a modest income earner, Ms Holme has secure employment. At present her salary is in the vicinity of $70,000.00 per annum.
·In addition, it is Mr Swayne’s case that his health is seriously compromised and will remain so. As such, he is precluded from obtaining any employment in future and therefore faces an uncertain financial future.
·In contrast, Mr Swayne points to the fact that Ms Holme enjoys good health and at forty-eight years of age, is likely to have many years in paid employment before her which will enable her to safeguard her financial future.
·In Mr Swayne’s submission, these are factors, arising at the third step, which greatly favour him, not only in respect of the parties’ immediately realisable assets, but also in respect of superannuation.
·On the other hand, Ms Holme points to her financial responsibility to support [X], including paying her private school fees.
·It is her position that the reality of the current situation is that she will have to bear all the expenses relating to [X]’s care and education, without any contribution from Mr Swayne. In her submission, this is a significant factor, which favours her.
·It is also Ms Holme’s position that she and [X] are entitled to enjoy a reasonable standard of living, following the end of the relationship concerned in the case.
·From Ms Holme’s perspective, it is only fair that the outcome ultimately arrived upon by the court should enable her to continue to live in the Property B property, which has been her home for many years.
·In her submission, this is particularly so, given that it is the actions of Mr Swayne, which have placed the property in jeopardy and so significantly disrupted the parties’ overall financial security.
·Clearly, the business debts of [A] are a significant factor in this case. If it is the court’s decision that Mr Swayne should assume responsibility for them, it is likely that such debts will consume any moneys received by him from these proceedings, leaving him destitute.
·Given his circumstances, particularly his significant level of disability, Mr Swayne submits that such an outcome would be grossly unfair to him.
·Accordingly, Mr Swayne submits that his level of indebtedness, at the conclusion of these proceedings, is a factor in his favour, which arises for consideration under the provisions of section 90SF(3)(r).
·Accordingly, at the end of the third stage, it is the submission of each of the parties, that any composite consideration of the various factors, arising under section 90SF(3) favours him or her to a marked degree.
In general terms, Mr Hodgson, on Mr Swayne’s behalf, would categorise the parties’ contributions, during their relationship, putting aside gambling issues, as being relatively close to even, but with some modest allowance being made in the applicant’s favour, by virtue of his significant initial financial contribution, in the form of the purchase of the Property B land.
Thereafter, Mr Hodgson submits that the various section 90SF(3) factors greatly favour his client, particularly given his debilitating condition and lack of income. In percentage terms, Mr Hodgson submits that an appropriate weighting, in his client’s favour, for these factors, is in the vicinity of twenty-five per cent.
Thereafter, if the court determines that issues of waste, relating to his client’s gambling are to be justly considered, it should occur at the third step. In these circumstances, Mr Hodgson submits that an allowance of fifteen percent, in the respondent’s favour, would represent the high water mark for such a negative contribution.
However, the extent of this allowance should necessarily be informed by reference to whether Mr Swayne alone is to bear the debts of [A] or whether those debts are to be regarded as joint debts of the parties and therefore allocated between them, in some way.
Accordingly, it is Mr Hodgson’s contention that the parties’ assets should be divided so that his client receives sixty per cent of the available assets, in dollar terms. In addition, he contends that the same principals should be applied to the parties’ accrued superannuation.
On the other hand, Mr Jones, in the context of what he would describe as Mr Swayne’s ruinous waste of joint assets, contends that issues of contribution, both in a financial and non-financial sense greatly favour his client. He would contend somewhere in the vicinity of 80/20 per cent.
He also asserts that Mr Swayne should bear the debts, relating to [A], alone. It also seems to be Mr Jones’ contention that the factors arising under section 90SF(3) do not greatly favour one or other of the parties, given the waste issues.
In these circumstances, he contends that his client should receive somewhere between sixty-five and eighty per cent of the parties’ non-superannuation assets. This calculation appears to be predicated on the basis of Ms Holme’s desire to retain the Property B property and minimise any borrowings required to achieve such an outcome.
As previously indicated, the court is specifically prohibited from making any order altering proprietary interests, following the end of a de facto relationship, unless it is just and equitable to do so. Accordingly, at the end of the process envisaged in steps one to three, it is necessary for the court to consider overall, whether the orders it proposes to make are just and equitable.
In a case, such as this one, where the individual needs of the parties are great indeed, and where the resources available to satisfy those needs are scarce, this is necessarily a difficult and finely nuanced task.
The “overriding requirement” of section 90SM is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[11] or of equalisation of assets or financial resources.
[11] See Waters & Jurek (1995) FLC 92-635
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation.
As it is clearly the case that the court can make a declaration that a de facto relationship existed between the parties in this case, they are to be regarded as spouses, in a joint relationship. How much buffer spouses must give one another, when financial setbacks occur, must depend on the degree of consultation and acquiescence in their relationship.[12]
[12] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions which are by their nature different, within the framework of a de facto relationship. Many contributions in a de facto relationship, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value. The discretion I have is a wide one.

The evidence

The applicant relies on the following documents:
a)Affidavit of himself filed 17 October 2013;
b)Statement of his Financial Circumstances filed 16 April 2013;
c)Affidavit of his current partner, Ms C, filed 17 October 2013;
d)Affidavit of Dr J filed 6 November 2013.
The respondent relies on the following documents:
a)Affidavit of herself filed 30 October 2013;
b)Statement of her Financial Circumstances filed 31 May 2013;
c)Affidavit of her father, Mr H, filed 30 October 2013.
Of these witnesses, the parties themselves and Mr H were subject to cross examination, although in Mr Swayne’s case, this cross examination was not extensive. Neither Ms C nor Dr J were cross examined. In Dr J’s case, no arrangements had been made for him to attend court and it transpired that he had operating commitments on the days scheduled for the hearing.
Dr J is a neurosurgeon. He has been treating Mr Swayne since early 2012. His expertise to provide a diagnosis, in respect of the applicant, is not challenged.
His Affidavit is brief. He deposes that he diagnosed Mr Swayne with obstruction, at the craniocervical junction, and keyhole aqueduct syndrome in January 2012. In addition, Dr J deposes that he operated on Mr Swayne on 5 March 2012; 10 March 2012; and 15 April 2013.
In mid-2013, Mr Swayne’s solicitors asked Dr J to provide a letter regarding his working capacity. The letter is brief and reads as follows:
“Mr Swayne has significant disability with spastic quadriparesis, impaired gait and frequent falls secondary to a keyhole aqueduct syndrome. He has required multiple neurosurgical interventions and I consider that he is no longer in a condition where he is able to undertake employment.[13]
[13] See Affidavit of Dr J at Annexure A
I had the opportunity to observe Mr Swayne, both in the witness box and in court generally. He is confined to a wheelchair. His significant level of weakness in his arms was apparent, as was a level of disability in his speech. I accept that Mr Swayne is significantly disabled and, as such, is unlikely to ever again be in paid employment. For obvious reasons, this is one of the more significant evidentiary findings in the case.
In my assessment, both parties are honest individuals, who each did their best to recount the details of their financial life together. However, neither has a head for figures or any great level of financial acumen. They are not the sort of people, who routinely keep financial records.
As such, there is not a wealth of financial documents, available in this case. This is particularly so, in the case of Mr Swayne, who was in the grip of a substantial gambling addiction, for much of the relationship. For obvious reasons, such individuals do not often keep accurate records of their expenditure.
Ms Holme is an honest and hardworking person. She seems to approach financial matters, on a day to day basis, with little account of the financial “big picture”. As previously indicated, she was often placed in the invidious position of having “to rob Peter to pay Paul”. In these circumstances, her understanding of what was going on in the parties’ relationship, in a financial sense, was often chaotic. A situation obviously exacerbated by Mr Swayne’s own conduct.
Proceedings between former partners invariably evoke strong emotions, particularly where one party feels hard done by as a result of the circumstances. Such emotions are likely to inform how parties recollect past events and, when those events need to be reconstructed, for the sake of adversarial proceedings such as these, it is only to be expected that such a subsequent reconstruction should favour the party making it.
In this case, both parties currently view the other through a distorting prism of hostility. As such, both have, I think, followed the natural human tendency, in proceedings such as these, to minimise their own failings and maximise those of the other.

