W and W - [2002] FMCAfam 43

FEDERAL MAGISTRATES COURT OF AUSTRALIA

W & W

[2002] FMCAfam 43

FAMILY LAW – Property – share trading and other losses – application that losses be notionally added back or treated as premature distribution of matrimonial property refused – s.79 Family Law Act 1975.

Applicant:

D M W

Respondent:

B J W

File No:

ZP1654 of 2001

Delivered on:

22 January 2002

Delivered at:

Parramatta

Hearing Dates:

8 & 9 January 2002

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr Jackson

Solicitors for the Applicant:

Matthews Dooley & Gibson
DX 8104 Blacktown

Counsel for the Respondent:

Mr Thistleton

Solicitors for the Respondent:

McDonnell Schroder
DX 8101 Blacktown

ORDERS

That the husband and wife do all such things to forthwith list the property situate at and known as 158 B Road, B (lot …… DP ……) for sale by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the President of the Real Estate Institute of NSW or his nominee.
That the proceeds of sale pursuant to order 1 above be disbursed as follows:
(a)Firstly in payment of the costs of sale including the real estate agents fees and legal fees;
(b)In payment of any outstanding rates and charges;
(c)In payment of 65% of the net balance to the wife; and
(d)The balance to the husband from which he is to pay to the wife $7,384.00.
In the event that contracts for the sale of the property have not been exchanged within three months of the property being listed for sale, (copy in 1[c] of the orders sought by the husband, then copy in order 3, 4, 5 and 6 of the orders in the husband’s response except in order 6 it should be the Federal Magistrates Court not Parramatta Family Registry).
That all documents produced under subpoena shall be collected by the solicitor who issued the subpoena and all documents forthwith returned to their owner.
That all exhibits be returned at the expiration of one calendar month unless an appeal is lodged.
That all outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

ZP1654 of 2001

D M W

Applicant

And

B J W

Respondent

REASONS FOR JUDGMENT

The proceedings

These are proceedings for the adjustment of property.

The application

D M W (“the wife”) filed an application for final orders in the Family Court on 12 January 2001. At the conclusion of the proceedings counsel tendered a minute of the orders sought by her at the hearing. I incorporate into these reasons the form of order sought by her:
1.   That the husband forthwith vacate the former matrimonial home.
2.   That within seven (7) days the Husband do all such acts and things and sign all such documents as may be required to transfer to the wife, at the expense of the wife, all of his right, title and interest in the real property situate at and known as 158 B Road, B being the whole of the land more particularly described in Folio Identifier ……/…….
3.   That the wife indemnify the husband against all payments and liabilities pursuant to the real property including all rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
4.   That the husband pay the wife a sum determined by this Honourable Court once the husband has disclosed his financial situation to give the wife an overall property settlement of seventy (70%) per cent of the net matrimonial assets.
5.   That the husband pay the wife the sum of ten thousand dollars ($10,000.00) by way of spouse maintenance.
6.   That the husband pay the wife a sum equivalent to fifty (50%) per cent of any of his superannuation funds.
7.   That the husband pay the wife’s costs of and incidental to this Application.
B J W (“the husband”) filed an amended response to the application for final orders in the Family Court on 2 April 2001. The orders he sought were:
1.   That the parties join in the sale of the former matrimonial home located at 158 B Road, B.
2.   After payment of the costs of sale and discharge of any encumbrances, that the parties each receive fifty (50%) per cent of the net proceeds, the wife to pay to the husband an additional sum of seven ($7,000) thousand dollars from her share of the sale proceeds.
3.   That the husband retain the Holden Kingswood and boat and that the wife retain the contents of the former matrimonial home and cash sums held in trust by her solicitor.
4.   That the parties otherwise be declared the owner of property in their respective possession and indemnify the other in relation to any current liability attached thereto.
5.   That the wife’s application be otherwise dismissed.

Short history

The husband was born on 5 October 1946 and is now aged 55 years.
The wife was born on 4 May 1954 and is now aged 47 years.
The parties commenced cohabitation about one month prior to their marriage on 9 December 1974.
The parties separated on 5 September 2000. Although they are separated they continue to reside at the former matrimonial home.
The marriage still subsists.
There are four children of the marriage. They are: L E W born 24 May 1978; R E W born 8 January 1981; B I W born 24 November 1982 and R M W born 1 September 1984.

