Baddour & Baddour
[2023] FedCFamC2F 711
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Baddour & Baddour [2023] FedCFamC2F 711
File number(s): PAC 1048 of 2021 Judgment of: JUDGE NEWBRUN Date of judgment: 14 June 2023 Catchwords: FAMILY LAW – PROPERTY – Court not satisfied that it would be unjust and inequitable if financial agreement were not binding on parties – Just and equitable property Orders made Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2), 90G Cases cited: Hoult & Hoult [2013] FamCAFC 109
Lotta & Lotta [2017] FamCA 50
Division: Division 2 Family Law Number of paragraphs: 139 Date of hearing: 22–23 May 2023 Place: Parramatta Counsel for the Applicant: Mr Mathews Solicitor for the Applicant: Khouzame Legal Counsel for the Respondent: Mr Cairns Solicitor for the Respondent: Legal Aid NSW Parramatta Family Law ORDERS
PAC 1048 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR BADDOUR
Applicant
AND: MS BADDOUR
Respondent
order made by:
JUDGE NEWBRUN
DATE OF ORDER:
14 June 2023
THE COURT ORDERS THAT:
1.Within 10 weeks the wife pay to the husband the sum of $175,427.
2.Failing the wife complying with the above Order, the matrimonial home located at C Street, Suburb D NSW, be then forthwith sold at a public auction by an agent agreed to and appointed by both parties with the proceeds of the sale of the former matrimonial home being distributed in the order set out below after the usual adjustments (up to completion) are made for any land tax, council rates or water rates:
(a)In discharge of the mortgage.
(b)Payment of all selling estate fees and marketing expenses in respect of the sale of the matrimonial home.
(c)Payment of all solicitor’s professional fees and disbursements in respect of the sale of the matrimonial home.
(d)As to the balance:
(i)The wife shall receive $347,199 less her half share of the expenses in b) and c) above,
(ii)The husband shall receive $175,427 less his half share of the expenses in b) and c) above.
3.The wife retain any motor vehicle which is currently registered in her name.
4.The husband retain any motor vehicle which is currently registered in his name.
5.That except as otherwise specified above, each party be declared the sole legal and beneficial owner, to the exclusion of the other party, of all furniture, household items, personal effects and belongings which is in his or her current possession or control.
6.That except as otherwise specified above, each party be declared the sole legal and beneficial owner, to the exclusion of the other party, of all superannuation entitlements, assets and financial resources of which he or she is the legal, registered or equitable owner or which is in his or her respective names or is in his or her current possession or control.
7.That except as otherwise specified above, each party shall be responsible for all outstanding debts and liabilities that may currently be held in their own name and such party shall release the other party from all liabilities with respect thereto and indemnify the other party with respect to any outstanding debt and/or liability in their own name.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Baddour & Baddour has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
INTRODUCTION
These are Reasons for Judgment relating to a final property hearing held before the Court on 22–23 May 2023.
The husband and wife both appeared, legally represented.
PROPOSALS
The husband seeks orders that:
1.The matrimonial home located at [C Street, Suburb D] be sold at a public auction by an agent agreed to and appointed by both parties with the proceeds of the sale of the matrimonial home be distributed in the order set out below after the usual adjustments (up to completion) are made for any land tax, council rates or water rates:
1.1.In discharge of the Mortgage.
1.2.Payment of all selling estate fees and marketing expenses in respect of the sale of the matrimonial home.
1.3.Payment of all solicitor’s professional fees and disbursements in respect of the sale of the matrimonial home.
1.4.The balance to be split 60/40 in favour of the Wife.
2.The Wife retain any motor vehicle which is currently registered in her name.
3.The Husband retain any motor vehicle which is currently registered in his name.
4.The Wife make available, within 7 days, the following items from the matrimonial home for collection by an individual nominated by the Husband:
4.1. Marble statue with base;
4.2. [Statue E];
4.3. [Bed F];
4.4. Gym machine;
4.5. Wood cutting machine;
4.6. 5 x photo frames;
4.7. [Picture G from Country H]; and
4.8. 2 x bikes.
5.That except as otherwise specified above, each party be declared the sole legal and beneficial owner, to the exclusion of the other party, of all furniture, household items, personal effects and belongings which is in his or her current possession or control.
6.That except as otherwise specified above, each party be declared the sole legal and beneficial owner, to the exclusion of the other party, of all superannuation entitlements, assets and financial resources of which he or she is the legal, registered or equitable owner or which is in his or her respective names or is in his or her current possession or control.
7.That except as otherwise specified above, each party shall be responsible for all outstanding debts and liabilities that may currently be held in their own name and such party shall release the other party from all liabilities with respect thereto and indemnify the other party with respect to any outstanding debt and/or liability in their own name.
The wife seeks Orders as set out in her case outline filed 7 November 2022, inter alia, that a declaration be made that the financial agreement dated 7 March 2016 is binding on the parties pursuant to section 90G(1A) of the Act. In the alternative, the wife seeks orders that the husband’s application for relief pursuant to section 79 of the Act be permanently stayed. Further in the alternative, the wife seeks a dismissal of the orders sought by the husband.
MATERIAL RELIED UPON
The husband relied upon the following documents:
(a)His Amended Initiating Application filed 9 May 2022;
(b)His affidavit filed 9 May 2022;
(c)His Financial Statement filed 9 May 2022;
(d)His Undertaking as to Disclosure filed 9 May 2022;
(e)His affidavit filed 1 November 2022.
The wife relied upon the following documents:
(a)Her Amended Response filed 20 May 2022;
(b)Her affidavit filed 20 May 2022;
(c)Her Financial Statement filed 20 May 2022;
(d)Her Financial Questionnaire filed 12 October 2021;
(e)Affidavit of Single Expert Valuer filed 20 May 2022;
(f)Affidavit of Ms J filed 1 May 2023.
The exhibits were as follows:
(a)Exhibit A: Pages 1, 3–15, 16–21, 24–25, 27, 29–35, 36–37, 39–43 of the husband’s tender bundle;
(b)Exhibit B: Pages 1–3, 25–27 and 45–46 of the wife’s tender bundle;
(c)Exhibit C: Husband’s child support assessment;
(d)Exhibit D: Revised Joint Balance Sheet for Final Hearing.