For those reasons, it is inevitable that both parties have attempted to reconstruct part of their financial history together. This tendency is particularly marked in Mr Swayne’s case. He has attempted to downplay the extent of his gambling losses and the implications of those losses in respect of both the demise of [A] and the creation of the current financial crisis surrounding the parties.
For all these reasons, it is impossible for me to conduct a financial audit of the parties’ financial affairs. Regrettably, their current situation is too disordered and uncertain for that to occur. In particular, there has been no audit undertaken of the affairs of [A], which indicates what level of income the business routinely generated for Mr Swayne, during the period of the parties’ relationship, which can be correlated with his possible gambling losses.
In what follows, I will attempt to analysis the evidence, relating to the various factual issues in dispute and, if I can, make findings, in respect of them, on the balance of probabilities, being in mind the seriousness of the issue involved.

(a) The parties’ work histories

At the time the parties met, in 1995, Ms Holme was employed, on a full time basis, as a Commonwealth public servant and had been so employed since 1994. Accordingly, at the time the parties met, she had only a modest amount of superannuation. She also worked as a [omitted], until 2010, earning up to $10,000.00, in addition to her public service income.
Ms Holme continued in full time employment, until shortly prior to [X]’s birth. Thereafter, she took paid maternity leave for a period of around eight months. She then returned to the workforce, on a part time basis, until [X] commenced school.
In 1995, Mr Swayne was employed by a company called [W]. He earned approximately $50,000.00-60,000.00 per annum. He commenced [A] in 2000. The business was Mr Swayne’s only source of income, from 2000 onwards.
On the basis of the evidence available to me, I am satisfied that

Ms Holme worked to the full extent of her capacities, bearing in mind her responsibilities to parent [X], during the course of the parties’ relationship. I am also satisfied that she contributed all her income to family purposes. I am not satisfied that this was the case, so far as Mr Swayne was concerned, for reasons which will follow.

(b) Initial contributions

When the parties met, Ms Holme had not been long employed by the Commonwealth Public Service. As such, she had modest amounts of superannuation and savings. I accept she also owned a motor vehicle and had some savings.
Mr Swayne had been previously married. I accept that he received a sum of around $105,000.00 in settlement of his matrimonial property affairs with his first wife. Of this sum, $65,000.00 was utilised to purchase the vacant land, on which the Property B property was subsequently constructed. The land was acquired on 6 May 1996. This must be accorded, as a significant contribution, which emanates solely from Mr Swayne.
The construction, of the home, at Property B, was financed by a mortgage in the sum of around $120,000.00. I accept that both of the parties utilised some of their savings to fit-out the house, particularly in respect of the finishing of the bathroom and the installation of blinds, curtains and drapes. The bathroom cost approximately $20,000.00, which emanated from Mr Swayne. Ms Holme’s contributions, in this regard, although important, were less significant.

(c) [A]

I accept Ms Holme’s evidence that she had little knowledge of the affairs of [A]. She had no direct involvement in the business. She was not a shareholder or director. She has never been employed by the company, either formally or informally. As such, she did not compile any of the business’ accounts. At all times, Mr Swayne was the alter ego of the business.
The financial implications of the end of Mr Swayne’s first marriage seem to have left a sour taste in his mouth. For this reason, he seems to have eschewed a deep level of financial entwinement with Ms Holme. As far as possible, he seems to have wished to keep his financial affairs, particularly in regard to his business, as separate from those of Ms Holme, as possible.
This understanding seems to have formed the basis of the parties’ financial relationship with one another. The parties agreed that they would share responsibility for paying their various bills, particularly in respect of the mortgage and other outgoings arising from their joint occupation of Property B. In addition, they would share the costs of supporting [X] and their general living expenses, but otherwise their finances would be kept separate from one another.
Ms Holme was content to go along with this simple arrangement, which was Mr Swayne’s preference. However, it was she who seems to have been primarily responsible for making it work. It was she, who would have to chase Mr Swayne for his contributions.
For his part, Mr Swayne seems somewhat lackadaisical, so far as financial matters are concerned. It was also his preference to exclude Ms Holme from what he saw as his business at [A].
In 2004, the business experienced difficulties. Due to an error, the business was not listed in the Yellow Pages, which was a major source for client referral. A supplier of [omitted] to the business was not paid and successfully sued for its debt.
As a consequence of these difficulties, the parties were compelled to extend the mortgage, secured over the Property B property, by approximately $70,000.00. This financial setback also coincided with other difficulties, relating to Mr Swayne’s health.