The evidence

The wife relied on the following evidence:
·Her affidavit sworn 12 December 2001 and filed 14 December 2001 and her oral testimony.
·Her financial statement sworn 9 January 2001 filed 12 January 2001.
·Affidavit of Elizabeth Picker sworn 31 July 2001 and filed that same day. This deponent was not cross-examined.
·
Affidavit of Dr Christine Tan sworn 7 January 2002 and filed

8 January 2002. This deponent was not cross-examined.
The husband relied on the following evidence:
·His affidavit sworn 10 December 2001 and filed 12 December 2001 and his oral testimony.
·His affidavit sworn 19 December 2001 and filed 24 December 2001.
·His financial statement filed 27 July 2001.
·Affidavit of Dr Torrevillas sworn and filed 24 December 2001 and his oral testimony. This witness was not cross-examined.
Both parties tendered documents in their respective cases that became exhibits the proceedings.

The issues

The primary issues are these:
·Whether the husband has given full and frank disclosure of his financial circumstances.
·Whether the husband has wasted in a Kowaliw (1981) FLC 91-092 sense the proceeds of sale of the South Australian property and share transactions.
·Whether the proceeds of sale of the South Australian property should be notionally added back and otherwise treated as a notional distribution made in favour of the husband.
·The wife’s capacity for paid employment.
·The husband’s capacity for paid employment.

Relevant facts

The parties met in about 1971 or 1972. When they met the wife was working in a factory at Burwood, where she had worked for several years. She was 16 or 17 years old living with her parents. The husband started work as a window cleaner in August 1972. He was keenly interested in the share market, having commenced trading in about 1966.
The parties are in dispute as to the date when they commenced cohabitation. I am satisfied that cohabitation occurred at or within four weeks of their marriage. They agree that at the commencement of cohabitation neither owned any assets of significance. Both had few personal effects and small savings.
Upon their marriage they moved into a rented unit at Summer Hill.
The wife continued to work after the marriage. She stopped working in the mid-1970s after she suffered a perforated eardrum. She gave up work prior to the birth of the parties’ elder son, L. Since then she has not worked in the paid workforce.
The husband worked as a contract window cleaner, operating his own business until late 1993 or early 1994. He earned about $25,000 per annum as a window cleaner.
On 21 March 1980 the parties purchased the former matrimonial home at 158 B Road, B. The purchase price was $49,000. The property was purchased in the parties’ joint names. They raised $33,000 on a mortgage from the ANZ Bank. The balance needed to make up the purchase price came from their savings. Within four years the mortgage was paid out. The husband holds but has not registered a discharge of the mortgage.
In 1985 the husband decided to use the equity in the former matrimonial home as security for borrowings that would be used by him share trading. These moneys were borrowed by the parties from the ANZ Bank. The bank secured its advance registering a mortgage V903394 on the property. Both parties executed the mortgage after the bank manager at the Seven Hills branch had explained to the wife that the bank did not normally advance moneys for the purpose proposed by the husband. The husband drew down on this mortgage twice. Once in 1985 and on a second occasion between 1987 and 1990. Having drawn down on the loan on the first occasion it was repaid before he drew down the second time. He did not draw down the loan to the full extent available, namely $60,000. The husband has repaid all money borrowed from the ANZ Bank and holds a discharge of this mortgage from the ANZ Bank that he has not lodged with the Land Titles Office.
In 1988 the husband purchased a property at 7 R Street, P in South Australia. Its purchase price was $43,000. The husband paid for the property from saving derived from his share trading. His mother and stepfather had lived in the property as tenants, renting it from the South Australia Housing Trust. During a visit to the husband and wife, the husband’s mother asked him to buy the home for her. He returned with her to South Australia and did so. I am satisfied that the wife was aware from conversations that occurred in the matrimonial home that the property had been purchased by the husband.
After settlement, the husband’s mother and stepfather continued to live in the property until late 1991. That year the husband's mother passed away and the husband’s stepfather, Mr D, no longer wished to live in the property.
During the period that the husband’s mother and stepfather lived in the home, they paid $35 per week rent to the husband. He otherwise paid all outgoings, including rates and payments for repairs to the property.
After his stepfather decided to leave the property, the husband sold it. He did not consult the wife before doing so. Settlement took place on 25 March 1992. The property sold for $90,000. After selling costs and adjustment for rates and taxes, the husband received $85,798.22.
In 1993, the husband sold his window cleaning business. He received approximately $10,000 from its sale. From that point until he resumed work in August 1996, the husband worked full-time as a share trader. This was an activity engaged in by him alone. He managed his own share portfolio, primarily using Rivken Krohl Smith. He had an account of some $128,000 with Rivken Krohl Smith, “the Rivken moneys”. The fate of those moneys will be dealt with later in these reasons.
In 1995, the wife started studying at TAFE to learn to read and write. Other than for some periods, when she has not been able to participate in TAFE studies because a course was not made available to her, she has continued her literacy studies since that time. The husband returned to work as a cleaner in August 1996. T and D Cleaning employed him. The proprietor of T and D Cleaning was the parties’ best man and a family friend. He worked for T and D Cleaning and Swan Cleaning continuously, other than for a period of eight months, until May of 2001. The husband protested when giving his evidence that he worked no more than 20 hours per week. I am satisfied that he worked more substantial hours having regards to the income earned by him. It is clear that at different periods he has worked between 30 and 40 hours a week since August 1996.
In 1999, the husband received a gift of $10,000 from his stepfather, Tom D. Those funds were invested by the husband in the stock market. He built the $10,000 up into a share portfolio of about $15,000. It then fell back to about $8,000. On 15 December 2000 he sold his shares and invested the $8,000 received in an ANZ term deposit. He closed his ANZ term deposit on 25 January 2001, taking the balance of $10,424. He then kept those moneys in cash in a safe at home.
As I have already found, the husband stopped work on 18 May 2001. His employment ended when T and D Cleaning lost the contract that the husband had serviced. In about January 2001, the wife broke into the husband's office and safe. She took the money that had been realised from the ANZ term deposit as well as a large volume of the husband's financial material. Those moneys have been retained by Matthews Dooley and Gibson and used progressively to meet the household expenses incurred by both parties.
On 14 August 2001 when he was about to celebrate his fifty-fifth birthday, the husband cashed in his superannuation fund. He received $6,500, which moneys were utilised in part for the acquisition of shares and have otherwise found their way into the St George and NAB accounts.

