BEATSON & BEATSON
[2013] FamCA 655
•2 September 2013
FAMILY COURT OF AUSTRALIA
| BEATSON & BEATSON | [2013] FamCA 655 |
| FAMILY LAW – PROPERTY SETTLEMENT – Where the parties to a marriage seek orders for final property settlement under s 79 of the Family Law Act 1975 (Cth) (“the Act”) – Determination of what constitutes the property of the parties or either of them available for distribution between them – Where the husband asserts that the parties have outstanding liabilities to his mother and to his brother – Where the parties each seek to have property which no longer exists added back into the asset pool – Whether in the circumstances of this case it is just and equitable to make an order altering the parties’ interests in property – Consideration of the parties’ contributions prior to, during and post cohabitation pursuant to the provisions of s 79(4) of the Act – Whether an adjustment to the contribution-based entitlement should be made having regard to the factors set out in s 75(2) of the Act – Whether the Court’s findings overall are just and equitable |
| Family Law Act 1975 (Cth) |
Bevan & Bevan [2013] FamCAFC 116
| Chorn and Hopkins (2004) FLC 93-204 |
| APPLICANT: | Ms Beatson |
| RESPONDENT: | Mr Beatson |
| FILE NUMBER: | SYC | 3927 | of | 2011 |
| DATE DELIVERED: | 2 September 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 22-24 July 2013 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Reeve |
| SOLICITOR FOR THE APPLICANT: | Marsdens Law Group |
| COUNSEL FOR THE RESPONDENT: | Ms Messner |
| SOLICITOR FOR THE RESPONDENT: | Moylan Family Lawyers |
Orders
The parties shall do all such acts and things as may be necessary to procure the sale of the properties situate at and known as B Street, Suburb A (“the B Street property”) and C Street, Suburb D (“the C Street property”) for the best price reasonably obtainable.
The sales of the properties referred to in Order 1 above are to take place in the first instance by private treaty at a price agreed between the parties or, in the absence of such agreement with respect to either or both of the properties, the following shall occur:
(a)the sale price of the property is to be determined by taking the mean of two valuations conducted by two registered valuers who are members of the Australian Valuers Institute
(b)one of the valuations is to be obtained by and at the expense of the husband and the other valuation is to be obtained by and at the expense of the wife
(c)the valuations are to be made not later than two weeks apart from each other.
In the event that either or both of the properties referred to in Order 1 above are not sold by private treaty within 90 days from the date of these Orders, the parties are to do all things necessary to make the unsold property or properties available for sale by auction.
For the purpose of the sale of the properties referred to in Order 1 above by private treaty or by auction the following shall occur:
(a)the selling agent or agents to be appointed for the sales shall be such agent or agents as are agreed by the parties and, in the absence of agreement, the selling agent or agents are to appointed by the President of the Australian Property Institute, New South Wales Division
(b)the solicitor or solicitors acting on the sale of the property shall be such solicitor or solicitors as the parties agree and, in the absence of agreement, such solicitor or solicitors as are nominated by the President of the Law Society of New South Wales.
Upon the sale of the B Street property, the proceeds of sale are to be applied in the following manner:
(a)in payment of any agents’ commissions and any costs and disbursements of and incidental to the preparation and marketing of the property for sale
(b)in payment of any legal fees, costs and disbursements arising from the sale
(c)in payment of any outstanding debt owing on the mortgage to the Commonwealth Bank of Australia and the Viridian Line of Credit
(d)in payment of 50 per cent of the balance then remaining to the wife and
(e)in payment of the balance then remaining to the husband.
Upon the sale of the C Street property, the proceeds of sale are to be applied in the following manner:
(a)in payment of any agents’ commissions and any costs and disbursements of and incidental to the preparation and marketing of the property for sale
(b)in payment of any legal fees, costs and disbursements arising from the sale
(c)in payment of any outstanding debt owing on the mortgage to the Commonwealth Bank of Australia and the Viridian Line of Credit
(d)in payment of 50 per cent of the balance then remaining to the wife and
(e)in payment of the balance then remaining to the husband.
Upon receipt by the parties of their share of the net sale proceeds of the B Street property and the C Street property the husband is to within 14 days pay to the wife the sum of $65,964.50, and his entitlement to those net sale proceeds is to be charged with his obligation for payment to the wife.
Within 14 days of the date of these Orders, the parties are to do all things and sign all documents as may be necessary to distribute in specie in equal half shares all shares held in the joint names of the parties being the Santos shares, the News Limited shares and the jointly held Comsec share portfolio.
Within 14 days of the date of these Orders, the parties are to do all things and sign all documents necessary to close the jointly held Commonwealth Bank of Australia account and distribute the credit balance therein between them in equal shares.
