Bard and Arthur

[2009] FamCA 818

FAMILY COURT OF AUSTRALIA

BARD & ARTHUR [2009] FamCA 818

FAMILY LAW – PROPERTY SETTLEMENT – Contributions of each party prior to separation and after separation – Allegation by the wife that the husband did not fully disclose his financial position

Family Law Act 1975 (Cth)

Norbis and Norbis (1986) 161 CLR 513
Lenehan and Lenehan (1987) FLC 91-814
Zyk and Zyk (1995) FLC 92-644

APPLICANT: Mr Bard

RESPONDENT: Ms Arthur

FILE NUMBER: SYF 6362 of 1987

DATE DELIVERED: 3 September 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 29 - 30 January 2009

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Litigant in person

COUNSEL FOR THE RESPONDENT: Mr Anderson

SOLICITOR FOR THE RESPONDENT: Ian Kalaf

Orders

1. That an order be made pursuant to Section 79 in accordance with the terms of paragraphs 2 to 4 set out hereunder.

2. Within three months from the date of these orders, that the wife pay to the husband the sum of $234,490.00 and the husband contemporaneously provide a withdrawal of caveat in respect of any caveat he has lodged upon the property known as B property.

3. In the event that the wife fails to make the payment referred to in Order 2 then the husband will be appointed as trustee for the sale of the property known as B property and shall do all things and sign all necessary documents for the purposes of selling that property at the earliest possible time and from the proceeds of sale the following amounts will be paid:

   3.1.the costs of the sale including agents’ fees and legal expenses;

   3.2.discharging the current mortgage on the B property;

   3.3.the husband shall receive the balance of the proceeds of sale.

4. In addition to Order 3, in the event that the wife fails to comply with Order 2, the wife’s property at N will be charged to recognise a responsibility of the wife to pay the husband an amount of $29,490.00, together with interest to accrue after the expiration of three months from the date of these orders at the rate prescribed from time to time by the Family Law Rules, 2004, and the husband shall be entitled to lodge a Caveat on the N property for the purposes of recognising that debt.

5. Except as otherwise provided in these orders the husband and wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equity, superannuation entitlements and personal effects currently in the possession or control of each of them respectively  

6. If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 6362 of 1987

MR BARD

Applicant

And

MS ARTHUR

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. The husband entered into voluntary bankruptcy on 19 May 1995 but that bankruptcy was discharged after a number of months.

2. Mr Bard (“the husband’) and Ms Arthur (“the wife”) were divorced on 17 July 1996.  On 11 November 1996 the husband filed an Application for Final Orders for alteration of the property interests of the parties. 

3. The parties sought to obtain consent orders from the Family Court in April 1997.  A requisition was raised and the matter remained unresolved.

4. The parties for many years did not actively seek that the Court finalise an alteration of their property interests but they now do so.

SHORT HISTORY

1. The husband was born in Ireland in 1946 and is now aged 62 years.  The wife was born in Australia in 1950 and is now aged 58 years.  The parties were married in the United Kingdom in February 1972.

2. There were four children of the marriage, A who was born in 1972, S who was born in 1973, T who was born in 1977 and L who was born in 1980.

3. There is controversy about when a separation of the parties occurred and I will deal with that below.

APPLICATIONS

1. At the commencement of the hearing the husband, who was self represented, indicated that he sought by way of alteration of property that the wife transfer to him the property at B (“the B property”) with all mortgages and fees discharged.  He sought a further order that the wife pay to him an amount of $110,000.00.

2. It is agreed that the gross value of the B property, which is currently registered in the sole name of the wife, is worth $400,000.00.  The effect of the husband’s application is therefore that assets of a value of $510,000.00 move from the wife to the husband.

3. The wife seeks an order that the B property be sold and from the net proceeds of sale (which are expected to be slightly less than $200,000.00) the husband is paid the amount of $120,000.00.  The husband has lodged a caveat on the B property and on the wife’s application that will need to be discharged upon the settlement of the sale of the B property.