Credit

Counsel pressed me for the wife to make substantial findings that the husband was less than frank with the court in the evidence he gave. I was pressed to make findings of a very wide sweeping nature that he has failed to give full and frank disclosure of his financial circumstances. Both parties, in my view, were less than frank on different matters about which they gave evidence. I make specific findings throughout the judgment in relation to those areas where I have preferred the evidence of one in preference to the other. There are, however, findings of credit that I wish to make at the commencement of the reasons.
Addressing firstly the wife. The wife made allegations in her affidavit concerning family violence. In her affidavit evidence the wife said:
Barry would often physically hit me[1].
[1] Paragraph 25 wifes affidavit sworn 12 December 2001
During cross-examination, she agreed that during an argument ten years ago, the husband had hit her across the face once. She denied that she had kicked him before he hit her. She agreed that that was the extent of physical violence towards her during the course of this long marriage. Her affidavit evidence, quite clearly, contains an exaggerated account. She gave no explanation why her oral testimony should differ so markedly from her affidavit evidence. She gave evidence that she had gained entry to the husband's office without breaking into it. Whilst she may have had reason to break into the office, that is to obtain access to financial records that the husband was quite clearly secreting to himself, I accept the husband's evidence that the premises were always locked and that the wife broke the window to get into the office.
The wife gave evidence that she knew nothing about the acquisition of property in South Australia and its subsequent sale. Whilst I accept that she was not consulted in relation to the sale of the South Australian property, I am satisfied that the wife was well aware that the South Australian property was to be acquired and that it was purchased. The husband’s mother and his stepfather lived in the property. The wife claims a close association with Mr Tom D and it defies credulity that this transaction was not known to her. I do not accept her evidence.
Her evidence in relation to knowledge of the husband's share trading was somewhat confused. It is quite clear that the husband traded from home, using the services of a variety of broking houses. There were many, many telephone calls by traders, by his brokers to the home and by him to his brokers. I do not accept that the wife was unaware that the husband was trading given the magnitude of the share trades. Again, it defies credulity.
The manner in which the husband gave his evidence was unfortunate. He was, at different times rude and bombastic. However, that he engaged in personal behaviour that falls within that description is not relevant to the findings of credit that can be made. I am satisfied he lacked candour in the manner that he dealt with his employment subsequent to 1996. He quite clearly, on his own evidence, has been engaged in significant employment with and T and D Cleaning. His affidavit material gives a different impression and suggests on its ordinary reading, that he has only engaged in very limited employment since August 1996.
In his financial statement, completed in the earlier part of 2001, he did not disclose any income. He was still employed by T and D Cleaning and his failure to disclose his income is a serious failure on his part. He could have given more complete information relating to the acquisition and disposition of the property at P. The wife’s solicitor in informal interrogatories sought the information. It was glibly responded to on instructions from the husband that the P property was not relevant. Quite clearly the acquisition and disposition of the South Australian property was relevant and the details should have been made known by the husband as soon as they were sought, if he had not already given them.
In relation to both parties neither have fully met their obligations to the court.

