Bayer and Bayer

[2009] FamCA 884

FAMILY COURT OF AUSTRALIA

BAYER & BAYER [2009] FamCA 884

FAMILY LAW - PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments – Just and equitable – Superannuation

Family Law Act 1975 (Cth) ss 75, 79

In the Marriage of Hickey (2003) 30 Fam LR 355
Wilde v Wilde [2007] FamCA 1044
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414

APPLICANT: Mr Bayer

RESPONDENT: Ms Bayer

FILE NUMBER: SYF 3761 of 2006

DATE DELIVERED: 11 September 2009

PLACE DELIVERED: Sydney

JUDGMENT OF: Judicial Registrar Loughnan

PLACE HEARD:  Sydney

HEARING DATE: 14 & 15 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT 

HUSBAND:

Mr G. Johnston

SOLICITOR FOR THE APPLICANT:

Millar Goddard Solicitors

COUNSEL FOR THE RESPONDENT 

WIFE:

Mr R. Schonell

SOLICITOR FOR THE RESPONDENT

Robert Napoli & Company

Orders

1. Pursuant to section 90MT(4) of the Family Law Act 1975 the amount of $197,270.00 (one hundred and ninety seven thousand two hundred and seventy dollars) of the husband’s superannuation interest in C Superannuation Fund (“the fund”) be allocated to the wife (“the base amount”) by way of a splitting order as follows:

   1.1.In accordance with paragraph 90MT (1) (a) of the Act:

   a.the Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   b.the Husbands 's entitlement in the fund, is correspondingly reduced.

   1.2.     C Pty Limited as Trustee shall do all things necessary to:

   a.calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the Wife by these orders; and

   b.        pay the entitlement whenever the fund makes a splittable payment out of the Husband’s interest in the fund.

   1.3.This order shall have effect from the operative time and the operative time for this order is four business days after service of a sealed copy of these orders on C Pty Limited, as trustee of C Fund.

2. Within two months from the date of these orders the wife shall pay to the husband $143,783.

3. Forthwith upon receipt of the payment in Order 2 the husband shall transfer to the wife all of his right title and interest in the property at W, being all of the land contained in Folio Identifier ….

4. In the event the wife does not make the payment ordered in 2. above, forthwith upon that default the parties shall do all acts and things and execute all documents necessary to sell the W property on such terms and with an agent agreed upon by the parties within 14 days of the date of default and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.

5. The proceeds of sale of the property shall be distributed in the following order and priority:

   i.    In payment of all legal costs and agents fees and commissions;

   ii.      In discharge of any mortgage secured on the property;

   iii.     In payment of 24% of the balance to the husband;

   iv.    In payment of the remainder to the wife.

6. Within 21 days from the date of these orders the husband shall do all acts and sign all documents to transfer to the the wife all of his interest in the Toyota Corolla motor vehicle ….

7. Within 21 days from the date of these orders the wife shall prepare two lists of the contents of the W home and serve them upon the husband and he shall chose the items in one of the lists as his sole property and the items in the other list shall be the sole property of the wife and the wife shall make the husband’s items available to him for collection on a date agreed between the parties being a date not later than 21 days after the husband communicates his choice to the wife.

8. The husband is the sole and beneficial owner of the joint account with R Company.

9. Otherwise each party is the sole and beneficial owner of all other items of property in their respective possession, custody or control including but not limited to superannuation entitlements.

10. In the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.

11. The operation of these orders is stayed for 14 days and the parties have liberty to restore the proceedings in respect of the form and implementation of these orders.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3761 of 2006

MR BAYER

Applicant

And

MS BAYER

Respondent

REASONS FOR JUDGMENT

1. After a marriage that involved more than 26 years cohabitation, the parties cannot agree on a settlement of their property.

Applications

1. The husband seeks orders in terms of a Minute of Orders attached to the Case Outline document provided by email on 13 May 2009 as follows:

   1.That pursuant to s90MT(4) the amount of $197,270.00 (one hundred and ninety seven thousand two hundred and seventy dollars) of the husband’s superannuation interest in the [C] Superannuation Fund (“the fund”) be allocated to the wife (“the base amount”) by way of a splitting order as follows:

   1.1.That, in accordance with paragraph 90MT (1) (a) of the Act:

   a.the Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   b.the Husbands 's entitlement in the fund, is correspondingly reduced.

   1.2.That [C] Pty Limited as Trustee do all things necessary to:

   a.calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the Wife by these orders and

   b.        pay the entitlement whenever the fund makes a splittable payment out of the Husband’s interest in the fund.

   1.3.That this order have effect from the operative time and the operative time for this order is the date of the order.

   2.That parties forthwith do all acts and things and execute all documents necessary to sell the property situate at [W] (“the home”) on such terms and with an agent agreed upon by the parties within 14 days of the date of this order and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.

   3.That the proceeds of sale of the home shall be distributed in the following order and priority:

   i.    In payment of all legal costs and agents fees and commissions;

   ii. In discharge of the mortgage;

   iii. In payment of the sum of $300,000 to the husband;

   iv. In payment of the remainder to the wife.

   4. That the wife prepare two lists of the contents of the home within 14 days and serve them upon the husband and he shall chose the items in one of the lists as his sole property and the items in the other list shall be the sole property of the wife and the wife shall make the husband’s items available to him for collection upon payment of the capital sum to him.

   5.Declare that otherwise each party is the sole and beneficial owner of all other items of property in their respective possession custody or control including but not limited to superannuation entitlements.

   6.That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.

   7.That the parties have liberty to apply on 7 days notice in respect of the implementation of these orders.

   8.That the wife pay the husband’s costs of and incidental to these proceedings.

2. The wife seeks orders in terms of a Minute of Orders as follows:

   1.That pursuant to s.90MT(4) the amount of $197,270.00 (One hundred and ninety seven thousand two hundred and seventy dollars of the Husband's superannuation interest in the [C] Superannuation Fund ("the fund") be allocated to the Wife ("the base amount") by way of a splitting order as follows:

   1.1That, in accordance with paragraph 90MT(1 )(a) of the Act:

   (a)The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   (b)The Husband's entitlement to the fund is correspondingly reduced. 

   1.2That [C] Pty Limited as Trustee do all things necessary to:

   (a)calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the Wife by these orders; and

   (b)pay the entitlement whenever the funds makes a splittable payment out of the Husband's interest in the fund.

   1.3That this order have effect from the operative time and the operative time for this order is the date of the order.

   2.That within fourteen (14) days of the date of this order the Husband transfer to the Wife all of the Husband's right title and interest in the property at [W], being all of the land contained in Folio Identifier […].

   3.That the Husband do all acts and sign all documents to transfer to the Wife all of the Husband's interest in Motor Vehicle […].