CREDIT

1. The primary factual dispute between the parties relates to what financial contributions the husband made towards the end of the marriage, during the period the parties were separated under the one roof and after the separation.

2. In the husband’s cross-examination of the wife, he put to her a number of things that he believed were inconsistent on the face of documents.  On each occasion the wife provided an explanation (that I accepted) for what might at first appear to be an inconsistency.

3. Counsel for the wife relies upon the husband’s statement of affairs to his trustee as an inaccurate depiction of the husband’s financial history prior to that time.

4. The husband has had major health problems associated with his heart.  His evidence is that he has significant difficulties with his memory.  That was demonstrated on a number of occasions during cross-examination.  Whilst both parties did their best during cross-examination to answer the questions, I was more impressed with the way the wife responded to questions than with the way the husband responded to questions.  Where there is a difference in the evidence given by the parties I prefer the version given by the wife to that given by the husband unless I adopt another approach based on documentation in respect of a specific issue.

CHRONOLOGY

1. Any statement made which is not said to be an assertion by one of the parties is to be taken as a finding of fact. 

2. Counsel for the wife prepared a detailed chronology and the husband has responded to that chronology in detail.  There does not seem to be any issue between the parties that between the date of the marriage in 1972 and March 1987 both made significant contributions in a myriad of different ways towards the acquisition, conservation and improvement of property.

3. Having considered that history I find that the contributions of the parties were equal during that period, and consequently I do not intend to deal in any detail with the history of the parties’ contributions up until 1987, except to note that both parties made significant and equal contributions during this period.

4. What happened between 1987 and 1995 is slightly murkier.  Disagreement exists between the parties as to the date of their separation.

5. The most contemporaneous and objective evidence I have of the husband’s position in respect of the separation is contained in the Decree Nisi of Dissolution of Marriage (Exhibit “K”).  This document is in the husband’s own handwriting and in it he swears that he and the wife separated in 1989, and at that time he had formed the intention to end the marriage and the parties physically separated.  The husband in that application goes on to assert that between March 1994 and May 1996 the parties lived under the same roof.  The husband asserts in the Application for Divorce that he lived with the wife “as husband and wife” between March 1994 and June 1995.  The wife agreed that she did not file any document in reply to the Application for Divorce.  The Decree Nisi was granted upon the facts set out in the husband’s Application.

6. The husband has given a significantly different version of what happened between 1989 and 1996 in his current affidavit material.  Where that version differs from the version he swore to in his Application for Divorce filed 4 June 1996, I reject his later version of events.

7. The wife’s evidence about this period was that in March 1987 she told the husband to leave the home at H.  The wife stated that she and her husband were then separated under the one roof and that her husband ceased speaking to her and did not contribute to the running of the household or the maintenance of the children.  The wife states that she sold personal belongings and made cakes for sale at a local shop to earn extra money to make ends meet.

8. On 8 October 1987 the wife commenced proceedings for sole occupation of the H property.  At that time the husband left the premises, taking all his possessions, and commenced living separately at Y.  He returned two weeks later, however, and the parties recommenced residing separately and apart under the one roof.  Although the wife claims that an order was made for exclusive occupancy, there is no evidence that her Application to the Court for such an order was ever followed through.  As at 1987, the children were aged approximately 15, 13, 10 and 8 years.

9. In January 1988 the property that the parties owned at H was sold for $93,000.00.  A mortgage of approximately $50,000.00 was paid off and $25,000.00 was applied to the purchase of a new property at O (“the O property”) which the wife purchased in March 1988 in her own name.  The purchase price was $109,000.00 and the total acquisition price was $111,842.00.  She borrowed $72,000.00 from the Commonwealth Bank of Australia.  The wife then contributed $25,000.00 from the sale of the H property.  She says that she contributed a further $14,751.98 from savings as well as the part sale proceeds of a property at Canberra (“the Canberra property”).

10. The Canberra property had been sold on 14 July 1987.  After the discharge of liabilities in respect of that property each party had received $15,000.00.