Evidence
The Court has considered the documentary material relied upon by the parties discussed above, and the oral evidence of the parties and witness adduced at the trial. The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below.
During the husband’s cross examination, the parties informed the Court that it was agreed that title to the matrimonial home (“the C Street, Suburb D property”) was transferred by the husband to the wife at about the same time as the wife assumed total responsibility for the C Street, Suburb D property’s mortgage loan, such events occurring in June 2016. The parties also informed the Court that it was agreed that the parties finally separated on 22 October 2016.
As to the Court’s impressions of the husband and wife as witnesses, the Court found that each witness sought to give responsive answers to questions asked of them, albeit that the wife had to be reminded on occasion to allow the cross-examiner to finish asking the question. The husband was a satisfactory witness. However, ultimately, the wife proved to be an unreliable witness and, subject to the Court’s findings in these Reasons below, the Court accepts the husband’s evidence where in conflict with the wife’s evidence.
The Court will now set out some examples of the wife’s unreliable evidence.
For example, the wife agreed that her affidavit was not particularly truthful in relation to the date of separation; her affidavit had stated in three separate paragraphs that the separation date was 7 March 2014. She stated that the parties had reconciled after having separated under the one roof on 7 March 2014. She stated that the parties were together on 7 March 2016 when the financial agreement was signed. She agreed that the parties were in a committed relationship when the transfer of the C Street, Suburb D property to her was affected on 30 June 2016.
For example, the wife’s affidavit filed 20 May 2022 at paragraphs 40–44 states, inter alia, that when the husband presented the financial agreement to her for execution the wife did not want the house in her name, the husband had looked at her in an intimidating manner, she did not read the agreement before signing it, and she did not feel confident enough to question his decision. Yet, inconsistently with these assertions, the wife, in her Financial Questionnaire filed 12 October 2021, stated (on page 6) that although she did not receive independent legal advice prior to signing the agreement, she “understood the nature of the agreement and was pleased that all matters were resolved and the children would continue to have their home.”
For example, the wife was cross-examined in relation to a sum of $20,000 transferred by the husband to her on 7 July 2016. She stated that “just today” she learnt that her previous affidavit evidence (paragraph 54) stating that the $20,000 was not transferred to herself but to a tiling friend of the husband was “untruthful”.
The wife agreed that despite her affidavit stating in paragraph 19 that at the incident at separation on 22 October 2016 the husband had allegedly hit her in the face twice, her police report in relation to that incident did not refer to being hit in the face. She conceded that it was an error in her affidavit that the husband had so hit her.
For example, when the wife’s attention was drawn to the financial agreement of the parties signed in March 2016, she stated that her memory was not the best anymore and she would say what she remembered.
Oral evidence of the husband
The husband stated he wasn’t exactly sure when his life insurer Company K ceased paying him compensation for his work injury suffered in 2013 however he stated that these compensation payments ceased prior to 2015/2016. He stated that the cessation of these payments was the reason he sold his shares in a property at City L in Country H; the husband’s agreement to sell his shares in the property to his brother occurred in about August 2014.
The husband was cross-examined in relation to the agreement signed by the parties in March 2016. He disagreed that he simply put the agreement to the wife and told her to sign it; he stated that the wife knew what she was signing. The husband had told the wife that because they did not have an income they had to find a way to secure an income by doing an extension to the unit at the C Street, Suburb D property, and thereby meeting the monthly mortgage repayments on the C Street, Suburb D property. He disagreed with the wife’s allegations relating to conversations that he had with the wife leading to the agreement being signed (for example, see paragraph 40 of the wife’s affidavit filed 20 May 2022).
The husband agreed that prior to his title to the C Street, Suburb D property being transferred to the wife he had controlled the family finances.
The husband referred to the refinancing of the mortgage for the C Street, Suburb D property, and stated that he was in a partnership with a friend of his called Mr J and with that person the husband was carrying out renovations; he stated that the wife told him that she would finance this partnership and the husband and his friend would carry out the renovations.
The husband referred to a credit card account with a debt of about $6,000 in existence in about 2016 and in relation to which account the wife assumed control.
The husband stated that he had invested $30,000 in a company called Company K controlled by Mr U. This latter person was purchasing goods from Country M and building units with a new design. The husband decided that he would invest this money in this company to obtain an income. The $30,000 came from the $77,000 received from the wife. The husband stated that he had paid $20,000 to the wife, being a separate amount to the $30,000 paid to Company K.
Oral evidence of the wife
The wife confirmed that she accepted that the parties had separated on 22 October 2016. It was drawn to the wife’s attention that her affidavit had stated, in paragraphs 7 and 37, that the parties separated on 7 March 2014. The wife conceded that her affidavit evidence in this context was “untruthful”. The wife then stated that the parties were not in a relationship at the time their financial agreement was signed (7 March 2016), stating that the parties were separated on 7 March 2016. The wife agreed that nowhere in her affidavit had she stated how the parties came to be separated on 7 March 2016, and she agreed that her affidavit was not particularly truthful in relation to the date of separation.
The wife agreed that despite her affidavit stating in paragraph 19 that at the incident at separation on 22 October 2016 the husband had allegedly hit her in the face twice, her police report in relation to that incident did not refer to being hit in the face. She conceded that it was an error in her affidavit that the husband had so hit her.
The wife was cross-examined in relation to the financial agreement. Her attention was drawn to her allegations in paragraph 40 of her affidavit. The wife stated that she recalled the husband coming to see her and the husband has asked her to sign the agreement and she did. She stated that she told the husband that she did not want the house in her name.
The wife confirmed the husband’s workplace injury (in 2013) had prevented the husband being able to work. She agreed that by 2014 the husband was in financial difficulty. She agreed that the family had lost the property at Suburb N by reason of the husband’s financial difficulties.
It was put to the wife that by 2015 she was in the midst of financial difficulties and she devised a plan to transfer the property. The wife responded by stating that she knew nothing and the husband had brought everything.
The wife stated that she made up her mind to separate from the husband after she was assaulted by him (in October 2016).
