Asher and Asher
[2016] FCCA 2072
•13 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ASHER & ASHER | [2016] FCCA 2072 |
| Catchwords: FAMILY LAW – Alteration of property interests – issues about constitution of the asset pool – husband’s draw down and expenditure of superannuation post-separation – dispute about $35,000 in cash kept in a red shoe box in the home – credit issues – assessment of contribution and future needs. |
| Legislation: Evidence Act 1995, s.128 Family Law Act 1975, ss.75, 79 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395 |
| Applicant: | MS ASHER |
| Respondent: | MR ASHER |
| File Number: | WOC 282 of 2015 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 28 July 2016 |
| Date of Last Submission: | 28 July 2016 |
| Delivered at: | Wollongong |
| Delivered on: | 13 September 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Rosic |
| Solicitors for the Applicant: | Kells The Lawyers |
| Counsel for the Respondent: | Ms Humphreys |
| Solicitors for the Respondent: | Kennedy & Cooke |
ORDERS
That within 21 days, the Applicant Wife and the Respondent Husband do all acts and things and sign all necessary documents to effect a sale of the property situated at Property Q (hereinafter “the Property Q property”), in the State of New South New South Wales and more particularly described in Certificate of Title Folio Identifier (omitted) and for that purpose the following shall apply:
(a)The property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and failing agreement, within 21 days of the date of these Orders the real estate agent will be as nominated by the President of the Real Estate Institute of New South Wales at the request of the parties or either of them;
(b)The list price of the property shall be such amount as is agreed between the parties and failing agreement, within 21 days of the date of these Orders the list price will be as nominated by the real estate agent;
(c)That the sale price of the property shall be such amount as is agreed between the parties and failing agreement an offer to buy the property that is at least 80% of the list price shall be accepted by the parties as the sale price;
(d)The parties are to cooperate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent, ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
(e)That upon agreement being reached for the sale of the property, the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor;
(f)The contract for sale shall provide for completion within 42 days after the date of the contract;
(g)The proceeds of sale of the property shall be paid in the following manner and priority:
(i)Payment of the agents commission advertising or other expenses if applicable payable on the sale;
(ii)Payment of the legal costs outlaid in relation of the sale; and
(iii)Balance be divided:
A.$293,675 to the Applicant Wife; and
B.$261,325 to the Respondent Husband;
C.Any remaining balance to be divided as to 52.5% to the Husband and the remainder to the Wife.
In the event that the property is not sold by private treaty pursuant to Order 1 within four (4) months from the date of this Order then the Applicant Wife and the Respondent Husband do all acts and sign all such documents as are necessary to sell the property by auction and the following shall apply:
(a)The property shall be listed with an agent appointed under Order 3 (hereinafter called “the Auctioneer”) for sale by auction within two months;
(b)The parties shall execute all documents requested by the auctioneer for the sale of the property;
(c)The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer;
(d)That the parties shall each pay to the auctioneer one half of any sums requested for the advertising or auction expenses and if one of the parties pays all the expenses, that party shall be reimbursed from the proceeds of sale in respect of one half of such payments before any division between the parties;
(e)That the parties shall give such instructions as are necessary to Kells to prepare a contract for sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer;
(f)That the parties agree to cooperate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the property at all times reasonably requested by the auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction;
(g)That the parties attend at auction and negotiate with the highest bidder in the event the reserve price not being reached;
(h)The sale price of the property shall be any amount in excess of the reserve price but in the event the reserve price not being reached the sale price of the property shall be such amount as agreed between the parties or failing agreement any offer received after the auction to the property at a price that is at least 80% of the reserve price shall be accepted by the parties;
(i)That the parties attend at the auction and negotiate with the highest bidder or any other interested party in the event that the reserve price is not reached for the purposes of reaching agreement under the above Order;
(j)That upon agreement being reached for sale of the property, Orders 1(e)-(g) shall apply.
Pending the Respondent Husband vacating the Property Q property before settlement of the sale:
(a)That the Respondent Husband maintain the Property Q property in a clean and tidy manner; and
(b)That the Respondent Husband be restrained by injunction from damaging the Property Q property (including the furniture and effects housed in the Property Q property) in any way.
That the Applicant Wife retain all right, title and interest in and to:
(a)The Kia (omitted) motor vehicle, registration number (omitted).