(d) Mr Swayne’s health

In early 2000, Mr Swayne was crushed by a trailer. As a consequence, he had to enter hospital for surgical treatment on a hernia. Following the operation, he began to suffer blackouts. These neurological incidents seem to have mystified the various medical practitioners consulted by Mr Swayne.
Between 2000 and 2004, Mr Swayne’s symptoms seem to have worsened. He suffered visual, motor and sensory problems, including signs of facial palsy. He began to lose his balance easily and started to shuffle in his walking because of a limited ability to lift his feet. His hand/eye co-ordination became impaired.
In October 2004, a tentative diagnosis of multiple sclerosis was made. Mr Swayne is somewhat un-effusive in his disposition. However, I accept that this diagnosis was emotionally devastating for him and caused him to believe that his life was effectively over. As a consequence, he became severely depressed.
The evidence regarding Mr Swayne’s psychological health is extremely limited. He is somewhat laconic in disposition. As such, he is not a person who presents as naturally inclined to talk about himself or his problems.
Counselling and other forms of psychological support are not things, which he would be easily inclined to seek out for himself. In these circumstances, I am satisfied that he began to self-medicate using alcohol and to find solace for himself in gambling.
In terms of his mental condition, at the time, and the personal circumstances from which it stemmed, Mr Swayne deposes as follows:
“I do not deny that I had a gambling problem. I do not deny that I was suffering from depression during this time either. I was suffering from a condition I did not understand and was watching my life slip away from me. Prior to becoming ill, in the early 1990s I was an [omitted].”[14]
[14] See Mr Swayne’s affidavit filed 17 October 2013 at paragraph 18
It is impossible not to be moved or feel anything other than sympathy for the situation in which Mr Swayne found himself. It was also a very difficult situation for Ms Holme, who lacked resources to deal with all the complex issues surrounding Mr Swayne’s illness, including his gambling and drinking. As a consequence of these significant pressures, the relationship between the parties fell into difficulties.
It is Mr Swayne’s perception that Ms Holme found his physical deterioration very confronting. The B property is located on a hill and, as a consequence, has a steep driveway. The property itself is accessed by a flight of stairs. Mr Swayne complains that he found it increasingly difficult to access the house. He asserts that Ms Holme provided him little support, which Ms Holme refutes.
From Ms Holme’s perspective, Mr Swayne became increasingly angry and difficult to live with, particularly after he had been drinking. She worried that he was not taking care of his health and seemed oblivious of his financial responsibilities. Without doubt, from both parties’ perspectives, the situation was extremely difficult.
By 2008, Mr Swayne’s condition had worsened. As a consequence of losing his posture, he suffered from back and neck pain. He lost saliva from the right side of his mouth. He continued to fall regularly. In this context, he was referred to Mr A, a clinical psychologist. Mr Swayne attended six sessions, with Mr A, who reported as follows:
“You will recall that when you first referred [Mr Swayne] to me in August 2009 that he was struggling to cope with his deteriorating neurological condition. He was very reluctant to talk about how this may be affecting him emotionally.
I have now seen him 6 times several times with his wife Ms Holme.
Unfortunately he remains anxious and often relies on excess drinking to calm himself down. This matter is made worse by the interaction with Ms Holme. She seems to have taken a ‘tough love’ approach and often their issues become fights or cold silences. I expect she too is very anxious and is keen to blame someone or find a miracle cure.
Despite this there has been modest progress and [Mr Swayne] seems to be slowly adjusting to the new realities of his life.”[15]
[15] Ibid at annexure B
Mr Swayne was recommended to return to Mr A, but did not do so. It is Mr Swayne’s position that he was unable to access Mr A’s rooms due to his incapacity. It seems to me to be more likely that he was disinclined to seek psychological support. Mr A referred him to another psychologist.
A significant omission, in this case, is any psychological assessment of the factors leading to Mr Swayne’s gambling, particularly the degree of his compulsion, if any, to gamble and what otherwise was the state of his mind. I will return to this issue.
As previously indicated, it was only in early 2012 that Dr J provided a definitive diagnosis, for Mr Swayne, of syringomeylia. I have earlier outlined Dr J’s prognosis for Mr Swayne. As previously indicated, I accept that he is unlikely to be able to return to the paid workforce. I have not been provided with any evidence regarding Mr Swayne’s life expectancy. I did not feel inclined to broach the subject, with him, directly myself.

(e) Contributions from 2004 onwards

As previously indicated, during the initial years of their relationship, the parties had an informal agreement to share expenses equally but otherwise agreed each would maintain some form of financial autonomy. It is Ms Holme’s evidence that this arrangement effectively broke down from 2005 onwards, when Mr Swayne’s gambling took hold.
Although Mr Swayne did contribute some moneys from time to time, I accept Ms Holme’s evidence that she increasingly became the person, who had to ensure that bills were paid and [X]’s school costs were met.
This state of affairs is most clearly demonstrated by accounts such as land tax, rates, gas, electricity and water, which still remain significantly outstanding. Mr Swayne seems to have completely abrogated his responsibility for the payment of these bills, which

Ms Holme did her best to pay – either through negotiating a payment regime or borrowing from her father. The same situation prevailed, so far as [X]’s school fees were concerned.
In these circumstances, I think it unlikely that Mr Swayne was making any significant direct financial contributions, which he provided to

Ms Holme, to buy things such as groceries or items of clothing, either for herself or [X] from 2005 onwards.
The reality seems to be that the moneys coming into Ms Holme’s hands were inadequate to meet the family’s expenses. She did the best she could, but the family’s overall financial position was gradually and inexorably deteriorating. The only logical explanation for this state of affairs is that Mr Swayne was not pulling his weight financially.
It is Ms Holme’s belief that Mr Swayne utilised the majority of moneys earned by him, from [A], from around 2005 onwards, went on gambling. In 2005, she opened an off-set savings account, in the parties’ joint names.
The purpose of the account was to offset the interest on the parties’ mortgage. It was essentially intended to be a savings account.

Ms Holme has provided some of the statements, which refer to this account for the period 12 January to 12 August 2005; and from 25 August to 27 August 2006.
These statements are characterised by numerous withdrawals, of relatively small amounts of money, most usually $100.00, which take place on the same day, at automatic teller machines, located at social clubs frequented by Mr Swayne.
By way of example, on 17 January 2005, a total sum of $900.00 was withdrawn at the [L] Rugby League Club, in nine separate withdrawals of $100.00. The only logical explanation for these withdrawals is that they were utilised in gambling. The parties were not in a position to be able to afford this level of expenditure on a regular basis. Ms Holme closed the account in question.
More recently, Ms Holme attempted to arrange for her bank account and Mr Swayne’s bank account, at [A], to be each regularly debited in respect of one half of the recurrent mortgage payment required for the Property B property.
Ms Holme’s evidence is from 2009 onwards, there were insufficient moneys, in Mr Swayne’s account, to satisfy the payment required. As a consequence, the bank issued a number of arrears notices. In these circumstances, it fell on her to maintain the mortgage.
Given Mr Swayne’s physical and psychological disability, I accept

Ms Holme’s evidence that she provided the lion’s share of homemaking and parenting responsibilities for [X]. I also accept that she became, by default, the parties’ main breadwinner. For long periods of the parties’ relationship, Mr Swayne’s daughter, Ms E, also lived with the family. Ms E left the home in 2007.
Ms E’s mother was not in a position to provide financial support for her daughter. In those circumstances, the responsibility fell on Ms Holme’s shoulders. She was happy to do so, particularly as [X] and Ms E are close.
However, in a strictly legal sense, Ms Holme was under no legal obligation to support Ms E. In my view, this is a contribution capable of some limited recognition pursuant to the provisions contained in section 90SF(3)(r).
However, this can only be done within a framework of “ordinary notions of justice and equity” between the parties concerned.[16] In my view, the relevance of Ms Holme’s contributions towards Ms E is that it exemplifies that she was required, more and more, to assume