   4.That the husband pay to the wife the sum of $220,000 within 30 days.

   5.Declare that otherwise each party is the sole and beneficial owner of all other items of property in their respective possession. custody or control, including but not limited to superannuation entitlements.

   6.That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders, then upon the other party filing an affidavit setting out such failure, neglect or refusal, then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.

   7.That the parties have liberty to apply on seven (7) days notice in respect of the implementation of these orders.

   8That the Husband pay the Wife's costs of and incidental to these proceedings.

Documents read

1. The parties relied on the following documents:

   Husband’s affidavit filed 1 December 2008

   Husband’s updating affidavit filed 5 March 2009

   Husband’s Financial Statement filed 23 April 2009

   Affidavit of Mr S filed 23 April 2009

   Affidavit of Ms H (with leave) filed 12 May 2009

   Wife’s Financial Statement filed 14 March 2008

   Wife’s affidavit filed 6 October 2008

   Affidavit of Dr K filed 24 April 2009

Short history

1. As at the date of the hearing the husband was 57 years of age and the wife was 55. They were married in October 1979 and separated on 3 May 2006. The parties’ marriage was dissolved by order dated 28 February 2008.

Children

1. There are two adult children of the marriage: a daughter, who was born in 1982 and as at the date of the hearing she was 26 years of age; and a son, who was born in 1984 and as at the date of the hearing he was 24 years o age.

Background facts

1. In 1979 the husband located the land on which former matrimonial home was built and paid 25% deposit from his savings.

2. The wife asserts that her father gave the parties $20,000.00 to purchase the land. The husband alleges that the wife’s father gave the parties $14,000.00 as an engagement/wedding/Christmas present to discharge the loan obtained to purchase land at W. It is not possible or necessary to resolve this issue.

3. Construction commenced of a dwelling on the W property.

4. The parties were married in 1979. They lived with the wife’s parents.

5. The parties moved into the property in January 1980.

6. In November 1982 their daughter was born.

7. In November 1984 their son was born.

8. In 1984 the wife’s father provided $20,000.00 for the wife or the parties to invest.

9. In 1988 the husband inherited $44,500.00 and used it: -

   a.To discharge the mortgage then secured on the former matrimonial home at W requiring the sum of $36,000.00.

   b.The remainder, being $8,500.00 was used to purchase furnishings.

10. In September 2000 the wife ceased full time work.

11. On 3 June 2003 the wife’s father gave the parties $20,200 towards the purchase of a motor vehicle. The balance of the purchase price was provided by trading in one of the vehicles the parties then owned.

12. On 28 July 2004 the wife’s father gave the wife $13,000.00 cash.

13. On 26 September 2004 the wife’s father gave the wife $2,000.00 cash.

14. In March 2005 the wife’s father died. The wife inherited $122,388.54.

15. On 16 April 2005 the husband purchased a building block in the Northern Territory for $67,000.00 using monies borrowed from his employer (M Company).

16. The husband caused a dwelling to be built on the land for rental purposes.

17. During the marriage the husband purchased shares using his earnings.

18. The husband alleges that he surrendered a Life Policy which he owned prior to the marriage and used proceeds to buy a piano ($5,700.00) and other furnishings ($2,300.00).

19. In December 2005 approximately $85,000 from the wife’s inheritance was used to pay off the parties’ mortgage.

20. The husband deposited $20,000 of wife’s inheritance into his M Company account to off set a loan of $20,000.00 from the Company used to pay for the daughter’s wedding.

21. From January-May 2006 the husband assisted with the renovation of a bathroom in the home. He paid $15,000.00 for tradesmen and required materials. He took annual leave from his employment for this purpose.

22. The parties separated on 3 May 2006.

23. On 15 September 2006 the parties agreed to Consent Orders for the husband to pay the wife $500.00 per week in respect of the period commencing 1 August 2006 and ending on the earlier of 30 June 2007 or the wife obtaining employment.

24. The wife undertook a TAFE course from 17 July 2006 to 30 November 2006.

25. On 8 January 2007 the husband made a proposal for property settlement.

26. In February 2007 the wife underwent a gall bladder removal.

27. On 15 March 2007 the wife requested copies of documents in relation to the husband’s financial circumstances.

28. In May 2007 the husband supplied financial documents.

29. On 27 August 2007 the wife commenced employment with the local council.

30. In January 2008 the husband learnt that his employer M Company was seeking a merger partner.

31. On 17 January 2008 the husband filed an Application for property orders.

32. The marriage was dissolved by order dated 28 February 2008.

33. On 14 March 2008 the wife filed a Response to the husband’s Application for property orders.

34. Merger negotiations occurred between O Company and M Company, subject to APRA approval.

35. On 25 June 2008 a Conciliation Conference was held.

36. On 1 August 2008 the husband made an offer of settlement pursuant to Family Law Rule 10.06.

37. On 3 September 2008, being the return date for subpoenas, the wife learnt of the husband’s possible redundancy payment.

38. On 18 September 2008 the wife made an offer pursuant to Family Law Rule 10.06.

39. In early 2009 a merger of the husband’s employer and the O Company took effect. The husband’s position was made redundant and his employment was terminated. The husband remained unemployed up to the date of the hearing. On the 4^th or 5^th February 2009 the husband received $321,418.00 (after tax) upon termination of his employment. From this amount he paid (inter alia): -

    ·$93.00 on pharmaceuticals;

    ·$2,318 off the mortgage on the Northern Territory property;

    ·$2,219.33 off the N property mortgage;

    ·$16,523.40    to discharge personal loan jointly owed by the parties to M Company Ltd;

    ·$119,094.50 to discharge mortgage secured on the former matrimonial home;

    ·$173,282.20 to partially discharge the mortgage secured on the property at N owned by the husband and Ms H;

    ·$217.90 to pay council rates on the N property;

    ·$168.57 for his mobile phone bill.

40. That accounts for all but $7,500 of the payment.

41. On the 12^th February 2009 the wife was told of the receipt by the husband of the redundancy payment.

42. The husband understands that he cannot claim Centrelink payments until the period of leave for which he received payment in his termination package expires. He says that will be 22 May 2011.

43. In March 2009 the sale of the Northern Territory property settled. The husband received $54,108 and the mortgagee bank received the balance. There is a CGT liability of $28,000.