(b)Any superannuation entitlement held in her sole name.
That the Respondent Husband retain all right, title and interest in and to:
(a)The (vehicle omitted) motor vehicle, registration number (omitted).
(b)The Honda motorcycle, registration number (omitted).
(c)The Honda motorcycle, registration number (omitted).
(d)All animals and livestock on the Property Q property as at the date of this order.
That:
(a)in accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to the Respondent Husband from his interest in the (omitted) Superannuation Fund (Member Number (omitted)) (hereinafter “the Fund”), the Applicant Wife is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using base amount of $171,596.60 and there is a corresponding reduction in the entitlement the Respondent Husband would have had but for these Orders.
That:
(a)the Court allocates, as required by Section 90MT(4) of the Family Law Act, a base amount of $171,596.60 to the Applicant Wife out of the Respondent Husband's interest in the Fund.
(b)in accordance with Section 90MT(1)(a) of the Family Law Act, the Court:
(i)creates an entitlement on the part of the Respondent Wife to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(ii)makes a corresponding reduction in the entitlement to the Respondent Husband, or such other person to whom a splittable payment may be made, would have had in the Fund but for these Orders.
(c)whenever the Trustee of the Fund makes a splittable payment out of the Respondent Husband's interest in the Fund, the Trustee shall do all such acts and things and sign all such documents as may be necessary to pay the entitlement created in Order 7(b) of these Orders in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
(d)these Orders have effect from the operative time and the operative time is 4 business days after the service of these orders on the Trustee of the Fund.
That as between the Applicant Wife and Respondent Husband and subject to the above orders the Applicant Wife and Respondent Husband shall each respectively retain all interest and entitlements to:
(a)All personal property now in his or her respective possession or control;
(b)All shares, debentures, unit in unit trusts, bank, building society, credit union accounts standing in his or her sole name respectively;
(c)All interest in all life insurance policies, superannuation funds standing in his or her sole name respectively.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
IT IS NOTED that publication of this judgment under the pseudonym Asher & Asher is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT WOLLONGONG |
WOC 282 of 2015
| MS ASHER |
Applicant
And
| MR ASHER |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment explain the Orders that the Court has made under s.79 of the Family Law Act 1975 (hereafter referred to as ‘the Act’), by way of alteration of the property interests between the Applicant Wife and the Respondent Husband.
Background
The Applicant Wife is 63 years old and describes herself as undertaking (occupation omitted) at a (employer omitted) in the (omitted) region of New South Wales. The Respondent Husband is 62 years old and describes himself as a pensioner. They commenced cohabitation in 1988, married in 1989 and separated in January 2015. There are no children of their relationship but during the marriage the Wife’s two children, both now adults, lived with them as part of the Husband and Wife’s household. Both the Husband and the Wife worked for extensive periods in the marriage.
The separation and the period thereafter, was quite tumultuous for the Husband and the Wife. It is common ground that as at the date of separation they had about $35,000 in cash kept in a red shoebox at the former matrimonial home. One of the factual issues that the Court needs to decide is who has the money, or at least what is left of it. Each asserts that the other took this money.
At separation the Wife left the former matrimonial home but returned on a number of occasions to collect her personal belongings. The Husband remained in the former matrimonial home and continues to do so as at the date of the hearing.
In the post-separation period the Husband incurred very substantial expenditure on his credit cards. In addition, he drew down about $93,000 from his superannuation. The Husband’s post-separation financial dealings were the subject of close cross-examination. The Husband asserts that the Wife has not properly disclosed her financial affairs because she has, in fact, the cash that existed at the time of separation. The Wife makes precisely the same assertion against the Husband. The constitution of the pool of assets was, therefore, a significant issue at the final hearing.
Putting aside balance sheet issues, the Wife contended that after a long marriage of about 25 years, contributions should be assessed as being equal but that there should then be a s.75(2)(o) adjustment in her favour of 10 per cent to represent inferences that the Court would draw against the Husband as regards his non-disclosure and unexplained financial dealings. Apart from this, however, she did not contend that any further adjustment under s.75(2) should be made. She submitted, in addition, that the Husband should be solely responsible for his post-separation credit card debt in circumstances where the evidence did not, indeed could not, demonstrate that these expenses were in any way reasonable or proportionate to his standard of living.