11. After the purchase of the O property the wife was the person who made monthly loan repayments and paid for repairs and insurance in relation to the property.  The husband contests that the wife paid the sum of $14,751.98 from her funds and asserts that any payments were made jointly.  I accept the wife’s version as to how the O property was acquired.

12. In January 1989 the husband went overseas and returned in February 1989.

13. In February 1990 the wife temporarily vacated the O property but returned in May 1990.

14. The wife asserts, and I accept, that in July 1990 the husband left the O property and commenced to live in another property at R. 

15. A consent order document was entered into by the parties in February 1997.  Its full text and discussion about it is set out later in these reasons.  The separation date that the husband recorded on that document was altered by the wife to be 17 July 1990.  The husband disputes this date and says in his oral evidence that it was later.  That evidence, however, does not sit comfortably with his own sworn Application for Divorce.

16. In July 1990 A returned to the O property to live with her mother.

17. The wife alleges, and I accept, that the husband was not making any contributions by way of child support from 1990 onwards.

18. The husband denies that, saying that he was giving the wife $250.00 per week by way of child support and mortgage contributions.  I accept the wife’s version.

19. In 1992 the husband left Australia and went to Ireland to live and work.

20. At one point the wife received from the husband gold coins which the husband asserts were worth $1,200.00.  That assertion does not seem to be disputed by the wife, although the details of how the coins came to her may be disputed.

21. In May 1992, the wife, A and S purchased a property at K for $87,500.  The wife contributed $7,500 and the balance was borrowed from the Commonwealth Bank.

22. The husband came back to Sydney for Christmas in December 1993 and returned to Ireland in January 1994.  The contract that he was due to have with a computer company fell through and he came back to Australia in February 1994 and returned to the O property.  At that time the parties lived separately and apart under the one roof.  The wife says that they did not talk to each other.  The wife asserts that the husband provided $100.00 per week for board for a period of six months and I accept that that is what happened.

23. In August 1994 the husband became employed and did work as an IT contractor for the State government. 

24. The husband was spending some time with S at his unit in K until S left Australia.

25. In March 1995 the husband commenced to reside at D.  The husband was in financial difficulties at this time and the extent of the husband’s difficulties are discussed below.

26. On 9 May 1995 the husband entered voluntary bankruptcy.  He was discharged from his bankruptcy in December 1995.

27. In May 1995 the wife purchased a property in her name and S’s name at D (“the D property”).  The wife says that she put in $14,000.00 and borrowed the rest.

28. Some time in 1995 the husband went overseas.  He came back to Australia on 9 March 1996.  The husband was convicted of an incident involving L in May 1996 (the circumstances of which are relevant to establish that the husband was in Australia at that date).

29. As mentioned earlier, the Decree Nisi of the parties’ marriage was pronounced on 17 July 1996.

30. On 20 September 1996 the husband filed an Application for Final Orders, seeking property settlement of $70,000.00 to be paid by the wife with no time specified for payment, or alternatively that he receive half the proceeds of the sale of the O property. 

31. Exhibit “J” is a form of Application for Consent Orders which was filed at the Family Court, Sydney on 7 February 1997.  It was verified by an affidavit affirmed by the husband on 7 February 1997 and an affidavit sworn by the wife on 3 February 1997.  It asked that the Court make orders in the following terms:

    1.Settlement only entails/applies to the property located at [O].  All other assets held by either party are to remain the sole property of that party.

    2.[The husband] is to receive the sum of one hundred and twenty thousand dollars ($120,000.00) as final settlement, whichever occurs first:-

    (a)on the sale of the property;

    (b)when [the wife] is in receipt of sufficient funds to effect settlement from any other source;

    (c)by 31 December 2006 (10 years hence).

    3.[The wife] is to be responsible for all outstanding principal, mortgages, rates and taxes.

    4.[The wife] is to have sole occupancy of the said property.

32. On 8 March 1997 the husband returned to Ireland and resided at X.  He subsequently moved to Dublin in 1998.

33. The wife says that in April 1997 she faxed to the Registry of the Family Court in Sydney a handwritten copy of purported final orders signed by the parties and dated 30 March 1997. 