The wife’s attention was drawn to the financial agreement of the parties signed in March 2016. The wife stated that her memory was not the best anymore and she would say what she remembered.
The wife agreed that recital B to the agreement was inaccurate (because as at the date of the agreement, 7 March 2016, the parties marriage had not “irretrievably broken down”).
The wife agreed that recital G to the agreement was false (this recital had stated that the agreement related to all property and financial resources of each of the spouse parties).
The wife confirmed, in relation to recital K, that it was false in that the wife had not received independent legal advice from a legal practitioner as to the matters stated in recital K.
The wife stated that she did not accept the value of the C Street, Suburb D property in recital L was $775,000, with the property being valued probably less at that time.
The wife agreed that the husband’s property in Country H was not referred to in recital L however she had not read “the paper”.
The wife’s attention was drawn to recital M, including recital M(b) relating to an indemnity from the wife to the husband, to which the wife stated she did not understand what it meant.
The wife stated that the Motor Vehicle 1 referred to in recital L was in the husband’s name.
The wife agreed that the ANZ bank statements at pages 3–15 of the husband’s tender bundle (Exhibit A) for the period from 4 April 2014 to 6 June 2016 were from a bank account in the husband’s name. She agreed that the mortgage repayment to Bank O was paid by the husband from that account. She agreed that the mortgage payment to Bank O from this account on 2 May 2016 was made after the parties entered into the financial agreement (in March 2016).
The wife was cross-examined in relation to the ANZ mortgage broker distribution–loan application document annexed to her affidavit (Annexure F). It was drawn to the wife’s attention that the document recorded the wife as being present at an interview on 31 March 2016 with the mortgage broker. The wife confirmed that she did not know Mr & Mrs P of Company Q referred to on the first page of the above loan application document. She stated that those persons just told her to sign the loan application. The wife denied giving any information to these persons on 31 March 2016. The wife agreed that she had met the above persons on 6 April 2016 and signed the document.
The wife agreed that page 9 of the loan application document was not accurate referring to the wife’s income as $80,000 per annum gross.
The wife was cross-examined as to an alleged outstanding electricity bill to Company R. The wife stated that she did not accept that there were no liabilities as at the time of the loan application document. She stated that the bills were all in her name and she never had money to pay the bills. She had a mortgage to pay. She was paying her bills fortnightly so she could pay them.
The wife was asked to accept that the husband paid money to Suburb S Council to pay for the unit. The wife answered that she did not know.
The wife stated that when the husband received $77,000 in July 2016 there was one tenant in the unit and he was paying rent. The wife’s attention was drawn to page 41 of the husband’s tender bundle being a Council memorandum dated 1 December 2017 in which a conversation is recorded between the Council officer and the wife with the wife stating that the tenants are still in the garage. The wife stated that there was in fact no one in the unit. It was put to the wife that she was lying to which the wife disagreed.
The wife confirmed that she had no involvement in trying to get Council approval in relation to the unit.
It was put to the wife that in July 2016, when the husband received $77,000, $27,000 was put towards Council approval (for the unit), to which the wife replied that she was not sure.
The wife agreed that during 2014 to 2016 the husband was responsible for meeting the car payments. She agreed that the husband was incapacitated and that after August 2014 he had no income.
The wife stated she did not know where the deposit for the purchase of the property in 2002 at Suburb N came from. In this context the wife stated that the husband did all the paperwork.
The wife stated that she is a carer for her mother and had been a carer for her since 2019. She stated that she is always with her mother. Her mother lives in the C Street, Suburb D area. The wife stated that she had had a full-time job in allied health prior to becoming her mother’s carer in 2019.
The wife stated that she spends all her income. She stated that she does not want to sell the C Street, Suburb D property.
The wife was cross-examined in relation to her alleged liabilities to the Council and Company R. She stated that she had not been paying the debt to Council however no enforcement proceedings have been taken by the Council. She had told the Council that she may have to sell the house and she would see what payments she could make them. She stated that she pays the electricity debt in instalments fortnightly.
Ms J, first cousin of wife
Ms J gave evidence through an affidavit filed 1 May 2023 and gave some brief oral evidence. She witnessed the wife’s signature to the financial agreement dated 7 March 2016. Ms J did not read the financial agreement.
THE WIFE’S APPLICATION FOR A DECLARATION THAT THE FINANCIAL AGREEMENT DATED 7 MARCH 2016 IS BINDING ON THE PARTIES
Relevant statutory provisions and legal principles will now be set out in relation to the wife’s proposed Order seeking a declaration that the financial agreement dated 7 March 2016 and is binding upon the parties “pursuant to section 90G(1A)(d)”.
Section 90G of the Family Law Act 1975 (Cth), provides:
When financial agreements are binding
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d) the agreement has not been terminated and has not been set aside by a court.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouse party seeking to enforce the agreement.
(1C)To avoid doubt, section 90KA applies in relation to the enforcement application.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
In Hoult & Hoult [2013] FamCAFC 109, the majority (Strickland and Ainslie-Wallace JJ) stated, inter alia:
305.We are firmly of the view that the content of the bargain has no relevance to the exercise of discretion under s 90G(1A)(c) and we base that on the plain words of the paragraph. That is also consistent with what Justice Strickland said at first instance in Parker (for example in paragraph 108 of his Honour’s reasons for judgment), and neither of the judges who formed the majority in the Full Court in Parker found otherwise.
306.We do not accept that because the enquiry in paragraph (c) is as to injustice and inequity, the content of the bargain must have some relevance. The issue of injustice and inequity can far more easily be seen as directed to whether, given the nature and extent of the non-compliance with the s 90G(1) requirements, it would be unjust and inequitable if the agreement was not binding.
307.We have referred to the fact that his Honour in paragraph 57 provided a range of factors that it would be appropriate to consider when exercising the discretion. The only factor that we suggest is not available is the last one, but if there is to be a list of factors identified we would prefer the following, all of which are to be found in his Honour’s reasons:
•The terms of the section, the nature of a financial agreement as a creature of the Act, and the place of Part VIIIA within the overall scheme of the Act.
•The nature and extent of the non-compliance with the requirements of s 90G(1).
