AIELLO & AIELLO

[2019] FamCA 588

FAMILY COURT OF AUSTRALIA

AIELLO & AIELLO [2019] FamCA 588

FAMILY LAW – PROPERTY – Where the contributions during the marriage were assessed as equal – Where the husband had substantially greater initial contributions than the wife – Where the husband’s income is derived from several rental properties – Where a child of the marriage has a chronic illness – Where the wife’s capacity to work is limited due to her caring responsibilities for the child – Where contributions are assessed as 65 per cent to the husband and 35 per cent to the wife – Where the wife receives 5 per cent adjustment for s 75(2) factors – Orders made.

FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband sought to rely on a summary of expenses he paid on behalf of the wife and child since separation – Where the schedule was a summary of expenses that were not identifiable in the original source documents – Where it was not possible to verify the accuracy of the schedule – Where the schedule was not found to be a summary of source documents pursuant to Evidence Act 1995 (Cth) s 50 – Where the husband was not permitted to rely on that schedule.

Child Support (Assessment) Act 1989 (Cth) s 118(c)
Evidence Act 1995 (Cth) s 50
Family Law Act 1975 (Cth) ss 75(2), 79

Dickons & Dickons (2012) 50 FamLR 244
Jabour & Jabour [2019] FamCAFC 78

APPLICANT: Ms Aiello

RESPONDENT: Mr Aiello

FILE NUMBER: SYC 2934 of 2014

DATE DELIVERED: 23 August 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 12,13 & 14 August 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Bridger

SOLICITOR FOR THE APPLICANT: Ken Heasman Solicitors

COUNSEL FOR THE RESPONDENT: Mr Gardiner

SOLICITOR FOR THE RESPONDENT: Batey's Family Lawyers

Orders

IT IS ORDERED

1. That within 60 days of the date of these Orders, the husband pay to the wife the sum of $944,674.

2. That from the sum of $944,674 the husband shall be repaid the sum of $10,175 owed by the wife to the husband on account of her share of the costs of the valuer.

3. That in the event that the husband does not pay the sum in Order 1 by the due date, the husband shall do all acts and things required to sell one of the properties referred to in Order 6 and to pay to the wife, from the proceeds of sale, the amount in Order 1, together with interest calculated in accordance with the Family Law Rules, from the due date until the date of payment.

4. That from the date of these Orders until the payment of the sum referred to in Order 1, the husband shall pay to the wife by way of spousal maintenance the sum of $400 per week.

5. That the wife shall be solely entitled to all property both real and personal in her possession at the date of these Orders.

6. That, subject to these Orders, the husband shall be solely entitled, to the exclusion of the wife to the properties at P Street, Suburb C; W Street Suburb B and M Street, Suburb D and to all other personal property currently in his possession.

7. That pursuant to section 118 (c) of the Child Support (Assessment) Act 1989 (Cth), the husband’s child support income for the period commencing on the date of these Orders shall be $140,000.

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

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

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2934 of 2014

Ms Aiello

Applicant

And

Mr Aiello

Respondent

REASONS FOR JUDGMENT

1. Ms Aiello (“the wife”) and Mr Aiello (“the husband”) married in 1995 and had two children, Mr R who is a university student and lives with the husband, and X who is 16 years old in Year 10 at high school and lives with the wife.

2. They separated in July 2012.

3. They now ask the Court to determine how their property should be divided. The wife asks the Court to make a child support departure order in relation to X. In addition, the wife seeks interim spousal maintenance between the date of the hearing and the payment of any sum that the husband is ordered to pay. Both the application in relation to child support and the application for spousal maintenance are opposed.

4. It was clear from the outset that there are few significant issues of fact to be determined.

5. Although they each set out extensive evidence about their respective contributions, and each was cross-examined about those contributions, both of them gave a picture of a relationship where both parties diligently applied themselves to the enterprise of their marriage, their children and their properties, often together.

THE HEARING

1. The wife relied upon two affidavits sworn by her and an affidavit of Dr F, X’s treating doctor. Dr F was not required for cross-examination.