Relevant law

The approach to the determination of an application under section 79 is well established by authority: In the Marriage ofLee Steere and Lee Steere (1995) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clausen (1995) FLC 92-595. The process ordinarily involves a multiple-part procedure. Firstly, identifying the property liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined by section 79(4). Thirdly, evaluating the matters contained in section 75(2) insofar as they are relevant. In determining what order the court should make under section 79, the court must be satisfied in all the circumstances, that is just and equitable to do so. Section 79(2). It is the justice and the equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.

The assets as at the date of cohabitation and hearing

I find that as at the date of cohabitation, other than their own clothes and small items of personalty, neither party had any assets or liabilities of significance. The parties reached agreement as to the value of most of the assets and quantum of liabilities as at the hearing.
I find the assets and liabilities and financial resources as at the date of the hearing are these:

ASSETS AS AT THE DATE OF HEARING	VALUE
Former matrimonial home at 158 B Road, B	$ 175,000.00
Kingswood motor vehicle (h)	$ 1,500.00
Household furniture	$ 4,000.00
Term deposit (h)	$ 1,000.00
National Australia Bank account (h)	$ 2,915.00
Parties trust account held by Matthews Dooley & Gibson	$ 6,871.05
Bill O’Shea painting	$ 1,000.00
Boat and trailer (h)	$ 7,000.00
Share portfolio (h)	$ 3,800.00
TOTAL ASSETS	$ 203,086.05
LIABILITIES AS AT THE DATE OF HEARING	VALUE
Department of Social Security (h)	$ 750.00
NET ASSETS AS AT THE DATE OF HEARING	$ 202,336.05

There are a number of discrete items that were the subject of controversy. Firstly, the husband's Australian Taxation Office liability. He claims he is indebted to the Australian Taxation Office for $4,500 arising from the 2000/2001 tax year. The husband prepares his own taxation returns and says his return was lodged some considerable time ago. He was unable to produce a copy of the return and says he has not yet received a notice of assessment from the Australian Taxation Office. During that tax year, the husband worked for T. and D. Cleaning Services until 18 May 2001. His employment was terminated when the company lost the cleaning contract. Exhibit A[2] reveals that the husband was paid $21,200 in wages and that no tax was deducted. On the face of it the claim that he may have to pay tax seems credible. However, he has not been assessed as liable to pay income tax since 1995. This is because of trading losses arising from his share trading, accruing during the relevant tax years as well as losses carried forward. The husband says he has now exhausted the taxation benefits available from accrued losses. He produced no evidence to support his claim, yet such evidence is likely to be readily available. In the absence of corroboration, I do not accept that he will have a debt to the Australian Taxation Office in the amount asserted, or at all.
[2] Letter T and D Cleaning