The Husband’s case contended that at the date of separation an adjustment in his favour should be made of about 2.5 per cent, to represent the greater initial contribution that he made at the commencement and to a lesser extent during the period of the relationship. He further contended that there should be a s.75(2) adjustment in his favour of between 2.5 and 5 per cent to reflect his age, poor health and the reality that he would not be able to work again because of a major depressive disorder that he suffers. In the Husband’s case, it was contended that there was no non-disclosure on his part but in fact that it was the Wife that had failed to disclose the cash that she took from the former matrimonial home after separation.
Both the Husband and Wife were capably represented by solicitor and Counsel. They both gave evidence and were cross-examined. It is necessary for the Court to make credit findings in order to assist it in making findings of fact.
The Applicable Law
This is an application under s.79 of the Family Law Act 1975 which relevantly provides:
Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
A problem that commonly arises and indeed does arise in this case, relates to property that once existed but no longer does. This disposed of property may still be significant, however. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. It would seem that notionally adding back such property may still be appropriate in some cases. In Vass & Vass [2015] FamCAFC 51, the Full Court said at [138]:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108 – is authority for any necessary contrary solution.
A significant issue in this matter was the alleged non-disclosure of the Husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
The Wife raised what is, in effect, a waste argument. A succinct statement of the law in this regard is the statement by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76 644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Credit Findings
The Wife contends that the Husband had exclusive access to and use of the $35,000 in cash at the home at the date of separation. The Husband contends that whilst there was $35,000 at the date of separation and that $12,000 was used to pay joint credit card debts at the time, he contends that the Wife took the cash from the home at some time after separation. The Wife insists, on the contrary, that he retained this money.
Both the Husband and the Wife were cross-examined. The Wife gave evidence in a matter of fact manner, with minimal or no embellishment. Her demeanour and manner were normal. She was responsive, cooperative and courteous in cross-examination. There is nothing in the way in which the Wife gave evidence, or in the evidence that she gave, that would indicate any concern whatsoever about the veracity of that evidence.
The contrast with the Husband could not be starker. He was frequently unresponsive, intensely discourteous to cross-examining Counsel and thus to the Court and plainly belligerent in his manner. He seemed to resent answering questions about his finances and could either not understand, or would not understand, the need to scrutinise his financial affairs. He simply declined to answer some questions, even when given a s.128 certificate in relation to what he believed was illegal activities on his part (engaging with prostitutes). He felt that he was entitled to do whatever he wanted in the post-separation period without scrutiny from the Court. He characterised the forensic exercise of disclosure during the course of proceedings and the cross-examination as a game in which it was necessary to be “in front of you” and “to out-step you” in each case referring to the Wife and her legal team.
Putting aside the manner in which he gave his evidence, the evidence that he actually gave about post-separation financial transaction beggars belief. He said, for example, that most of the $93,434 that he withdrew from his superannuation after separation was spent on “buying food, drinks, and women”. Apart from this money, he also incurred credit cards debts totalling almost $70,000, for the same purposes he contended. In addition, throughout this entire period, he was earning a Newstart Centrelink allowance. Of course, as it turns out, most of this expenditure was in cash (particularly the prostitution services, he repeatedly emphasised) and thus the expenditure could not be verified, for the most part. When it was put to him that, in effect, the post-separation spending spree in which he participated was in fact a strategy to disguise the fact that he retained substantial cash, he insisted that he spent the money on services for “prostitution, prostitution, prostitution” which, he was keen to point out, were very expensive services.
The Husband’s evidence about what the Court will describe as his profligate spending spree in the post-separation period lacks credibility. It is, in this Court’s view, inherently unlikely that the Husband spent almost $94,000 from the superannuation, $70,000 raised by way of credit cards and indeed the Court finds the balance of the $35,000 cash held in the house at the time of separation – for the lifestyle expenditure that the Husband asserts. The Court believes that it is, more likely than not, that he in fact retains substantial cash. The Court finds that it is, more likely than not, the case that he deliberately incurred credit card liabilities in the misguided belief that those liabilities would be brought into account as part of his property settlement. The Court believes that, more likely than not, the Husband’s alleged use of prostitution services, to the extent that he asserts, was an allegation intended to embarrass, humiliate and hurt his wife, rather than an expenditure on services actually incurred.