Mr Swayne’s responsibilities in the family overall.
[16] See Robb & Robb (1995) FLC92-555 at 81,547
f) Mr H’s evidence and its implications
Mr H was a pleasant and frank witness. He is very family orientated and extremely fond of his daughter and granddaughter. He is seventy years of age and permanently retired. He is not a wealthy person, nor one who can be regarded as being punctilious in the keeping of his financial records.
It was to her father Ms Holme turned, when she was unable to pay [X]’s school fees. Mr H has provided unequivocal documentary evidence that he provided $2,520.00 for [X]’s school fees. It is likely that the overall sum provided, for the fees, was greater. However,

Mr H has not retained the records.
In addition, it is clear that Mr H provided the sum of $19,000.00 to enable Ms Holme to purchase the motor vehicle, which she currently utilises. I also accept that Mr H regularly provided other sums to his daughter, when called upon to do so. He did this without hesitation, but did not always keep a record of the payment.
Overall, Mr H estimates that, during the period of the parties’ relationship, he gifted his daughter a sum somewhere between $60,000.00 and $65,000.00. In the absence of documentary proof, I approach this figure with some caution. However, I accept that Mr H made significant financial contributions, which benefited the family concerned in this case overall.
In my view, in the circumstances of this case, Mr H’s significant direct financial contributions must be considered as emanating from the applicant, for the purpose of these proceedings. [17] Mr H became involved because he was aware that his daughter was struggling financially because Mr Swayne was, in some way, incapacitated.
[17] See Kessey & Kessey (1994) FLC 92-495 at 81,149
Because of his devotion for Ms Holme and [X], he was prepared to step into the breach. In addition, I accept that Mr H did a number of maintenance tasks around the parties’ home. He seems to be a handy sort of person, who enjoys gardening and maintenance tasks. In this regard, I accept Ms Holme’s evidence that she and her father did most of the routine maintenance around the Property B property.

g) Mr Swayne’s gambling

This is the central evidentiary issue arising in the case. It raises complex legal, equitable and indeed moral issues. It concerns the point at which Mr Swayne’s gambling losses should result in him being penalised for some form of economic fault, in these proceedings and, if so, how that fault should be allocated, in practical terms.
The difficulty in the case is that it is difficult to quantify exactly the level of Mr Swayne’s losses and place those losses within the context of his overall business affairs. As previously indicated, the standard of proof, in these civil proceedings, is the balance of probabilities.
As a result of the operation of section 140(2) of the Evidence Act 1995 (Cth), without limiting the matters which the court can take into account, in determining whether it is satisfied regarding any particular matter on such a balance, the court may also take into account the following:
“(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceedings; and
(c) the gravity of the matters alleged.”
In D & D[18], Carmody J said as follows:
“The balance of probability standard takes account of the instinctive judicial feeling that even in civil proceedings a court should be surer before finding serious allegations proved than when deciding less serious or trivial matters. However, the law looks for probability not certainty. There are degrees of probability but, when the law talks about ‘the balance of probabilities’, it envisages a degree of probability to the point that a court can be satisfied that the alleged fact in issue is more likely than not.” (footnotes omitted)
[18] D & D [2005] FamCA 356 referred to in C & C (2006) FLC 93-269 at 80,562
The allegation that Mr Swayne waged a sum in excess of $560,000.00 is clearly a serious one. Given the parties’ modest circumstances, the sum in question can only be regarded as significant. I acknowledge that I must consider the gravity of this allegation before making any specific findings, in respect of Mr Swayne’s gambling.
As such, I must be careful of reaching conclusions on the basis of “inexact proofs, indefinite testimony, or indirect inferences.”[19] This includes reaching any conclusion as to whether Mr Swayne was psychologically impaired, in some way, at the time of his gambling.
[19] See Briginshaw v Briginshaw (1938) 60CLR 336 at 362
Mr Swayne was not extensively cross-examined, by Mr Jones, regarding his mental state, when he was gambling. In addition,

Mr Swayne himself did not proffer any evidence in this regard, other than he believes he was depressed at the time. Rather, he was briefly examined as to the mechanisms of his gambling.

As previously indicated, Mr Swayne’s precise gambling losses cannot now be accurately tabulated. Nonetheless, it is Ms Holme’s position that the relevant sum should be somewhere in the region of $500,000.0. From Ms Holme’s perspective, it is essential that the gambling losses be added back so far as is possible, dollar for dollar, to avoid justice being occasioned to her.
In my view, such an approach is highly problematic, in the overall circumstances of this case, and has the potential to be grossly unfair to Mr Swayne. There are always implicit risks in bringing accounting or arithmetical considerations to what is essentially an equitable exercise.
However, given the significance of the moneys lost, particularly given the parties’ current parlous financial circumstances, it would also be grossly unfair, to Ms Holme, if the court did not have regard to the significant level of Mr Swayne’s losses, in some manner.
It is clear from authority that a direct accounting or arithmetical approach is not the only means to resolve potential unfairness arising to a party. There is no prescribed response or code to issues of the kind raised by each of the party. What is important is that the court recognises such matters consistently within overall considerations of justice and equity.
In Watson & Ling Murphy J said as follows:
“Where the Court has determined that it is just and equitable to make an order pursuant to s 79(2) or s 90SM(3) and there is clear evidence that one party has engaged in conduct and, but for that conduct, the legal and equitable interests of a party or the parties (or the value of those interests) would have be significantly greater, justice and equity may require recognition of the unfairness inherent in those circumstances in the terms of the orders to be made.
How might that be recognised? First, consistent with existing authority, it can be recognised pursuant to s 75(2)(o) (cf s 90SF(3)(r)) (see, for example, AJO & GRO (2005) FLC 93-218, Browne & Green (1999) FLC 92-873 and Cerini). Secondly, it might be contended that it might be recognised within the assessment of contributions. This Court has long eschewed the notion of “negative contributions” (see, for example, Antmann & Antmann (1980) FLC 90-908). Nevertheless, it might be argued that the “non-dissipating party” can be seen to have made a disproportionally greater indirect contribution to the existing legal and equitable interests (for example to their preservation) if it is established that, but for the other party’s unilateral dissipation, those existing legal and equitable interests would have been greater or had a greater value.
The assessment of the circumstance under discussion is, ultimately, a matter of discretion (see, for example, Cerini at [46] and Townsend at 81,654). Equally, however, authority dictates that it will be “the exception rather than the rule” (Cerini at [46]) that a direct dollar adjustment equivalent to the amount of the alleged dissipation of the pool is made to the otherwise entitlement of a party. It may be that aspects of the erstwhile treatment of legal fees pre-Stanford (see, for example, Chorn & Hopkins (2004) FLC 93-204) will require further consideration in an appropriate case.
Importantly, of course, as has been emphasised in many authorities including those cited above, not every dissipation by a party can be seen to involve an affront to justice and equity; again the circumstances of the individual relationship must be assessed.” [33]
[33] Watson & Ling (supra) at [33] – [34]
In my view, in all the circumstances of this case, the appropriate way for the court to consider the issue of Mr Swayne’s waste of assets, within the context of what is just and equitable overall, is through the mechanisms provided by section 90SF(3)(r).
This is also the appropriate stage at which the court may consider the implications arising from the level of debt remaining with Mr Swayne, by virtue of him retaining responsibility for the debts relating to the demise of [A]. In my view, such an approach is commensurate with the holistic nature of the task arising, for the court, pursuant to section 90SM. The court must be careful of overly compartmentalising its responsibilities.
For all those reasons, I find that the pool of assets, available to be divided between the parties, is as follows:

Assets

$

Property B

560,000.00

Jaguar XJ 6 motor vehicle (applicant)

3,000.00

Quintrex boat (applicant)

4,500.00

Subaru motor vehicle (respondent)

11,300.00

Total

578,800.00

Liabilities

Mortgage on Property B

143,336.00

Transact

1,466.22

[K] Accountants

9,210.00

ACT Revenue

6,515.00

Actew AGL

7,994.00

Natural Gas account

6,232.00

Total

174,753.22

Net assets

404,046.78

Superannuation

[P] (respondent)

181,310.56

[Z] (applicant)

45,000.00

Total superannuation

226,310.56

Step Two – Assessment of contributions

Section 90SM(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and may be taken into account generally, as contributions in a total sense.
The task required of me, pursuant to section 90SM(4), of the Family Law Act, thus is to weigh and assess the desperate contributions of the parties, to arrive at an outcome, which is both appropriate and just and equitable, in all the circumstances. Contributions which are different in quality and nature, must be compared. The exercise is not a purely arithmetical or accounting one.
The relationship between the parties was one of significant length, being of around seventeen years in duration. It ended when Mr Swayne left the Property B property, because he found it difficult to access the home, because of its steep driveway and multiple stairs.
The marriage produced one child, now fourteen years of age. When the parties began their relationship, they loved one another. As such, they were committed to providing the other with support, in myriad ways, arising as a consequence of their mutual commitment to one another.
Accordingly, in my view, their relationship was analogous to a marriage, with each accepting the obligation to provide support to the other in response to whatever exigencies life threw up for them. For the parties, in this case, there have been many such unforseen exigencies.
Undoubtedly, as a result of the tragic and unforeseeable circumstances, arising from Mr Swayne’s illness, the parties’ relationship was characterised by an extreme level of difficulty.
In these circumstances, I am satisfied that Ms Holme discharged significantly more of the parenting and homemaking responsibilities, for [X], than did Mr Swayne. She did so in arduous and difficult circumstances.
I accept that, from 2004 onwards, Mr Swayne retreated, into himself, as a consequence of the trauma relating to his debilitating illness. He found solace in drinking and gambling. Activities which he undertook alone. Why he did so is readily understandable. However, the fact remains that Ms Holme had to fill the void in the family left by him.
This void was created, not only by the absence of input into the home and into the parenting of [X], but also by the abrogation, by Mr Swayne, of a significant degree of his financial responsibility for the family.
Although, Ms Holme found the situation of Mr Swayne’s illness to be confronting and emotionally overwhelming, she did not abandon him. I accept however that her efforts to assist Mr Swayne, given the magnitude of his problems, proved to be woefully inadequate.
To a large extent, I accept that, from 2004 onwards, to a very significant degree, Mr Swayne disembarked from the parties’ shared commitment to their relationship and elected to navigate on his own. In these circumstances, it was difficult for Ms Holme to provide

