Ball & Ball

FAMILY COURT OF AUSTRALIA

BALL & BALL

[2009] FamCA 3

FAMILY LAW – PROPERTY SETTLEMENT – Pool of about $9 million – long marriage – Only issues in dispute relate to contribution and s. 75(2) factors

FAMILY LAW – PROPERTY SETTLEMENT – ADJUSTMENTS – Husband seeks adjustment based on contribution principles for loss incurred when 2008 share market dropped dramatically – Wife had injunctions initially obtained on ex-parte basis and without notice but husband subsequently did not pursue application to set the orders aside – Wife refused to lift injunction to enable husband to sell shares at a time just before the market drop – Husband also had no specific evidence of loss because the shares were not sold – Adjustment refused – Wife seeks adjustment for health reasons found not to affect earning capacity – No formal evidence which would establish distinction between earning capacity of husband and wife – Adjustment refused

FAMILY LAW – PROPERTY SETTLEMENT – SALE OF PROPERTY – Issues relating to sale of home – husband seeks sole responsibility as a result of wife’s previous agreement and subsequent change of decision about sale – Husband’s application refused

FAMILY LAW – PROPERTY SETTLEMENT – SHARES – Question of how shares should be divided discussed when in various tranches and each has a different cost basis for future tax purposes

Family Law Act 1975 (Cth)

Beneke (1996) FLC 92-698
Browne v Green (1999) FLC 92-873
Harris v Calladine (1990) FLC 92-130
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143
AJO & GRO [2005] FamCA 195
Townsend and Townsend (1995) FLC 92-569

APPLICANT:

Ms Ball

RESPONDENT:

Mr Ball

FILE NUMBER:

MLF

3252

2006

DATE DELIVERED:

12 January 2009

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

THE HONOURABLE JUSTICE CRONIN

HEARING DATE:

15 December 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MR O'SHANNESSY

SOLICITOR FOR THE APPLICANT:

KENNEDY GUY

COUNSEL FOR THE RESPONDENT:

MR CROFTS

SOLICITOR FOR THE RESPONDENT:

AITKEN PARTNERS PTY LTD

Orders

That unless the parties agree in writing otherwise, by 4 pm on 19 January 2009, the husband and the wife do all acts and things and sign any necessary document to place the real property at M (“the real property”) on the market for sale
For the purposes of paragraph 1 and unless the parties agree in writing otherwise, the following shall apply:
(a)Mr G is appointed as the real estate agent to sell the real property;
(b)The real property be initially placed on the market for sale by private treaty;
(c)If the real property has not been sold by private treaty by 31 March 2009, it shall be placed on the market for sale by a public auction to be fixed to be held no later than 30 May 2009;
(d)The private treaty price and auction reserve shall be determined upon the evidence provided to the parties by a sworn valuer appointed by the parties;
(e)In the event that either party disputes the amount determined by the sworn valuer or there is disagreement as to who is to be the nominated valuer, the provisions of paragraph 5 hereof shall apply;
(f)The legal practitioners for the husband (but on behalf of the husband and the wife) shall have the responsibility for conducting the conveyancing associated with sale of the real property and if either party disputes the terms and conditions (including the legal costs) of those practitioners, the provisions of paragraph 5 hereof shall apply.
That in a timely manner and consistent with paragraph 1, the parties sign any necessary document to give effect to paragraph 2.
That pending the completion of the sale of the real property, the husband shall have the exclusive right to occupy it upon condition that he:
(a)continues to reside there;
(b)maintains it in its present condition;
(c)permits the wife to have the opportunity to attend for reasonable inspections in the company of Mr G upon the wife giving the husband reasonable notice of her desire to do so; and
(d)permit the wife to attend the real property at the auction.
That each party have liberty to apply on short notice to have issues arising out of paragraphs 1, 2, 3, 4, 7 and 9 determined by the Court.
Upon the settlement of the sale of the real property, the proceeds of the sale be applied as follows:
(a)first, to pay all costs, commissions and expenses of the sale;
(b)secondly, to divide the balance equally between the husband and the wife.
That unless the parties agree in writing otherwise, by no later than 4 pm on 19 January 2009 and at a time and a method to be arranged, the husband make available for collection and retention by the wife the following:
(a)One of the two photographs of W and N in New Zealand when they were aged 9 and 12 years;
(b)The photographs of the wife’s parents;
(c)The photograph of J, B and family and the photograph of U, D and E;
(d)The mantel clock which was a gift from the wife’s brother;
(e)The contents of the cupboard located above the fridge (being items accumulated by the wife during her first marriage) to the extent that these are available;
(f)The Bamix attachments and stand located in the pantry;
(g)The wife’s gortex raincoat if it can be located;
(h)The wife’s tennis racquet;
(i)The rubber hose for the laundry trough if it can be located;
(j)The double bed blankets from the wife’s first marriage but that otherwise, the husband retain and be the sole owner of all other chattels in and at the real property.
That as soon as practicable, the husband do all acts and things and sign any necessary transfer document to divide equally each of the three tranches of the total of 68,329 N Bank shares held in his name save that in the case of a tranche with an unequal number of shares, the husband shall have the extra one share.
That the parties forthwith instruct their respective accountants and advisers to confer, identify and calculate the amount of the dividend received by the husband on the N Bank shares subsequent to 15 December 2008 for the purposes of determining the net amount to which the husband would be entitled after tax and upon such calculation being agreed, the husband pay to the wife 50% of such net sum.
That all orders made by the Magistrates Court at Sunshine in Case number … on 22 November 2006 be forthwith discharged.
That in accordance with s 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable/available in respect of the interest held by the husband in the N Bank Staff Superannuation Scheme (the Scheme) the trustees shall pay a specified percentage to the wife being the entitlement under these orders and there be a corresponding reduction in the entitlement that the husband would have had but for these orders.
That in accordance with s 90MT(1)(b) of the Act, the percentage for the purpose of paragraph 11 of this order is 50%.
That paragraphs 11 and 12 hereof have effect from the operative time.
That the operative time for these orders is 4 business days from the date that the orders are served on the trustee of the Scheme. This amount is calculated in accordance with Part 6 of the Family Law (Superannuation Regulations).
This order binds the trustee of the Scheme.
That each party otherwise retain and the other relinquish any interest in, all other property in the possession of such person as at this date.
Any joint tenancy in any real or personal property is forthwith expressly severed.
That each party provide to the other a copy of any income tax return for the year ended 30 June 2008 and any amended return for that year subsequently lodged together with all supporting documents and calculations and a copy of the relevant and consequent assessments so received.
In the event that any assessment or amended assessment:
(a)received by the wife is less than $72,167, the wife shall pay to the husband one half of the amount by which such assessment or amended assessment is less than such sum; and
(b)received by the husband is less than $65,930, the husband shall pay to the wife one half of the amount by which such assessment or amended assessment is less than such sum
That save as provided in these orders, each party otherwise be liable for any taxation assessment made against them and in respect of any debts incurred by them in their respective names.
It is certified that it was appropriate to brief counsel to attend and appear at the hearing.
Any and all questions of costs arising out of these orders are reserved to be determined on written submissions. If any party desires to make such a submission, it shall be filed with my Associate and served on any other party by 4 pm on 30 January 2009 and any reply thereto shall be similarly filed and served by 4 pm on 13 February 2009.
That save as to any issue of costs, all proceedings between the parties are otherwise dismissed and removed from the list of cases awaiting a hearing.