•The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding.
•How the parties have acted subsequently in relation to the agreement (bearing in mind that changes of circumstances cannot be considered).
308.In discussing the “benefits” of the construction of s 90G(1A)(c) advocated by the trial judge, Justice Thackray sought to emphasis two points in his reasons for judgment. First, his Honour looked to highlight the presence of the words in brackets in paragraph (c) and suggested that they provide “a proper basis for [the trial judge’s] view that it is appropriate to assess whether the terms of an agreement ‘offend ordinary notions of fairness’” (our emphasis). However, with the greatest of respect to his Honour we fail to see the connection. It is a logical inference to draw from the words in brackets that it is permissible to take into account “circumstances” existing at the time of formation of the agreement, but given the terms of the bargain cannot be relevant because of the plain words of the paragraph there can be no warrant for suggesting that the “fairness” of the terms is what is being referred to. The obvious “circumstances” we suggest are those surrounding the making of and the performance of the agreement. Plainly, the words in brackets are words of limitation and highlight that it is the nature and extent of non-compliance with the requirements of s 90G(1) at the time of the execution of the agreement that is relevant, as well as the facts and circumstances surrounding the making of the agreement, but allowing for consideration of how the parties have acted subsequently in relation to the agreement.
309.Secondly, it is suggested that “[a]lthough the Act now undoubtedly allows parties to enter into bad or grossly unfair bargains, it is perfectly consistent for the legislation to permit consideration of the fairness of the bargain (judged at the date of execution) in cases where the safeguards in s 90G(1) have not been met”.
310.Again with the greatest of respect to his Honour we fail to see how that can be. The point of the legislation is to allow the parties to decide what bargain they will strike, and provided the agreement complies with the requirements of s 90G(1) they are bound by what they agree upon. Significantly, in reaching agreement, there is no requirement that they meet any of the considerations contained in s 79 of the Act, and they can literally make the worst bargain possible, but still be bound by it. Thus, again, rhetorically, how can the fairness of the bargain be an enquiry that the court can make when it is seized of a matter under s 90G(1A)? Furthermore, it is not the case that to fail to consider the fairness or injustice of the bargain does not mean that “the discretion is exercised in a vacuum”. The factors set out in paragraph 307 above will be those that are addressed.
….
313.Finally, we agree with Justice Thackray that it would be unwise to close off at this early stage possible interpretations of paragraph (c), but it is plain from the words of that paragraph and from the purpose of s 90G in allowing the parties to make whatever bargain they wish, the justice and equity, or the fairness of the terms of the agreement cannot be considered in the exercise of the discretion. Thus, to so determine does not close off a possible interpretation of the paragraph.
314.Thus, we conclude that the trial judge was in error in finding that a relevant enquiry in exercising the discretion under s 90G(1)(c) is as to whether “the terms of the bargain itself offend ordinary notions of fairness or plainly fall markedly outside any reasonable broad assessment of the s 79 discretion”.
Discussion and determination
The Court will now consider the issue of contended unjustness and inequity by reference to the Court’s discussion of Hoult’s case (above).[1]
The terms of the section, the nature of a financial agreement as a creature of the Act, and the place of Part VIIIA within the overall scheme of the Act
[1] See Hoult & Hoult [2013] FamCAFC 109 at para [307].
The financial agreement, in recital B, stated that, “Both spouse parties agree that the marriage has irretrievably broken down and the Wife proposes to file and Application for Divorce in the Federal Magistrates Court.” The wife had agreed that recital B to the agreement was inaccurate because as at the date of the agreement, 7 March 2016, the parties’ marriage had not “irretrievably broken down”.
The financial agreement, in recital K, stated that each of the parties to whom the financial agreement related had been provided before the parties signed the agreement with independent legal advice as to certain matters, which, as discussed below, was incorrect; the parties had not received independent legal advice prior to signing the financial agreement.
The financial agreement, in recital L, purporting to list the parties’ agreed assets and liabilities “that would make up the pool of assets for the purpose of proceedings between the parties (under the Act)” did not refer to the husband’s real estate in Country H, nor debts on a car, and nor debts to Council and Company R.
The financial agreement in recital J referred to the parties desiring “to have finalised, once and for all, all matters of a financial nature in dispute between them” yet recital M merely stated that the parties “agree that it is the intention of this agreement and any future Consent Orders to be filed by the parties” that, inter alia, the wife will hereafter own and be entitled to the absolute ownership possession and control of the C Street, Suburb D property, the wife will indemnify the husband against any payments due under the C Street, Suburb D property mortgage held by Bank O, the husband will hereafter own the household furniture and furnishings, and he will hereafter own the Motor Vehicle 1.
The nature and extent of the non-compliance with the requirements of s 90G(1)
Neither party was provided with “independent legal advice” before signing the financial agreement on 7 March 2016 pursuant to section 90G(1)(b), and neither party, either before or after signing the agreement, was provided with a signed statement by the legal practitioner stating that such independent legal advice was provided pursuant to section 90G(1)(c). By reference to section 90G(1)(ca), a copy of the above signed statement was not provided to a “spouse party or to a legal practitioner for the other spouse party”.
The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding
In about 2007 the parties had lost their property at Suburb N during the GFC; they had been unable to meet the mortgage repayments on this property.
The C Street, Suburb D property had been purchased in 2008 with the assistance of a mortgage loan. At the time of purchase the parties were not informed by the previous owner that the unit at the rear of the property was not approved by Council. The husband conducted renovation work on this property creating a three-bedroom property.
During the parties’ relationship, the wife was not usually in paid employment but was a carer for the children. In 2013 the husband suffered a serious injury in the workplace. The parties decided to renovate and rent out the unit on the C Street, Suburb D property utilising the husband’s income protection monies he began receiving after the injury. These income protection monies ceased to be paid to the husband in about August 2014. From about 2014 until the husband left the C Street, Suburb D property (about five months after separation on 22 October 2016), the unit was rented out at $300 a week and this rental income was applied towards payment of the mortgage. It is likely that the husband, to relieve his financial difficulties, sold his interest in a property in City L, Country H, in about August 2014, to his brother, for $40,000, however the brother only paid $35,000 of this sum and in instalments.