2. The husband relied on two affidavits sworn by him and a financial statement sworn on 9 August 2019.

3. Objections were taken to the husband’s trial affidavit. Relevantly, those objections related to a schedule upon which the husband sought to rely that purported to be a summary of expenses he had paid on behalf of the wife and X from the date of separation in 2012 until the hearing.

4. The husband was not permitted to rely upon the schedule and I indicated that I would give reasons for that decision in the substantive reasons. These are the reasons:

5. The husband relied on s 50 of the Evidence Act  1995 (Cth) (“Evidence Act”) which provides:

   Proof of voluminous or complex documents

   (1) The court may, on the application of a party, direct that the party may adduce evidence of the contents of 2 or more documents in question in the form of a summary if the court is satisfied that it would not otherwise be possible conveniently to examine the evidence because of the volume or complexity of the documents in question.

   (2) The court may only make such a direction if the party seeking to adduce the evidence in the form of a summary has:

   (a)  served on each other party a copy of the summary that discloses the name and address of the person who prepared the summary; and

   (b)  given each other party a reasonable opportunity to examine or copy the documents in question.

   (3)  The opinion rule does not apply to evidence adduced in accordance with a direction under this section.

6. No application had been made to rely on s 50 but copies of the documents had been served with the husband’s trial affidavit.

7. In order to understand the ruling, it is necessary to explain how the summary was presented.

8. Although the relevant portions of the husband’s affidavit were struck out, it is necessary to reproduce some of that material here so that the issue can be understood. The husband’s affidavit stated:

   92.I estimate that I contributed at least $469,094.44 for [the wife’s] benefit and/or the benefit of the children since our separation in July 2012. I have provided Schedules of the expenses incurred, taken from my various bank statements that show these calculations. Copies of the schedules are marked Exhibit 8 pages 1393-1511.

   93.Of that amount, I have calculated that the funds have been spent in the following broad categories:

   (a)Travel  $80,528.98

   (b)Utilities  $15,325.28

   (c)Car (lease, repairs & etag)  $46,173.95

   ...

9. The list continued to nominate amounts in other categories – groceries, personal services, charities, stores, entertainment, other expenses, school and dancing fees, Private Health Insurance, payments to cards, kids account and payment to cover $20K taken out. 

10. Counsel for the husband sought to tender 1,189 pages of bank and credit card statements which were the source documents. He also sought to tender what purported to be a summary of the expenditure in the terms set out in the affidavit.

11. However, it was not possible to verify the summary by reference to the statements because the summary was, itself, a summary of a summary, the earlier summary not being available.

12. So that the objection can be understood, a part of the summary, relating to expenses using a E Bank Visa Card, is reproduced below:

    [The wife] Sep to Oct 2013

    Travel  $5,306.61

    Utilities  $3,086.34

    Car  $10,538.15

    Groceries  $6,822.42

    Personal services  $5,807.92

    Charity  $385

    Kmart, Ikea Target etc  $23,043.67

    Entertainment  $5,288.44

    Other  $685.59

    School  $12,299.74

    Private Health Insurance                 $1,546.03

    Total  $74,810.03   

13. Setting aside the fact that it is extremely unlikely, having regard to the parties’ general standard of expenditure, and their available income, that the schedule records expenses for a period of only one month, it can be seen from the document that there is no reference to the source documents which would allow any verification of its accuracy.

14. There was no document which extracted the individual transactions which, for example, constituted the payments for groceries which it was asserted totalled $6,822.42 for the month. Without knowing which payments appearing on the statements had been taken into account to reach the total, it was not possible to verify the accuracy of the schedule.

15. Similarly, it was not possible to test whether an individual transaction had, in fact, been referable to a payment to or on behalf of the wife or the child since individual transactions were not listed. The husband said in answer to questions, that he had determined which transactions were referable to the wife and the child. It follows therefore that some of the transactions in the statements were not so referable and there was no opportunity to test the validity of the husband’s determination.

16. Accordingly, the schedule was not a summary of the source documents for the purpose of section 50 of the Evidence Act.

HISTORY

1. At the commencement of the marriage, the wife was the beneficial owner of a unit at S Street, Suburb T. The unit was worth $80,000 at the time of the marriage. The mortgage was $20,000. The unit was then rented and has been rented throughout the marriage and until the hearing. The rent was applied to the mortgage until 2008 when the mortgage was discharged and thereafter the wife retained the rent. She had no other significant assets. The husband disputed the wife’s assertion that she owned the unit at the time of the marriage.