34. This was a handwritten document that was signed by both of the parties and dated 30 March 1997 (Exhibit “H”).  The text of the document is as follows:

    Property:

    That the wife pay to the husband the sum of $120,000.00 (the payment) on or before the 31^st day of December 2001 (the date).

    That the husband has no claim on the said property known as [O property], being in the wife’s name and that the wife be solely responsible for all outgoings on the property known as [O property].

    That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

    (a)each party be solely entitled to the exclusion of the other to all other property (including choses-in action) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the real property being deemed to be in the possession of the wife);

    (b)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;

    (c)insurance policies remain the sole property of the owner/beneficiary named therein.

35. On 11 April 1997 a Registrar of the Family Court declined to grant the orders sought.  A requisition was raised.  At that point in time the document that is dated 7 February 1997 was lodged with the Court, but given that there was no compliance with the requisition, no orders were ever made.

36. Whilst it is of some interest to note what the parties agreed was a fair settlement in 1997, it is only one of the historical matters that I need to take into account when assessing what today is a just and equitable adjustment of property between the parties.

37. On 11 September 1997 the wife, together with L, purchased another property at G (“the G property”) to which she says she made a contribution of about $22,000.00.

38. In April 1998 the parties spent some time overseas together in Europe visiting Dublin.

39. On 8 May 1998 the husband caused to be transferred from an account held by AMLLC, a company incorporated in the Channel Islands, an amount of $2,000.00 by way of a loan to L. 

40. Whilst the parties were overseas there was some discussion between them about the acquisition of property back in Australia.  The husband says that the conversation was originally about a property at Bondi Junction, but the wife ultimately found the B property in October 1998.  The settlement took place on 16 October 1998.  The purchase price was $310,000.00 and the overall acquisition cost was $323,875.95.  A mortgage of $279,000.00 was used to fund the purchase.  The husband contributed $35,470.45 and the wife contributed $9,405.50.  I accept that the husband made no further financial contribution towards the repayment of the mortgage on the B property and that the wife has attended to the collection of rents and the payment of monies on the property since its acquisition.  The wife says, and I accept, that the husband originally agreed that he would pay all the outgoings, including the loan repayments, however that did not happen after the husband informed the wife that he did not have the funds to fulfil that promise.

41. In September 2000 the wife and L sold the G property but did not receive any capital from the proceeds of that sale.

42. On 21 January 2001 the wife sold the O property.  It was in her sole name and she had the capacity to do so.  The husband complains about a number of things relating to the sale of the O property.  Firstly he complains that he was not advised that the sale was going to, or had taken place.  He classifies the O property as “the former matrimonial home”, not an unreasonable description, even though whilst the parties were living together they were substantially separated under the one roof.  That is not an unreasonable description.  I find, however, that the wife has made the major contributions to the O property after the date of initial separation.  The husband alleges that the wife, whilst in negotiations with his solicitor, skipped with the proceeds of sale of the O property and did not leave a forwarding address.  The husband was not of course living in Australia at that time.  He had been living and working in Ireland since March 1997.

43. Secondly, the husband complains that when the wife sold the O property she did not fulfil the terms of the agreement that both parties signed up to in February 1997 (that is, that he would receive $120,000.00 from the net proceeds of sale).  The second agreement required that payment take place by 31 December 2001.  Given that the O property was sold in January 2001 and no payment was made to him by the end of December 2001, the husband complains that the wife breached both versions of the agreement entered into in 1997.  That is technically true.  It may well have been that had the wife paid to the husband $120,000.00 out of the sale of the O property, this litigation would never have taken place.

1. The fact was, however, that there were no final property orders, which was a pre-condition of both the agreements entered into as a result of the parties not entering into an agreement in a form that would have enabled the Court at that time to have made consent orders under s 79 of the Family Law Act1975 (Cth) (“the Act”).

2. The wife sets out, at paragraph 72 of her affidavit sworn 30 August 2007, how the proceeds of sale of the O property were accounted for and I accept the evidence contained in that document.