Credit and Submissions

The evidence of the witnesses

1. The only witnesses called for cross-examination were the parties and the husband’s partner, Ms M.

2. The husband was a poor witness. During cross-examination he changed his evidence on several occasions without adequate explanation. He is a man of obvious intelligence and yet struggled to concede the simplest of propositions. For example he struggled to concede that saying “he knew something would happen” was different to saying that “something may happen”. Despite warnings from me about the importance of being careful during cross-examination he persisted in that vein. At one point he asserted that if his position was terminated on a merger of his employer there was no guarantee that he would receive any payment. That suggestion rested on the possibility of wrongful dismissal. The husband was asked why he did not tell the wife or her solicitor forthwith on receiving the redundancy payment and replied to the effect that he thought she would want him to pay off the mortgage.  He ultimately conceded that he did not make adequate disclosure to the wife. It transpired that the wife was aware of some matters in any event but nevertheless the husband did not make adequate disclosure. As a result of those problems, the husband is not a reliable witness.

3. The wife too is a poor witness. She said she does not have a good grasp of figures but offered evidence about various figures only to resile from that evidence soon thereafter. There have been substantial changes in her finances since her Financial Statement was filed – her income increased, she applied $40,000 of her savings to legal costs, she repaid a $5,500 loan and her son ceased to reside with her. The wife struggled to agree that those were significant changes.

4. In relation to some events, her affidavit evidence is unambiguous even though she never had first hand knowledge of the event in question. For example it transpires that her knowledge of her father’s contribution to the purchase of the land on which the former matrimonial home is built came from things she was subsequently told by the husband.

1. I do not believe that the wife set out to mislead the Court. In the circumstances, however, I cannot safely rely on her uncorroborated testimony.

2. Ms M gave brief evidence in cross-examination by telephone. She was not significantly challenged in cross-examination. I accept her as a witness of truth.

Submissions

1. The written submissions on behalf of the husband attached to an email of 13 May 2009 include the following:

   CONTRIBUTION BASED ENTITLEMENTS:

   1.The contribution based entitlements other than for the husband’s redundancy payment are about equal. Different inheritances were received at different times and the husband had a vastly superior direct financial contribution.

   2.The husband’s annual salary was:

   YearIncome $                 GIFTS/INHERITANCES

   H                   W

   1979             E 20,000  14,000          

   1980E20,500        

   1981E21,000

   1982E22,000

   1983E23,000

   1984E23,000  20,000

   1985E30,000

   1986E31,000

   1987E32,000

   198840,000  44,500*

   198943,508

   199047,015

   199150,523

   199254,031

   199357,538

   199461,046

   199564,554

   199668,061

   199771,569

   199875,077

   199978,584

   200082,092

   200183,734

   200286,665

   2003102,506  20,200

   2004123,340  13,000

   2005164,072  122,388

   2006178,078     3/5/06 sep.              

   2006178,078

   2007188,918

   200931/1/09 red.  321,418

   Total2,121,489               365,918                   189,588

   * W says $36,000

   Wife worked as a typist until October 1982

   She did casual office work between 1993 and 1995 for 6 months

   1996 worked as a casual telemarketer

   April 1996 to 2000 untrained [council] worker

   3.The husband’s recent redundancy payment was for post separation leave entitlements and compensation for future lost earnings. He took annual and long service leave following separation. From his redundancy payment he was able to discharge the home mortgage, discharge the joint personal loan and partially discharge the [N property] home loan.

   4.It is submitted that the contribution based entitlements favour the husband in a ratio of 60:40.

SECTION 75(2) FACTORS:

1.The husband is aged 57 years and the wife is aged 54 years.

2.The husband’s employment [at M Company] was terminated by letter dated 31 January 2009 by becoming redundant 1 February 2009. The husband has remained unemployed since that time. Expert evidence is relied upon to the effect that it is extremely unlikely that the husband will be able to secure a [similar] position in the […] industry at this time (affidavit of [Mr S])

3.The husband suffers from stress and was on sick leave from 4 August 2008 until his redundancy. He left school at School Certificate level and has no qualifications other than experience.

4.The wife works [for the local council]. She consulted a Dr [K] in relation to right arm pain and groin pain. She was diagnosed with palindromic rheumatism advancing to rheumatoid arthritis and she is being treated with anti-inflammatory medication.

5.The husband has re-partnered. He now lives with [Ms H] who is wholly financially dependent on the husband. They have jointly borrowed to buy a home at [N]. She has no income and very few assets (affidavit to be relied upon with leave).

6.It is submitted that there should be no further adjustment.

7.The husband submits that it would be just and equitable to split his superannuation as both parties are in need of cash funds.

1. In oral submissions learned counsel for the husband spoke to a balance sheet. The submissions in relation to the disputed items on the balance sheet are dealt with later in these reasons. It is submitted that the husband’s contributions were made in the proportions 60% compared to 40% by the wife, largely because of the redundancy payment received by the husband after separation. It is submitted that the parties are in a similar position going forward and that the husband is out of paid employment and is unlikely to secure a job of similar status to his prior employment. He had stress leave and has no formal tertiary qualifications. In addition the husband wholly supports Ms H. Therefore, the argument goes, there should be no adjustment under section 75(2).

2. The written submissions on behalf of the wife are as follows:

   1.The parties were married and commenced cohabitation [in] 1979. The parties separated on 3 May 2006. The marriage was dissolved by order dated 28 February 2008. The period of cohabitation was thus 27 years.

   2.There are two children of the marriage, namely [a daughter] born [in] 1982 and [a son] born [in] 1984. As at the date of separation, each of the children was over the age of 18 years.

   3.Prior to the commencement of cohabitation, the parties purchased a parcel of land at [W] by ballot. The wife's father provided the whole of the purchase monies in the sum of $20,000 to acquire the land. The parties obtained a loan from the [X] Bank to finance construction of the home on that land. The wife at that stage working for the [X] Bank as was the husband. The parties lived with the wife's parents for about 2 months prior to assuming occupation of the home.

   4.During the course of the marriage, the wife's father provided financial assistance to the parties. In 1984, the wife's father provided the wife with $20,000. In June 2003, the wife's father gave the wife $20,200 to buy a Corolla motor vehicle. During the course of the marriage, the wife's father provided funds of money to the wife on a regular basis as particularised in paragraph 6 of the Wife's Affidavit.

   5.[In] March 2005, the wife's father died and the wife received an inheritance of approximately $122,388. Approximately $85,000 of this amount was used to discharge a mortgage on the matrimonial home.

   6.During the course of the marriage, the husband received an inheritance.

   7.During the course of the marriage, the wife was the principal homemaker and parent, as well as making a financial contribution.

   8.In April 2005, the husband purchased in his own name a property in Darwin for $67,000 funded by borrowings over the former matrimonial home.

   9.The parties separated in May 2006, at which stage the husband's salary package was approximately $178,000. The husband retained the benefit of all of this income in the period post-separation. The husband also received some significant tax refunds as a consequence of the investment in the Darwin property which were retained by the husband post- separation. The husband provided no financial support between May and August 2006 other than the sum of $400.

   10.The wife found the separation of the parties very distressing given the manner in which the husband announced same.