In 2014 the husband’s company Company T went into liquidation.
To avoid losing the C Street, Suburb D property like the parties had lost the Suburb N property, the parties agreed to transfer the C Street, Suburb D property to the wife’s name. The parties agreed that refinancing the C Street, Suburb D property would allow them to obtain extra money from the bank to cover the money required to have the unit approved by Council as well as cover their day-to-day living expenses given the husband was unable to work at the time. A broker, Mr U, was engaged to assist with the refinancing process.
As part of this refinancing process the husband was asked to sign the financial agreement having been told that the agreement was required for the C Street, Suburb D property to be transferred to the wife. The wife was also asked to sign that financial agreement.
The parties signed the financial agreement on 7 March 2016. The Court does not accept that shortly before signing the agreement the wife told the husband that she did not want the house in her name. If the Court is incorrect in this finding, the Court finds that in any event by the time she signed the agreement she had likely resolved voluntarily to sign the agreement being consistent with her earlier agreement with the husband referred to above. Again, the parties were not separated at the time of the signing of the financial agreement by the parties on 7 March 2016.
It is likely that the wife knew that the refinancing process (involving the husband’s title to the C Street, Suburb D property being transferred to the wife) could not occur unless the financial agreement was signed by both herself and the husband. It is likely that the wife knew that unless the refinancing process occurred the parties could well experience serious financial difficulties including losing the C Street, Suburb D property as a result of mortgage default. These conclusions are reached by the Court by reason of the wife knowing, inter alia, that the Suburb N property had previously been lost to a bank by reason of mortgage default; she knew the husband had suffered serious work injury and had later become incapacitated for work; she knew that she was not working in paid employment by reason of her primary care of the children; and she knew her government benefits were insufficient to meet the cost of mortgage repayments on the C Street, Suburb D property.
Pursuant to the refinancing process the wife had been interviewed by Mr & Mrs P, ANZ mortgage brokers, on 31 March 2016, and those brokers had completed, on information provided by the wife to them, an ANZ mortgage broker distribution–loan application document on 6 April 2016. The wife had signed this document. The Court observes, again, that the financial agreement in recital B had incorrectly stated that the marriage had irretrievably broken down and the ANZ mortgage broker distribution–loan application document of 6 April 2016 had stated on the opening cover sheet, “Favourable purchase due to marriage separation. Transaction costs to come off the loan.”
The parties decided ultimately to only obtain a refinancing loan for $340,000 which would allow them to discharge the existing mortgage loan and leave them with an extra $77,000. They decided that they would use the $77,000 to undertake the required works to have the unit approved by Council, to invest in a building company that Mr U had an interest in, Company K, and utilise the balance to cover mortgage repayments and day-to-day living expenses. This $77,000 was not referred to in the financial agreement.
How the parties have acted subsequently in relation to the agreement (bearing in mind that changes of circumstances cannot be considered)
On about 30 June 2016 the husband’s title to the C Street, Suburb D property was transferred to the wife. On the same date $77,103 was deposited into the husband’s ANZ bank account with such funds effectively being redrawn out of the equity in the C Street, Suburb D property (after the refinancing process). Those funds were utilised as follows:
(a)on 7 July 2016, $20,000 was transferred to the wife;
(b)on 8 July 2016, $20,000 was transferred to Company K. Later, and before the parties’ final separation, the husband was repaid about $4,500 from those funds of $20,000, however the husband is unsure as to what happened to the balance of monies invested with Company K;
(c)on 11 July 2016, a further $10,000 was transferred to Company K; the balance of funds were utilised to complete the paperwork to have the unit approved by Council as well as to cover the parties’ day-to-day living expenses.
After the financial agreement was executed on 7 March 2016, the parties continued in their marital relationship until final separation on 22 October 2016; the Court does not accept that after the C Street, Suburb D property was transferred to the wife on about 30 June 2016 the husband told the wife that the parties were now separated, the wife could do whatever she wanted, that the husband wanted nothing to do with the wife, and that the husband had his share and the wife had her share (i.e. the Court rejects the wife’s allegations in paragraph 58 of her affidavit filed 20 May 2022).
After the financial agreement was executed the parties did not commence property proceedings in this Court seeking to file Consent Orders in relation to the financial agreement.
After the financial agreement was executed the husband did not retain the household furniture and furnishings which were, post separation, retained by the wife (see recital M(c) to the financial agreement).
In summary, the financial agreement signed by the parties was not, in reality, an agreement intended by the parties to finalise, once and for all, all matters of a financial nature in dispute between them (see recital J). Rather, the financial agreement, to the knowledge of the parties, was a device executed by them to secure financial security for the family at a time when the family’s financial situation was vulnerable. At the time of the financial agreement in March 2016 the parties’ marriage subsisted, and, contrary to recital B, the marriage had not “irretrievably broken down”, and nor did the wife propose to file an Application for Divorce at that time. Again, and as discussed above, there were numerous factual inaccuracies stated in the financial agreement. And, consistent with the agreement merely being a device (as discussed above), there was a complete failure of the parties to each obtain independent legal advice and otherwise comply with section 90G(1). And finally, the manner in which the parties acted subsequently in relation to the agreement was inconsistent with the terms of the financial agreement (e.g. the husband’s receipt of $77,000 and his particular dispersal of that money, and the parties continuing their relationship). However, the manner in which the parties acted subsequently in relation to the agreement was consistent with the parties’ agreement prior to signing the financial agreement relating to protecting ownership of the C Street, Suburb D property (by transferring title from the husband to the wife) and obtaining benefits through refinancing the mortgage loan on the C Street, Suburb D property (e.g. benefits such as obtaining funds to obtain unit approval from Council).
Taking into account all the above discussed matters, the Court is not satisfied that it would be unjust and inequitable if the financial agreement were not binding on the parties.
ESTOPPEL
The Court rejects the wife’s contention, in the alternative, that the husband’s section 79 application should be permanently stayed in accordance with the principles of estoppel. The Court broadly accepts the husband’s submissions in this context. Inter alia, the Court has found that the husband did not represent to the wife shortly following the signing of the financial agreement that they were now separated and the matter finalised, and the Court is not satisfied that there was relevant delay by the husband in commencing these property proceedings.