The totality of the matters set out above lead the Court to conclude that the Husband was an unreliable witness in relation to financial matters and that, therefore, where the evidence of the Husband and Wife conflicts, her evidence should be preferred to his, unless there is independent corroborative evidence in his favour.
Balance Sheet Issues
At the commencement of the hearing, the following joint balance sheet was tendered by Counsel for both parties:
| ASSETS | |||||||
| Ownership | Description | Wife/de facto partner's value | Husband/de facto partner's value | ||||
| 1 | Joint | Property Q | $510,000 | $510,000 | |||
| 2 | Wife | Kia (omitted) ((omitted)) | $12,000 | $12,000 | |||
| 3 | Husband | (omitted) Account | $14,300 | $14,300 | |||
| 4 | Wife | (omitted) Bank Account | $3,983 | NK | |||
| 5 | Husband | (omitted) Account ((omitted)) | NK | $13 | |||
| 6 | Husband | (omitted) Bank Account ((omitted)) | NK | $2,200 | |||
| 7 | Husband | (vehicle omitted) ((omitted)) | E $8,000 | E$8,000 | |||
| 8 | Husband | Honda Motorcycle ((omitted)) | E $1,165 | E$1,165 | |||
| 9 | Husband | Honda Motorcycle ((omitted)) | E$1,165 | E$1,165 | |||
| 10 | Husband | Cash monies | NK | $18,000 | |||
| 11 | Husband | Household Contents | E $10,000 | E $5,000 | |||
| Total | $ 560,613 | $ 571,843 | |||||
| ADDBACKS | |||||||
| Ownership | Description | Wife/de facto partner's value | Husband/de facto partner's value | ||||
| 12 | Husband | 19.02.2015 withdrawal (omitted) Super | $53,434 | $53,434 | |||
| 13 | Husband | Cash held at Property Q | $35,000 | NIL | |||
| 14 | Husband | 11.03.2016 withdrawal (omitted) Super | $40,000 | $40,000 | |||
| 15 | Wife | Cash removed from Property Q | NIL | $17,000 | |||
| Total | $ 128,434 | $ 110,434 | |||||
| LIABILITIES | |||||||
| Ownership | Description | Wife/de facto partner's value | Husband/de facto partner's value | ||||
| 16 | Husband | (omitted) Bank (incurred by Husband post-separation) | NK | $25,288 | |||
| 17 | Husband | (omitted) Bank (incurred by Husband post-separation) | NK | $14,349 | |||
| 18 | Husband | (omitted) Bank (incurred by Husband post-separation) | NK | $30,464 | |||
| 19 | Wife | Personal Loan to (omitted) | $6,314 | ||||
| 20 | Wife | Personal Loan to (omitted) | $30,000 | ||||
| Total | $ 36,314 | $ 70,101 | |||||
| SUPERANNUATION | ||||||||
| Member | Name of Fund | Type of Interest | Wife/de facto partner's value | Husband/de facto partner's value | ||||
| 21 | Wife | (omitted) | Accumulated | $20,220 | $20,220 | |||
| 22 | Husband | (omitted) | Retirement Savings | $361,256 | $361,256 | |||
| Total | $ 381,476 | $ 381,476 | ||||||
| FINANCIAL RESOURCES | |||||||
| Ownership | Description | Wife/de facto partner's value | Husband/de facto partner's value | ||||
| 23 | |||||||
| 24 | |||||||
| 25 | |||||||
| 26 | |||||||
| Total | $ 0 | $ 0 | |||||
| NETT TOTAL ASSETS (including Superannuation) | $ 1,034,209 | $ 993,652 |
Items 1-3 are agreed. Items 4-6 are non-contentious as the amounts in bank accounts are what each party contends they presently have in their bank account. Items 7-9 are agreed.
The first contentious item is item 10. The Husband contends that he has, presently, $18,000 in cash. The Wife does not dispute that he has at least $18,000 in cash but contends that he probably actually has much more. Having regard to the Court’s comments in the earlier section of these reasons, the Court agrees but it is not possible to quantify precisely how much he does, in fact, have by way of cash. What is clear from the evidence, however, is that if the Husband has cash, it is either the cash that existed at the time of separation, or what is left over from the withdrawal of his superannuation entitlements, totalling $93,434. The Court will need to be careful not to double dip as regards other items on the balance sheet. Item 10 will be $18,000.