   11.In August 2007, the wife commenced employment with [the local] Council.

   12.The wife asserts that the husband has failed to make a full and frank disclosure, and particularly the circumstances surrounding the receipt by the husband of his redundancy in circumstances where he failed to disclose same to the wife until such time as he had expended the funds was done by the husband to place him in a financial advantageous position to the detriment of the wife. The husband, without notice to the Court or to the wife, sold the Darwin property by Contract dated 6 February 2009 and after discharge of the mortgage applied the net proceeds of the sale for his own purposes. The wife asserts that the husband has failed to make a full and frank disclosure.

   13.The wife submits that the Court would find, given her inheritances and the contributions by her family, that subject to determination of the pool and the extent of the husband's failure to make a full and frank disclosure, the contributions would warrant a finding in the wife's favour as to 65% and 35% to the husband

   14.The wife was born [in] 1959 and is aged 50 years. The husband was born [in] 1951 and is aged 57 years.

   15.There are some significant restrictions on the wife's capacity to earn an income by virtue of inexperience and health. There are no similar limitations on the husband. The husband has elected not to work in the period post his redundancy and has an earning capacity of in excess of $175,000. That earning capacity would call for an adjustment in the wife's favour of 5% calling for a division of the parties' assets as to 70% to the wife and 30% to the husband.

3. In oral submissions learned counsel for the wife submitted that the evidence of the wife should be preferred over that of the husband and that I should find that the husband did not make proper disclosure and was not a credible witness. Counsel spoke to a different schedule of assets and liabilities that are included in the papers but will not be reproduced here.

4. I deal with the submissions in relations to the disputed items below.

5. In relation to contributions it is submitted that the contributions favour the wife 65% to 35% by the husband. It is conceded that the contributions from the parties themselves are equal but because of the injections of funds through the wife from her father and inheritance, the wife is ahead at separation. Since separation the husband used up 6 months of income by taking long service leave; he kept the benefit of a salary of $178,000 per annum and paid nothing except $400 per week for a period and one payment of $1,400. The wife then argues for a 5% adjustment because the husband has greater earning capacity than she and unlike the wife he has no identified health issues. It is submitted that the husband has no legal duty to support Ms H and that although the legal title to the N property is held as joint tenants, the husband would claim all of the property on the basis of him contributing all of the cost.

The approach in proceedings under section 79

1. The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 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. Third, I should identify and assess the relevant matters referred to in s 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. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]

   [1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in  In the Marriage of Hickey (2003) 30 Fam LR 355 at 370

2. There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.

The property of the parties at the date of the hearing

1. The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.

Disclosure

1. In Wilde v Wilde [2007] FamCA 1044 the Full Court addressed the requirement of financial disclosure in property proceedings in the following way:

   51.The need for parties in financial matters to make such disclosure is not in doubt.  In the seminal passage in Briese and Briese (1986) FLC 91-713 Smithers J said at 75,180 to 75,181:

   “I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.

   …

   In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v. Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.”

   (See also Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Kannis and Kannis (2003) FLC 93-135).

2. After something of a struggle, the husband ultimately conceded that he did not make adequate disclosure to the wife. That was a proper concession. The husband knew by some time in July or August 2008 that if the merger of his employer went ahead, he would be made redundant in 2008 and he would be paid about $377,000. He did not tell his wife’s solicitors that he may receive about $377,000 until on or after 12 February 2009, after he had disbursed all but $7,500 of the funds.

3. He was a senior employee of the Company. Consequently, he knew of board discussions in relation to merger proposals. As at 30 June 2008 the husband knew his position was at some risk. The wife’s solicitors wrote to the husband’s solicitors on 28 July 2008. Part of that letter starting at the third paragraph contained:

   “On making enquiries we have ascertained,

   (a)That [M Company] to survive must merge; and

   (b)That your client has been aware of the merger for many months.

   It appears that your client intends to take a redundancy and retire from his employment as a result of the merger.

   You are no doubt aware that your client has an obligation to make a full and frank disclosure both to our client and to the Court of his true financial position. Your client was obliged to draw these developments to our client’s attention prior to or at the Conciliation Conference and …”

4. In the responding letter of 14 August 2008 the husband’s solicitors said in part:

   “ In the third paragraph of your letter you state knowledge of matters which are respectively unknown to our client and not true.

   The conclusion stated in the fourth paragraph is not true. Would you please advise the person or persons from whom the enquiries were made upon which the statements and conclusion contained in these paragraphs are based.

   We confirm that our client discharged his obligation of full and frank disclosure at the time of the conciliation conference. ….”

5. The husband was asked about that and said that he had always thought the response related to the next paragraph. It was then pointed out to him that the letter went on to separately address the next paragraph of the August letter.

6. The wife’s solicitors wrote to the husband’s solicitors in September 2008 saying in part:

   “Our client has grave concerns that your client will apply his redundancy payment and or superannuation towards liabilities outside the marriage.”

7. The letter went on to propose an order restraining the application of those funds.

8. The husband says he knew he had an obligation of timely disclosure. He cannot recall why he did not agree to that proposal. However he says that the wife’s proposals that any such funds be held in a trust account was unreasonable. He posed the rhetorical question “What would I live on?”. That suggests and I am satisfied, that his failure to notify the wife of the likely payment and actual payment, was deliberate.

9. In his affidavit sworn 28 November 2008 and filed 1 December 2008 the husband deposed:

   “I am informed that one of the terms of such a merger may be that I would be made redundant.”

10. There is no mention in the affidavit of the husband’s expectation about the likely amount of his redundancy.

11. A publication prepared under the Company’s obligations to the Australian Prudential Regulating Agency was received by the husband in mid December 2008. That publication made it clear, among other things, that the husband would be redundant and would be paid $377,000 as well as his statutory entitlements.

12. In seeking to explain why he did not tell the wife’s solicitors about that, the husband said in cross-examination that he felt he could not rely on that document. That makes no sense because of his earlier concessions.

13. In cross-examination the husband initially conceded that before 25 December 2008 he knew he would be made redundant. He then sought to change that evidence by saying that he did not know before Christmas that he would be made redundant, because any merger required approval from the members of the Company. It is highly likely that the change in his evidence came about because the husband was reminded of something by a sotto voce comment made by his solicitor to his counsel during the course of cross-examination which was unfortunately overheard by the witness. I should say that I accept counsel’s assurance that that was not the intention of his instructing attorney.

14. The husband received the money on 4 February 2009. He knew that information was of urgent interest to the wife. By the time he told the wife’s solicitors about the payment on 12 February 2009, he had disbursed all but $7,500 of the funds. The disbursements included expenditure to which he knew his wife would not agree. The husband is a man of obvious intelligence and therefore his initial position, that he made proper disclosure, is insulting.

