Angelou and Tyler

FAMILY COURT OF AUSTRALIA

ANGELOU & TYLER

[2019] FamCA 9

FAMILY LAW – PROPERTY – Final orders.

Family Law Act 1975 (Cth)

Kessey & Kessey (1994) FLC 92-495; [1994] FamCA 162

APPLICANT:

Ms Angelou

RESPONDENT:

Mr Tyler

FILE NUMBER:

SYC

1251

2014

DATE DELIVERED:

15 January 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

21 August 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Dura

SOLICITOR FOR THE APPLICANT:

Barry Nilsson Lawyers

COUNSEL FOR THE RESPONDENT:

Ms Picker

SOLICITOR FOR THE RESPONDENT:

Prime Lawyers

Orders

Pursuant to s 79 of the Family Law Act 1975 (Cth), an order be made in accordance with paragraphs 2 to 10 hereof.
Within 42 days the husband shall do all acts and things and sign all documents necessary to transfer to the wife the whole of his right, title and interest in the property situated at and known as B Street, Suburb C being the whole of the land contained in follow identifier … (“the B Street property”).
Simultaneously with the husband complying with paragraph 2, the wife shall do all acts and things and sign all documents necessary and pay all sums of money necessary so as to cause to be discharged all of the husband’s liability on the mortgage registered on the B Street property title being registered mortgage number #86 to the Commonwealth Bank of Australia (“the mortgage”).
Simultaneously with the husband complying with paragraph 2, the wife shall pay to the husband the sum of $466,419.
Within 28 days the husband shall do all acts and things and sign all documents and make all payments necessary so as to transfer to the wife free of encumbrance the Motor Vehicle 1 registration number ….
In the event the wife, within a period of 3 months from the date of these orders, fails to comply with paragraphs 3 and 4 the parties do all such acts and execute all such documents as may be required to effect a sale of the B Street property by private treaty at a price agreed upon between the parties and failing such agreement to be determined by the President for the time being of the Australian Property Institute of New South Wales or his nominee and that upon the completion of the sale, the proceeds of the sale be applied as follows:
6.1.To pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the matrimonial home;
6.2.Discharge of the mortgage;
6.3.76.1 per cent of the balance to the wife; and
6.4.23.9 per cent of the balance to the husband
provided that in the event that the property sells for more than $2,250,000, the wife shall receive 72.5 per cent and the husband shall receive 27.5 per cent of that increase and in the event that the property sells for less than $2,250,000, then the amount the wife shall receive will be reduced by 72.5 per cent and the amount the husband shall receive will be reduced by 27.5 per cent of that decrease.
Save as specifically provided for by any of these orders to the contrary as against the husband, the wife be declared the sole owner of and the husband has no interest in all other personal property of whatsoever nature and kind in the name possession or ownership of the wife including but not limited to household furniture, jewellery and effects, funds in bank accounts in her sole name, superannuation entitlements.
Save as specifically provided for by any of these orders to the contrary as against the wife, the husband be declared the sole owner of and the wife has no interest in all other personal property of whatsoever nature and kind in the name possession or ownership of the husband including but not limited to household furniture, jewellery and effects, funds in bank accounts in his sole name, superannuation entitlements.
Save as specifically provided for by these orders to the contrary:
9.1.The husband indemnifies the wife and shall keep her indemnified from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to any liability in the name of the husband; and
9.2.The wife indemnifies the husband and shall keep him indemnified from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to any liability in the name of the wife.
Save as specifically provided for in these orders to the contrary, each of the husband and the wife release the other from all debts owing from one to the other.
If either party refuses or neglects to execute any deed or instrument necessary to give validity to these Orders then, pursuant to Section 106A of the Family Law Act 1975 to execute any deed or instrument in the place of the defaulting party and to do all acts and things to give validity the Registrar of the Family Court of Australia Sydney hereby appointed to execute all deeds or documents necessary in the name of the person to whom the direction is given and to do all acts and things necessary to give validity in operation to all such deeds and documents so as to give effect to these Orders.

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 Angelou & Tyler 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 1251 of 2014

Ms Angelou

Applicant

And

Mr Tyler

Respondent

REASONS FOR JUDGMENT

Introduction

The husband and wife both seek different property settlement orders. The parties have three children and had lived together for a period of 13 years. Their major asset is the former matrimonial home at B Street, Suburb C (“The B Street property”).
The wife points to a significant initial contribution, being a property that she owned prior to the cohabitation and monies provided to her by her family during the course of the relationship. The wife also seeks an adjustment in her favour for prospective factors, the most significant of which is the disparity in the earning capacities of the two parties. Whilst the husband agrees that the overall adjustment should be in the wife’s favour, he disputes the extent of the adjustment sought by the wife.
The parties agree that the wife, who has been living in the former matrimonial home since separation with the three children, should be given an opportunity to acquire the former matrimonial home.