3. After payment of the first mortgage of $48,000.00 a second mortgage of $60,000.00 was also paid out.  The second mortgage related to a collateral mortgage in respect of the B property.  There were two other mortgages registered on the O property that were collateral security for other acquisitions by the wife but there was no money owing in relation to those mortgages and the bank discharged them upon the sale of the O property without the need for further security in respect of the other two properties.  The balance of the money received by the wife was in the approximate sum of $198,000.00.  The wife loaned $60,000.00 of that sum to L, made a gift to T of $10,000.00, bought a motor vehicle, went on an overseas trip and made a $25,000.00 contribution to another property that was acquired at P (“the P property”).

4. On 18 May 2001 the wife provided L with an amount of $30,000.00 for the purposes of discharging a personal loan of approximately $20,000.00 and paying stamp duty on a property that L was buying with his partner.  There has been a falling out between L and his mother and his mother has written off that debt.

5. On 17 July 2002 the wife purchased T property (“the T property”) for the sum of $134,344.00 and borrowed the whole of that amount from the St George Bank, using the P property as cross-collateral.

6. In August 2002 the K property was sold with a small capital return to the wife.

7. In September 2002 the wife’s mother passed away and the wife inherited $650,000.00 in cash and a one-sixth interest in a property at A (which interest was worth $150,000.00).  The wife initially bought two properties from the proceeds of the inheritance: one at C (“the C property”) for $372,690.00 and the other being a cafe for $250,000.00, a business which she still operates.  She also purchased stock worth $30,000.00.

8. On 18 December 2002 the wife purchased N property (“the N property”) for the total sum of $339,299.00, utilising funds of $263,000.00 from the St George Bank and the balance from the wife’s own funds, including the funds she inherited from her mother.

9. When the Café was purchased L was an equal co-owner.  L was to pay his mother $120,000.00 over a period of 15 years in order to acquire that interest.  In 2003 orders were made in the Supreme Court of New South Wales dissolving the partnership between L and his mother on the basis that the wife acquired L’s interest in the Café by her paying, as directed by L, $70,000.00 to St George Bank. 

10. The husband came back to Australia for a short time in September 2003 and again in April 2004.

11. On 27 February 2004 the wife sold the T property and received $88,375.00.

12. In 2005 the husband commenced defamation proceedings against the wife in the Supreme Court of New South Wales.  Those proceedings were settled in July 2007 on the basis that each party pay their own costs.

13. In March 2005 the husband commenced proceedings in the Supreme Court of New South Wales claiming 100 per cent interest in the B property and on 11 March 2005 the husband commenced proceedings in the Supreme Court of New South Wales claiming 40 per cent interest in the sale proceeds of the O property.

14. In April 2005 the husband returned to Ireland and resided in Dublin.

15. In April 2005 the wife sold the P property for $300,000.00 and received a net amount of $73,174.00.

16. On 2 May 2005 the husband returned to Australia and has permanently resided in Australia since that time.

17. In February 2006 the proceedings that the husband commenced in the Supreme Court of New South Wales in respect of the O property were discontinued and the husband filed an Amended Application for Final Orders in the Family Court on 30 March 2006. Part of that application sought leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) to the extent it was necessary. It was agreed by both parties that given that the original application, filed on 20 September 1996, had been filed in time and had never been dealt with, there was no need to grant leave under s 44(3). I note that if there had been a need to grant leave the parties would have consented to such an order.

18. In March 2006 the D property was sold for $245,000.00 and the wife received $58,286.00 from that sale.  S received $50,000.00 and half the balance of the deposit from the proceeds.

19. The C property was sold by the wife on 17 October 2007 for $355,000.00 and she received $160,124.00 net after payment of mortgage and sale expenses.

20. On 3 October 2007 the wife purchased a unit at H (“the H property”) for $412,384.00, borrowing an amount of $246,835.00 from the Commonwealth Bank.  Monies from the sale of the C property were primarily used for the balance of the acquisition costs.