2. The husband had an extensive portfolio of property and a Motor Vehicle 4. Three of the husband’s properties still remain in his possession. Three of the properties were unencumbered.

3. The properties of the parties have been valued, both at the present date and historically, by a single expert valuer.

4. The husband had:

   ·    W Street, Suburb B which was valued at the time of the marriage at $350,000. This property comprised three rented flats.

   ·    M Street, Suburb D which was valued at the time of the marriage at $320,000. This property had a two bedroomed flat upstairs and a commercial property on the ground level.

   ·    N Street, Suburb U which was valued at the time of the marriage at $120,000. This property was later sold and the proceeds used to pay down mortgages.

   ·    G Street, Suburb H valued at the time of the marriage at $320,000. This property was sold in 2007 for $1,650,000. The property was rented until its sale.

   ·    P Street, Suburb D which was valued at the time of the marriage at $325,000.

5. At the time of the marriage, there was a mortgage for $270,000 cross collateralised over both Suburb B and Suburb U. Thus the husband had gross property worth $1,435,000 with mortgages of $270,000. His net initial contribution was $1,165,000. The wife’s initial contribution was $60,000.

6. At the time of the marriage, the wife was working in administration earning $30,500 per annum. The husband has not been in paid employment throughout the marriage. The rent from the husband’s properties were the principal source of income throughout the marriage.

7. They lived in the husband’s unit at P Street, Suburb D.

8. Work was done to improve the properties from time to time. Architects and tradesmen were engaged. Although a great deal of time in the hearing was taken up in an enquiry about exactly who did what in relation to the renovations, it is most likely that the parties jointly planned and discussed the work and that they were both involved in overseeing it. For much of the time neither was in other employment and they both depose to doing things together. In cross- examination, the husband said that he always consulted the wife and that he valued her opinion.

9. In 1998 the wife ceased her employment and started a sales business. The business made no significant income. The husband gave some assistance.

10. Mr R was born in 2000.

11. The wife closed the business in 2001.

12. In 2002 the husband sold the Suburb U property and applied the proceeds to discharge the mortgage.

13. X was born in 2003.

14. In 2007, the property at G Street, Suburb H was sold for $1,650,000. The husband bought a boat and a car and paid various expenses and the balance of the money, $1,460,000, was invested in joint names in a term deposit, earning interest. The wife wanted to buy a home to live in but the parties were unable to agree on a property.

15. In 2008 the mortgage over the wife’s Suburb T unit was discharged. Thereafter she received the rent.

16. In May 2009 the parties separated for a few months. The wife moved out of the home with the children. They reconciled and resumed the marriage a few months later.

17. In 2011 the wife obtained qualifications in Allied Health.

18. On 6 July 2012, the parties separated. The husband left the P Street, Suburb D unit and moved to live at a unit in the property at M Street, Suburb D. The children remained living with the wife.  Wife had access to a credit card, paid for by the husband, for living expenses for herself and the children.

19. In December 2012, the property at Q Street, Suburb D (“Q Street”) was purchased in the wife’s name for $1,020,000 using the money originally received from the sale of the unit at G Street, Suburb H.  That fund was also used to pay for the costs of the purchase, some white goods and decorating. As a consequence of the purchase of Q Street, the income from the term deposit was no longer received. The wife moved into Q Street with X. The husband moved back into the P Street, Suburb D unit. X then lived with the husband.

20. Mr R suffered some emotional difficulties after the separation and required medical assistance. He also missed days from school and then did not go to school for a whole term. The husband was responsible for Mr R’s care during this period. Mr R was, for a time, estranged from his mother.

21. After separation, the husband paid for all of Mr R’s expenses without contribution from the wife. He also paid X’s school fees and expenses, including uniforms, and paid for her dancing lessons. He paid for health insurance for the family. The husband also paid when the family travelled to attend X’s dance performances.

22. In 2013, the wife recommenced employment in administration, working for two days each week.

23. In October 2013, the wife withdrew $20,000 from a line of credit. As a consequence, the husband paid interest of $781 per month thereafter. The husband stopped the wife’s access to the supplementary credit card.