IT IS NOTED that publication of this judgment under the pseudonym Ball & Ball is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3252 of 2006

MS BALL

Applicant

And

MR BALL

Respondent

REASONS FOR JUDGMENT

This is a modest dispute about the division of property between parties who were married for a long time.
Although the parties were divorced from each other in March 2008, I propose to refer to them as husband and wife.
Leaving aside the subjective judgment as to the assessment about the appropriate orders dividing their property, the main issues are:
(a)Should an adjustment be made in favour of the husband because the wife sought, obtained and insisted on maintaining contrary to the husband’s opposition, injunctions preventing the husband dealing with a large portfolio of bank shares, which, as a result of the global financial crisis, have substantially dropped in value; and
(b)Should there be some adjustment in the wife’s favour because of her health problems?
(c)Should an amount be added to the pool for the wife’s post-separation acquisition of furniture from funds jointly saved.
When the case began, there was a contentious issue about the wife having agreed and then later withdrawing her agreement to the sale of the former matrimonial home. That issue largely became unimportant because of the appointed real estate agent indicating that he did not believe that the delay has had any particular effect on market price albeit that he was not able to say what would happen on a sale.

The wife’s position as to the outcome

After setting out the specific assets sought, the wife sought an overall division of property as to approximately 53 per cent.

The husband’s position as to the outcome

The husband sought 55 per cent of the “matrimonial pool”. On the conclusion of the hearing he sought specific orders that each party retain what they had, that superannuation be divided equally and the remaining assets be divided reflecting an overall division of 55 per cent to him.