Applications

The wife’s proposed minute of order is in Schedule 1. The order sought by the wife would give her 92 per cent of the net assets including superannuation.
In his Response filed 19 May 2014, the husband sought the sale of the former matrimonial home and 35 per cent of the net proceeds of sale. He also sought a superannuation splitting order in the sum of $28,756 to the wife.

Documents relied upon

The wife relies upon the following:
a)Initiating Application filed 5 March 2014;
b)Affidavit sworn and filed 19 July 2018;
c)Financial Statement sworn and filed 19 July 2018;
d)Affidavit of Ms D Angelou sworn 18 July and filed 19 July 2018;
e)Affidavit of Ms E (re: valuation of the Suburb C property) sworn 23 July 2018 and filed 8 August 2018;
f)Affidavit of Ms E (re: retrospective valuation of the Suburb H property) sworn 23 July 2018 and filed 8 August 2018; and
g)Orders of Judge Monaghan dated 4 June 2015.
The husband sought to rely upon his Response filed 19 May 2014, an affidavit filed 17 August 2018, a financial statement filed 17 August 2018 and an affidavit from his uncle, Mr F Tyler, filed 20 August 2018.
In relation to the husband’s affidavit (which had attached to it a significant tender bundle) and his uncle’s affidavit, the wife objected to the husband relying upon that material. The basis of that objection was that on 21 June 2018 the following order had been made:
5.That the parties each file and serve a single consolidated trial Affidavit and Financial Statement within 28 days.
That meant that the husband’s trial affidavit and financial statement should have been filed by 19 July 2018. Instead, it was served on 17 August 2018 (the Friday before the commencement of the hearing). Counsel for the wife did not object to the husband reading his financial statement.
Not only were the documents filed significantly out of time, but they were also filed on the eve of the trial. They gave the wife very little opportunity to consider them. Counsel for the wife pointed to parts of those affidavits that would make any meaningful response by the wife exceedingly difficult.
Pursuant to rule 11.02(1) of the Family Law Rules (“FLR”), the husband’s affidavit filed out of time has no effect unless relief is given from the effect of the sub-rule (r 11.03(1)(a) of the FLR). Counsel for the husband made no application for that relief. As indicated, the wife opposed the husband being able to rely upon these documents. On that application, the wife tendered two documents which became Exhibit 13. The first document was an email written by the husband’s lawyers dated 24 July 2018 addressed to my associate, with a copy to the wife’s lawyers, referring to the direction for the filing of documents (which had already expired) and saying, “We anticipate that we will be in a position to file Court documents next week and we note that there is no prejudice to the other side”. Exhibit 13 also contains a letter from the wife’s lawyers to the husband’s lawyers dated 7 August 2018 noting that they had still not filed any affidavit material or an updated financial statement and put them on notice that an objection would be taken to the husband being given leave to rely upon any material not filed in accordance with the direction that had been made.
Counsel for the husband said that the husband’s current lawyers ceased to act on 23 June 2018 and only came back on the record in mid-July 2018. That in my view is not sufficient excuse for the extremely late filing of the material almost a month after it was due on the eve of the trial.
Counsel for the husband offered no other reason why I would grant leave to dispense with the nullity rule and I disallowed the husband’s evidence apart from the evidence contained in his financial statement.
I did, however, have before me Exhibits 7 and 8. Exhibit 7 was a list of agreed facts. Exhibit 8 was a list of contentions by each party. In so far as a contention in Exhibit 8 has been made by the husband, which is an admission by the husband against his interests, that admission is admissible.

Short history

The wife was born in 1968 and is currently 50 years of age.
The husband was born in 1971 and is currently 47 years of age.
The parties commenced cohabitation on 30 September 2000 and married in 2001.
The parties’ first child, X, was born in 2002 and is currently 16 years of age.
The parties’ second child, Y, was born in 2004 and is currently 14 years of age.
The parties’ third child, Z, was born in 2007 and is currently 11 years of age.
The parties separated on 11 November 2013.