15. The husband’s conduct meant that the task of identifying the relevant net pool of assets was made very difficult.

16. It must be noted that the wife too had problems with disclosure but her failure to disclose related to matters of little or no significance to the identification of the pool of assets.

Add Backs

1. There are circumstances whereby assets are included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:

   [30]To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:

   (a)Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:

   [11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.

   (b)Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:

   In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.

   (c)In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:

   As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

   (a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or

   (b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

   Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.

1. The parties have settled aspects of the balance sheet. It is submitted on behalf of the wife that there is no issue as to the value of items 1-9 on the husband’s list of assets. Therefore the N property comes in at $201,000 being 50% of the value of the property at $402,000.

2. The parties argue for very different approaches to the identification of the pool of assets. Through her counsel and largely based on the husband’s failure to disclose, the wife advocates for a reading back into the list of current assets, of all of the funds that have come to the husband since separation. On the other hand the husband says that those funds are largely accounted for and concedes only those funds from which the husband has had specific benefit. Even with different approaches, both parties argue for the inclusion in the pool of assets, substantial allowances for notional assets.

3. The issues to be determined are:

Add back for the increase in the mortgage on the former matrimonial home

1. The husband conceded in cross-examination that there was an increase in the mortgage after separation, of about $30,000. The husband gave evidence in cross-examination about a debt to a builder of $12,775. It is submitted for the wife that there is no other evidence and the husband should not be accepted on this. Minds would differ about it but I accept the husband’s evidence and will add back only $17,225 ($30,000 - $12,775).

Add back from the investment float

1. The husband conceded in cross-examination that he retained $10,261 from the investment float. That represents a preliminary distribution of matrimonial funds. I will add back $10,261 to the credit of the husband.

Add back from the sale of the Northern Territory property

1. The wife seeks that there be an add back of $169,667 for the difference between the sale price achieved for the Darwin property and the balance of the mortgage at separation. Some of the subsequent increase in the mortgage arose when the husband needed $90,000 as a deposit on the N property. It is conceded on behalf of the husband that $32,615 should be added back for the proceeds of sale of the Northern Territory property minus the current balance of his M Company account ($54,508 + $705 - $22,598). In support of her contention the wife relies on the settlement statement[2] which shows that from the sale price of $455,000, $54,508 and $705 were paid to accounts with the Company. The balance of the proceeds were applied to discharge the mortgage and to costs and adjustments on sale.

   [2] Exhibit 4

2. I am not comfortably sure that the increase in the Darwin mortgage is not already accounted for in the table of assets. I will add the conceded sum back to the credit of the husband.

Add back from the proceeds of sale of shares

1. In paragraphs 16(b) & 17 of his first affidavit the husband agreed he received the proceeds of sale of shares in October / November 2008. That represents a preliminary distribution of matrimonial funds. I will add back $38,660 to the credit of the husband.

Add back for the husband’s tax refunds

1. The husband received a tax refund of $4,600 for 2006. He agreed in cross-examination that he received $28,030 in December 2008 for the 2007 & 2008 income tax years. The tax refunds were an incident of the husband’s income. True it is that they were paid as capital sums and the larger payment was made only 6 months before the hearing. However, I do not propose to add these payments back. I cannot be confident that they are not reflected, for example in the balance of his M Company account.

Add back for forgiven loan to Ms H

1. The husband advanced moneys to his partner, Ms H by way of loan. Ultimately he forgave $26,390 of that loan. It was conceded in the course of final submissions that that sum should be added back.

Add back from the husband’s redundancy payment

1. In February 2009 the husband received a net payment of $321,418 representing the after tax proceeds of a gross payment of $433,413.63 made up of a termination payment of $377,836 and leave entitlements. Virtually all of that amount was disbursed.

2. The husband seeks to account for about $313,900 of that sum. He concedes that $175,719 should be added back on his side of the ledger, representing that part of the termination payment that was applied to the mortgage secured on his N property ($173,282.20 + $2,219.33) and council rates on that property ($217.90).

3. In relation to other expenditure from that same source he seeks that some payments be treated as contributions by him:

Purpose of Expenditure	Amount
Paying off loan for daughter’s wedding	$16,523.60
Paying off the mortgage on the W property	$119,094.50
Total	$135,618.10

1. On his evidence, that left:

   ·$168.57 which was applied to a mobile phone bill;

   ·$93 spent on pharmaceuticals; and

   ·$2,318 which was paid off the mortgage secured in the Northern Territory property.

2. The submission on his behalf is that the first two represent normal living expenses and should not be added back. It is submitted that the last payment increased the equity in the Northern Territory property and was a contribution.

3. It is submitted on behalf of the wife that $183,481.90 should be added back, representing the balance of the redundancy payment after taking away $137,936.10 (being the amount applied to discharge the W mortgage; to pay out a personal loan and the Darwin payment).

4. I will add back the conceded amount of $175,719 plus the $7,501.43 being the remaining portion of the termination payment not accounted for by the husband. Thus I will add back $183,220.43.

Paid legal fees and Inheritance

1. The submission on behalf of the husband is that the remainder of the wife’s inheritance and the legal fees paid by the parties should be included in the list of assets. It is submitted for the wife that I should ignore the inheritance and the paid legal costs for both parties. In the course of submissions I told counsel that I thought I would include both the residue of the inheritance and the paid legal costs.

2. In 2005 the wife inherited $122,388.54. In December 2005 approximately $85,000 from the wife’s inheritance was used to pay off the parties’ mortgage. The husband deposited $20,000 of wife’s inheritance into his M Company account to off-set a loan of $20,000.00 from the Company used to pay for the daughter’s wedding. The wife withdrew that $20,000 on 10 August 2007. The wife retains $13,000 in her account. I will include the $20,000 withdrawn by the wife on 10 August 2007 in that way all but $4,000 of the inheritance is accounted for.

3. Notwithstanding the intimation I made during final submissions, on reflection I do not propose to include any of the expended portion of the wife’s inheritance or the parties’ paid legal costs, in the pool. The starting position is that the assets be identified and valued as at the date of the hearing. The reasons for that are obvious. The risk in allowing add-backs is that so artificial a pool is created as to frustrate the intention of section 79. Here, some of the wife’s inheritance was applied to her legal costs. Having added back all but $4,000 of the inheritance, any further add back for it or for paid legal fees would risk double counting an asset.

4. In the circumstances of this case, with further commitments taken on by the parties, I cannot be confident that but for the payment of costs, the pool would be greater.

The Household contents

1. There is no agreed value or valuation evidence for household contents. The parties each ask that I make provision for a division in specie and I will make orders for such a division.