24. In May 2014, the wife purchased a new car. The husband made the loan repayments.

25. In 2014, the wife borrowed $150,000 secured by way of mortgage over Q Street. She has used those funds to supplement her income from employment, to pay for living costs for herself and X, to pay the cost of taking X overseas for dance competitions, to pay for a holiday and to pay legal fees. She has since met the mortgage payments.

26. In 2014 X competed in a dance competition in Country J. The wife accompanied her. The husband contributed $4,000 towards the cost of the trip.

27. In 2017, the wife and X travelled to Europe so that X could participate in a dance competition. The husband contributed $2,000 towards the trip.

28. In late 2017, the husband gave the wife a supplementary credit card to use for X’s expenses. She estimated that she was spending about $270 per week on the card but that amount increased to about $370.

29. In January 2018, the wife and X travelled to City K so that X could participate in a workshop.

30. In early 2018, X’s health began to fail. By June 2018 she was extremely ill and unable to get out of bed. She was later diagnosed with Chronic Fatigue Syndrome. The extent of X’s illness and its effect on the wife’s ability to work full time was in issue.

31. From mid-2018 until April 2019, the wife used the supplementary credit card for her own expenses as well as those of X. She conceded in oral evidence that she spent between $800 and $900 per week but said that she didn’t keep a tally.  The husband paid the credit card bills. All of X’s medical expenses were paid on the card during that period.

32. The husband has continued to spend time with X and to look after her on occasions when the wife is not available. The wife conceded in cross- examination that he assists with X about three times each week, taking her to school or collecting her or looking after her when she is not well enough to go to school.

THE WIFE’S INITIAL CONTRIBUTION

1. The wife deposed that the Suburb T unit had been purchased in the 1980’s by her father for about $33,000. She contributed the deposit of $5,000. In cross- examination she said that the unit was registered in her father’s name because she was travelling overseas at the time of the purchase.

2. There is no evidence that the wife’s father made any financial contribution to the purchase.

3. In those circumstances, the wife was the beneficial owner of the unit by resulting trust.

4. The Suburb T unit was part of the wife’s initial contribution.

THE EXTENT AND NATURE OF X’S ILLNESS

1. Dr F, who is X’s general practitioner, provided a report and swore an affidavit in the proceedings. He was not required for cross-examination. In his report dated 30 April 2019 Dr F stated:

   [X] is suffering from chronic fatigue syndrome associated with immune deficiency and chronic/ recurrent infection. The nature of chronic fatigue syndrome is for sufferers to experience deterioration associated with excessive physical or cognitive activity. Symptoms associated with this deterioration may include headaches, immune deficiency with vulnerability to recurrent infections, sore throats and tender cervical lymph nodes, sleep disturbance and non restorative sleep, cognitive dysfunction often described as brain fog, muscle pain and weakness, postural dizziness and post exertional fatigue.

2. Dr F stated:

   [X’s] symptoms are multiple and complex her main issues include 1.Chronic Fatigue/ severe post exertional fatigue and malaise and nausea worsened by physical or mental activity 2. Severe disabling Nausea 3.Chronic Gut issues : Constipation, bloating 4. Severe Anxiety and associated panic attacksand [insomnia] 5. Low Body Temperature associated with hypometabolism, Heart palpitations. She also suffers intermittent migrating pain. She has proven immune deficiency […] and has multiple infections associated with chronic fatigue including bartonellosis and Ebstein Barr virus. Given her immune deficiency it is likely that chronic low grade persistence of these infections is contributing to her clinical syndrome and that she may have significantly altered bacterial imbalance in her gut contributing to her digestive symptoms. she is currently [being] treated by Professor L an internationally renowned gastroenterologist for gut bacterial imbalance most likely related to this […] deficiency. In terms of consequences on her day to day activity [X’s] symptoms effect her constantly including limiting her ability to attend school. She can only tolerate at best 3-3.5 hours of classes per day but often only 2 hours per day on many days. She only managed school attendance 2-3 days per week for most of last term. Her anxiety is extremely debilitating which means she is extremely anxious and hypervigilant when she is left alone. The stress exacerbates her physical symptoms including fatigue so that if she is left alone for prolonged periods she will crash energetically. At times she becomes so weakened she can’t even prepare food for herself. [X] [has] had to give up dance which is her passion and was her desire for a future career due to her level of fatigue and this has resulted in a significant emotional cost. The consequences of this is that her mother has had to limit her work hours and these have been sporadic Her second job which was home based she has had to forego as she can’t commit to work as she may have to assist [X] at short notice rather than be with a client. There has been a substantial time and financial cost as [X] is attending multiple medical practitioners including myself a doctor specialising in mental health and emotional trauma her [gastro] enterologist and previously her psychologist. She is on numerous medications and supplements that are not PBS subsidised prescribed by these practitioners.