Detailed chronology

The wife was born in1968 and is currently 50 years of age.
The husband was born in 1971 and is currently 47 years of age.
On 24 November 1997, the wife purchased G Street, Suburb H (“the Suburb H property”) for $202,000 plus legal costs and stamp duty of $18,622. The wife says that she borrowed $135,000 from the Commonwealth Bank of Australia secured by mortgage.
In April 2000, the husband purchased an apartment at J Street, Suburb K (“the Queensland property”), for $170,000 plus legal costs and stamp duty. The husband funded the purchase by way of an interest only loan in the sum of $153,000 and he borrowed the balance of the acquisition costs from his uncle.
The parties commenced cohabitation on 30 September 2000 and married in 2001.
At the time of cohabitation, the husband had credit card debts either in the sum of $35,000 or $25,000 (discussed below).
In February 2002, the parties purchased a property at L Street, Suburb C (“the Suburb C Property”) in their joint names for $489,000. The property was rented out for 2 years.
On 11 October 2002, the husband refinanced the mortgage over the Queensland property, with a borrowing of $179,845.
In 2003 or 2004, the wife received a $100,000 from her mother which she used to pay off the Suburb H mortgage. There was nothing owing on the Suburb H mortgage following this payment.
The parties’ first child, X, was born in 2002 and is currently 16 years of age.
In 2004, the parties moved into the Suburb C property. The husband purchased a Motor vehicle 2 for the wife for $26,000 and arranged finance with monthly payments totalling $410 per month.
The parties’ second child, Y, was born in 2004 and is currently 14 years of age.
In December 2004, the Queensland property was sold for $300,000. Exhibit 8 contains a contention by the husband that he received about $40,000 from the net proceeds after his uncle had been paid half of them. There is no evidence as to what happened to any of the net proceeds of sale. The wife recalls the husband may have received about $30,000 and that some of that money may have been expended on an overseas trip by the family.
In June 2006, the parties purchased a unit located at M Street, Suburb N (“the Suburb N unit”) for $620,000 which was subject to a mortgage with the Commonwealth Bank of Australia. The property was tenanted at all times.
In 2007, the wife’s parents gifted $160,000 to the wife. The wife applied $100,000 to the Suburb C property and $50,000 towards the reduction of the Suburb N unit mortgage. The balance was used on payment of credit card and living expenses.
In July 2007, the husband purchased a Motor vehicle 1 for the wife for $42,500 under a finance lease with payments of $759 per month.
The parties’ third child, Z, was born in 2007 and is currently 11 years of age.
In February 2008, the wife transferred a 99/100 share of the Suburb H unit to the husband. The husband borrowed 100 per cent of the purchase price and paid to the wife the sum of $320,000 which was then paid to the Suburb C mortgage. At this point, the parties had three children who were under the age of 6. The third child had significant health difficulties and the wife took a year and a half off work. The arrangement to transfer the whole of the wife’s interest in the Suburb H property, 99 per cent to the husband, was a strategy to negatively gear interest payments upon borrowings that were against real estate which was generating income and not borrowings secured by the former matrimonial home.
In May 2009, the husband purchased Motor vehicle 3which was subject to a hire purchase loan agreement.
In February 2011, the husband was employed as a Senior Manager at Company O and was earning approximately $299,520 gross per annum.
In May 2011, the husband purchased Motor vehicle 1 for the wife for $43,001 under a finance lease with repayments of $785 per month.
In about December 2011, the husband borrowed about $120,000 to fund loans on two motor vehicles and for other unknown purposes.
On 6 September 2013, the parties purchased the B Street property for $1,550,000, with a mortgage of $810,000 secured on the property.
In October 2013, the parties exchanged contracts to sell the Suburb C property for $947,000.
The parties separated on 11 November 2013. The parties agreed that the wife would collect the Suburb N unit rental income of approximately $2,721 per month and apply it to the mortgage repayments and outgoings. The husband withdrew approximately $4,000 from the joint account.
On 18 November 2013, settlement of the Suburb C property occurred and net proceeds of $925,000 were deposited into the parties’ joint bank account.
On 25 November 2013, the wife cancelled the husband’s supplementary credit card.
On 27 November 2013, contracts for the sale of the Suburb H property were exchanged for $571,000.
On 29 November 2013, the settlement for the B Street property occurred and the wife and children moved into the property.
On 30 November 2013, the wife withdrew $41,000 from the Commonwealth Bank Account #58.
In December 2013, the husband resecured the borrowing of $120,000 that had been taken out in 2011 using the B Street property as security.
On 9 December 2013, the husband sold shares valued at $3,920.39.
On 13 December 2013, the husband transferred $5,771.99 to the wife’s Commonwealth Bank Account #58.
On 20 December 2013, the sale of the Suburb H property was settled at the sale price of $571,000. The net proceeds, after the discharge of the mortgage totalling $214,000 were applied to the B Street mortgage.
In January 2014, the husband rented a 3 bedroom unit in Suburb P to be close to the children.
On 11 January 2014, the husband made the first Child Support payment of $3,181.22.
In April 2014, the husband purchased Motor vehicle 4 for $45,535.12 through a lease agreement. The husband traded Motor vehicle 5 for approximately $25,000 in cash.
On 24 June 2014, the husband sold his Company O shares for $34,199.54. In September and October 2014 the husband sold further shares and received $8,347.92 and $3,916.62 respectively.
On 7 November 2014, the settlement of the sale of the Suburb N property took place, with net proceeds of $459,928 paid to the B Street mortgage.
In December 2014, the husband ended his employment at Company O. He then worked as a self-employed consultant earning approximately $12,000 to $15,000 per month, until he opened a small consulting business in mid-2015.
On 4 June 2015, Judge Monahan made interim property orders. The husband was ordered to pay $175 per week towards the B Street property, council rates and home and contents insurance on the property and mortgage interest payments.
In July 2017, the husband purchased Motor vehicle 1 for the wife under a finance lease, with repayments of $566 per month which were all met by the husband.
On 3 August 2017, in accordance with orders made in May 2015, the parties withdrew the following sums of money from the joint CBA home loan:
a)$35,258.88, which was paid to settle the wife’s tax bill;
b)$86,724, which was paid to settle the husband’s CGT liability; and
c)$7,000 which was paid to reimburse the wife for payment of the parties’ son’s baseball trips.
The husband re-partnered and has a child of that relationship, namely W, who was born in 2017.
On 5 February 2018, the husband says that he is currently employed with Q Group and earns $240,000 per annum. The wife says that the husband is entitled to bonuses which will increase his income. Since separation, the wife works approximately 22.5 hours per week with R Ltd and earns approximately $42,000 per annum.