2. I find that the assets are:

Assets	Value
W property – joint	$600,000.00
R Credit Union – joint	$98.00
N property  - husband	$201,000.00
R Credit Union - husband	$3,205.20
½ share contents N property – husband	$5,000.00
Add back for the investment float - husband	$10,261
Add back for the sale of shares - husband	$38,660
Net proceeds of sale of Darwin property minus the balance of the husband’s M Company account ($54,508 + $705 - $22,598) – husband	$32,615
Increase in the mortgage on the former matrimonial home – husband	$17,225
Forgiven balance of loans to de facto partner, Ms H – husband	$  26,390.00
Add back for termination payment applied towards the N property and not otherwise accounted for - husband	$183,220.43
Toyota Corolla – joint (with wife)	$7,000.00
Bendigo Bank accounts – balance of inheritance – wife	$13,000
Moneys withdrawn by the wife on 10/8/07 – wife	$20,000.00
Total	$1,157,674.63

1. The superannuation is agreed at:

Superannuation	Value
Husband’s C Super	$394,539.29
Wife’s Local Government Superannuation	$3,589.24
Wife’s C Superannuation	$10,045.00
Total	$408,173.53

Liabilities:

1. The liabilities are agreed to be:

Liabilities	Amount
½ share mortgage N property – husband	$93,841.00
Net tax payable by Husband to ATO for year ended 30/6/2009 including Capital Gains Tax on the sale of Darwin property - husband	$19,166.00
Total	$113,007.00

Net assets

1. The net non-superannuation assets have a value of $1,044,667.63 ($1,157,674.63 - $113,007). The parties’ superannuation has a value of $408,173.53.

Financial Resources

1. For the purposes of the above calculations, the husband’s interest in the N property is represented as about $100,000. In fact the equity in that property is about $280,400. All of the financial contribution to that property was made by the husband. In the event of a dispute with Ms H, it is likely the husband would have a greater claim than his legal interest. Some of that potential interest is reflected in the sums added back on the husband’s side of the ledger.

2. Otherwise, the parties disclose no financial resources.

Contributions

1. The obligations placed on the Court by section 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[3]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[4].

   [3] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1

   [4] In the Marriage of Shewring (1987) l2 Fam LR 139

2. As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.

3. In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:

   “… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”

4. Here the case has been argued on a global basis. Notwithstanding that fact, the parties agree on the terms of a splitting order which has the effect of providing for a division of the superannuation interests in a proportion different to that advocated for by either of the parties. The joint proposal is to split the husband’s interest using a base amount of 50% of that interest. That ignores the wife’s superannuation. Thus the effect of the agreed splitting order is to facilitate the current value of the superannuation being split about 52% to the wife (her super at $13,997 and a split of the husband’s interest based on $197,270) and 48% to the husband ($197,269 left of his interest).

5. I will deal with the non-superannuation assets in a global way.

Contributions

Section 79(4)(a) Contributions

1. Financial contributions, both direct and indirect were made by each of the parties.

2. The husband made the overwhelming financial contribution. The parties each had paid employment but the husband was in full-time employment throughout the marriage and mostly at a very senior level. He received over $2,000,000 in salary over the course of the marriage, while the wife’s receipt of income was over shorter periods and in modest amounts. In this regard the calculations set out in the husband’s Case Outline document were not disputed.

3. There were injections of funds through both parties. In the first half of the marriage there were injections of not dissimilar amounts through each of them. For the wife - $14,000 or $20,000 to the initial purchase of land and later $20,000 was received. For the husband $44,500 was injected in the mid 1980s.

4. Over the last few years of the marriage the wife received moneys from her father and from his estate:

   ·on 3 June 2003 the wife’s father gave the parties $20,200 towards the purchase of a motor vehicle;

   ·on 28 July 2004 the wife’s father gave the wife $13,000.00 cash

   ·on 26 September 2004 the wife’s father gave the wife $2,000.00 cash; and

   ·in March 2005 the wife’s father died. The wife inherited $122,388.54.

5. Of the cash component of those advances of about $137,000 the following amounts are accounted for in the pool of assets:

   ·in December 2005 approximately $85,000 of the wife’s inheritance, was used to pay off the parties’ mortgage;

   ·the husband deposited $20,000 of wife’s inheritance into his M Company account to off set a loan of $20,000.00 from the M Company used to pay for their daughter’s wedding. The wife withdrew that sum on 10 August 2007;

   ·the wife brings to account $13,000 in the form of her Bendigo Bank balance.

6. The husband paid the wife $500.00 per week for the period commencing 1 August 2006 and ending on 30 June 2007. After separation the husband had the benefit of his considerable salary until he was terminated in February 2009. In that period the husband took 6 months long service leave and thereby reduced his gross leave payout on termination by something of the order of $75,000.

7. In February 2009 the husband received a net payment of $321,418 representing a termination payment and leave entitlements. As I have found above, all of that sum is now accounted for. Comparing the injections since 2003 the wife brought in about $157,588 and the husband $321,418. If comparing the positions since 2005 the wife brought in about $122,000 and the husband $321,418. On any view the additional contributions of recent times, over and above periodic salary and homemaker contributions favour the husband.

8. As things transpired the husband had not returned to the paid workforce as at the date of the hearing, was not in receipt of Centrelink benefits and therefore needed to live on capital for much, if not all of the period since 1 February 2009.

Section 79(4)(b) contributions

1. This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.

2. The parties lived with the wife’s parents from the date they returned from their honeymoon until they moved into the W property in January/February 1980.

3. The husband landscaped the W property. He laid lawns, and arranged for paths to be laid and a brick garden shed to be built. He laid out decorative gardens and planted trees and shrubs. Later he arranged for a pool to be installed and personally undertook the landscaping of the pool surrounds.

4. Between January and May 2006 the husband renovated the bathroom. He took 18 days leave. He spent $15,000 on materials and to pay for the tiling to be carried out but he undertook some work himself.

5. The wife had the benefit of living in the W home after separation.

Section 79(4)(c) contributions

1. This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.

2. I am satisfied that the wife undertook the main parenting and homemaker role.

3. The parties arranged their affairs so that it was the wife who had time away from paid employment to care for the children and managed the household.

Conclusion on Contribution

1. The husband argues that the contributions favour him in the proportions 60% compared to 40% by the wife. The wife seeks a finding that contributions favour her in the proportions 65% to 35% by the husband.

2. The husband provided the overwhelming financial contributions in the form of a substantial income, inheritances and a redundancy.