Next, notionally adding back $124,000, comprising the proceeds of share trades held by Rivken and Company as at 1993. From the time he left school, the husband has had a keen interest in the share market. In 1966 he started share trading well prior to the parties’ marriage. Throughout their marriage the parties agreed that the husband would be responsible for the family's financial affairs. This came about because of the husband's interest in trading and the wife's belief that her illiteracy and lack of financial experience ill equipped her to contribute to financial decisions. When he started trading, the husband primarily used Bridges Investment Services as his broker. He then moved to Rivken Krohl Smith, also using Andrew West and Waterhouse Services from time to time. During 1993, 1994 and 1995, he worked as a professional trader.
During the course of the marriage, the husband carried out approximately one and a half million share transactions. While he glibly described his share transactions, "as a hobby", akin to people who play the horses, I am not satisfied that his description reflects the true picture. When giving evidence, the husband was often offhanded in his use of language as well as using colourful, and, at times, unfortunate language.
At the former matrimonial home, the husband set up an office contained in a building separate to the house. Only he had the keys to gain entry. He developed his own trading charts that he relied on for his buy/sell decisions. Clearly he devoted a large amount of time and effort as a trader. More credible than the hobby descripta is the husband's evidence that he hoped his share trading would provide a source of superannuation for him and the family.
I accept that during the 1980’s and early 1990’s the husband achieved moderate success trading shares. Profits from his trading provided the source of funds that enabled the husband to buy a boat and trailer and four wheel drive vehicle in about 1987/1998. That boat was sold in 1993 for $5,000. It funded the purchase of 7 R Street, P in 1988 for $43,000. It complemented the income earned by him as a cleaner and was used to meet the family's day-to-day living expenses.
When the husband sold the P property, he received $85,798.22. He had already sold his cleaning business for $10,000. He drew down against his savings so that in 1993 he had $128,000 in a share trading account with Rivken's, that was established from these amounts. Probably the savings arose from the funds sourced from the ANZ mortgage.
The husband claimed that he sold his cleaning business because of his declining health. It is more likely that he sold his business to devote himself full-time to trading the fund he had built up. His lack of success as a trader is reflected in his eligibility for a Department of Social Security Newstart Allowance between 1993 and 1996. In August 1996, he started working again with T and D Cleaning to supplement and improve the family's finances.
Although he had previously traded industrials, in about 1993 the husband shifted the share portfolio to the mining sector. This was a disastrous decision in the long term. Subsequently his share portfolio fell in value at about $25,000 a year. Between 1993 and 2001 it fell from $128,000 to $10,000. I have already made findings about its current value and do not repeat them.
Counsel for the wife submits that a net amount of $124,200 should be notionally added back into the current assets. This is because he categorises the losses as a premature disposition of a proportion of the matrimonial assets. In making this submission, counsel relied on Townsend (1995) FLC 92-569, a case readily distinguishable on its facts from this one. In that case the impugned transaction, which was the sale of a taxi, occurred at or shortly after separation. The husband in Townsend (ibid) repaid a joint matrimonial debt and acquired an asset that still existed, together with moneys that repaid joint matrimonial living expenses. These moneys were excluded from the add-back exercise. Notionally added back were moneys spent on the husband's day-to-day living expenses, his paid legal costs and the balance that the husband was unable to adequately account for.
The share portfolio losses incurred in this matter occurred over an eight-year period, a trend established long before there was any suggestion the marriage might fail. When he traded successfully, the husband applied the proceeds to the betterment of the family. I am satisfied he tried and hoped to maintain his prior successes and none more than he regrets the losses. That the husband was trading shares was well known to the wife. I accept the husband's evidence that his broker called the house repeatedly and the wife frequently answered his broker's calls. She did not try and temper his trading and her lack of business experience meant that she did not contribute to the decisions made by the husband. His bombastic attitude towards her means that he would have been deaf to her contributions or her objections. That is not, however, material in the circumstances. The fact is that she did know about the share trades and she acquiesced to the venture. It would be unjust to the husband and a misapplication of the Townsend (ibid) principles to notionally add back the Rivken moneys. Just as both parties derived benefit from the gains, they should share the losses.