Background

The wife is 60 years of age and not in paid employment. She has not worked in paid employment since late 1998. The husband accepted that the wife is about to undergo some surgery.
The husband is aged 60 years. He will turn 61 years of age in March 2009. In May 2006, the husband took early retirement from his employment with a bank where he held a senior position.
The parties commenced cohabitation in 1981 and were married in October 1982. It seems clear that the marriage ended in December 2006 when the wife moved out of the home. At that time, the husband was working overseas as a sports instructor (he having retired from the bank) on a contract for a period of two years.
There are two adult children of the marriage aged 22 years and 25 years respectively. They are financially independent of the parties.
Save for the issue of what has been described as “wastage” to which I have already referred, the parties agreed that their contributions overall, had been equal. To do justice to the “wastage” argument however, some background is helpful. What I have set out hereafter as facts are intended to be findings by me on the evidence.
The wife said that when her relationship with the husband began, she owned a house in Adelaide upon which there was a small loan outstanding. She had the proceeds of the sale of another property and she commuted a pension entitlement from her then deceased husband giving her a sum of $43,514. She also had the proceeds of the sale of another property which she received subsequent to the commencement of cohabitation but clearly, that property was in existence at the time that the parties commenced living together. She also had some proceeds from the sale of some shares.
The wife also said that there were some other investments but she was unable to put a value on them.
Subsequent to their cohabitation, the husband finalised a property settlement with his wife from a former marriage. The precise details of the husband’s contribution are not clear but they certainly reflect that he had assets. On any view, there was some disparity between the parties and having regard to the concessions they have made, that disparity is irrelevant.
The parties’ first child was born in 1983 and the following year they moved from Adelaide to Melbourne for employment purposes. That move precipitated the sale of property and the purchase of another property in Melbourne. The parties had the benefit of the husband’s bank providing a loan.
After the birth of the second child, the parties moved to New Zealand for the purposes of the husband’s career. That was a senior position in New Zealand and the parties benefited financially as a result of the move.
In 1989 the parties moved back to Melbourne again for employment purposes for the husband. The husband was then able to hold a very senior position with the bank.
Years went by and in 1993 the parties moved back to New Zealand again for the employment of the husband. It was during that period of time that the husband obtained tertiary qualifications at for the purposes of advancing his career. During that time, the wife continued to live in New Zealand looking after the children but was also working as a nurse on three or four days each week. In 1998 the family moved back to Melbourne and resumed occupation of what had been the matrimonial home.
The wife contributed her income throughout the years. She worked as a nurse on a part-time basis and left her positions when the parties moved for the sale of the husband’s employment. Whilst she was in New Zealand and in Australia, and working, the parties engaged a baby sitter to help with the children.
There was no dispute between the parties that the wife’s income was all pooled and used for family purposes.
To enable the husband to pursue his career for the benefit of the parties, he had to work long hours and many of the parenting duties fell to the wife. The husband was also required to travel overseas for work conferences.
In the latter part of the marriage, the husband was away attending sporting courses no doubt culminating in his overseas employment as a sporting instructor upon ceasing to work for the bank.
It was common ground between the parties that the husband controlled all of the family finances and made investment decisions. The wife conceded that she signed documents for various investments but those decisions were made by the husband whom she trusted. The wife conceded that she was largely unaware of the financial circumstances and in particular not aware of the extent of the share portfolio held by the husband in the bank for whom he had worked.
Cross-examination of the wife was limited. She conceded that the husband mostly made wise decisions about their finances and at the time that they separated, they had considerable wealth. Part of that wealth was created by obtaining professional advice from persons including the wife’s brother. In relation to the question of the parties’ financial records, the wife conceded that she mostly knew where they were and that at the time she chose to end the marriage, she took the records with her. In addition to obtaining the professional advice of the wife’s brother, the husband also obtained financial advice from other sources and the wife conceded that she had been present. It was shortly after a meeting with one of the financial advisers that the wife chose to end the relationship.
Only days after the last financial adviser meeting, the husband went overseas back to his employment as a sport instructor and the wife obtained financial injunctions from the Sunshine Magistrates Court on an ex parte basis. For clarity’s sake, counsel for the husband asked the wife whether she knew that those injunctions were intended to stop the husband from dealing in the shares and she conceded that she knew that.
It is also to be noted that the wife left the home without notice to either the husband or the two adult children. Upon leaving, she withdrew significant sums of money from the joint account and placed them in an account in her name.
The wife’s evidence which I accept, was that subsequent to separation and having obtained control of a significant portion of the finances, she obtained further financial planning and accounting advice. In her affidavit of evidence in chief, the wife set out what she did with the various assets under her control. On her view, she was taking “protective’ action.
On his affidavit of evidence in chief, the husband was not significantly challenged. He said that it was only when he was overseas and checked his banking accounts online that he discovered the withdrawals to which I have already referred. He then left the overseas posting and returned home.
Upon returning home, the husband found a notice dated one month earlier indicating that proceedings had been listed in this Court. It now transpires that this was the first the husband knew of the ex parte injunctions in the Sunshine Magistrates Court. The orders of that court note that the proceedings were transferred to this Court.
In the injunctions, the wife sought and obtained orders that the husband, as well as the managers of share registries, be restrained from permitting any dealings with the husband’s bank shares. Those injunctions also directed the trustee of his banking staff superannuation scheme not to make splittable payments without leave of the court and to notify the Court in the event that a splittable payment became payable.
The making of the orders in the Sunshine Magistrates Court on an ex parte basis was troubling having regard to the fact that the wife knew where the husband was and did not set out any of the matters that would normally be required to be established for a court to proceed on an ex parte basis. The transfer of the proceedings to this Court did little to ameliorate the problem. It was only in final addresses that it became apparent that the parties did not have the affidavit material upon which those injunctive orders were granted. The original documents were on the Court’s file. In my view, nothing turns on that material.
The parties then began the proceedings in this Court. The husband sought “a dismissal” of the orders of the Sunshine Magistrates Court. The first hearing on 8 January 2007 was before a registrar. Even had there been a desire to challenge the continuation of the injunctions, the Registrar could not have determined the dispute. The next court event was 6 February 2007 again before a registrar. Procedural orders were made. Paragraphs 4 and 5 of the orders made with the consent of the parties read:
4. That the further hearing of the Form 2 Application of the Wife originally filed in the Sunshine Magistrates Court on 22 November 2006 and the hearing of the husband’s Form 2A Response filed 16 January 2007 be fixed for hearing in the Judicial Duty List at 10.00am on 21 March 2007.
5. That the parties be at liberty to seek any order varying the ex parte orders made on 22 November 2006 which may put into effect the advices arising pursuant to paragraph 3(a) of this order.