3. The husband did not adequately disclose his termination payment to the wife but that is entirely addressed by reading back into the list of assets the entire value of the payment. Up until the last few years of the marriage, the parties’ contributions should be seen as equal. However, it would be unfair not to make an adjustment in favour of the husband on the basis of the difference in contributions after that time. In effect the husband put in as much as $200,000 more than the wife. Balancing that difference are the fact of him using up valuable long service leave and not accounting for all of the increase in the mortgage secured on the  Darwin property. Further, this was a long marriage involving very significant contributions. Care is needed in making an adjustment for an imbalance of contributions at the end of the marriage, not to undervalue the contributions made over the previous 29 years. I find that the various contributions of the parties would be properly acknowledged by a finding that they were made in the proportions 55% by and on behalf of the husband and 45% by and on behalf of the wife. In the context of this case that represents an adjustment of the net non-superannuation pool of about $50,000 and a difference between the parties of about $100,000.

The other matters in Section 79

1. Once contributions have been assessed, the other factors in section 79(4) need to be considered. They are:

Section 79(4) (d)

1. Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no relevant effect.

Section 79(4)(e) - Section 75(2) Factors

1. The relevant matters in Section 75(2) would seem to be paragraphs (a), b), (e), (f), (j), (k) and (m).

(a)the age and state of health of each of the parties;

1. First, as to the age and state of health of each of the parties. The husband and wife are 57 and 55 years of age respectively. The wife suffers from rheumatism. Her Specialist, Dr K says her condition is well on the way to being rheumatoid arthritis. He has prescribed medication and notes that her inflammatory markers have come down and her blood tests are looking quite good. He says that one medication takes three months to work and her joint symptoms may flare up stopping her from her work.

2. There is no authoritative evidence about the health of the husband. Late last year he was on extended sick leave from his employment.

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

1. The husband receives no income. He lives with his de facto wife who also has no income. He spends $1,030 per week made up as follows:

Expense	Amount
Rates	$31.00
Mortgage payments to the M Company for N property	$522.00
House and contents insurance - Allianz	$20.00
Motor vehicle comprehensive insurance – Allianz	$18.00
Motor vehicle CTP insurance - Allianz	$7.00
Health Insurance (H) – Medibank Private	$33.00
Health Insurance (dependant) – Medibank Private	$40.00
Motor vehicle registration Hyundai Getz (dependant)	$6.00
Other expenses.	$353.00
Total	$1030.00

1. The husband estimates that of his expenses, $403 per week is applied to the benefit of Ms H.

2. As to his earning capacity, the husband has provided evidence of applications he made for jobs in the period February – May 2009. The positions range from jobs similar to his role with M Company, jobs in the hospitality industry and one clerical / administrative position. I note that the latter position was a low level position (about $17,000 pa) with a social club to which the husband belongs. The husband and or Ms H have been office holders of that club. The husband does not appear to have sought similar employment elsewhere and I do not accept that to be a reflection of his earning capacity.

3. No damage was done to the husband’s testimony on this issue in cross-examination. Although he has no formal qualifications he has extensive experience at a senior level in financial institutions. Given his age and the impact of the global financial downturn on the unemployment rate in general and on the financial sector in particular, it may be some time before he can find suitable employment. He understands that he is precluded from receiving Centrelink benefits until May 2011.

4. The evidence about his assets and liabilities is addressed above. The husband has a financial resource in the form of the remaining half interest in the N property. Most of that interest is accommodated for the purposes of the wife in these proceedings, by the add backs included in the pool of assets.

5. The wife’s income is $723 per week, made up of her salary of $681 working for the local City Council and $42 in interest on her savings with the Bendigo bank. She lives with the parties’ son who is financially independent.

6. The wife’s expenditure is as follows:

Expense		Amount
Income tax		$104.00
Rates		$24.00
House and contents insurance		$26.00
Motor vehicle comprehensive insurance		$13.00
Health Insurance		$31.00
Motor vehicle registration Toyota Corolla Ascent		$12.00
Other expenses.		$737.00
Food	$150.00
House supplies	$81.00
House repairs	$60.00
Electricity	$25.00
Telephone	$21.00
Petrol	$28.00
Car maintenance	$33.00
Fares and parking	$28.00
Clothing and shoes	$55.00
Medical dental and optical	$23.00
Entertainment & hobbies	$27.00
Holidays	$47.00
Chemist pharmaceuticals	$24.00
Gardening / lawn mowing	$12.00
Cleaning	$23.00
Repairs furnishings and appliances	$37.00
Dry cleaning	$20.00
Books and magazines	$7.00
Gifts	$17.00
Hairdressing, toiletries	$19.00
Sub-total	$737.00
Total		$947.00

1. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.

2. It is not suggested that the wife is not exercising her earning capacity.

3. Despite difficulties he will experience in returning to the paid workforce, the husband has a greater earning capacity than the wife. She has never enjoyed income of the order of that which the husband consistently received over many years.

(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

1. The parties’ children are over 18 years of age.

(d)commitments of each of the parties that are necessary to enable the party to support:

1. himself or herself; and

2. a child or another person that the party has a duty to maintain;

(e)the responsibilities of either party to support any other person;

1. I have set out the evidence in relation to the parties’ expenses. The husband supports his partner, Ms H. She is 49 years of age and a Registered Nurse by profession. She last had paid employment as a receptionist =. That was in 2000 before she suffered a heart attack and underwent a double bypass operation. In May 2006 the husband advanced Ms H some moneys to pay out a debt she had incurred and could not repay. The husband says that he charged interest on the advance and that Ms H paid back some of the money. The husband later forgave $26,000 of the advance when he and Ms H started their relationship. I accept that, if not a duty, the husband has a responsibility to support Ms H.

(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

1. any law of the Commonwealth, of a State or Territory or of another country; or

2. any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,

and the rate of any such pension, allowance or benefit being paid to either party;

1. Neither of the parties receives a Centrelink benefit. The parties have interests in superannuation funds and have agreed to a splitting order that has the effect of leaving the wife with 52% of the superannuation interests. Neither of the parties is making contributions to superannuation but I presume the wife’s employer would be making contributions to a fund on her behalf.

(g)where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;

1. There is little evidence in relation to the standard of living of the parties during the marriage.

(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

1. There is no evidence of either of the parties planning further study or intending to set up in business.

(ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; 

1. This is not a significant aspect of the case.

(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

1. The wife undertook the main parenting role and that allowed the husband to maintain employment on a full-time basis.

(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. The parties’ arrangement had the wife taking the main parenting role and leaving the husband to pursue full-time employment. It is likely that the marriage restricted the wife’s earning capacity in the sense that she was not able to build a career and presumably lost the benefits of a long history of full-time employment such as leave entitlements and opportunities for promotion.

(l)the need to protect a party who wishes to continue that party's role as a parent;

1. This is not relevant.

(m)if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;

1. I have set out what there is of that evidence, above.

(n)the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;

(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

1. There is no child support.

(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. Nothing comes to attention here.

(p)the terms of any financial agreement that is binding on the parties.