Mr Swayne with any great buffer. Mr Swayne’s effective withdrawal from the family caused the parties’ joint vessel to come close to founder.
I use these nautical metaphor because of what was said by the Full Court in D & D:
“By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s.79 principles.”[34]
[34] D & D [2003] FamCA 473 at paragraph 49
In this case, Mr Swayne diverted the financial resources available to him, as a consequence of his operation of [A], to his own devices. He did so without any form of acquiescence, either actual or passive, from Ms Holme. In my view, this is an example of solo sailing, which compelled Ms Holme to take up the slack, in the family, in both financial and practical terms.
In these circumstances, I am of the view that Ms Holme’s overall contributions, both financial and non-financial, were significantly superior of Mr Swayne, from 2004 onwards. She utilised the entirety of her salary to keep the family afloat. In addition, she relied on her own father to provide top up moneys, particularly in respect of [X]’s school fees and other pressing bills.
In a number of cases, the Full Court has generally disapproved of the concept of negative contributions.[35] However, given Mr Swayne’s effective abrogation of responsibility for the family, to Ms Holme, it is difficult to assess his role in the relationship, from 2004 onwards, in anything other than negative terms.
[35] See In the Marriage of Spiteri (2004) 33 FamLR 109 at 119
However, notwithstanding my criticisms of Mr Swayne, I must not lose sight of the invidious circumstances, in which he found himself, through no fault of his own. In the prime of life, he was struck down with a debilitating and mysterious illness. He is not to be criticised merely because he lacked the psychological resources to deal with this extreme level of misfortune.
In the period between 1995 and 2004, I accept that Mr Swayne made many direct financial contributions, which benefited the family. I also accept that he was involved in other aspects of the family, during this period and continued to be so afterwards, but to a lessening degree.
It also is likely to be the case, notwithstanding the depredations arising from his gambling that, after 2004 he made some direct financial contributions, particularly in respect of the mortgage on Property B.
In addition, I must not lose sight of the fact that, at the outset of the relationship between the parties, Mr Swayne brought significant capital into it. His contribution of the land, on which the former family home was subsequently constructed, must be regarded as significant, particularly given the parties’ limited asset pool now.
Without the contribution of the land, the parties’ current financial situation is likely to have been very different. In my view, it would result in a level of injustice, to Mr Swayne, if some weight was not given to his superior initial contribution of capital into the relationship.
In my view, the evidence is sufficient for me to conclude that there was such a discrepancy, in the parties’ respective level of asset backing, at the start of their relationship, that this is a factor, which must be given ‘special recognition”[36] in Mr Swayne’s favour.
[36] See Pierce & Pierce (1999) FLC92-844
However, Mr H also regularly injected moneys into the family unit, to keep “the wolf from the door”. He had no legal obligation to advance these sums and did so only because of his devotion to his daughter and granddaughter. These must be accounted a direct financial contribution attributable solely to the wife.
Accordingly, notwithstanding the significance of Mr Swayne’s capital contributions, at the beginning of the parties' relationship, in a total sense, I find Ms Holme’s overall contributions to be markedly greater than those of Mr Swayne.
However, I must be careful not to conflate any considerations relating to so-called “negative” contributions attributable to the applicant with any allowance made pursuant to section 90SF(3)(r) and so potentially penalise Mr Swayne twice for his diminution of the asset pool, as a consequence of his gambling losses.
In all these circumstances, I have come to the conclusion that the parties’ respective contributions to their pool of non-superannuation assets should be assessed 60/40 percent in Ms Holme’s favour. Obviously, this is prior to any consideration arising pursuant to the matters contained in section 90SF(3).
Superannuation is a form of compulsory saving for retirement. Upon becoming a Commonwealth Public Servant, in 1994, it was not open to Ms Holme to opt out of the [P] scheme. In paternalistic terms, it was determined that superannuation was a benefit Ms Holme would have, whilst she remained a public servant, whether she wanted it or not.
However, superannuation represents a considerable benefit, particularly in this case, so far as Ms Holme is concerned. Due to the nature of superannuation, Ms Holme’s entitlements have been protected from possible depredation, as a consequence of Mr Swayne’s gambling. In Ms Holme’s case, her superannuation remains inviolable until either she retires from the workforce or she becomes incapacitated. It is a deferred benefit.
Perhaps security of employment and benefits on retirement were some of the attractions, of the Public Service, for Ms Holme, when she joined in 1994. No evidence was provided in respect of this issue. More likely, in her twenties at the time, she gave no great thought to how she would fund her far distant retirement. Rather, her benevolent and perspicacious employer assumed that responsibility for her, through its compulsive authority.
As a consequence of her joining the Commonwealth Public Service, just under twenty years ago now, by dint of small but regular payments, made on her behalf by her employer, Ms Holme’s superannuation has grown to a sum of around $180,000.00. Mr Swayne, obviously, has made no direct contribution to the accumulation of this sum.
In my assessment, Mr Swayne is not a person of any great financial acumen. Rather, he is a person who lives in the financial moment. As such, he has a propensity to spend whatever is available to him. This tendency is most readily demonstrated by his disastrous level of gambling.
As a consequence of his decision to pursue self-employment, from 2004 onwards, unlike Ms Holme, Mr Swayne has not had a benevolent or far-sighted employer, paternalistically looking out for his situation in retirement. In those circumstances he has only the modest sum of $45,000.00, put away for his retirement, which now, due to his illness, is upon him.
When Mr Swayne and Ms Holme began their relationship, they joined their financial lives together cautiously and with significant reservations on Mr Swayne’s part. They agreed they would share financial responsibility for keeping a roof over their head and would share their joint living expenses, including the cost of providing for [X] and her education, but otherwise their finances would be kept separate. As such, there was no specific planning for their joint financial future.
This was particularly so in respect of [A]. It was always regarded, by Mr Swayne, as being his business. He was responsible for its affairs, to the total exclusion of Ms Holme. These affairs including paying its taxation liabilities and providing for its employees, of which he was one, including making financial provision for their retirement.
No doubt, the parties did not give any great thought to these matters. From Ms Holme’s perspective, from 2004 onwards, she was living day to day financially. Mr Swayne had other serious concerns, relating to his illness and the debilitation, which it brought.
Accordingly, in my view, there was no tacit understanding between the parties that they would make any joint provision for their retirement. Accordingly, in my view, Mr Swayne must assume significant responsibility for the fact that his current superannuation circumstances are so dire.
This is not a case where one party, at the behest or the acquiescence of the other, has forgone a particular form of employment, with the implicit security of superannuation, in order to be a homemaker or to gain a greater income in the short term on the explicit understanding that the other is making provision for the retirement of them both.
In total, the parties’ current holdings of superannuation are represented by a sum of approximately $225,000.00, of which Ms Holme has contributed directly about eighty per cent in her [P] superannuation. However, as I am at pains to point out, the task for the court is not a purely arithmetical or accounting one. Rather, it is one which is to be informed by considerations of overall justice and equity.
For the reasons outlined above, I find that Ms Holme’s direct contributions to the accumulation of the parties’ superannuation holdings are markedly superior to those of Mr Swayne, particularly following the inauguration of [A].
However, due to the manner of his employment, Mr Swayne had significantly less scope to contribute to superannuation. Although it was largely his choice, Mr Swayne did not have a benevolent employer, as did Ms Holme.
In all these circumstances, I have come to the conclusion that the parties overall contributions, towards the acquisition of their current holdings of superannuation over the entirety of their relationship should be assessed as being 70/30 percent in Ms Holme’s favour.

Step Three – section 90SF(3) – the prospective needs of the parties

I am now required to consider the various matters set out in section 90SF(3) and in particular to consider whether any further adjustment should be made in favour of the party. The section 90SF(3) factors are mainly, but not only, prospective in nature. Specifically, they are as follows:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.