Item 11 of the balance sheet deals with the Husband’s household contents. He says it is worth $5,000. She says it is worth $10,000. There was no expert evidence in this regard. In the circumstances, therefore, all the Court can do is to accept the Husband’s figure as being an admission against interest. Accordingly, item 11 should read $5,000.
Items 12 and 14 are quite correctly added back as being the premature distribution of the Husband’s superannuation entitlements.
At item 13 of the balance sheet the Husband contends that the Wife should be treated as having the $35,000 which, he says, she took from the home shortly after separation. Quite apart from the fact that the Court accepts the Wife’s evidence, and not the Husband’s, the figure is plainly incorrect. The Court finds that at the date of separation, $35,000 in cash was in fact kept in a shoebox. However, it is not contentious that he used $12,000 of that to pay off joint credit card debts.
This means that the most that could have been kept in the shoebox at the date of separation was, in fact, $23,000. In any event, for the reasons previously stated, item 13 should read nil.
The focus then turns item 15, which is the cash that the Wife alleges the Husband either retains at the former matrimonial home, or has removed from the same but controls. She says it is $17,000, but it is by no means clear where this figure comes from, or how it was calculated. In any event, the Court has already found that, more likely than not, after the Husband had paid the credit card debts, only $23,000 was left. Given that the Husband has agreed to notionally add back the superannuation prepayments and further given that he has conceded that he already retains cash of $18,000, it must mean that the most that he could retain is the difference between $23,000 and the $18,000 that he has declared, i.e. $5,000. Item 15 should, therefore, read $5,000 and should be treated as notional property of the Husband. The effect of this finding, therefore, is that all of the known cash that existed at the time of separation has been accounted for and all of the superannuation has been accounted for.
Item 16-18 represent the Husband’s credit card liabilities incurred exclusively in the post-separation period. The Court is not prepared to treat these liabilities as having the character that should be shared between the parties. It must be remember that the evidence of both the Husband and the Wife is that before they separated and notwithstanding the fact that they were relatively poorly paid manual workers, they managed, no doubt through a measure of frugal living and industriousness to save at least $35,000 in cash. There can be no basis whatsoever for somehow allowing to the Husband a lavish, let alone profligate, lifestyle after separation, when they both enjoyed a modest one before separation. Item 16-18 should read nil.
In relation to 19-20, even Counsel for the Wife conceded that there was no basis for including these items on the balance sheet. In reality, like item 16-18, items 19-20 have a post-separation character and may well have been used to fund legal fees anyway. Items 19-20 should not be included in the balanced sheet.
There was no contention about items 21 and 22.
The final balance sheet should, therefore, be as follows:
| ASSETS | |||||||
| Ownership | Description | VALUE | |||||
| 1 | Joint | Property Q | $510,000 | ||||
| 2 | Wife | Kia (omitted) ((omitted)) | $12,000 | ||||
| 3 | Husband | (omitted) Account | $14,300 | ||||
| 4 | Wife | (omitted) Bank Account | $3,983 | ||||
| 5 | Husband | (omitted) Account ((omitted)) | $13 | ||||
| 6 | Husband | (omitted) Bank Account ((omitted)) | $2,200 | ||||
| 7 | Husband | (vehicle omitted) ((omitted)) | $8,000 | ||||
| 8 | Husband | Honda Motorcycle ((omitted)) | $1,165 | ||||
| 9 | Husband | Honda Motorcycle ((omitted)) | $1,165 | ||||
| 10 | Husband | Cash monies | $18,000 | ||||
| 11 | Husband | Household Contents | $5,000 | ||||
| Total | $ 575,826 | ||||||
| ADDBACKS | ||||||
| Ownership | Description | VALUE | ||||
| 12 | Husband | 19.02.2015 withdrawal (omitted) Super | $53,434 | |||
| 13 | Husband | Cash held at Property Q | NIL | |||
| 14 | Husband | 11.03.2016 withdrawal (omitted) Super | $40,000 | |||
| 15 | Husband | Cash removed from Property Q | $5,000 | |||
| Total | $ 98,434 | |||||
| LIABILITIES | ||||||
| Ownership | Description | VALUE | ||||
| 16 | Husband | (omitted) Bank (incurred by Husband post-separation) | NIL | |||
| 17 | Husband | (omitted) Bank (incurred by Husband post-separation) | NIL | |||
| 18 | Husband | (omitted) Bank (incurred by Husband post-separation) | NIL | |||
| Total | $ NIL | |||||
| Member | Name of Fund | Type of Interest | VALUE | ||||
| 21 | Wife | (omitted) | Accumulated | $20,220 | |||
| 22 | Husband | (omitted) | Retirement Savings | $361,256 | |||
| Total | $ 381,476 | ||||||
| NETT TOTAL ASSETS (including Superannuation) | $ 1,055,736 |
Assessment of Contribution
The Husband’s argument for a finding of greater financial contribution than the Wife, as at the date of the trial, was only faintly argued. Indeed, in closing submissions Counsel for the Husband all but conceded the difficulty, in a long marriage such as this one, of asserting that, somehow, the Husband’s contributions should be treated as greater than that of the Wife’s.