Paragraph 3(a) of the order of February 2007 required the parties to obtain financial advice to “maximise the asset pool” and “legally minimise the taxation exposure” as a result of the superannuation amendments and “with particular emphasise on any necessary sales, transfers of shares or other assets prior to 30 June 2007”.
On 21 March 2007, orders were made by consent of both parties by Dessau J which did not affect those injunctions. In fact, the husband sought and obtained injunctions that day against the wife’s use of various funds. The wife consented to those orders. Paragraph 13 of those orders provided:
Liberty to apply be reserved as to any difficulty with taxation payments or superannuation increase including but not limited to discharge or vary (sic) of orders made on 22 November 2006 at the Sunshine Magistrates Court to facilitate such payment or increased superannuation.
The proceedings were then adjourned to 24 May 2007 in the Judicial Duty List with a conciliation conference listed three days before that. At the conciliation conference, the return date in the Judicial Duty List was vacated on the basis that a settlement was “being negotiated”. Paragraph 4.2 of the orders made by the Registrar at the conciliation conference read:
The matter is adjourned/continuing to a list conducted by a judge on 13/6/2007 at 10.00am for possible interim hearing if settlement not confirmed.
Things then fell apart.
On 8 June 2007, consent orders were made varying the restraints on the parties to enable the disposal of 54,000 shares to be released to each of the husband and wife allowing each to deal with those shares as each saw fit. The notation to those orders read:
These orders are made without prejudice to the husband’s entitlement to re-apply on an interim basis to dismiss the Orders made in the Sunshine Magistrates Court on 22 November 2006 and 21 December 2006 respectively.
The husband’s evidence about the release of the shares which sets out his intention was:
I had requested provision of those shares for the purposes of ensuring that I could maximise the amount which I was entitled to deposit into superannuation pursuant to the arrangements which were being offered by the Government at that time. I did not otherwise have sufficient funds in my control to achieve this.
The parties were able to reach agreement about the distribution of shares with an equivalent cost base for the purposes of tax.
The husband created a self-managed superannuation fund which is now in the pool of assets for division. That fund has a corporate trustee of which the husband is sole director and shareholder.
The husband also obtained a loan for $1.1million from his former employer bank and applied those funds to his newly established superannuation fund and then sold the shares distributed to him so that that loan could be repaid.
The husband said that he retained 16,000 of the bank shares because that was “the best way” to handle his “liquidity”.
It will be seen therefore that by June and July 2007, at a time when the parties were negotiating a settlement and also going to a private mediation, the husband sought to have the opportunity to dispose of assets which, I accept, would have ultimately largely been his in the settlement. Nothing happened and no agreement was ultimately reached.
In relation to any “wastage” or “loss” argument, there can really be no suggestion that the injunctions adversely affected the husband or the parties collectively to this point in time. Whilst no-one could have anticipated the 2008 share market problems, both parties seemed content not to vociferously contend for their retention or discharge. By the middle of June 2008, on the evidence, things changed and a dispute surfaced.
On 17 June 2008, the husband’s solicitor wrote to the wife’s solicitor raising a number of issues but in particular:
Your client’s injunction has served to freeze matrimonial assets in bank shares. Our client is of the view, and as you are aware has been for some considerable time, that the matrimonial assets invested are too heavily concentrated in bank shares.
…
Our client again seeks to rebalance the portfolio and is prepared to advise your client of the sale and reinvestments which he proposes.
…
Please confirm by signing the attached proposed consent orders…as evidence of your client’s consent. Again, consent orders are necessary given the form of the injunction obtained by your client.
…
In the event that your client fails to consent, our client reserves the right to cite this part of this letter at trial on the issue of your client’s wastage of matrimonial assets.
On 20 June 2008, the wife’s solicitor wrote to the husband’s solicitor saying that they had difficulty understanding the husband’s reasoning for requiring a further release of shares. This issue was the subject of some cross-examination by each side. It was put to the wife that she knew by August 2008 that the bank shares were falling. She agreed. However she said she did not see this restructuring of the shareholding as protecting the family wealth because the share market could go up or down. She conceded she did not perceive the shares falling the way they did. This evidence however must be taken in the context of the request being made in June 2008. She was cross-examined about the period of August.
In the same way, the husband was cross-examined and he conceded that he had not told the wife what he intended to do as part of this restructuring of the share portfolio. He said he knew what he was going to do but he conceded that he did not put a specific proposal. He said in answer to a question about a concern that there was too much wealth tied up in bank shares that that was right. When asked whether he blamed the loss that followed on the wife he said that was not his case. He was asked why had had not provided more information to the wife and his response was that he thought he had. He conceded however that the communication between he and the wife was very poor and only through solicitors. He was asked whether he agreed that it would appear that the wife and her solicitor did not understand the reasoning behind the release of the shares and he agreed.