1. There was no binding agreement made between the parties.

Section 79(4)(f)

1. There are no other relevant orders made under the Family Law Act 1975.

Section 79(4)(g)

1. There is no child support.

Conclusion

1. The wife seeks a 5% adjustment under section 75(2) because of the husband’s greater earning capacity. The husband asserts that the parties are in similar circumstances and seeks that there be no adjustment.

2. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:

   ØThe wife’s health is compromised;

   ØAlthough unemployed at the date of the hearing, the husband has a greater earning capacity than the wife;

   ØThe husband provides support to Ms H;

   ØThe division based on contribution alone, would leave the husband with a far greater share of the property; and

   ØThe parties have agreed that the wife will take a split of the husband’s superannuation that leaves her with about 52% of the current interests.

3. On balance these matters call for adjustments in favour of the wife although given their ages the significance of these matters will not be as great as they would have been if the parties were in their 30’s. I will make an adjustment of 2½% in favour of the wife.

Just and Equitable

1. The net non-superannuation assets have a value of $1,044,667.63 ($1,157,674.63 - $113,007). The parties’ superannuation has a value of $408,173.53.

2. A division in the proportions 52.5% to the husband and 47.5% to the wife would leave the husband with net non-superannuation assets of about $548,450 and the wife with net non-superannuation assets of about $496,217.

Framing the Orders

1. The wife would like to retain the W property. Thus of the pool of assets identified by me, the wife has the benefit of and would like to retain:

Assets	Value
W property – joint	$600,000.00
Toyota Corolla – joint (with wife)	$7,000.00
Bendigo Bank accounts – balance of inheritance – wife	$13,000.00
Moneys taken on 18/8/07 – wife	$20,000.00
Total	$640,000.00

1. In order to bring her to 47.5% of the non-superannuation assets she would need to pay the husband about $143,783.

2. That would leave the husband with:

Assets	Value
R Credit Union – joint	$98.00
½ share N property - husband	$201,000.00
R Credit Union - husband	$3,205.20
½ share contents N property – husband	$5,000.00
Add back for the investment float - husband	$10,261
Add back for the sale of shares - husband	$38,660
Net proceeds of sale of Darwin property minus the balance of the husband’s M Company ($54,508 + $705 - $22,598) – husband	$32,615
Increase in the mortgage on the former matrimonial home – husband	$17,225
Forgiven balance of loans to de facto partner, Ms H – husband	$  26,390.00
Add back for termination payment applied towards the N property and not otherwise accounted for - husband	$183,220.43
Payment from the wife	$143,783
½ share mortgage N property – husband	-$93,841.00
Net tax payable by Husband to ATO for year ended 30/6/2009 including Capital Gains Tax on the sale of Darwin - husband	-$19,166.00
Total	$548,450.63

1. The orders I propose commit the wife to make a payment to the husband. The wife may be able to transfer the portion of the husband’s fund based on the splitting order to a fund in her own name and access those funds. Short of leaving the workforce that may require access through a hardship provision and some financial penalty. Short of that, she is unlikely to be able to make the required payment. I will provide for a sale of the W property in default of payment and for a division of the net proceeds of sale in the proportions that reflect the ratio of the required adjustment to the agreed value of the property. In that way the parties will share in the costs of sale and the benefit or loss associated with any difference between the sale price and the agreed value. That is division in favour of the husband in the proportion 143,783:600,000 which I will round up to 24%, with the balance to go to the wife. In my view those orders represent a just and equitable settlement of the parties’ property.

Alternate approaches

1. In arriving at the above outcome I have adopted the general approach advocated for on behalf of both parties which involves substantial add backs. As I commented earlier in these reasons, there are risks with that approach. They are mentioned in the following passage from the Full Court in Omacini:

   48.It seems to us that all of the difficulties that we have identified with respect to her Honour’s reasons for judgment to date arise because her Honour departed from the approach that she identified.  Her Honour did not make findings with respect to the asset pool as at the date of trial, nor did she consider the contribution of the parties to that pool.  Rather, she attempted to resolve the dispute by relying upon a complex mixture of add backs, the exclusion of some assets and the inclusion of others and notional valuations.  This is demonstrated by the following passage from her Honour’s judgment:

   “I have accepted that a large proportion of the wife’s claim for add backs.  I do accept that this issue could have been addressed through contributions rather than add backs, but I have concluded add backs were more appropriate because of the nature of the shares expenditure, and the fact that pre-owned assets were realised.”

   49.In adopting the approach that she did, her Honour created the opportunity to fall into error not only in the ways we have identified but also there arises a considerable risk that relevant considerations have been overlooked in the assessment of contributions.  We are of the view, that the reasons given by her Honour for adopting the approach that she did, which, in our view, is a novel approach does not justify the way she approached the resolution of the property dispute.

2. In particular, the add backs ignore the parties’ living expenses since separation. For example, taking the situation at the time of the hearing, the wife’s income was $723 per week and her outgoings were $947. As at that same time the husband had no income and liabilities of $1,030. Even without the $403 per week he applies to the benefit of Ms H, he has had a shortfall of over $600 per week since February 2009. Just to compare like with like, if those circumstances have persisted between February and September of 2009, the wife has needed to fund nearly $7,000 and the husband, $18,000, for living expenses. According to his earlier Financial Statement, but for moneys applied to the benefit of Ms H, the husband did not have a shortfall in his weekly budget prior to February 2009. On the other hand it is likely that the wife’s shortfall persisted for a significant period, perhaps since separation.

3. As a check against the approach I have taken I will consider the outcome likely under each of the parties’ proposals as to the pool of assets.

4. If I accepted the approach to the pool advocated on behalf of the husband the net non-superannuation assets would be $1,071,255. On my findings of under section 79(4) the husband would receive $562,408 of which he has $382,388. The wife would need to pay him $180,000.

5. If I accepted the pool advocated for on behalf of the wife the net non-superannuation assets would be $1,001,386.10. On my findings under section 79(4) the wife would receive $475,658 of which she has $20,000. Those findings would need to be adjusted under this approach because the wife seeks to bring to account every dollar the husband received from his redundancy and from the Darwin sale and yet ignores paid legal fees. However, in order to retain the W property the wife would need to pay the husband $144,341.

6. In each case the parties argued for vastly different divisions based on section 79(4). With all of the caveats in relation to add-backs, it seems to me that the outcome I have identified is within a proper range and meets the aspirations in section 79.

Conclusion under Section 79

1. This was a long marriage involving very significant contributions by each of the parties. They acquired assets and provided a secure home for their children. In the course of over 26 years of cohabitation and since, the parties shared the work of the family in different ways but overall the contributions slightly favoured the husband. A modest adjustment is required by reference to the non-contribution aspects of Section 79(4).

I certify that the preceding one husband and seventy nine (179) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.

Associate: 

Date: 11 September 2009