   (As per the original)

1. Dr F stated that standard management of chronic fatigue syndrome includes the need for patients to participate in what is described as “pacing programs”. This refers to limiting the total activity to a tolerable limit and having rest days either before or after days of excessive activity. The pacing is combined with “micro pacing” or taking small frequent rest or recovery breaks during the day.

2. Dr F stated that chronic fatigue also appears to be associated with nutrient depletion due to an inability for nutrients to be passed efficiently to cells and to clear intercellular acidosis after activity. Dr F stated:

   Once the cell energy becomes depleted the cell becomes anaerobic which is inefficient and causes lactic acid production with weakness, cellular dysfunction and pain.

3. Dr F concluded:

   Given these factors [X] is limiting her hours of study and her physical activity on health grounds and when [X] does have a crash in to a depleted energy state she needs compensatory sick days off to recover. In the absence of this management scheme [X] may deteriorate further functionally. As part of her pacing program it is essential for her to take frequent breaks and space her workload with a modified schedule.

4. I accept Dr F’s unchallenged evidence. 

BALANCE SHEET

1. The parties tendered an agreed balance sheet which is reproduced below. The value of their assets is agreed with the exception of one issue. There is a dispute about an asserted add back of the sum of $20,000 drawn by the wife from the mortgage over P Street in October 2013.

2. The husband seeks to have the sum of $20,000 added back as an asset of the wife.

3. It is not in dispute that, in October 2013, there was an argument between the parties and the husband stopped the wife’s access to the supplementary credit card which she had been using to pay some of her and X’s living expenses. She then drew $20,000 from the mortgage account to which she was a signatory.

4. The wife used those funds for living expenses for herself and X. Her only other source of income was the rent from Suburb T of $300 per week and her wages for 16 hours of work each week.

5. I am satisfied that the wife used the sum of $20,000 to pay living expenses for herself and X and that it was reasonable for her to do so.

6. The amount will not be added back.

7. Although the evidence established that both of the parties had paid legal fees from the mortgages over their respective properties, the wife from the Company T mortgage and the husband from the NAB line of credit, it was agreed that those mortgages should remain on the balance sheet as liabilities and that no adjustment should be made for paid legal fees.

8. The assets and liabilities of the parties, for the purpose of these proceedings, are:

Description		Value
H	P Street Suburb C	$     1,250,000
W	Q Street Suburb D	$     1,450,000
H	W Street Suburb B	$     1,800,000
H	M Street Suburb D	$     2,000,000
W	M Street Suburb T	$        360,000
W	CBA a/c …73	$                52
W	Company T Action Account	$            2,384
W	CBA a/c …56	$            3,888
W	CBA a/c …39	$            4,551
W	CBA a/c …47	$              302
H	NAB a/c …84	$                35
H	NAB a/c …98	$                64
H	NAB a/c …54	$                14
H	Y Limited shares 1900 shares @ $8.54	$          16,226
W	Motor Vehicle 2	$          19,700
H	Motor Vehicle 1	$            6,000
H	Motor Vehicle 3	$            4,400
W	DD Business	$                  0
H	Household Effects – P Street	$            7,000
W	Household Effects – Q Street	$            3,000
H	Boat	$          35,000
H	Scooter	$            3,000
TOTAL	$      6,965,616
LIABILITIES

W	Company T Mortgage/Westpac Q Street	$        123,687
W	Motor Vehicle 2 Loan	$          13,250
H	NAB Mortgage P Street	$            8,934
H	NAB Line of Credit over P Street	$        190,710

2

TOTAL $        336,581

SUPERANNUATION
W	Super Fund 1 accumulation fund	$          18,026

1. The net asset pool, excluding the wife’s superannuation, is $6,629,035.

2. Of this amount, the wife has assets in her possession of $1,843,877 and liabilities of $136,937 leaving her with net assets of $ 1,706,940.