Section 79(4) – the assessment of contributions

I have made findings about the husband's employment as a cleaner. He has worked continuously but for those years where he traded full-time as a share trader as a cleaner. He earned approximately $25,000 a year until he sold his business. Later in these reasons I make specific findings about the income derived by him as a cleaner.
From his earnings as a cleaner and his earnings as a share trader, he applied the whole of his income to the support of the family. At no time during the marriage other than a brief period when she was in receipt of a DSS entitlement, did the wife receive any money from her employment after she gave up work at a factory prior to L's birth. The $10,000 given by Mr Tom D, the husband's stepfather, is a contribution made indirectly by the husband. I am satisfied that the husband comparatively made a much greater financial contribution to the marriage than did the wife.
During the course of the marriage, the husband undertook handyman jobs around the house. Th wife was a keen gardener and she was primarily responsible for maintaining the gardens and certainly primarily responsible for maintaining the interior of the home. Having regard to the evidence given by each of them, there is considerable synchronicity as to the evidence they gave. I am satisfied that the wife made a greater contribution to the conservation, maintenance and improvement of the property than did the husband.
These parties divided their family responsibilities using a very traditional model. That is, the husband earned the income and took care of the family finances. The wife took care of the home and the children. The parties have four children, one of whom is not yet quite 18 years old. The wife diligently undertook her responsibilities as a home maker and parent. This is a contribution that must be given proper weight in the assessment and evaluation of the contributions that the parties made. She made a much greater contribution to the welfare of the family as a home maker and parent than did the husband. She did not and still does not drive. The husband, as a driver, took the children to and from their various activities and, at different times, took them on holidays. Comparatively his contribution does not equate to hers.
The orders I make will not affect the earning capacity of either party. The other subsections do not arise.
I am satisfied that the parties have made an equal contribution to the acquisition, conservation and improvement of the assets of the marriage. Over this long marriage, the wife undertook the overwhelming majority of the responsibility for the home and for the children. The authorities are clear that this must be given proper weight. The husband worked hard to maximise the family finances. He worked as a window cleaner, as I have found and he worked hard in his activity as a share trader to try and maximise the income that his family had available to it. Ultimately the share trading exercise has probably been, on balance, an unsuccessful one. His early gains supplemented the family's income and enabled the family to acquire an investment property in South Australia, which, when sold, produced a significant capital gain. It enabled the acquisition of assets, such as the boat, car and trailer.
The husband cannot have, though, the benefit of the gains without taking into account the consequences of the losses. The losses have been substantial, although they have enabled the husband to accrue significant tax losses that have entitled him to offset his tax that would otherwise be payable from his earnings as a window cleaner. The net outcome of his share trading has probably been moot; that is, the gains made over the long term have probably equated to the losses, including the taxation benefits, in the long term.

Section 75(2)