Paragraph (a) – Mr Swayne was born [in] 1964. Ms Holme was born [in] 1965. Accordingly, both parties are in their late forties. Ordinarily, each could anticipate having many more years of productive life before him or her.
Regrettably, this is not the case, so far as Mr Swayne is concerned. He suffers from a serious and debilitating illness, which has left him physically and psychologically infirm. To all intents and purposes, I accept that his working life is over.
Ms Holme’s health is good. As such, she is in a markedly superior position to that of Mr Swayne. This, when coupled with the considerations arising under section 90SF(3)(b) must be a factor which militates significantly in favour of Mr Swayne.
Paragraph (b) – for obvious reasons, this is one of the more significant considerations arising in this matter. Due to his illness, Mr Swayne lacks the physical and mental capacity to obtain gainful employment. He will remain an invalid for the remainder of his life.
During his working life, Mr Swayne earned his income through physical endeavours. He is now confined to a wheelchair. He faces an uncertain medical future, having recently undergone three neurological operations.
On the other hand, Ms Holme is a permanent Commonwealth Public Servant. Her employment provides her with a modest but secure income. Given her robust health, she is likely to have many years of paid employment before her.
It has been said by the Full Court of the Family Court that the most valuable “asset” which a party can take out of a marriage is an “a substantial reliable income earning capacity”.[37] In this case, it is axiomatic that Ms Holme has such an asset but demonstrably Mr Swayne does not.
[37] See Clauson & Clauson (1995) FLC 92-595 at 81,911
At present, Mr Swayne has no recurrent source of income. He is totally reliant on Ms C. Ms Holme enjoys an income of around $70,000.00. In my view, clearly the factors arising under this criterion favour Mr Swayne to a marked degree.
Paragraph (c) – there is one child of the relationship, [X], who has recently turned fourteen. She is a secondary school student, who has some degree of autonomy. However, [X] still needs support and guidance. She lives exclusively with her mother and sees her father rarely, if at all.
Given [X]’s level of maturity, Ms Holme’s responsibility to care and provide for [X] are not likely to significantly restrict Ms Holme’s capacity to remain in the workforce. Ms Holme will not have to restrict her work hours or forego a promotional opportunity because of any obligations to care for [X].
However, the burden of providing for [X] financially, particularly for paying her school fees, will fall exclusively upon Ms Holme. These fees are in the vicinity of $6,000.00 per annum. Ms Holme’ obligation to support [X], without the probability of any contribution from Mr Swayne, is a significant consideration, which will be considered more closely under the remit of section 90SF(3)(q).
Paragraph (d) – for all sorts of reasons, Mr Swayne faces an uncertain future. I accept his evidence that he utilised the majority of the moneys received by him, from the sale of [A], to purchase a new wheelchair for himself and pay other medical bills.
In these circumstances, I find that Mr Swayne is likely to have significant costs relating to the satisfaction of his medical expenses. He requires regular physiotherapy. He falls and injures himself frequently. As matters stand, he has no facility to supply these needs.
Paragraph (e) – apart from [X], neither party has any responsibility to support any other person.
Paragraph (f) – as a consequence of her members of the Commonwealth Public Service, Ms Holme has accrued a significant benefit in the [P] Superannuation scheme and will continue to augment that benefit during the remainder of her working life.
For reasons already provided, Mr Swayne is not so well equipped, in respect of superannuation and, more significantly, has no capacity to provide for his retirement by way of any future contributions to any superannuation scheme of which he is a member.
Accordingly, at the present time, Mr Swayne faces a difficult retirement, in financial terms, whereas, Ms Holme has possibly as long as ten to fifteen years to make provision for her retirement. The current discrepancy in the parties’ respective capacities to prepare for and fund their retirement is a factor which favours Mr Swayne.
Paragraph (g) – one inevitable consequence of the end of the majority of both marriages and de facto relationships, is a drop in the standard of living of one or sometimes both of the parties concerned. It is trite, but true nonetheless that two households usually cannot live as comfortable as one. What is important, in respect of this consideration, is that any drop in living standards should not be born disproportionately by one party.
The end of the parties’ relationship has been an unmitigated financial disaster for them both. For Ms Holme, the standard of living, to which she aspires, is inextricably tied up with her continued occupation of the former family home at Property B.
From Mr Swayne’s perspective, a reasonable standard of living entails that he should be able to live with some dignity and supply his basic medical needs, notwithstanding his significant level of disability. I accept that he finds it difficult to be totally financially dependent upon Ms C.
Accordingly, as I observed at the outset of these reasons for judgement, the respective needs of the parties, in financial terms, are significant but the resources to meet those needs are modest.
In considering a reasonable standard of living for each of the parties, the court must bear in mind what is just and equitable for them each, given the overall circumstances.
This means that Ms Holme’s aspiration to retain Property B, understandable though it is, should not be given pre-eminence over

Mr Swayne’s expectation of a dignified life, if it would be unfair to him.
Paragraph (h), (j), (k), (l), (m), (n), (o) & (p) – these considerations are not relevant in the present case.
Paragraph (i) – as matters currently stand, Mr Swayne has significant debts, particularly to the Australian Taxation Office, as a result of the failure of [A].
In his evidence, he indicated that he had considered the possibility of pursuing bankruptcy, given his apparent level of insolvency, but has not done so, pending the outcome of these proceedings, which have the potential to confer a cash settlement upon him.
One of the issues arising, in this case, is that such a sum has the potential to be entirely consumed by Mr Swayne’s creditors, leaving him destitute. This is a consideration to which I will return under the considerations arising under paragraph (r).
Paragraph (q) – the weight to be attached to a child support assessment will vary in the circumstances of each particular case concerned. The court is directed to look at the amount of the assessment, the financial circumstances of each of the parties, the needs of the children concerned and whether child support is likely to be paid regularly and at an adequate rate in future.[38]
[38] See Clauson & Clauson (supra) at 81,911
In this case, given his circumstances, it is unlikely that Mr Swayne will be assessed to pay any significant amount of child support for [X]. Certainly, he will be unable to contribute towards her school fess. To all intents and purposes, [X] will be supported by her mother, augmented by assistance from Mr H.
This burden is likely to remain on Ms Holme’s shoulders for the next three or four years. Given her straitened financial circumstances, it is a consideration, which favours her to a significant degree.
Paragraph (r) – at the beginning of their relationship, neither party was in an exceptional financial position. Mr Swayne was a skilled manual labourer, whilst Ms Holme was a low level public servant. At an early stage, they purchased land and built a home, in common with countless other Australian couples.
No doubt, their implied and common aspiration was to gradually pay off the mortgage on the property, so that they would own it outright. I accept that, largely as a consequence of Mr Swayne’s gambling losses, this aspiration has been deferred indefinitely, so far as Ms Holme is concerned.
The amount lost by Mr Swayne cannot be definitively calculated. I accept that, when regard is had to the parties’ current level of assets, the sum must be regarded as being highly significant. From 2004 onwards, due to constant losses and the failure of Mr Swayne to contribute financially, the parties’ overall financial position went inexorably backwards. They were not in a position where the mortgage could be gradually reduced and their wealth incrementally grown.
Notwithstanding the sympathy one must feel for Mr Swayne, in my view, considerations of justice and equity dictate that his gambling losses into account, in some significant way, in Ms Holme’s favour.
As a result of the view I have taken of how Mr Swayne managed the business of [A], I have determined that he should be responsible for its debts. I am satisfied that these debts have accrued as a corollary of

Mr Swayne’s gambling, which led him to divert moneys away from the payment of his recurrent debts, particularly taxation debts, into gambling. As previously indicated, I am well aware that there is a real risk that this approach will mean, in real terms, Mr Swayne will be left with very little, once his creditors have been paid out.
In these circumstances, I must be careful about a double counting of the gambling losses, bearing in mind that, to some degree, the gambling losses have been crystallised in the moneys owing by [A]’s creditors, which Mr Swayne will be responsible for discharging.
Mr Swayne’s child Ms E, lived with the parties for a significant period of their relationship. During this period, Ms Holme made regular financial and non-financial contributions to support Ms E. She was happy to do so, given the close relationship between Ms E and [X]. In all the circumstances of this case, I do not consider that this is a significant factor.
Paragraphs (s) & (t) – these are not relevant considerations in the case.