It is often said that hindsight is a wonderful thing. I find that whilst the husband as an astute investor was focussed on the need to ensure that the assets of the parties or at least his interest in them were prudently managed, his precise intentions were not made obvious and clear. Whilst the wife, albeit having the advantage of business advisors, did not expect the rapid deterioration in the financial markets; I do not find that there was any obstructive, imprudent or deliberately destructive behaviour designed to adversely affect the parties’ wealth. To a very large extent, the injunctions, albeit curiously obtained on an ex parte basis remained in force with the acquiescence of both parties until what appeared to be a strident objection by the husband in June or more particularly, July 2008. It was during the period subsequent to that time that I find that the husband’s intentions were unclearly or imprecisely expressed and that the wife was not conscious of the impending financial disaster.
A considerable portion of evidence was given by the husband about action by the wife to withdraw the family home from the market for sale. Initially it was put on the basis that there had been some financial loss as a consequence. Ultimately it was put by the husband that the wife’s action warranted me making machinery orders for the sale as part of the final division which effectively excluded the wife’s control.
The husband said that after separation, he had no desire to retain the home apart from his wish to ensure that the stability of the two adult children whilst they completed their studies. The husband had requested a sale of the home and the wife agreed but with conditions. Her condition was that she be able to attend the home prior to it being sold to collect some of her personal belongings but in the absence of anyone other than perhaps someone such as her lawyer. As a consequence, the property went on the market for sale and the obvious preparations were made. Having involved an agent and begun the sale process, the wife through her solicitors said that if the husband did not agree with her attending the home for an inspection and to collect her personal items, she would withdraw her consent.
It is important to note that according to the husband, and I have no reason to doubt what he said, the only real objection came from the two adult children. Sadly, the separation was without their knowledge and they have apparently harboured some ill will towards their mother.
Over a space of only a few days, correspondence was sent by the solicitor for the wife indicating initially that if the agreement was not reached the consent to the sale would be withdrawn and then ultimately, it was withdrawn. That caused some angst for the real estate agent. One example for the problem was that the solicitor for the wife on 26 September 2008 wrote to the solicitor for the husband and said:
Firstly our client intended to inspect the improvement works that had been undertaken in readiness for the potential sale. It is entirely reasonable that our client be given this opportunity prior to the home being open for inspection. More so given that our client was bearing the percentage of the costs incurred for this work.
A second reason given by the wife was that she decided to collect her personal effects. Apparently the husband had said that there may have been some difficulties in putting the items aside and the wife complained that that assertion was without foundation. To compound matters, during the course of the process of correspondence, some of the matters apparently remained unanswered. The wife then asserted that the husband sought to impose “unreasonable and unacceptable conditions” upon the wife having an opportunity to inspect the home.
The whole issue was the subject of a limited amount of cross-examination. The husband conceded that the payment for the repairs to the house came from joint funds. In turn, the wife agreed that the agent would have been the best person to work out the selling arrangement but it was not the sale details which caused her the problem. It was put to the wife that she did not “think through” the financial consequences of not proceeding with the sale but she disagreed.
I had the opportunity to observe the wife in the witness box as I did with the husband. The wife was calm and forthright and made appropriate concessions. I find that much “water has passed under the bridge” now such that I need do no more than make an order that the parties have liberty to apply in the event that there is a dispute about the machinery provisions of the final orders that I propose to make.
The plethora of correspondence in this case confuses the picture and does little credit to either party. However, it is not such that I would draw the conclusion proffered by the husband that I ought therefore exclude the wife from involvement in the sale of the home.
What was common ground was that I should follow the four step process. I propose to do that.
That is the process set out by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at 78,386 where the Full Court said:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
The first step therefore is to determine the pool of assets.
Save for issues in relation to the wife’s furniture, a share dividend received in December 2008, money inherited from the wife’s mother’s estate, trust funds held by the wife for the two adult children, the husband’s diving equipment and a significant portion of frequent flyer points to which I shall return below, the asset pool was agreed between the parties and is set out below.
The wife’s current home  $ 445,000
Wife’s bank accounts     125,322
Wife’s share portfolio     632,542
Wife’s car     25,000
Wife’s furniture     1,775
Husband’s bank accounts                      61,993
Husband’s Telstra shares     34,160
Husband’s N Bank shares         226,400
Husband’s other shares     655,427
Husband’s furniture                   11,225
The joint N Bank shares   1,046,800
The former matrimonial home   1,450,000
Total tangible assets  4,715,644
Agreed Add-Backs
Wife’s prepaid legal fees     53,139
Husband’s pre-paid legal fees               122,448
Sub-total  4,891,231
Superannuation
Husband’s N Bank Superannuation 1,946,447
Husband’s other superannuation                  1,217,034
Wife’s superannuation   1,079,167
Sub-total  9,133,879
Liabilities
Wife’s 2008 Tax liability                 72,167
Husband’s 2008 Tax liability           65,930             (138,097)
NET EQUITY FOR DIVISION  8,995,782
ADD N Bank dividend received late 2008 estimated as $42,000 but separately divided in the final orders.