(a) The wife is 46 years old. Following the breakdown of her marriage, she has felt stressed and depressed. She has suffered some heavy uterine bleeding and chest pains. Because of her depression, Dr Tan prescribed her Lovan. Dr Christine Tan swore an affidavit that comprised text and attached 12 pages of clinical notes. The clinical notes were not explained and I am unable to make any findings based upon them. In her text Dr Tan reports prescribing the anti-depressants to the wife. She gives no account that the other health difficulties have warranted continuing medical intervention. I am satisfied that although she has some health difficulties, the wife is in reasonably sound health. The husband is 55 years old. Although he claimed to be in receipt of a DSS pension, he is in fact receiving unemployment benefits. Dr Torrevillas, his medical practitioner since 1986, deposes that the husband has left hip osteoarthritic changes and spondylitis of the lumbar sacral spine. During the last few years, the husband has suffered from hypertension, obesity, and back and leg pain. The husband takes medication for his hypertension, back and hip pain. Whilst I am satisfied that Dr Torrevillas accurately reports upon the husband's health since 1986, I do not accept his opinion that the husband is, "unlikely or able to go back to his old job of cleaning". This is because the husband withheld from Dr Torrevillas important information that he had been working as a cleaner after 1996. As Dr Torrevillas’ information was materially incomplete, I give his opinion no weight. Although the husband carries some health difficulties, I am not satisfied that they are not adequately addressed by medication and I make no adjustment pursuant to the subsection.
(b) In her financial statement, the wife discloses that she receives $158 per week from the Department of Social Security. I find that is her income. I have already made findings as to property and financial resources and do not repeat them. Although she is stressed by her current circumstances, she anticipates that her stress and depression will be alleviated by the completion of the proceedings and the opportunity to live separately from the husband. I accept that this is so. As a consequence, I am satisfied that she has the physical and mental capacity for full-time employment. Her opportunity for employment, however, is remote. Her competitiveness for employment is diminished by her:
·prior history of unskilled factory work;
·that she has not worked in the paid workforce since the early 1970s;
·her limited literacy.
To her credit, the wife has undertaken TAFE literary classes since 1995. As places are limited, she has not studied continuously and has acquired rudimentary literacy skills. This is a major impediment and severely limits her opportunity for employment. The wife has attempted to obtain work mowing lawns, as a factory hand and recently picking mushrooms. She has been unsuccessful. Should she ever obtain work, the wife's earnings would be modest and may not even be sufficient for her own support. Although physically and mentally able to work, for the reasons given, I am satisfied that the wife does not have the capacity for appropriate gainful employment, because it would not be made available in a competitive employment market by prospective employers.
Like the wife, the husband receives $158 per week from the Department of Social Security. Although he claims expenses for rates, electricity and telephone, exhibit B[3] makes it clear that those expenses have been paid from the trust moneys. Currently his income and expenses are in fact similar to the wife's, the difference being that he pays $19 per week on his motor vehicle expenses. I have already made findings about the husband's assets. He has no financial resources. Otherwise, I am not satisfied, although he may believe otherwise, that the husband has the capacity in the long term to derive an income from his share trading. That flies in the face of history. He does have the capacity to work as a cleaner.
[3] Trust statement Mathews Dooley and Gibson
Although he claims not to have worked full-time since August 1996, I accept counsel for the wife's analysis of the actual hours worked by the husband and that that means he has actually worked close to full-time fairly recently. Allowing for recreation leave at four weeks a year, the husband worked 38.9 hours during 1997/98 financial year; 42.5 hours during the 1998/1999 financial year and 29.9 hours during the 1999/2000 financial year. Those hours are a weekly average. This apparently coincides with time he was suffering health difficulties. Because the husband has worked as a cleaner for many years, which work is as recent as May 2001, I am satisfied that he has the physical and mental capacity to work at about 35 to 40 hours a week as a cleaner. Exhibit A shows that he is paid $15 per hour ordinary rates, a figure that is reasonably current. This means that working the hours I have found he can earn approximately $25,000 to $28,000 per annum.
Given his age and health, it is likely that his capacity to earn that income will diminish as he gets older and his health difficulties take an increasing toll upon him. I doubt that he is likely to be able to earn that amount of money by the time he has reached 60 and certainly not by the time he is 65 years old. I make an adjustment in favour of the wife, pursuant to the subsection.
(c) R is 17½ years old. She does not attend school and is receiving unemployment benefits. I make no adjustment pursuant to the subsection.
(d) Both parties have set out in their financial statement their commitments. They are modest indeed. It will be necessary for both parties to rehouse as a consequence of the orders I make and their commitments will increase either to take on mortgage repayments or in the payment of rent. Their commitments are comparable at present and are likely to be reasonably comparable in the future. I make no adjustment pursuant to the subsection.
(f) Both parties are in receipt of a Newstart Allowance. They otherwise have no financial resources and I make no adjustment to the subsection.
(g) Both parties live in the former matrimonial home. The household expenses have been primarily met out of the trust moneys. During the course of the marriage, these parties lived a very modest life. They were bringing up four children on an average income of $25,000 per annum. The standard of living that they enjoyed during the course of their marriage will not be able to be maintained and both parties will endure a decreased standard of living. That is the reality of the division of their limited matrimonial assets. I make no adjustment pursuant to the subsection.
(h) The wife withdrew her application for lump sum spousal maintenance at the conclusion of the proceedings. Accordingly, the subsection does not arise, nor do subsections (j), (k), or (l).
(m) The wife implied that she proposed to continue living with three of the four adult children after the conclusion of the proceedings. That may or may not be so. There is no suggestion on the evidence that if she is doing so, that any of them will contribute to her support. Like their parents, three of the four children are in receipt of unemployment benefits. I am satisfied that there are no financial circumstances relating to cohabitation that would require adjustment pursuant to the subsection.
(n) Both parties will need to rehouse themselves. The wife may have the chance to re-enter the property market in a very modest way. She is unlikely to be able to raise a mortgage to supplement the distribution of the proceeds of sale of the home. The husband will have less capital, but he does have a capacity to earn a modest income. Given his age, the prospect of him raising a mortgage is also unlikely. His prospect of buying a place to live in is limited, indeed. I make no adjustment pursuant to the subsection.
Section 75(2)(n), (na) and (p) do not arise.
(o) In the event that the court was not persuaded to add back the Rivken account, counsel for the wife submitted that the losses should be characterised as waste. He relied upon the remarks of Baker J in Kowaliw (ibid). In that case, His Honour commented as follows:
“If a party has acted in a manner to which I have referred earlier, either by (a) embarking on a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets or; (b) acting recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value, then such conduct, in my view, and the economic consequences which flow therefrom, are clearly matters to which the Court may have regard pursuant to the provisions of section 75(2)(o). If on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of the pursuit of matrimonial objectives, such as the gaining of income or the acquisition of assets, whether the liability for such losses be joint or several, then in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.”
Kowaliw (ibid) does not lay down a principle of general application, that if a loss has been sustained by reckless, negligent or wanton conduct by either party, the other party has entitlement to a complete indemnity. All that case establishes is that the economic consequences of such conduct are a matter to which the court may have regard pursuant to section 75(2)(o).
Although continuing to trade in shares in the face of a trend of overall loss was financially imprudent, it was not economically reckless. With the benefit of hindsight, it is apparent that the husband should have taken advice from a sharebroker after he realised that his mineral trades were not successful. His failure to do so against a background of early success as a trader does not amount to behaviour however, that attracts an adjustment pursuant to section 75(2)(o). I make no adjustment pursuant to the subsection.
The effect of section 75(2) will be an adjustment to the wife of 15%. This is because her financial future is marred by the lack of employment opportunity. The husband, by comparison, has a more secure financial future in the short to middle term, because he will have the opportunity for paid employment.