SECTION 79(2)

1. The parties are no longer able to jointly use and benefit from the property they have amassed. They both ask the Court divide their assets between them.

2. It is just and equitable to do so.

THE COMPETING APPLICATIONS

1. The wife seeks an adjustment which would divide the property as to 45 per cent to her and 55 per cent to the husband. On her behalf it is submitted that the adjustment for her contribution would be 40 per cent with a further adjustment of 5 per cent for section 75(2) factors.

2. The husband, in his response, sought an adjustment in his favour for contribution of 73 per cent and that there be no further adjustment in favour of the wife to take into account the matters in section 75(2).

3. In submissions, the husband changed his position and sought an adjustment of 75 per cent in his favour for contribution. In submissions, it was the husband’s position that there should be an assessment in his favour of contributions during and after marriage of 55 per cent and a further adjustment to take into account his initial contribution of 20 per cent.

4. There is no dispute that the wife should retain the Q Street property in which she lives and the Suburb T flat she owns.

5. If the wife were to retain the property in her possession, that would equate to slightly more than 25 per cent of the asset pool.

CONTRIBUTIONS

1. The parties acknowledge the disparity in their respective financial contributions. The husband’s initial assets of $1,165,000 exceeded those of the wife by $1,105,000.

2. After the marriage, the wife continued in her employment until 1998 when she established her business. I do not accept the evidence of the husband that none of her earnings were applied to the marriage. He does not suggest that she spent her income outside of the family or give any evidence of what she did with her money. I accept that the wife contributed her income to family purposes.

3. After the marriage, both of the parties applied their efforts to the welfare of their family and the acquisition, conservation and improvement of their property. When their children were born, neither of them was employed outside the home and I am satisfied that they both devoted their energies to their children and their family.

4. After they separated in 2012, Mr R lived with the husband and X lived with the wife.

5. The wife made no contribution to Mr R’s expenses. The husband contributed to the expenses of the wife and of X.

6. Although there was significant dispute about the level of the contribution, I note that the wife, having obtained a Child Support Assessment for X after the husband stopped her access to the supplementary credit card in October 2013, entered into an agreement with the husband to collect privately. There was no weekly payment of a set sum to the wife. Rather, she used a credit card provided by the husband after October 2017 and he paid various of her expenses, such as car payments and expenses, and expenses for X including medical benefits cover, medical expenses, school expenses and dancing expenses. In her affidavit and in cross-examination, she said that she kept an eye on what the husband was paying to ensure that he was paying as much as he was assessed to pay.

7. There is no evidence that, at any time, the wife was of the view that the husband was contributing less for X’s support than the assessment provided. Having heard her evidence, I am reasonably confident that she would not have tolerated that situation.

8. After X became very ill in mid-2018, the wife said that she used the husband’s credit card for expenses for food and petrol and living expenses, in addition to expenses for X and it was her estimate that she spent between $800 and $900 per week on the card. The husband made no complaint and continued to pay the balance on the card each month. I note that between June 2018 and January 2019, the assessment was $1,732 per month, whereas on the wife’s evidence, the husband was providing at least $3,467 per month, if not more. That situation continued until April 2019 when the wife asked the Child Support Agency to collect and thereafter the husband paid only the assessed amount.

9. After X became ill, the husband assisted with her care as he was asked to do so by the wife. I accept his evidence that he has always been willing and available to provide more assistance than the wife would permit. She conceded that he helped at least three times each week by taking X to school or picking her up or keeping an eye on her when the mother was working. The level of co-operation displayed by both parents in relation to the care of their daughter was impressive.