It was agreed between the parties that the pool above represented the assets for division. That can be seen in Exhibit W3. Although that exhibit includes a notation that it does not include the diving equipment and frequent flyer points, those matters were not canvassed by the parties nor any valuations obtained. The same applied in respect of the wife’s mother’s estate which was received in December 2006.
Having regard to their respective ages, there was no dispute that the superannuation should be included as an asset.
There is some controversy about the taxation liabilities because they are yet to be clarified but I will make provision in the orders for the parties to make the necessary adjustments arising out of any inaccuracies in the parties’ estimates.
It will also be seen from the pool above that the parties agreed to quantify their paid legal fees on the basis that those sums had come from joint resources and accordingly were to be added back. The husband conceded that there was no evidence as to the value of the wife’s car and as such it was put in to the pool of assets on the basis of a concession or admission against interest.
The matrimonial home which is shown in the pool is to be sold by agreement and the figure shown in the pool is the expected gross sale price. In the orders that I propose to make, I shall divide the net proceeds on a percentage basis to ensure that the picture is not distorted.
The same problem arose in respect of the valuation of shares. The share market dropped dramatically in 2008 but even in between the time of the commencement of the hearing and final addresses, there had been changes. Accordingly, and sensibly, the parties agreed on the figures as shown above.
The two variations in the pool are the figures in Exhibit W3. The first relates to the wife’s furniture. At the time of separation, the wife took very little furniture from the home. However in cross-examination, she conceded that of the monies she had taken, she spent about $20,000 on furnishing the house in which she now lives. This furniture issue was not canvassed in any other material.
There is no evidence as to the value of the furniture retained by the wife other than the statement that it was purchased with funds. Having regard to its minimal nature in value terms by comparison to the total pool plus the fact that the husband had the benefit of all of the furnishings acquired during the marriage, I see no injustice in ignoring the $20,000 so spent.
The same applied to the sports equipment and frequent flyer points all of which were not the subject of controversy. In the circumstances, I do not propose to add the extra $20,000 into the pool.
The second issue relates to the question of a dividend received after the hearing commenced but prior to final addresses. That dividend is a significant sum of money of just over $50,000. It is clear from the way the parties conducted their case that they intend to divide the assets which gave rise to that dividend. It is clouded somewhat by the fact that there will be a taxation payment in respect of that dividend. That liability will be affected by a whole series of issues which are difficult to predict at the moment. In the circumstances I propose to make an order that the net sum as determined by agreement be placed in the pool and divided equally between the parties. I will require the parties to work out with their respective taxation advisors just what that net sum should be having regard to what is known about their respective financial circumstances in this current financial year.
Accordingly I find that the pool of assets for division is $8,995,782 plus the dividend which is approximately $42,000.
I turn then to the question of contribution which is the second step in the process.
I have already indicated that the parties agreed that their contributions save for those that I have isolated, have been equal.
I have already pointed out that up until separation, the husband made the decisions and it appears, made them well. There is also evidence of the involvement of the wife with financial advisors. There is no suggestion that the wife was in any way excluded from having access to information about the financial position of the parties.
The fundamental question is whether or not the injunction sought by the wife has any impact in this case. On the evidence, the husband did not learn about it for one month.
I have set out the chronology of events subsequent to the making of the orders in the Sunshine Magistrates Court. I do not find that there is anything other than acquiescence by both parties in the continuation of the orders. More importantly, there is no evidence of any disadvantage to either party as a result of those injunctions at least up until the middle of 2008.
Counsel for the husband said that because of the injunction and there being no undertaking as to damages, together with the fact that the wife had access to all of the financial information necessary to assess of the parties’ financial position, there was a “greater obligation to act proactively” rather than the way in which she did and specifically, to do so after the middle of 2008. Counsel pointed to the wife’s statement that she “thought” that the share market would go up in the same way that it went down. The husband’s case is that the duty of the wife to both she and the husband had therefore been breached. There is no suggestion by the husband that there was a deliberate intention by the wife to reduce the size of the pool. Rather, the husband’s case is that in light of the duty of the wife, the losses should not fall equally between the parties.
The wife’s response was simple. She said that there had been no activity by the husband to seek to remove the injunction notwithstanding that he kept his option to do so alive. Merely as a part of general deliberation on this issue, I was urged to look at what the parties were saying to each other during the period between June 2008 and September 2008. Having been requested to “lift” the injunction, the wife’s solicitor on 26 August 2008 wrote:
In relation to the proposal to release the injunction on the [N] Bank shares, our client does not agree. Our client wishes to obtain her own advice in relation to this proposal from her accountant and financial planner before further consideration is given to your client’s proposal.