PROPERTY
The Court now turns to consider the husband’s application for alteration of property interests.
Evidence
Relevant evidence relating to the issues to be determined will be set out below under the headings “Balance sheet”, “Contributions”, and “Section 75(2)”. In this regard, the Court will take into account relevant factual findings made above in relation to the financial agreement issue.
Legal principles
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281 The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
287It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
Balance sheet
The balance sheet of the parties as at trial date (Exhibit D) is now set out:
BALANCE SHEET Ownership Description Husband’s value Wife’s value Assets 1 W Property at C Street, Suburb D $820,000 E $820,000 2 H Property in Country H
(Joint Valuation of City V property - $41,666 = AUD$62,752)E $31,296 E $62,752 3 W Contents of Home E $5,000 E $5,000 4 W Motor Vehicle 2 E $1,000 E $1,000 5 H Contents of Home E $1,000 E $1,000 6 H Motor Vehicle 3 E $4,200 E $4,200 7 W ANZ Bank Account #...99 $6 $6 8 W Westpac Bank Account #...67 Nil Nil 9 H Bank Accounts Nil Nil 10 W Jewellery E $14,000 Nil 11 H Monies owing from Husband’s brother for purchase of property in Country H ($5,000) Nil E $7,390 Total E $876,502 E $901,348 Addbacks 12 H Property Settlement paid to Husband in 2016 Nil $77,000 13 H Insurance W Permanent Disability Insurance Payout Nil $27,250 14 H Proceeds of sale from Country H property
(Joint Valuation of current value of 100 shares in City V property - $20,833 = AUD$31,376)
(Joint Valuation of City L property –
$44,888 = AUD$67,506)Nil E $98,882 15 H Monies wasted by Husband on alcohol, gambling and adult entertainment Nil $40,000 + NK Total $0 E $243,132 + NK Liabilities 16 W Mortgage $290,557 $290,557 17 W Water Nil $134 18 W Company R Nil $17,320 19 W Suburb S Council Nil $5,652 20 W ANZ Credit Card #...38 Nil $6,287 21 H Revenue NSW – Overdue Fines $2,351 Nil 22 H Company X $2,038 Nil Total $294,946 $319,950 Net Total Assets Total $581,556 $824,530 + NK Item No Notation 2 The valuation for the 200 shares came at $41,666. The Husband asserts he currently has 100 shares in the City V Property which equates to $20,833. As at 17 May 2023, 1 = 1.50 Australian Dollar. That is how the estimate of $31,296 was obtained.
As to item 2, the Court accepts the husband’s evidence in relation to the City V property. The Court accepts the husband’s evidence that, in relation to his interest in the City V property in Country H, he sold 100 shares to his brother in 1996 and a further 100 shares was sold to his brother in 2019. The transfers were not registered in his brother’s name as there were problems with the paperwork. The husband had made the 1996 transaction to enable him to open a business. By reference to the valuation for this property (see Mr Y’s valuation affidavit of 12 May 2023), the husband’s contended value for his present interest in the City V property, $31,296, should be accepted for item 2. This monetary figure is calculated, per Mr Y’s formula: $500,000 times 100 shares (now held by the husband) divided by 2400 = $20,833, which converts to $31,296.
As to item 10, the husband conceded there was no relevant evidence to establish that the wife had jewellery in the sum of E $14,000, and this item shall be removed from the balance sheet.
Items 11 and 14 are now dealt with together.
As to item 11, in relation to the husband’s proceeds of sale from his property in City L, Country H, the Court accepts that in 2013 whilst the husband was in Country H, he sold the land that he owned in Country H to his brother for about $40,000, and at the time his brother paid him $5,000 in cash. His brother transferred $30,000 to the husband in three instalments, and his brother is yet to pay him the balance of $5,000. The Court finds, in relation to item 11, that the $5,000 owing by the husband’s brother to the husband in relation to the sale of the property in Country H is likely not recoverable by the husband from the brother, taking into account in particular the relevant limitation period of six years.
In relation to item 14 relating to the City V property in Country H, again the Court accepts the husband’s evidence in relation to this property. The Court refers to its discussions above in relation to this property in respect to item 2 including its discussions in relation to the husband’s sale of shares relating to this property in 1996 and 2019.
The Court finds that the husband reasonably spent the sale proceeds from these two transactions; expenditure for a business and later, expenditure on behalf of the family. The Court accepts that the husband was not able to work following his injury in 2013 and up to October 2016, and then between October 2016 and mid-2019 he was only able to work part-time as a factory worker, by reason of his injuries. The Court accepts that as his income protection money was no longer being paid, the husband reasonably used the above proceeds of sale to pay the mortgage, household bills, groceries, school fees, sporting fees and other family expenses, and payments for Council and engineering paperwork to obtain Council approval for the unit at the C Street, Suburb D property.
Items 11 and 14 shall be removed from the balance sheet.
As to item 12, the wife’s contended add back of $77,000 for “property settlement paid to (the) husband in 2016”, following the C Street, Suburb D property being transferred into the wife’s name, a refinanced mortgage loan of $340,000 being established in the wife’s name, the previous mortgage loan being discharged, the balance of monies under the refinanced mortgage loan of some $77,000 was deposited into the husband’s ANZ bank account on about 30 June 2016. As to the dispersal of this $77,000 the Court confirms its earlier findings and finds that:
(a)on 7 July 2016, $20,000 was transferred to the wife;
(b)on 8 July 2016 $20,000 was transferred to Company K as an investment that the parties agreed to;
(c)on 11 July 2016 a further $10,000 was transferred to Company K; and
(d)the balance of funds were utilised to complete the paperwork to have the unit Council approved (on the C Street, Suburb D property), about $15,000, as well as to cover the parties day-to-day living expenses.
The Court accepts the husband’s evidence that whilst he was repaid about $4,500 from the funds invested with Company K, he is unsure as to what happened to the balance of monies invested with Company K.
The sum of $77,000 shall be removed from item 12 in the balance sheet.