The Wife’s case was that contribution as at the date of the trial should be treated as being equal. The Court so finds.
An Adjustment under Section 75(2)
The Husband’s claim for an adjustment in his favour of up to 5 per cent has two main aspects to it. He points out that the Wife is working and he is Centrelink-dependent. She earns $700 weekly but his only income is $436, being the Disability Support Pension that he is paid through Centrelink. He argues that he has no capacity for employment having regard to his age and state of health, the latter (he contends) supported by the Affidavit of his psychologist, Ms W. The Court accepts that the Husband’s age and the psychological difficulties that he experiences would make it almost impossible for him to return to gainful employment. The Wife does have a financial earning capacity which, for the time being, exceeds that of the Husband. However, the reality is that she is 63 years old, in fact older than the Husband and while she does appear to be in better health than him, it could hardly be said that her capacity for future employment would subsist for very long at all. Nonetheless, the s.75(2) factors favour the Husband, albeit slightly.
He also contends for a s.75(2) adjustment in his favour, arising out of the care and assistance that he provided to the Wife’s children throughout the relationship. The evidence supports this but it could not be said that this is a significant adjustment in his favour.
Nonetheless, the totality of the factors leads to a 2.5 per cent adjustment in his favour.
The Wife contends, however, for a 10 per cent adjustment in her favour as the Court would be concerned that the Husband has not, even now, properly disclosed his financial circumstances to the Court. There is some substance in this but the percentage contended for by the Wife is problematic, from the Court’s perspective. The findings that the Court has made against the Husband are reflected in balance sheet line items set out above. Thus, for example, he is being treated as having $93,000 in superannuation, whether he has it or not. He is being treated as having $23,000 cash, whether he has it or not. He is being left with $70,000 of credit card liabilities, whatever those liabilities were used for but in a manner that does not disadvantaged the Wife. Once those non-disclosure issues are rectified in the balance sheet, it is hard to understand precisely what is the basis for the s.75(2) adjustment contended for by the Wife.
A s.75(2) adjustment is not a de facto costs order. A costs order is a separate application, for another time. In order to make a s.75(2) adjustment in the Wife’s favour based on non-disclosure, the Court would have to have even a small measure of satisfaction that there are yet other assets that the Husband is likely to own or control, that have not been identified or disclosed. Whilst the Court has lingering doubts about whether the Husband has been truthful in his disclosure of his financial affairs, the balance sheet findings against him largely account for any discrepancies.
There is no further room for an adjustment in the Wife’s favour. To do so would be to act on a hunch rather than the evidence and the risk would be double dipping as regards balance sheet findings. In the circumstances, there is no s.75(2) adjustment in the Wife’s favour.
Conclusion as to Contribution and Assessment of Future Needs?
Having regard to the matters set out above, the Court finds that the Husband is entitled to 52.5 per cent of the asset pool as found. The parties accept that the Husband’s superannuation monies at item 22 are, in reality, cash in his hands. Thus, the 52.5 per cent can be applied on the basis of a single pool. This means the Husband would be entitled to 52.5 per cent or $554,261.40 and the Wife would be entitled to 47.5 per cent or $501,474.60.
Both parties agree that the former matrimonial home listed at item 1 of the balance sheet needs to be sold, in order to implement final Orders. Both parties also sought a superannuation split, in order to achieve their entitlements.