21. The wife currently retains the N property.  That is her principal place of residence.

THE APPROACH TAKEN IN THESE REASONS FOR JUDGMENT

1. In this matter my task is to:

   79.1.Identify and value the property, assets, financial resources and liabilities of the parties;

   79.2.Identify relevant contributions and assess them;

   79.3.Consider relevant matters referred to in Section 79(4)(d) – (g) of the Family Law Act;

   79.4.Ensure my order adjusting the property assets and liabilities of the parties is just and equitable.

BALANCE SHEET

1. It was agreed that the following assets and liabilities exist at the current time:

Assets	Title	Value
N property	Wife	$500,000.00
B property	Wife	$400,000.00
Cafe	Wife	$259,000.00
H property	Wife	$395,000.00
Volvo motor vehicle	Wife	$40,000.00
Shares in public company	Wife	$67,771.00
Household contents	Wife	$10,000.00
Jewellery	Wife	$2,000.00
Superannuation	Wife	$111,176.00
Total	$1,784,947.00

Liabilities	Value
Mortgage on the B property	Wife	$195,000.00
Mortgage on the H property	Wife	$250,000.00
Total	$445,000.00

Net Total $1,339,947.00

1. In final submissions, counsel for the wife did not press for any other liabilities of a personal nature that the wife might have to be included on the balance sheet.

2. The wife had recently borrowed a sum of $30,000.00 from the Commonwealth Bank for the purposes of assisting her daughter, T and her son in law in Ireland.  That liability is not one that should be added back to the Balance Sheet.

Did the husband fail to disclose assets and income?

1. It was part of the wife’s case that the husband has not fully disclosed his financial position.  The wife relied upon the following:

   83.1.When the husband caused money to be transferred to her to assist in the acquisition of the B property, the monies came from a company registered in a tax haven.

   83.2.That the husband worked in IT overseas and was generating a good income and has not explained why it is that he did not accumulate any capital as a result of that generation of income.

   83.3.The husband lived at the same address in Ireland for a considerable period and the implication was that I should find that he had acquired some interest in that property.

2. I find that the husband gave a plausible explanation as to how it was that income earned by him was paid into a company in a tax haven, and I draw no inference from that evidence that he was in some way attempting to secrete monies from his former wife.

3. Given the husband’s evidence about the history of his work (and taking into account the fact that the husband actually went bankrupt at a particular point in time) I draw no inference from the fact that the husband had employment from time to time overseas in the IT industry.

4. I draw no inference from the fact that the husband had a stable address.  The husband said he was renting and I have no reason to disbelieve that he was.  The fact that he was renting the one premises for a number of years does not, absent other evidence, indicate that he had some equity in that property.

ASSET BY ASSET OR GLOBAL APPROACH?

1. The wife suggested that notwithstanding the length of the marriage, an asset by asset approach was appropriate in this case given that significant assets were acquired by the wife after separation, particularly using the proceeds of the inheritance that the wife received from her mother’s estate in September 2002.  Counsel for the wife submitted that a line should be drawn no later than 1997.

2. The force of that submission (although I ultimately will not accept the submission) arises from the fact that it seems clear that the husband cannot point to any contribution towards the acquisition of the Café, nor towards the acquisition of the H property (the equity in which came directly from the sale of the C property which was purchased from the proceeds of the wife’s inheritance).

3. I intend, at least initially, to examine contributions made to some of the individual assets.

4. The T property was bought in July 2002 and was wholly financed by the St George Bank.  Whilst the bank took cross-collateral over the P property the husband cannot claim any significant contribution towards the acquisition of the T property although he may point to the fact that $25,000.00 of the acquisition costs of the P property came from the sale of the O property.  

5. What remains, which has connection to the time the parties were together or joint acquisitions, is the B property (subject to its mortgage) and the amount of $198,000.00 that the wife received from the proceeds of the sale of the O property.