As to item 13, the wife’s contended add back of $27,250 for the husband’s Insurance W permanent disability insurance payout, the husband had suffered a serious injury in 2013 at work. After the injury and up to August 2014 the husband was paid monthly compensation by his life insurer Company K. In 2014 the husband’s company Company T went into liquidation. Between 2014 and October 2016 the husband was unable to work due to his injury. From October 2016 to mid-2019 the husband worked part-time (because of his injuries) as a factory worker. In about April 2017 the husband received $27,250 from a settlement he made with Insurance W regarding his permanent disability claim. His injury, the subject of the claim, required the husband to undertake surgery. The husband travelled to Country H to undergo the surgery as it was cheaper there. He remained there for 8 months to allow himself time to recover, and the rest of the money (after the surgery) was used for associated expenses. Accordingly, the Court finds the husband reasonably expended the funds of $27,250 as discussed above. Item 13 shall be removed from the balance sheet.
As to item 15 in the balance sheet, being a sum of at least $40,000 allegedly wasted by husband on alcohol, gambling and adult entertainment, the husband had stated in cross examination that, by reference to an earlier affidavit of himself sworn 26 October 2021, he estimated that he spent about $40,000 in relation to gambling, alcohol and adult entertainment over a period of 10 years. He agreed that this was an accurate figure at the time of that earlier affidavit.
The Court is not satisfied that this expenditure of about $40,000 over a period of 10 years represented relevant wastage of matrimonial property. This expenditure translates to about $4,000 per year over a period of 10 years (the precise years during the parties’ relationship which this 10 year expenditure occurred is not known) being about $4,000 per year or about $77 per week which, even in the modest circumstances of this family, does not prove wastage. Accordingly, item 15 shall be removed from the balance sheet.
As to item 17, there is no relevant evidence that the debt of the wife to the Water company, $134, is a matrimonial debt, and it shall be removed from the balance sheet.
As to item 18, the debt to Company R, $17,320, the wife gave evidence that she now has a payment plan for the debt owing to this third party. She adduced no objective evidence from this third-party as to, for example, what debt was owed to this third party prior to or as at separation on 22 October 2016. The wife in her affidavit filed 20 May 2022 (paragraph 60) had alleged that when the parties separated (in this affidavit the wife alleged that the parties separated in March 2014) she had retained certain debts including a $9,000 debt owing to Company R, however, such alleged debt of $9,000 as at March 2014 is well before actual separation date of 22 October 2016. (In passing, and referred to below, the wife had also alleged (in paragraph 60) that as at March 2014 she had also retained a debt of $4,000 owing to the Council yet as at 11 March 2016 the Council debt was $530). Accordingly, there is no reliable evidence as to the wife’s contention that the sum of $17,320 owing to this third-party is a relevant matrimonial debt. Accordingly, item 18 shall be removed from the balance sheet.
As to item 19, the debt to Suburb S Council, $5,652, at page 24 of the husband’s tender bundle (Exhibit A) is a Council rates payment overdue notice for the date 11 March 2016 (prior to separation on 22 October 2016) and referring to the period 1 July 2015 to 30 June 2016 (an annual period) in the sum of $530. The wife adduces no relevant objective evidence as to her contention in item 19. The wife has been in occupation of the C Street, Suburb D property since about five months after separation on 22 October 2016. The sum of $530 shall remain in the balance sheet for item 19.
As to item 20, the ANZ credit card debt of $6,287, the husband gave evidence that he used this credit card for building works and that effectively this sum that was part of the 2016 arrangement agreed to between the parties. The Court finds that it is likely a matrimonial debt, and it shall remain in the balance sheet noting that there is no reliable evidence that the debt has been forgiven by the bank.
As to items 21 and 22, being the husband’s contended debts for Company X and Revenue NSW, there is no relevant evidence that these are matrimonial debts and they shall be removed from the balance sheet.
Accordingly the final balance sheet shall be as follows:
BALANCE SHEET Item Description Value Assets 1 Property at C Street, Suburb D $820,000 2 Property in Country H $31,296 3 Contents of Home (W) $5,000 4 Motor Vehicle 2 (W) $1,000 5 Contents of Home (H) $1,000 6 Motor Vehicle 3 (H) $4,200 7 ANZ Bank Account #...99 (W) $6 Total $862,502 Liabilities 8 Mortgage $290,557 9 Suburb S Council $530 10 ANZ Credit Card #...38 $6,287 Total $297,374 Net Total Assets Total $565,128
Accordingly, the Court finds that the parties’ total assets are $862,502, the parties’ liabilities are $297,374, and the parties’ net assets are thus $565,128.
Section 79(2) of the Act
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
Contributions
The parties’ relationship spanned the period from about 2000 until about October 2016; a period of over 16 years. There were 3 children of the relationship; now aged 22, 17, and 13 (turning 14 in 2023).
At the commencement of the relationship, the husband brought in certain interests in two Country H properties but their value at that time is not known. There appears to have been no debt attached to these properties (it is known that the husband’s interest in one property (in City L) was sold for $44,000 but much later in 2014. The husband’s remaining interest in the other property is now valued at $31,296).
The wife, at commencement of cohabitation, had savings of about $25,000 which she used to pay the majority of the parties’ wedding expenses.
The parties had purchased a property at Suburb N in 2001. The parties had saved funds for a deposit. During the GFC, in about 2007, the parties lost this property, and the Court accepts the husband’s evidence in this context.
In about 2008 the parties purchased the C Street, Suburb D property for $295,000 with a mortgage advance from Bank O. The property was purchased in the husband’s name. The husband borrowed $30,000 from the wife’s sister to pay the deposit which he later repaid to her. This property had a unit with no Council approval for certain previous works within it.
During the parties’ relationship, the husband, probably from a combination of his work income, his income protection receipts post his work injury in 2013, and proceeds of sale of a property he owned in Country H (sold in about 2014 to his brother), caused the mortgage loan repayments to be paid and substantially paid the parties’ living expenses.
The husband carried out some renovation work to the C Street, Suburb D property which cost about $15,000. The wife received $15,000 by way of early inheritance in about 2007 and contributed about $6,000 of such monies towards household furniture and an appliance. The wife likely contributed towards the parties’ living expenses through her parenting payment and family tax benefit.