Approach

In this matter my task is to:
a)Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
b)Determine whether it is just and equitable to make an order altering those interests and if so;
i)Identify relevant contributions and assess them;
ii)Consider relevant matters referred to in s 79(4)(d) – (g) of the Act;
c)Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.

Balance sheet

The settled balance sheet (Exhibit 16) is set out below.

Assets
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
1	J	B Street, Suburb C	$2,250,000	$2,250,000	Agreed	$2,250,000
2	W	CBA Streamline a/c #58	$1,917	$1,917	Agreed	$1,917
3	H	CBA Transaction a/c #69	$13,598	$13,598	Agreed	$13,598
4	H	CBA Netbank saver a/c #46	$21	$21	Agreed	$21
5	H	Motor vehicle 1	$27,000	$27,000	Agreed	$27,000
6	H	Motor vehicle 4	$20,000	$20,000	Agreed	$20,000
7	W	Company AA Shares	$7,880	$7,880	Agreed	$7,880
8	H	Company U Pty Ltd shares	$48,233	$48,233	Agreed	$48,233
9	W	Furniture and effects	$3,000	$3,000	Agreed	$3,000
10	H	Furniture and effects	$5,000	$5,000	Agreed	$5,000
11	W	CBA shares	$24,471	$24,471	Agreed	$24,471
12	H	Proceeds of sale of Motor vehicle 5	$25,000	$25,000	Agreed	$25,000
13	H	Tyler Super Fund	$211,193	$211,193	Agreed	$211,193
14	H	Super 1	$10,961	$10,961	Agreed	$10,961
15	H	Super 2	$6,633	$6,633	Agreed	$6,633
16	W	CBA Super	$192,723	$192,723	Agreed	$192,723
17	H	Super 3	$12,245	$12,245	Agreed	$12,245
Total assets			$2,859,875
Liabilities
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
18	J	CBA loan over Suburb C	$299,091	$299,091	Agreed	$299,091
19	H	AMEX Platinum #07	$11,815	$11,815	Agreed	$11,815
20	W	CBA credit card #60	$17,440	$17,440	Agreed	$17,440
21	H	CBA Credit card #41	$2,489	$2,489	Agreed	$2,489
22	H	S Finance	$29,964	$29,964	Agreed	$29,964
23	H	T Finance	$14,959	$14,959	Agreed	$14,959
24	H	Directors loan from Company U	$106,130	$106,130	Agreed	$106,130
Total liabilities			$481,888
Total net assets			$2,377,987
Total net assets over all pools				$2,377,987

Whether an order altering interests should be made

The parties have separated and their partnership has ended. After the separation, there was no longer a continuing commitment to the mutual use of assets and a shared responsibility for liabilities. The balance sheet sets out how the assets and liabilities are held. Both parties seek a different property settlement order, each of which would make adjustment to how the assets are currently held.
I find that in all the circumstances, it is just and equitable to make an order altering property (including adjusting liabilities).

Contributions

The wife contends that there should be an adjustment of 65 per cent in her favour based on contributions. The husband contends that that adjustment should only be 60 per cent in the wife’s favour.

Initial contributions

At the commencement of cohabitation, the wife owned the Suburb H property which the single expert retrospectively valued at $250,000 at the date of cohabitation. At this time, the Suburb H property was encumbered by a mortgage in the approximate sum of $100,000. The circumstances in which this mortgage was discharged are discussed below. This property was ultimately sold for $571,000 in November 2013.
The introduction of the $150,000 equity in the Suburb H property is a significant contribution to the overall finances of the parties at the commencement of their relationship.
The wife also had superannuation entitlements of $32,309 at the time of cohabitation.
The husband owned a property in Suburb K, Queensland with his uncle at the time of cohabitation. The wife asserts that there was no equity in this property at the commencement of cohabitation. The purchase price of this property was $170,000 plus stamp duty. The husband says he borrowed $153,000 to acquire the property from a financial institution and $22,000 from his uncle. The amount borrowed, therefore, exceeded the purchase price and I accept the wife’s contention that the husband had little equity in the Queensland property at the time of the cohabitation.
The wife also contends that the husband entered into the relationship with $35,000 of credit card debts and a motor vehicle lease. The husband contended in the Chronology of Contentious Facts (Exhibit 8) that he only owed $25,000 in credit card debt. There is no evidence before me from the husband about that. The wife asserted that she had a specific memory of going to a financial institution and cutting up the husband’s credit cards. She says that her specific memory is that the debt was $35,000, not $25,000. Whilst the wife asserted these facts in quite a positive way, her memory in other areas has proven not to be so reliable and I am unable, based on her evidence, to make a finding that the husband had $35,000 in credit card debts. I adopt the admission by the husband that his credit card debt was $25,000 at the date of cohabitation.
The husband owned a motor vehicle which was leased and there is no evidence that there was any equity in this asset.
The husband was unable to acquire superannuation statements as of the date of cohabitation but approximates that it was in the value of $60,000. Again, there is no evidence to substantiate that assertion.