Conclusion in respect of section 90SF(3) factors

In my view, the most significant factor arising under section 90SF(3) is Mr Swayne’s health. He is forty-nine years of age and is currently destitute. He suffers from a rare and debilitating condition, which means that he is incapable of providing for his own support.
In Waters & Jurek[39] the Full Court remarked that analogous provisions to those in section 90SF(3), which relate to matrimonial property proceedings, are to be given “real rather than token weight”. Accordingly, given the level of Mr Swayne’s disability, when coupled with the modest extent of the asset pool and the level of debt, with which Mr Swayne will leave the relationship, must mean that the allowance to be made in his favour, at this stage, must be significant indeed.
[39] See Waters & Jurek (1995) FLC92-635 at 82,376
I assess the appropriate weighting to be in the vicinity of twenty-five per cent of a small net non-superannuation pool. However, the modest level of the pool is attributable to losses inflicted on the parties by

Mr Swayne alone.
In my view, it would offend proper considerations of justice and equity, if this allowance was not significantly discounted to reflect the fiscal crisis Mr Swayne’s conduct has wrought for both him and Ms Holme.
Having considered all of the various section 90SF(3) factors, I have come to the conclusion that the weighting to be made in Mr Swayne’s favour should be reduced by fifteen per cent to reflect the gambling losses. Accordingly, I have come to the conclusion that the parties’ non-superannuation assets should be divided equally.
So far as the superannuation is concerned, I propose to allow a further ten per cent allowance, in Mr Swayne’s favour to reflect his significant level of disability. This means that the parties’ superannuation is to be divided 60/40 per cent in Ms Holme’s favour.

Conclusion and form of orders

This is a tragic case, which is illustrative of the destructive consequences of gaming machines for the vulnerable. As a consequence of Mr Swayne’s gambling, explicable by his reaction to his debilitating illness, the parties’ seventeen year relationship has been a financial catastrophe for each of them.
In these circumstances, the court is left with little scope to satisfy the pressing needs of each of the parties. The depleted asset pool will leave both parties in need. It is a case of the court attempting to distribute, what is left, as fairly and as equitably as it can.
Fifty per cent of the parties’ net assets is represented by $202,023.39. If Ms Holme retains the Property B property and all the liabilities relating to it, together with her motor vehicle, it will be necessary for her to pay a sum of $194,523.39 to Mr Swayne, on the basis that he retains the Quintrex boat and his motor vehicle.
If Ms Holme’s evidence is correct, she has a capacity to borrow such a sum. It will leave her level of indebtedness in respect of any mortgage on Property B, somewhere in the vicinity of $337,000.00. It is at the upper range of her capacity to borrow. It also leaves her with the various debts, particularly the outgoings relating to the property, which remain significant and have been outstanding for some time.
I will round down the sum to $194,000.00. If Ms Holme is not able to raise the sum or believes that it is not financially viable for her to borrow it, the Property B property will have to be sold and the net proceeds after the payment of the parties’ respective joint debts, be divided equally between them.
I can understand why Ms Holme places particular emphasis on retaining Property B, which has been her and [X]’s home for so many years. The outcome proposed provides the possibility of this outcome being attained, although not without the possibility of significant financial privation on Ms Holme’s part.
On the other hand, once the debts of [A] have been taken into account, Mr Swayne will be left with a sum of around $59,000.00. Such a sum can go little way to providing for his ongoing financial needs, other than in the extremely short term. He will remain dependent upon Ms C and ultimately the State. This is tragic, but ultimately is as a consequence of the losses he inflicted, not only on himself, but also on Ms Holme.
The other significant aspect of the case concerns their accumulated superannuation. Due to its nature, it remains preserved and has not been depleted by Mr Swayne’s gambling. It can accordingly, be utilised largely for its intended purpose, which is to safeguard the parties in their retirement. However, as a consequence of decisions made by Mr Swayne, particularly relating to his self-employment, there is a significant imbalance in the parties’ respective superannuation backing. It is also likely to be the case that Ms Holme is more focussed on the here and now of her financial situation, rather than what it will be, on her retirement.
Mr Swayne has a pressing need for whatever sums he can liquidate now. I have decided that the parties’ total superannuation should be divided 60/40 per cent in Ms Holme’s favour. Given her superior contributions, I consider this a just and equitable outcome. It will require a split from her superannuation of $45,524.22 to be made from her superannuation. I will round down this sum to $45,000.00.
The outcome, which I propose, leaves Ms Holme with a significant level of debt but potentially still in the housing market and in the home of her preference. It minimises disruption to [X].
Ms Holme is in her late forties. She will have to continue to work, at the very least, until her sixties. She is fortunate to have secure employment, in this regard.
Given the amount of superannuation, which she retains, and the capacity she has to replenish it, through her continued participation in the workforce, Ms Holme may be able to overcome her current parlous financial position. I acknowledge that Mr Swayne is not in a similar position, largely because of his compromised health.
However, if he is able to access his superannuation, including the split to be made in his favour, it will allow him some capacity to provide financially for himself. However, I acknowledge this his future is a difficult one.
Notwithstanding the heart breaking difficulty, which this case creates, I am satisfied that the outcome, which I propose, represents a just and equitable one, when all the circumstances are considered.
So far as [X] is concerned, I can see little point in making extensive orders, which are unlikely to be followed. I do not think that such an outcome would be in [X]’s best interests. I am also concerned that such an order is likely to create an expectation for Mr Swayne, which cannot be satisfied.
[X] is a child of fourteen years of age. She knows her father well. She is also likely to be aware of the reasons why her parents are in such difficult financial circumstances. It would seem to be the case that she is aligned, with her mother, whose household she shares.
Ms Holme has said that she has no objection to [X] seeing her father, when she wishes to do so. In these circumstances, I would hope that Ms Holme would speak positively of Mr Swayne to [X], reminding her that her father loves her and cares about her.
In these circumstances, I propose making an order that [X] live with her mother and spend time with her father, on terms and conditions to be agreed between the parties, from time to time, but subject to [X]’s wishes. I will also make an order that Ms Holme encourage and support [X] to spend time with her father.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding three hundred and fifty-six (356) paragraphs are a true copy of the reasons for judgment of Judge Brown

Associate:

Date: 19 December 2013

[2013] FCCA 2193

19 December 2013

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Jurisdiction

Natural Justice

Procedural Fairness

Estoppel

Fiduciary Duty

Assets	$
Property B	560,000.00
Jaguar XJ 6 motor vehicle (applicant)	3,000.00
Quintrex boat (applicant)	4,500.00
Subaru motor vehicle (respondent)	11,300.00
Total	578,800.00
Liabilities
Mortgage on Property B	143,336.00
Transact	1,466.22
[K] Accountants	9,210.00
ACT Revenue	6,515.00
Actew AGL	7,994.00
Natural Gas account	6,232.00
Total	174,753.22
Net assets	404,046.78
Superannuation
[P] (respondent)	181,310.56
[Z] (applicant)	45,000.00
Total superannuation	226,310.56