Whilst the husband’s position was that the letter of 26 August 2008 was an outright refusal to lift the injunction, the sentence referred to above indicated that the refusal by the wife was not absolute. Nothing further happened and the subject appears not to have been raised again. This was the commencement of the world turmoil after which substantial drops in the value of the shares occurred. The husband does not seek to have any specific sum added back to the pool. Rather, he points to the only evidence he says I have available to make an adjustment to the parties’ respective contributions. The husband pointed to the fact that in June 2007, the bank shares were worth $1.978 million. By September 2008, the shares according to the husband’s financial statement filed at that time totalled $1.105 million. There was a further drop between September and the commencement of trial by a further $150,000. Since then, the share value has risen ameliorating that drop by approximately $50,000 to $60,000. Overall and in a very general way, the husband says that over a space of a year or so, the drop in the value of the shares is about $900,000 which on the pool to which I have referred, is about 10 per cent. It was the husband’s submission that $900,000 drop attributable to the way in which the wife breached her “duty”, justified an adjustment that gave the husband 10 per cent of the pool more than the wife.
The authorities of this Court have traditionally been that absent the application of a waste principle, it would be just and equitable to expect spouses to share the brunt of any loss that befell them.[1]
[1] See Browne v Green (1999) FLC 92-873, Townsend and Townsend (1995) FLC 92-569, AJO & GRO [2005] FamCA 195.
In Beneke (1996) FLC 92-698 the Full Court said that in proceedings under s 79 of the Act, a court is not obliged nor expected to undertake something akin to an accounting exercise. The Court pointed out that the task was to examine the facts of each case carefully to decide what was appropriate and just and equitable in the circumstances. That must be the case here. There can be no principle to guide a court other than that all of the factors need to be taken into account in the exercise of what is clearly a judicial discretion. A number of authorities including those to which I have referred make the observation that marriage is an economic partnership where one has to take the good with the bad during the relationship. As part of the exercise, a court is entitled to take into account how the parties have dealt with each other and consulted with each other in respect of that economic partnership in a similar way to a joint venture or commercial partnership. That in turn leads to the question of avoiding isolating particular incidents and examining them too closely in the context of a long history of otherwise cooperative contribution. Here, the parties each did different things and contributed in their own way and there is no challenge to any of those contributions over the long duration of this marriage. Importantly, the “wastage” evidence really related to the period of the second half of 2008 during which the drama occurred financially. This could not be a period of time that I could isolate from all of the other unfortunate and perhaps irresponsible decisions that might have been made over many years of the relationship which were not put before the Court. The concession by the husband that there was no “deliberate wastage” was a sensible one. However, the other significant matter to take into account is that even had the wife agreed for the shares to be sold, I have no evidence of what might have happened particularly having regard to the fact that the whole of the world share market was in turmoil.
In the circumstances, I find that it would not be fair and reasonable to make a specific adjustment in favour of the husband in respect of the wife’s approach to refusing to lift the injunctive orders.
In the circumstances, I find that the parties have contributed equally.
The third step in the process is to consider the factors set out in s 75(2) of the Act.
I have already set out in some detail at the commencement of these reasons, the personal details of the parties.
The husband is aged 60 and in good health. He has been highly skilled in financial and business matters and was able to obtain employment as a sporting instructor as a result of his training and courses during the latter part of the marriage. The husband also has the benefit of equipment not to mention frequent flyer points that might enable him to have access to that sort of employment in the future. On the other hand, the wife is facing a medical operation which will create something of a disability for her and she does not have the training or experience as does the husband.
The wife’s position was that I should give her a loading of 3 per cent on the basis of the significant health issues. There can be no doubt that there is a difference between the parties’ health positions. Mr O’Shannessy for the wife argued that the wife’s health affected her earning capacity and in particular, pointed to the wherewithal that the husband has should he choose to pursue employment. I am conscious however of the husband’s age and have taken into account that he has made a life choice to retire from the workforce after what has been a very successful career which has been to the benefit of the parties. Even should he choose to pursue the sporting interest, it is hard to see how it would make a substantial difference to the financial picture in income or capital terms over the ensuing years to such an extent as to widen the gap between the husband and the wife.
Mr Crofts on behalf of the husband said that whilst the husband accepted that the wife was to undergo an operation, she had health insurance and there was no medical evidence to indicate just what impact her disability would have on her in the future. Mr Crofts cross-examined the wife about the fact that she had no special requirements placed in her home to assist her. The wife filed an affidavit by Dr Y who is a specialist rheumatologist. Dr Y provided a report in the middle of 2008 indicating that the wife would have pain but that would be controlled by analgesia and anti-inflammatories. In a subsequent report attached to the affidavit, Dr Y said that whilst the wife needed Panadeine Forte for her pain levels, he could review her management in the future and the pain issues would have to be addressed.