Monies received from the wife’s mother

The evidence given by the wife and her mother about these matters was somewhat confusing.
At the outset of the hearing it was an agreed fact that that the wife had received gifts and an inheritance from her family in sums totalling $260,000. It had been agreed that the wife received an inheritance from her grandfather’s estate of $100,000 from her mother in 2004, which she used to discharge the mortgage on the Suburb H property. In addition, the wife received in May 2008, a further $160,000 from her mother.
Exhibit 7, contains the following agreed facts:

Item 7

2003

The wife received an inheritance from her Grandfather of $100,000 and the wife applied this to the [Suburb H] mortgage.

…

Item 14

2007

The wife’s parents gifted $160,000 to the wife. The wife applied $100,000 to reduce the [Suburb C] property mortgage and $50,000 towards the reduction of the mortgage on the [Suburb N] unit mortgage.

The balance was used for payment of credit card debt and living expenses.

The wife now asserts that there were, in fact, two payments of $100,000 that she received from her mother, in addition to the receipt of the sum of $160,000. The husband disputed that there were two payments of $100,000.
The wife, in her affidavit of 19 July 2018, stated at [16] the following:
I have now had a chance to further search my memory and obtain records in relation to my grandfather’s estate… I have been reminded by my mother, that my grandfather passed away in 2005 and I did not receive my inheritance from him until late 2005/early 2006. My mother also reminded me that she gave me money in 2004 to pay out the mortgage on the [Suburb H] property. When she reminded me of that I recall her giving me the cheque. I recall running down the street with the cheque in my handbag to go to the bank to pay out the loan. I believe my mother gave a similar amount to my brother. It was $100,000 each. I subsequently received money from my grandfather’s estate and those monies were paid against the mortgage owing for the property at [L Street, Suburb C].
During her oral evidence, the wife reiterated what she had asserted in her affidavit, namely, that she had received two amounts of $100,000 instead of one from her mother.
During the wife’s mother’s oral evidence she confirmed that she had given the wife an amount of $100,000 as a gift from monies that were saved from the family’s business, had given her an additional $100,000 that comprised of $80,000 from the wife’s grandfather’s estate which she “topped up” with an amount of $20,000 and a final amount of $160,000. When questioned in cross examination about the $100,000 that she had gifted from the $80,000 received from the estate, the wife’s mother replied “yes” to the question of whether the wife had reminded her of that that day.
The husband denied that he had ever heard about the second amount of $100,000 that the wife received from her mother.
Counsel for the wife did not attempt to re-examine the wife’s mother in relation to that evidence nor recall the wife in reply. I was not taken to any corroborative evidence that would establish the payment of two lots of $100,000. Given the lateness in the assertion of the additional payment of $100,000 and the inconsistency in the wife’s position on this topic, I am reluctant to accept oral evidence of the wife in this regard. Given the communication the wife has had with her mother in relation to this evidence, I do not accept that their evidence is independent on this topic. I consequently on balance am not prepared to accept an additional amount of $100,000 was paid.
Counsel for the husband relies upon questions she asked of the wife’s mother in the witness box to the effect as to whether or not the $100,000 that was given early in the relationship to discharge the mortgage was a gift to both parties. The wife’s mother, who had poor English, said yes to that question. Counsel for the husband did not ask the wife whether she considered the gift from her mother to be to both the parties and not just to herself. Given the earlier agreement by the husband and my lack of confidence in the wife’s mother’s understanding of the question she was asked, I am not prepared to accept that the $100,000 should be treated as a joint contribution made on behalf of both the parties by the wife’s mother. I find that it was a contribution made on behalf of the wife. (see Kessey & Kessey (1994) FLC 92-495).

Other financial contributions

The husband’s earnings from personal exertion were higher than the wife’s throughout the relationship.
The wife has been employed throughout the marriage on a full time or part time basis, except for periods of maternity leave.
In December 2004, the husband’s Suburb K property was sold, with net proceeds of $106,562. Upon payment of the arrangement made with his uncle, and the debt he owed to him, the husband received $31,967. The proceeds were used to renovate the Suburb C property and a family trip.
Prior to the mortgage on the Suburb H property being discharged, approximately $35,000 was paid during the parties’ cohabitation towards servicing the mortgage.
The wife had three periods of maternity leave from Company BB. Her evidence is that she was paid substantial maternity leave during the times she had off. The most lengthy of those times was after the birth of the third child who had significant health problems. The wife’s evidence was that she stayed at home with him for about a year and a half and he had a serious operation when he was about one year of age.