The likelihood is that the sale of the former matrimonial home will take longer than it would to split the superannuation. The reality is that both parties have need to pay expenses, including legal expenses and so the order will provide for the superannuation split to be implemented without delay. It is hard to understand how the Wife calculated the amount referred to in her superannuation splitting order. In the circumstances, the Court will order that she receives 47.5 per cent of the Husband’s superannuation, at line 22 of the balance sheet and the Husband the rest. Any further adjustment will come out of the sale proceeds of the former matrimonial home. On this basis, the Husband and the Wife would each receive by way of superannuation split $189,659.40 and $171,596.60 respectively.
After the superannuation splitting order is made, the Husband’s assets (excluding the former matrimonial home) are as follows:
(omitted) Account $14,300 (omitted) Account ((omitted)) $13 (omitted) Bank Account ((omitted)) $2,200 (vehicle omitted) ((omitted)) $8,000 Honda Motorcycle ((omitted)) $1,165 Honda Motorcycle ((omitted)) $1,165 Cash monies $18,000 Household Contents $5,000 19.02.2015 withdrawal (omitted) Super $53,434 11.03.2016 withdrawal (omitted) Super $40,000 Cash removed from Property Q $5,000 (omitted) Retirement Savings (after the superannuation splitting order is made) $189,659.40 TOTAL $337,936.40
Therefore, the Wife’s current assets (excluding the former matrimonial home) are as follows:
Kia (omitted) ((omitted)) $12,000 (omitted) Bank Account $3,983 (omitted) Superannuation Fund $20,220 (omitted) Retirement Savings (after the superannuation splitting order is made) $171,596.60 TOTAL $207,799.60
As the Husband’s entitlement is $554,261.40, he would receive $261,325.00 from the sale of the home. As the Wife’s entitlement is $501,474.60, she would receive $293,675.00 from the sale of the home.
In the Wife’s Minute of Order (reproduced in the first Schedule of these reasons) she sought an order that the Husband vacate the property and that she be appointed, in effect, a trustee for sale. Her argument in this regard was that it was highly likely that he would be uncooperative, hence the need for her to control the sale. There is insufficient evidence before the Court to justify making such an order. If the Husband is uncooperative, an appropriate application can be made and costs will be considered in that context.
The Wife sought a number of ancillary Orders in her Minute, in respect of which there was neither evidence, nor submissions made. Thus, the Court cannot make orders 6 or 7.1.
The Court is satisfied that these Orders are as just and equitable as the circumstances permit.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 13 September 2016
Schedule 1
The Wife’s Proposed Minute of Order
That within 21 days the Respondent Husband vacate the property situated at Property Q (hereinafter "the Property Q property"), in the State of New South New South Wales and more particularly described in Certificate of Title Folio Identifier (omitted).
Pending the Respondent Husband vacating the Property Q property pursuant to Order 1 above:
2.1That the Respondent Husband maintain the Property Q property in a clean and tidy manner; and
2.2That the Respondent Husband be restrained by injunction from damaging the Property Q property (including the furniture and effects housed in the Property Q property) in any way.
That forthwith the Applicant Wife and the Respondent Husband do all acts and things and sign all necessary documents to effect a sale of the Property Q property and for that purpose the following shall apply:
3.1The property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and failing agreement within 14 days of the date of these Orders the real estate agent will be as nominated by the President of the Real Estate Institute of New South Wales at the request of the parties or either of them;
3.2The list price of the property shall be such amount as is agreed between the parties and failing agreement, within 14 days of the date of these Orders the list price will be as nominated by the real estate agent;
3.3That the sale price of the property shall be such amount as is agreed between the parties and failing agreement an offer to buy the property that is at least 80% of the list price shall be accepted by the parties as the sale price;
3.4The parties are to cooperate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent, ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
3.5That upon agreement being reached for the sale of the property, the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor;
3.6The contract for sale shall provide for completion within 42 days after the date of the contract;
3.7The proceeds of sale of the property shall be paid in the following manner and priority:
3.7.1Payment of the agents commission advertising or other expenses if applicable payable on the sale;
3.7.2Payment of the legal costs outlaid in relation of the sale; and
3.7.3Balance be divided:
(a)66% to the Applicant Wife; and
(b)34% to the Respondent Husband.