There is no evidence upon which I could make any definitive statement that I was comfortable about an adjustment between the parties because of health. Whilst I have sympathy for the wife’s position, it is also to be noted that the husband made the concession in his affidavit of evidence in chief from the outset about the wife’s health position.
Section 75(2) requires me to take a number of matters into account. Those considerations are all part of the matters to be taken into account in s 79(4). Balancing all of the matters in s 75(2) as they apply to each party, I am not in a position to say that I can distinguish between them in any meaningful way such as would justify a specific adjustment in either party’s favour.
Accordingly, I propose to make no adjustment as between the parties.
The fourth and the final step is to ultimately make adjustments so that the outcome between the parties is one that is just and equitable.
On the basis of an adjustment of equality between the parties, each should receive $4,497,891 together with a half share of the net dividend from the N Bank. The wife currently has assets in her possession or control amounting to $2.290 million or thereabouts. She needs therefore to receive a further $1.598 million or thereabouts to achieve an overall equity of 50 per cent in the assets of the parties. It is agreed that the home will be sold and the other asset in joint names is the large portfolio of N Bank shares.
The husband’s bundle of assets as can be seen from the pool above amounts to $2.263 million or thereabouts.
The parties agreed in final submissions that the N Bank superannuation should be divided equally between them. That means that the gap between them is substantially narrowed.
The question is whether or not the proceeds of the sale of the house and the remaining N Bank shares should be divided other than on equal basis on each case. I see no distinction between the parties in this case that would justify any such distinction. Both parties have a need for cash and both parties have a need to have a form of financial capital that will provide them with ongoing income into the future. As I have been unable to distinguish in any significant way either of the positions of the parties, the appropriate order is to divide the remaining assets on an equal basis as well.
It is not the percentage division which must be just and equitable but the underlying value of the settlement in the hands of each particular party. I am cognizant of the fact that the wife has some extra furniture and the husband has sports equipment and access to frequent flyer points. All of that albeit not specifically accounted for in a mathematical way means that I should not be too concerned about a minor discrepancy of less than 1 per cent in the ultimate division of the assets. Accordingly, I find that the division of the N Bank superannuation, the N Bank shares and the matrimonial home on an equal basis is a just and equitable outcome if those portions are then added to the existing bundle of assets retained by each party.
In my view that is a just and equitable outcome.
The division of the remaining N Bank shares was also a matter of some controversy. There are three tranches of shares. Each of them was acquired at a different time as a result of which each has a different cost base for the purposes of the calculation of any capital gains tax. The fairest way to resolve the problem using the philosophy to which I have referred is for each party to share the benefits and liabilities of those shares. As such, I propose to divide each of the three tranches equally and to ask the parties to arrange for their expert advisors to determine the most sensible way of doing that. It will be noted that one of the tranches of shares has an uneven number and having regard to the minor discrepancy between the bundle of assets that each party currently has, I propose to allow the husband to have that extra share.
I have also decided to make orders requiring the parties to provide to each other their 2008 taxation returns and any amended returns and assessments that arise there from on the basis that they have each worked on a specific taxation liability which might ultimately be incorrect. The orders I propose will make any necessary adjustments albeit small.
The sale of the home was a contentious subject in 2008 and I have already referred to it earlier in these reasons. The parties have now agreed on a single estate agent and even on the fact that the husband’s legal practitioners will be responsible for the conveyancing providing it is done so that each party is the client of the conveyancer. That will obviously require the conveyancer to keep each informed of the developments. I have made provision in my orders for that to occur but in the event that it is not something about which the legal practitioners are comfortable or the parties desire to save money by using a conveyancing company, they can obviously amend my orders by agreement accordingly. Because of the fact that there have been difficulties in the past in relation to the execution of various things that required cooperation, I propose to make orders giving them liberty to apply in respect of a number of matters where there is a prospect of a lack of cooperation. Should that occur, the party who is uncooperative faces serious cost consequences.
In respect of the sale of the home, the husband’s counsel urged me to give the husband the conduct of the sale including in respect of conveyancing matters. I have already given reasons why that is in my view, inappropriate here. I wish to add to that however that I consider a court has to be careful about delegating its responsibilities to parties over whom it does not have control. See the High Court’s view in Harris v Calladine (1990) FLC 92-130.
Finally, I have canvassed with counsel the prospect of ongoing disputes in relation to costs arising out of these orders and all agreed that I should make orders that any such dispute should be determined on submissions and heard in chambers. I propose to make orders accordingly.

I certify that the preceding One Hundred and Three (103) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:

Date: 12 January 2009

[2009] FamCA 3

12 January 2009

Key Legal Topics

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Family Law

Commercial Law

Tax Law

Legal Concepts

Injunction

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