Non-financial contributions

The wife was the primary homemaker and parent throughout the marriage.
The wife asserts that the husband incurred debts on the wife’s credit card pre-separation, in pursuit of an extra-marital affair.
The husband often helped out through the preparation of meals and the feeding and bathing of the children. He coached all three children in sport and would also tutor the children and help them with school work.

Post separation contributions

After separation, the wife continued to be the primary homemaker and parent to the parties’ three children. In addition, she has been solely responsible for the maintenance and upkeep of the B Street property.
In addition, the wife contends that the husband received the full benefit of the sale of the Motor vehicle 5 for $25,000 which was obtained during the marriage, whilst entering into the purchase of another vehicle which was fully financed. However, the parties have agreed that that $25,000 is to be notionally attributed to the husband on the balance sheet by way of an addback, so I disregard the husband’s receipt of this sum when assessing contributions.
The wife believes that the husband has acted in the parties’ financial detriment by spending extravagantly on girlfriends and travelling overseas and the like.
Since separation, the husband has continued to pay the wife’s car lease and insurance of $161 per week and the home and contents insurance of the B Street property. The husband has also paid $6,199 in private health insurance. The husband currently pays child support in the sum of $632 per week. He asserts that he has paid a total of $156,238 in child support since separation (almost 5 years). The wife alleges that the husband has not complied with the orders of Judge Monahan dated 4 June 2015 that he pay $175 per week towards the home loan. The husband concedes that he is approximately $10,000 in arrears on the mortgage payments on the B Street property. He paid about $20,000 over the five year period but not the whole amount that had been ordered.

Conclusion on contributions

The parties’ contributions by personal exertion in their respective roles during the marriage were equal. There is, however, a significant disparity in contributions in favour of the wife arising from differences in the initial contributions of the parties (and in particular the wife’s $150,000 equity in the Suburb H property), the infusion of $260,000 by the wife or on her behalf during the marriage and greater contributions made by the wife in the role of parent of the children in the five years since separation.
Taking all the above into account, in my view, there should be a 62.5 per cent adjustment in the wife’s favour based on contributions.