During the parties’ relationship the wife was the primary carer of the children and this contribution was a contribution of substance. The husband assisted the wife in the care of the children.
Since separation to date the wife has been the sole carer of the children (the husband has not spent time with the children since 23 October 2016). This contribution has also been a contribution of substance by the wife.
During the parties’ relationship the wife was primarily responsible for and carried out the homemaking duties which were also contributions of substance.
Since about 30 June 2016 to date, a period of almost 7 years, the wife alone has met the mortgage loan payments and paid rates and utilities, whilst observing that the wife has had the benefit of living in the property since about March 2017, and was able to utilise some rental income from the unit (in this regard, the Court accepts the Council memorandum of 1 December 2017 that tenants were still living in the unit whilst accepting a later Council memorandum dated 5 September 2018 that there were no tenants in the unit at that time).
The husband only worked part-time between separation and mid-2019 and he has been in receipt of a disability support pension since about 2019. His child support payments to the wife post separation have probably been quite limited.
The Court observes that the C Street, Suburb D property was valued at about $650,000 in April 2016 with a then mortgage liability of $258,000.
The wife contended that a contributions finding of 60 per cent should be made in her favour.
The husband contended that a contributions finding of equality should be made between the parties.
Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to the net assets of $565,128 to be 45 per cent in favour of the husband and 55 per cent to the wife. This results in a disparity of $56,513 in favour of the wife.
Section 75(2) of the Act
The parties’ relationship was in excess of 16 years.
The husband is aged 50 years. The wife is aged 42 years.
The husband suffered an injury at work in 2013. He started to receive the disability support pension in mid-2019. He receives about $450 per week. He has had two bouts of significant surgery (2013 and 2018). The Court refers to his x-rays without contrast dated 13 November 2020 (Annexure J to the husband’s affidavit filed 9 May 2022). The Court accepts that the husband probably has no significant work capacity.
The husband presently resides at Z Street, Suburb D being a rental property for which he pays $200 per week.
The wife is a carer for her mother (since 2019) and thereby receives income through Centrelink. She receives other benefits from Centrelink (see Annexure Q to her affidavit filed 20 May 2022). The wife had worked in allied health for about two years between 2017 and 2019.
The wife asserts she suffers from a number of injuries. Her ultrasound scan results appear to be consistent with an injury. However she adduces no health professional evidence linking up these matters with any significant adverse effect upon her work capacity. Nevertheless these matters are taken into account.
Subject to the above, the wife probably has some reasonable work capacity in allied health. However, in particular, the wife is the carer for her mother and is sole carer of the children; the middle child is currently aged 17 years, and the youngest child will turn 14 years in 2023. And the husband only pays the wife child support of $38 per month (see Exhibit C) and is unlikely to be able to pay increased child support.
The wife resides in the C Street, Suburb D property with the children.
The wife made a Kennon claim. She had made numerous allegations of family violence perpetrated against her by the husband during the relationship. The husband denied these allegations apart from an incident at final separation in October 2016 when he had assaulted the wife. There was no significant cross-examination of the husband in relation to the detailed allegations of family violence made by the wife in her affidavit. The Court is not persuaded on the balance of probabilities that the wife’s allegations of family violence are proved. The Court is not satisfied that the Kennon claim is made out.
The wife has debts to Company R and Suburb S Council which did not enter the final balance sheet (except as to $530 to the Council). The husband has lesser debts to third parties which did not enter the final balance sheet.
The husband contended that an adjustment under section 75(2) of 10 per cent should be made in the wife’s favour. The wife adopted this figure in her favour.
Taking into account the above matters, there should be an adjustment in the wife’s favour of 7.5 per cent. Thus the adjusted contributions finding of the Court is 37.5 per cent to the husband and 62.5 per cent to the wife; the resulting disparity in favour of the wife is thus $141,282.
JUSTICE AND EQUITY
Pursuant to the Court’s adjusted contribution assessment, the husband should be left with assets representing, in value, 37.5 per cent of the net assets, being $211,923 (37.5 percent of $565,128).
The wife will be entitled to 62.5 per cent of the net assets, being $353,205 (62.5 per cent of $565,128).
Should the husband retain:
(a)Interest in the Country H property: $31,296
(b)Home contents: $1,000
(c)Car: 4,200
totalling $36,496,
and the wife retain:
(a)C Street, Suburb D property: $820,000
(b)Home contents: 5,000
(c)Car: $1,000
(d)Bank account: $6
totalling $826,006,
less home loan $290,557
leaving net $535,449
then the wife will need to pay the husband the sum of $175,427 ($211,923 less $36,496). The wife should be given 10 weeks to pay this sum to the husband, failing which the C Street, Suburb D property should be sold.
The Court now turns to what should occur if the C Street, Suburb D property is sold.
Should the wife retain:
(a)Her above assets (but not the C Street, Suburb D property) totalling $6,006,
then she will need to receive cash of $347,199 (being $353,205 less $6,006). Such cash can be paid to the wife from the net sale proceeds of the C Street, Suburb D property. With such cash, which in part or in whole could be invested, she can at least rent accommodation and pay off debt.
Should the husband retain:
(a) His above assets: 36,496,
then he will need to receive cash of $175,427 (being $211,923 less $36,496). Such cash can be paid from the net sale proceeds of the C Street, Suburb D property. With such cash, which in part or in whole could be invested, together with his disability pension receipts, he can probably at least maintain rental accommodation.
The parties both have debt which did not enter the final balance sheet.
The evidence before the Court, in relation to the items of personalty the husband seeks by way of Court Order to have returned to him by the wife (see his proposed Order 4), with the Court noting that the wife avers that all that remains of these items is a marble statue, portraits, and a broken timber bed frame, all of estimated fairly insignificant monetary value, does not persuade it, as a matter of justice and equity or otherwise, that these remaining items should be returned to the husband. Neither party made final submissions in relation to this issue.
The Court is of the view that its proposed property adjustment orders will represent a just and equitable property settlement between the parties.
The Court makes Orders accordingly.
I certify that the preceding one hundred and thirty-nine (139) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 14 June 2023
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