Section 79(2) — Is this a just and equitable outcome?

It will mean that the outcome is that the wife will receive 65% of the assets and the husband will receive 35%. The cases require that I give proper weight to the husband’s substantial financial contribution throughout the course of the marriage as well as his capacity for paid employment in the future. I must also give proper weight to the wife's very significant contribution as a homemaker and parent and the findings that I have made pursuant to section 75(2).

The parties’ assets comprise a modest pool of asset and any adjustment less than 15% in favour of the wife given her lack of secure financial future would be a notional one. A greater adjustment to the wife would occasion an injustice to a man who has worked hard to provide as best he could for his family.

Conclusion

Although the house has an agreed value, the parties agree that it must be sold hence the net proceeds cannot be known. The parties plan to list it for sale at a price greater than its value agreed in these proceedings.
The husband it is agreed will retain the Kingswood, the term deposit and the NAB account. He will have the Bill O'Shea painting. It was made a particular issue by him in his affidavit material and in the cross-examination of the wife. I am satisfied that he has an attachment to it and it should be returned to him. He will have his share portfolio, his boat and trailer. These items have an agreed value of $17,215.
The wife will have the moneys held in trust by Matthews Dooley and Gibson and the household furniture and goods. These have an agreed value of $10,871.05. She will receive 65% of the net proceeds of sale of the home.
Of the remaining assets, there will be an adjustment to the wife, taking into account the assets she retains. From his share of the proceeds of sale of the home, the husband must pay her $7,384. This adjusting figure is the amount the wife needs to receive to give her 65% of the totality of the assets; having regard to the assets the husband retains.
For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate:

Date: 27 February 2002