Section 79(4)(d) – (g) matters

It is the wife’s contention that there should be a 15 per cent adjustment in her favour based on s 79(4)(d) – (g) considerations. The husband contends that that adjustment should be 5 per cent (based upon a contention that the contribution finding should be 60 per cent).
The parties’ were married for approximately 12 years, and the wife’s role in the home during those years has impacted upon her future earning capacity. The wife’s gross income is $44,000 per annum. The husband’s gross income per annum is approximately $240,000. The husband has access to bonuses and long term incentives and benefits. The disparity in the respective abilities of the parties to regenerate wealth through personal exertion is a weighty consideration.
I have regard to the division of the net assets that arise as a result of the contribution findings.
The wife is in good health. I have no indication that the husband is otherwise than in good health.
After separation, the husband sold Company V shares totalling $3,920.39 and Company O shares totalling $46,464.08. In the husband’s Financial Statement of 17 August 2018, he asserts that he applied the proceeds to general living expenditure. It was put to the husband that these monies had been expended on legal fees. The husband in oral evidence indicated that to the best of his knowledge, the monies had not been spent on legal fees. The wife then referred to page 64 of the index of exhibits to her affidavit (Exhibit 11). That is a letter from the husband’s lawyers dated 11 January 2018 in the following terms:
We are instructed that our client sold the [Company O] and [Company V] shares post separation. Accordingly our client apologises for the oversight. Furthermore, we are instructed that the net proceeds of sale were applied to legal fees. We are informed by our client that this was disclosed in 2014. Nonetheless, we enclose a copy of the disclosure material in relation to this issue.
I accept that the Company O shares were used for the payment of legal fees and that the wife received no benefit in respect of the disposition of those shares. I would infer that the rights to these shares were significantly contributed to by efforts made by the husband in his employment during the marriage.
The husband has provided evidence in this financial statement that he currently owes his uncle, Mr F Tyler, $230,000. The husband gave oral evidence that the amount owed to his uncle had “pretty much” accumulated since separation. The husband agreed in cross examination it was possible that some of the monies that he owed his uncle had gone to legal fees (I infer that the balance of these borrowings are most likely borrowings to assist the husband’s living expenses). They have not been placed on the balance sheet but I do have some regard to that outstanding liability in the context of the husband’s current financial position. The husband also asserted that he had a tax debt that he owed associated with his business.
The wife states that the husband has made no contributions to the parenting of the two eldest children for the last 12 months. The wife also has the sole care of the youngest child, who spends minimal time with the husband.
The wife has not re-partnered. The husband has a new partner and child who was almost one year old at the date of the hearing. The husband contends that his new partner has a profession, but has not earnt an income since the birth of their child. The new partner also has a child from a previous relationship who resides with the husband and who was aged five at the date of the hearing.
Counsel for the husband did not attempt to rely upon a financial statement sworn by the husband’s new partner. Consequently, I have very little overall knowledge of the financial position of the husband’s partner except that she owns two properties and has income from those rental sources of $740. The wife alleges that there has not been proper disclosure by the husband of his new partner’s income.
The husband pays $850 per week by way of rent for his own accommodation and the accommodation of his new partner, her child and their new child.
Counsel for the wife agreed to place on the balance sheet liabilities of the husband with Amex in the sum of $11,815 and with CBA credit card in the sum of $2,489. Having made that concession, counsel for the husband then attempted to argue that the wife should not be made responsible for any of those liabilities because they were incurred after separation. There is no evidence one way or the other as to how these borrowings and credit cards were used and counsel for the wife did not ask the husband that question. Given the concession by the wife that these liabilities should be placed upon the balance sheet, I do not intend to regard those liabilities as something that somehow counts in the wife’s favour. By way of contrast, the husband makes no similar assertion in relation to the wife’s credit card which is on the balance sheet at $17,440. In that regard, counsel for the wife argues that there is evidence that that credit card debt existed as to about $14,000 as at the date of separation and is of a different nature than the husband’s credit cards. Again, given there was agreement prior to the trial to place these credit card debts upon the balance sheet, they do not need to be further taken into account at this stage.
Counsel for the wife also raised issues in respect of items 8 and 24 on the balance sheet. Item 8 is a value ascribed to the husband for his shareholding in Company U Pty Ltd. This is a dormant company which is not currently trading. The husband explained that the director’s loan account came about as a result of Division 7A loan agreements being entered into in 2015 and 2017. This is money that has come to the husband from the company. These loans have been created so that the monies coming to the husband from the company are not being treated as a dividend but rather as a loan. I infer that the monies were available because of the personal exertion of the husband. The wife’s agreement to items 8 and 24 being placed on the balance sheet constituted an acceptance that Company U Pty Ltd actually had a negative value if the husband’s loan to that company was disregarded.
The husband, in any event, gave evidence that these loan monies drawn from the company were primarily used on living expenses. Apart from the relevance that items 8 and 24 have by way of an asset and liability on the balance sheet, I do not take these items into account in any other way.
The wife’s mother (and to a lesser extent, the wife’s brother) provide a financial resource to the wife. The wife has over the years relied on her mother to assist her with her financial needs from time to time. The wife’s mother gave evidence that she has some capacity along with her son who lives with her, to ensure that the wife’s ownership of the Suburb C is protected and the wife and the wife’s mother’s grandchildren retain the use of that property.
There is evidence that after separation the wife moved $8,000 into an account in the name of the eldest child. The wife retains control over that account. The wife asserted that this was the christening money of the three children. I do not accept that the wife does not actually continue to have control over this money.
The wife was questioned about an amount of $69,000 which she said she had at one point held in a term deposit account in her name on behalf of her mother. The wife says that her mother had asked her to deposit this money for her as the bank that offered this account had only one branch and the wife’s mother didn’t drive. Later, when the wife’s mother wanted that money moved, the wife closed the account and gave the money back to her mother. The wife’s mother confirmed this in cross examination. I accept the evidence of the wife and her mother in relation to the ownership of this money, however, it does to some degree demonstrate the fluidity with which money flows between the wife and her mother.
The wife was also asked questions about an amount of $41,000 that she had withdrawn from her CBA account. The wife said that she did not consider this money hers as it was monies she had saved from what her mother had lent her over time. She stated that she was a “good saver” and had returned those monies to her mother. I accept the wife’s evidence about that.

Conclusion in relation to s 79(4)(d) – (g) considerations

Taking all the above into account, there should be a 10 per cent adjustment in the wife’s favour.

Just and equitable

At the end of final submissions, counsel for the wife indicated that he sought leave to amend his application for a property settlement order to seek a super splitting order. He did not specify the quantum of that order and conceded that procedural fairness had not been given to the trustee. More than that, procedural fairness had not been given to the husband and it was too late in the last breath of the case and at the heel of the hunt to make such an application. The application was opposed and I did not grant the wife leave to amend her application in that way at that time.
Based upon findings in respect of contributions and s 79(4)(d) – (g) considerations, there should be a 72.5/27.5 per cent split of the net assets of the parties in the wife’s favour. That alteration could be achieved by distributing the assets and liabilities and superannuation in accordance with the following table:

Husband gets 27.5 per cent
Assets
Item No.	Description	Percentage	Value
3	CBA Transaction a/c #69	100 per cent	$13,598
4	CBA Netbank saver a/c #46	100 per cent	$21
6	Motor vehicle 4	100 per cent	$20,000
8	Company U Pty Ltd shares	100 per cent	$48,233
10	Furniture and effects	100 per cent	$5,000
12	Proceeds of sale of Motor vehicle 5	100 per cent	$25,000
13	Tyler Super Fund	100 per cent	$211,193
14	Super 1	100 per cent	$10,961
15	Super 2	100 per cent	$6,633
17	Super 3	100 per cent	$12,245
Liabilities
Item No.	Description	Percentage	Value
19	AMEX Platinum #...07	100 per cent	$11,815
21	CBA Credit card #...41	100 per cent	$2,489
22	S Finance	100 per cent	$29,964
23	T Finance	100 per cent	$14,959
24	Directors loan from Company U	100 per cent	$106,130
Husband receives		$466,419
Net Assets		$653,946
Wife gets 72.5 per cent
Assets
Item No.	Description	Percentage	Value
1	B Street, Suburb C	100 per cent	$2,250,000
2	CBA Streamline a/c #...58	100 per cent	$1,917
5	Motor vehicle 1	100 per cent	$27,000
7	Company AA Shares	100 per cent	$7,880
9	Furniture and effects	100 per cent	$3,000
11	CBA shares	100 per cent	$24,471
16	CBA Super	100 per cent	$192,723
Liabilities
Item No.	Description	Percentage	Value
18	CBA loan over Suburb C	100 per cent	$299,091
20	CBA credit card #69	100 per cent	$17,440
Wife pays Husband		$466,419
Net Assets		$1,724,041

Standing back, I consider the above distribution to be just and equitable.
The wife gave evidence that she has already arranged with a financial institution to refinance the current mortgage on the Suburb C property so that the property and the mortgage can be placed in her sole name.
The wife should be given three months to organise (including with her mother and brother) the payment of the amount of $466,419 to the husband.
In the event that that payment cannot be achieved within a period of three months, then there is to be a sale of the Suburb C property on the basis that if the sale price of that property is in the sum of $2,250,000 then the wife is to receive 76.1 per cent of the net proceeds of sale after the discharge of the mortgage ([$2,250,000 - $299,091 - $466,419] ÷ [$2,250,000 - $299,091]) and the husband is to receive 23.9 per cent of the net proceeds of sale ([$466,419 ÷ [$2,250,000 - $299,091]). In the event that the property sells for more than $2,250,000, the wife shall receive 72.5 per cent and the husband shall receive 27.5 per cent of that increase and in the event that the property sells for less than $2,250,000, then the amount the wife shall receive will be reduced by 72.5 per cent and the amount the husband shall receive will be reduced by 27.5 per cent of that decrease.

I certify that the preceding one hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 15 January 2019

Associate:

Date: 15.1.19

SCHEDULE 1

That within 42 days the Husband shall do all acts and things and sign all documents necessary to transfer to the Wife the whole of his right, Title and interest in the property situated at and known as B Street, Suburb C being the whole of the land contained in follow identifier … (“the B Street property”).
That simultaneously with Order 1 the Wife shall do all acts and things and sign all documents necessary and pay all sums of money necessary so as to cause to be discharged all of the Husband’s liability on the mortgage registered on the B Street property title being registered mortgage number … to the Commonwealth Bank of Australia.
That within 28 days the Husband shall do all acts and things and sign all documents and make all payments necessary so as to transfer to the Wife free of encumbrance the Motor Vehicle 1 registration number ….
Save as specifically provided for by any of these orders to the contrary as against the Husband, the Wife be declared the sole owner of and the Husband has no interest in all other personal property of whatsoever nature and kind in the name possession or ownership of the Wife including but not limited to household furniture, jewellery and effects, funds in bank accounts in her sole name, superannuation entitlements.
Save as specifically provided for by any of these orders to the contrary as against the Wife, the Husband be declared the sole owner of and the Wife has no interest in all other personal property of whatsoever nature and kind in the name possession or ownership of the Husband including but not limited to household furniture, jewellery and effects, funds in bank accounts in his sole name, superannuation entitlements.
Save as specifically provided for by these orders to the contrary:
6.1.The Husband indemnifies the Wife and shall keep her indemnified from and in respect of all actions, claims, suits and demands as may be made against the Wife in relation to any liability in the name of the Husband; and
6.2.The Wife indemnifies the Husband and shall keep him indemnified from and in respect of all actions, claims, suits and demands as may be made against the Husband in relation to any liability in the name of the Wife.
Save as specifically provided for in these orders to the contrary, each of the Husband and the Wife release the other from all debts owing from one to the other.
If either party refuses or neglects to execute any deed or instrument necessary to give validity to these Orders then, pursuant to Section 106A of the Family Law Act 1975 to execute any deed or instrument in the place of the defaulting party and to do all acts and things to give validity the Registrar of the Family Court of Australia Sydney hereby appointed to execute all deeds or documents necessary in the name of the person to whom the direction is given and to do all acts and things necessary to give validity in operation to all such deeds and documents so as to give effect to these Orders.
That the Husband pay the Wife’s costs of and incidental to these proceedings.

[2019] FamCA 9

15 January 2019

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Family Law

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