10. Overall, I assess the contributions between the time of the marriage and the hearing as equal.

11. The issue is, what weight should be given to the disparity in their initial contributions?

12. In Jabour & Jabour [2019] FamCAFC 78, the Full Court, referring to the authorities on this issue, stated:

    Again, consistent with the authorities set out above and those which we discuss below, the import of Pierce is that the weight to be attached to an initial contribution must be assessed against the rubric of all of the contributions, both financial and non-financial, made by the parties over the course of their relationship.

13. Their Honours cited with approval the following passages from Dickons & Dickons (2012) 50 FamLR 244:

    18.Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).

    19.That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the Court to take into account contributions made to the welfare of the family (and substantively and “...not in any merely token way...”; see, Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 605 at 636 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property.

    20.Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).

    21.Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79). That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?

    (As per the original)

14. Having regard to all of the contributions made by both parties to the marriage, over a period of some 17 years of co-habitation and a further seven years as separated parents who continued to care for their children, I assess the contributions of the husband to be 65 per cent and of the wife 35 per cent. This provides for the husband to receive, on the basis of his contributions, some $1,988,711 more than the wife.

SECTION 75(2)

1. The wife contends for an adjustment of 5 per cent in her favour. The husband contends for no adjustment.

2. The basis of the husband’s contention is his assertion that the wife is capable of full time work because she can rely upon him to care for X while she works.

3. Whilst I accept that the husband is willing to care for his daughter for any period of time she needs him, the evidence satisfies me that X’s preference is that her mother be her carer.

4. Having regard to the unchallenged evidence of Dr F, I am satisfied that X’s illness restricts the wife’s availability for full time work. Dr F does not suggest that X’s condition will resolve in the foreseeable future.

5. In any event, there is no evidence that there is full time work available to the mother. She has only ever worked as an arts administrator for her present employer. She has not worked more than 16 hours a week since 2013 when she returned to casual work. There is no evidence that there is a full time position available to her.

6. Although she has a qualification in Allied Health, I accept that she cannot run a full time practice from her home because of the strictures of X’s illness. Although I do not question the husband’s sincerity, his proposal would involve his being in the wife’s home caring for X for full days at a time to enable the wife to see patients. That proposal is not feasible. The wife’s evidence is that, between 2013 and 2019 she practiced from home and had about 30 clients.

7. The evidence does not establish what income she received from her practice. Nor is there evidence which would allow a confident prediction that the wife could re-build that practice.

8. The wife is 53 years old. She is probably earning as much as she will be able for the foreseeable future.

9. The husband is a beneficiary under the will of his 85 year old mother. The husband deposed that he will receive no benefit from her estate. The wife disputes that assertion.

10. The will, made in December 2010, was in evidence.

11. The will mandates the creation of three trusts, each holding one third of the estate. The first trust benefits the husband’s sister Ms BB and her family. The husband’s sister is the trustee.

12. The second trust benefits the husband’s sister Ms Z and her family. She is the trustee.

13. The trustees of the third trust are the husband’s two sisters. The beneficiaries of the third trust are the husband and his children or descendants.  The wife is excluded as a beneficiary.

14. There is no evidence which suggests that the husband is not likely to benefit from his mother’s estate.

15. There is no evidence of the value of the estate. The husband’s mother owns five unencumbered real properties in inner western Sydney.

16. Whilst the husband’s prospective inheritance cannot be quantified, I accept that it will be significant. The wife has no prospects of receiving an inheritance, her parents having died some time ago.

17. The wife has a small superannuation entitlement, currently $18,026. She will not be entitled to receive those funds for some time.

18. The husband, who is 62, is not likely to engage in paid employment but will continue to live from his rental income. He will be required to make arrangements to raise a sum of money to pay out the wife’s entitlement but, as I have found later in these reasons when dealing with spousal maintenance and child support, it is likely that his income will continue to be greater than that of the wife.

19. Having regard, primarily, to the disparity in income, I consider that an adjustment in favour of the wife of 5 per cent is appropriate.

CONCLUSION

1. The wife will receive 40 per cent of the net assets of the parties or $2,651,614. She has net assets in her possession of $1,706,940.

2. The husband will pay her a further sum of $944,674.

SPOUSAL MAINTENANCE

1. For the reasons already explained, I accept that the wife is unable to support herself adequately by reason of her obligations to care for X.