In the event that the property is not sold by private treaty pursuant to Order 3 within four (4) months from the date of this Order then the Applicant Wife and the Respondent Husband do all acts and sign all such documents as are necessary to sell the property by auction and the following shall apply:
4.1The property shall be listed with an agent appointed under Order 3 (hereinafter called "the Auctioneer") for sale by auction within two months;
4.2The parties shall execute all documents requested by the auctioneer for the sale of the property;
4.3The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer;
4.4That the parties shall each pay to the auctioneer one half of any sums requested for the advertising or auction expenses and if one of the parties pays all the expenses, that party shall be reimbursed from the proceeds of sale in respect of one half of such payments before any division between the parties;
4.5That the parties shall give such instructions as are necessary to Kells to prepare a contract for sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer;
4.6That the parties agree to cooperate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the property at all times reasonably requested by the auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction;
4.7That the parties attend at auction and negotiate with the highest bidder in the event the reserve price not being reached;
4.8The sale price of the property shall be any amount in excess of the reserve price but in the event the reserve price not being reached the sale price of the property shall be such amount as agreed between the parties or failing agreement any offer received after the auction to the property at a price that is at least 80% of the reserve price shall be accepted by the parties;
4.9That the parties attend at the auction and negotiate with the highest bidder or any other interested party in the event that the reserve price is not reached for the purposes of reaching agreement under the above Order;
4.10That upon agreement being reached for sale of the property, Orders 3.5, 3.6 and 3.7 shall apply.
That the property shall be sold in accordance with Orders 3 and 4 as applicable for the purposes of which the Applicant Wife is authorised to act as Trustee for the parties in respect of doing all things specified in Orders 3 and 4 to be done by the parties.
That within 14 days the Respondent Husband transfer to the Applicant Wife all of his right, title and interest in and to the burial/entombment/inurnment in Site(s) (omitted) Memorial Park and Crematorium.
That the Applicant Wife retain all right, title and interest in and to:
7.1All furniture and effects presently situated in the Property Q property (including 2 x ride-on lawn mowers).
7.2The Kia (omitted) motor vehicle, registration number (omitted).
7.3Any superannuation entitlement held in her sole name.
That the Respondent Husband retain all right, title and interest in and to:
8.1The (vehicle omitted) motor vehicle, registration number (omitted).
8.2The Honda motorcycle, registration number (omitted).
8.3The Honda motorcycle, registration number (omitted).
8.4All animals and livestock on the Property Q property as at the date of this order.
That:
9.1in accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to the Respondent Husband from his interest in the (omitted) Superannuation Fund (Member Number (omitted)) (hereinafter "the Fund"), the Applicant Wife is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using base amount of $265,000 and there is a corresponding reduction in the entitlement the Respondent Husband would have had but for these Orders.
That:
10.1the Court allocates, as required by Section 90MT(4) of the Family Law Act, a base amount of $265,000 to the Applicant Wife out of the Respondent Husband's interest in the Fund.
10.2in accordance with Section 90MT(1)(a) of the Family Law Act, the Court:
10.2.1creates an entitlement on the part of the Respondent Wife to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
10.2.2makes a corresponding reduction in the entitlement to the Respondent Husband, or such other person to whom a splittable payment may be made, would have had in the Fund, but for these Orders.
10.3whenever the Trustee of the Fund makes a splittable payment out of the Respondent Husband's interest in the Fund, the Trustee shall do all such acts and things and sign all such documents as may be necessary to pay the entitlement created in paragraph 10.2 of these Orders in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
10.4these Orders have effect from the operative time and the operative time is 4 business days after the service of these orders on the Trustee of the Fund.
That as between the Applicant Wife and Respondent Husband and subject to the above orders the Applicant Wife and Respondent Husband shall each respectively retain all interest and entitlements to:
11.1All personal property now in his or her respective possession or control;
11.2All shares, debentures, unit in unit trusts, bank, building society, credit union accounts standing in his or her sole name respectively;
11.3All interest in all life insurance policies, superannuation funds standing in his or her sole name respectively.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
That the Respondent Husband pay the Applicant Wife's costs of and incidental to these proceedings.
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Injunction
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Remedies
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Jurisdiction
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Costs
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Statutory Construction
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