6. Conveniently both parties swore a Financial Statement (see Exhibit “P”) in late 1996.

7. The Financial Statement sworn by the wife on 22 October 1996 indicates that her superannuation fund as at that date was of virtually no value.  The properties owned at that time were the O property, K property and D property.  The wife estimated that the equity in the O property at that time was about $134,000.00, that she had about a $6,000.00 interest in K property and a $73,000.00 interest in the D property.  The evidence is that when the D property was sold in April 2006 the wife received $58,286.00 from it, S who was a half owner received $50,000.00, and that the wife and S each shared the deposit remaining after deduction of commission.  The wife records in her 1996 Financial Statement that she had $3,000.00 in BT Managed Funds.

8. The Financial Statement of the husband sworn 13 September 1996 records an assertion by him that he had a one-half interest in the O property.  This was not a legal interest that was being asserted by the husband but presumably an interest under either a resulting or constructive trust.

9. Counsel for the wife suggested that I should make findings as to what equitable interests the husband had in the assets that are left. It is in my view not necessary to do that. The only asset that is left that the husband could assert a beneficial interest in is the B property. I intend to look at the contributions made to that property as part of my analysis under s 79 FLA and, for that reason, it is not necessary for me to first establish the equitable interests each party has in the B property prior to conducting that assessment.

10. I find that the wife has made all contributions towards the assets consisting of the N property, the Café, the H property, her shares (apart from the amount of $3,000.00 that the wife had in shares as at 1996), motor vehicle, household contents, jewellery and superannuation.

Contributions to the B Property

1. The B property was acquired for $310,000.00.  It is not a matter of dispute on the wife’s part that the husband contributed whilst he was overseas an amount of $35,000.00 towards the acquisition; that is, the husband contributed 11.3 per cent of the original acquisition costs of the B property.  Eleven point five (11.5) per cent of the current gross value of the B property is $45,200.00 ($400,000 x 11.3%).

Contributions to the O Property

1. I note the property was owned by the wife between 1988 and 2001.  The wife received benefits from the O property upon its sale of $195,000.00.  I have accepted that the wife was primarily responsible for the mortgage payments in respect of the O property during the period of time that it was owned.  Doing the best I can, I assess the husband’s contribution to the O property as 40 per cent of the amount that the wife received by way of benefit from the sale in 2001.  Forty per cent of $195,000.00 is $78,000.00.

Shares

1. At around the time the parties separated the wife had $3,000.00 in shares and I attribute 50 per cent to the husband.

Raw result based upon an asset by asset analysis of selected assets

1. Based on those contributions the husband can claim an amount of $124,700.00 from existing assets held by the wife ($45,200.00 + $78,000.00 + $1,500.00). 

2. This represents about 9.3 per cent of the overall current net assets ($124,700.00 ÷ $1,339,947.00) 

Global approach

1. In my view a raw asset by asset approach does not adequately take into account the myriad of contributions the parties made between February 1972 and 1987.   

2. The extensive contribution made by the husband over that period means that an assessment of contributions on an asset by asset basis is not appropriate. An assessment of contributions on a global basis is the appropriate approach in this case (see Norbis and Norbis (1986) 161 CLR 513; Lenehan and Lenehan (1987) FLC 91-814; Zyk and Zyk (1995) FLC 92-644).

3. I also need to weigh in the wife’s favour, her significant post separation contributions on behalf of the children.

4. The respondent husband submitted that contributions should be assessed on the basis that he would be entitled to 50 per cent of the current net assets.  Based upon a global assessment of contributions and taking into account the history as I have set it out, I find that the husband should receive a 15 per cent adjustment on a global basis.

SECTION 75(2) FACTORS

1. The husband’s statement to his trustee indicates difficulties in his earning capacity going back to 1992. 

2. The husband has been on a disability pension paid by the Australian Government since 2004.  The husband last went to Ireland in 2005.

3. Annexure “B” to the husband’s affidavit sworn 23 May 2007 consists of medical certificates from treating specialists of the husband.  The disability in respect of which the husband originally received and continues to receive his pension related to difficulties with his heart.  The husband was diagnosed originally as having a heart murmur in about the beginning of 2003.