2. However, that position will abate when she receives the funds which the husband has been ordered to pay.

3. The wife currently earns $561 per week. I do not include, for the purpose of this application, the income she receives by way of benefit from Centrelink. Her unchallenged fixed expenses are $489. I do not include the amounts claimed for credit card repayments as those amounts must represent either fixed expenses or discretionary expenses. Her unchallenged discretionary expenses are $879 per  week.

4. I accept she has established a need for $400 per week.

5. On behalf of the husband, it was submitted that he has no ability to pay that sum.

6. The husband swore a Financial Statement on 9 August 2019.

7. The husband’s only source of income is rent received from two significant properties. The property at W Street, Suburb B is comprised of three separate flats. The property at M Street, Suburb D is comprised of a two bedroomed flat and a restaurant.

8. He deposed to receiving $1,461 per week from M Street and $1,321 per  week from W Street, a total of $2,782. Since the husband claimed as an expense $416 per week in rates and unit levies and $110 per week for “insurances for rental properties”, it cannot be asserted by the husband that the rent was the net amount after expenses. It is unclear where those figures came from but it is clear that his income was significantly understated.

9. In cross-examination, it emerged that the husband received $2,460 per week gross rent from M Street (excluding GST) and $1,870 per week gross rent from W Street, a total of $4,330.

10. The husband’s claimed fixed expenses, including child support for X of $346 per week, were $2,571. His discretionary expenses for himself and Mr R were $1,792. Thus his claimed total expenses were $4,363.

11. Although there was no challenge to the husband’s claimed expenses, his discretionary expenses included $438 per week for GST and $104 per week for Private Health Insurance.

12. In relation to the GST, that could only be referable to the commercial premises on M Street. I have specifically excluded the GST component of the rent from the husband’s income for the purpose of this exercise. In any event, if the rent is $8,000 per month, the GST on that rent would be $800 per month or $185 per week. The husband has already claimed $98 per week for Private Health Insurance as a fixed expense. I would therefore reduce the husband’s claimed expenses by a total of $542, leaving him with an excess of income over expenditure of $575.

13. The husband has the capacity to pay $400 per week until the wife receives the amount he is required to pay her.

CHILD SUPPORT

1. The husband is currently assessed to pay $32.68 per week, based on the wife’s income of $20,635 and his taxable income in the year ended 30 June 2019 of $32,449.

2. It is immediately clear that the taxable income for the year ended 30 June 2019 of $624 per week bears no resemblance to his current income. The husband gave evidence that he had experienced difficulties with tenants in the year ended 30  June 2019, the tenant in the commercial property in M Street defaulting for a number of months and two of the Suburb B flats being vacant for a period.

3. However, those difficulties have been resolved and his income appears to have normalised.

4. The husband’s taxable income in the year ended 30 June 2018 was $113,887; in 2017 it was $136,534; in 2016 it was $141,388 and in 2015 it was $106,085.

1. Even if the claimed taxable income for 2019 is accurate (the return has not yet been assessed), it is clear that the amount earned was an anomaly.

2. The basis of the wife’s claim for a departure order is the difference between the husband’s claimed income and his actual income.

3. In the circumstances of this case, it was conceded that a basis for departure had been made out.

4. The Child Support Agency is best placed to determine on what income the husband’s child support liability should be assessed.

5. Section 118 of the Child Support (Assessment) Act 1989 (Cth) permits the making of an order varying the payer’s child support income. I propose to order that, from the date of these Orders, the father’s income for the purpose of calculation of child support accord with his actual income.

6. His gross income from rent is $4330 per week or $225,160 per annum. In the year ended 30 June 2016, the husband’s gross rent was about $231,000 and his consequent taxable income was $144,894. I propose to set his child support income at $140,000. I am unable to be more exact in circumstances where the husband has not provided any evidence of his tax deductable expenses.

7. If the husband has to sell one of his properties, his income may change. He will be at liberty to apply for the assessment to be adjusted. Similarly, the wife’s income may change when she receives the money she is to be paid pursuant to these Orders. Nothing in these Orders prevents either party from asking for the assessment of child support to be varied if circumstances change.

I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 23 August 2019.

Associate:

Date: 23 August 2019