4. By November 2005 the husband’s heart condition was diagnosed as slightly worse and on 2 February 2006 the husband underwent open heart surgery at St Vincent’s Hospital for the replacement of a valve.

5. The husband asserts that he is unable to involve himself in any gainful employment. 

6. Counsel for the wife points to the fact that the husband has had a long involvement in the IT industry and had competently prepared and run his court case.  The assertion made by the wife was that the husband could do some IT work if he chose to do so, notwithstanding his medical condition.  In support of this submission, counsel for the wife pointed to the fact that Exhibit “C”, which contains a photocopy of an entry card that the husband filled out on 2 May 2005, has the husband describing his usual occupation, in his own handwriting, as “IT”.  This card was filled out after the husband went on a disability pension in 2004.

7. During the hearing the husband did appear to become unwell, particularly at the end of the first day when he had been cross-examined for a day.

8. On the evidence I have, I must assume that the husband will remain on a disability pension.

9. The husband’s evidence, which I accept, is that he currently does not have any assets apart from $1,300.00, which he received from the government at Christmas time 2008 and currently has in a savings account.

10. The wife’s earning capacity was the subject of controversy. 

11. The husband asserts that I should be cautious about accepting financial evidence from the wife, because her evidence of that income does not square with her ability to take regular overseas holidays as evidenced in the records from DIMIA.  I am unable to find that the wife’s disclosed income earning history meant that she would not have had the funds to be able to travel.  After separation, the wife involved herself in the purchase and sale of real estate and she received from time to time capital from those transactions in addition to the income that she was earning.

12. The wife is currently the proprietor of the Café.  She says that she is currently working seven days per week and the stress of doing that is “killing her”.  Although there is no medical evidence, she said that she had been diagnosed as having a condition brought on by stress (Hasimoto disease).

13. In the 2006 and 2007 financial years the wife’s tax returns as originally drafted by her accountant showed that her net profit from the business was in the approximate sum of $100,000.00.  The wife claimed in oral evidence that that assessment of the level of her income was inaccurate because significant capital payments that she had put into funding the day to day cash-flow of the business had been initially counted as income by her accountant.  That has subsequently been corrected.  The fact that that correction has been made was evidenced by documents from the Australian Taxation Office which indicated a significantly amended amount of tax payable.  The wife currently asserts that the business is actually not making any money and that it has been on the market for the agreed figure of $259,000.00 for nine months without any takers.  The wife has also had the N property on the market for 12 months with nobody showing any interest in purchasing it at the price of $500,000.00.

14. The wife is 58 years of age.  I conclude that the income that she currently has available is primarily derived from capital that can be traced back to her inheritance. 

15. If there is a division of overall assets based upon contributions, then the wife will have significantly more assets than the husband.

16. I find that it is appropriate to give the husband a 2½ per cent adjustment for matters under s 79(4)(d) – (g) factors.

JUST & EQUITABLE

1. The result reached on assessment of contributions and the remaining factors under s 79(4) leads me to the conclusion that the husband is entitled to 17½ per cent of the net assets.

2. This would mean that the husband would receive an amount of $234,490.00 ($1,339,947.00 x 17½%). 

3. Standing back and looking at the adjustment of assets on an overall basis, I find that that is a just and equitable outcome. 

PROPOSED ORDERS

1. I have found that a just and equitable alteration of property interests is for the wife to pay the husband an amount of $234,490.00.  I will make that as a primary order.

2. In the event that the wife does not pay that money to the husband within three months, then the husband will be appointed as trustee for the sale of the B property and will receive the whole of the benefit of the proceeds of that sale.  That benefit is in the sum of $205,000.00.  There is a remaining amount of $29,490.00 which the wife will then have to pay the husband.

3. I will charge the N property with the payment of that sum and the husband will be entitled to lodge a Caveat on the N property to secure the payment of that amount, together with interest that will accumulate after the expiration of three months from the date of orders at a rate in accordance with the Family Law Rules, 2004.

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

Associate: 

Date:  3 September 2009