Within 14 days of the date of these Orders the parties are to do all things and sign all documents necessary to provide that the husband will act as the Trustee of the University Scholarship Fund in the name of the parties’ daughter, E, and that the wife will act as the Trustee of the University Scholarship Fund in the name of the parties’ son, F.
Within 14 days of the date of these Orders the husband is to sign all documents and do all things necessary to transfer to the wife all of his right, title and interest in and to the Burial Licence (evidenced by a Right of Burial Certificate) numbered … in relation to allotment … section … of Suburb G Cemetery and, upon such transfer, the wife shall be declared to have the sole right, title and interest in and to that Burial Licence.
Within 28 days of the date of these Orders the parties shall pay in equal half shares the joint debt in the sum of $2,500 which is owed to their accountant.
Within 28 days of the date of these Orders the parties shall pay in equal half shares the joint debt in the sum of $2,143 which is owed to Suburb G Council.
The husband is to indemnify the wife and keep her indemnified from and against all claims, actions, suits, demands, costs or damages (if any) arising out of, or in connection with, a claim against the parties for a debt owing to the husband’s brother, Mr H.
The husband is to indemnify the wife and keep her indemnified from and against all claims, actions, suits, demands, costs or damages (if any) arising out of, or in connection with, a claim against the parties for a debt owing to the husband’s mother, Ms I.
Within 28 days of the date of these Orders the husband shall provide to the wife either digital copies or original photographs of all family photographs that he has in his possession.
Within 28 days of the date of these Orders, the husband and the wife shall do all things and sign all documents necessary so as to cause the husband to cease and resign from any office that he holds within the Beatson Superannuation Fund and he shall transfer his interest in the Beatson Superannuation Fund to another superannuation fund of his choice.
Except as otherwise provided for in these Orders, all other property, financial resources, shares and superannuation entitlements presently in the name, possession or control of the wife shall remain hers absolutely to the exclusion of the husband, such items including but not limited to:
(a) the wife’s share of land in Europe
(b) the wife’s Comsec Share Portfolio
(c) the wife’s Comsec CDIA share trading account
(d) the wife’s Dividend Reinvestment Plan
(e) the wife’s CSL shares
(f) the wife’s James Hardie shares
(g) the wife’s Westfield shares
(h) the wife’s St George Bank account
(i) the wife’s Bendigo Bank account
(j) the wife’s Commonwealth Bank account
(k) the wife’s Commonwealth Bank Beatson Consulting Services account
(l) the wife’s St George Bank Beatson Consulting Services account
(m) the wife’s Subaru motor vehicle
(n) the furniture currently in the wife’s possession
(o) Beatson Consulting Services and
(p) the wife’s interest in the Beatson Super Fund.
Except as otherwise provided for in these Orders, all other property, financial resources, shares and superannuation entitlements presently in the name, possession or control of the husband shall remain his absolutely to the exclusion of the wife, such items including but not limited to:
(a) the husband’s Telstra shares
(b) the husband’s Westpac E-saver account
(c) the husband’s Westpac Choice account
(d) the husband’s two Commonwealth Bank accounts
(e) the husband’s Volkswagen motor vehicle
(f) the furniture currently in the husband’s possession
(g) the photograph equipment currently in the husband’s possession
(h) the sporting equipment currently in the husband’s possession
(i) the artwork and valuables currently in the husband’s possession
(j) the husband’s Spectrum Superannuation entitlements
(k) the husband’s CC Superannuation entitlements
(l) the husband’s MLC Superannuation entitlements and
(m) the husband’s BT Superannuation entitlements.
The wife shall remain liable for any debts and liabilities in her name and shall indemnify the husband from any claims or actions arising from those debts and liabilities which include but are not limited to:
(a) the wife’s debt to her accountant and
(b) the wife’s JB Hi Fi Package Contract debt.
The husband shall remain liable for any debts and liabilities in his name and shall indemnify the wife from any claims or actions arising from those debts and liabilities which include but are not limited to:
(a) the husband’s Westpac Mastercard debt.
In the event that the wife or the husband refuse or neglect to execute any deed or instrument necessary to give effect to these Orders, then a Registrar or a Duty Registrar of the Court shall be empowered pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of the wife or the husband and to do all acts and things necessary to give validity and operation to the said deed or instrument, provided that such Registrar or Duty Registrar shall be satisfied upon affidavit evidence of the other party alleging the refusal or neglect, that the other party is in breach of these Orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Beatson and Beatson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3927 of 2011
| Ms Beatson |
Applicant
And
| Mr Beatson |
Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court are proceedings in which each of the parties seeks an alteration of their property interests following the breakdown of their marriage. Ms Beatson (“the wife”) is the Applicant and Mr Beatson (“the husband”) is the Respondent.
The parties lived in a relationship of marriage and cohabitation for approximately 25 years. There are two children of the relationship: E who is 17 years old; and F who is 15 years old.
The significant issues between the parties are: the identity of the assets and liabilities of the parties; the assessment of the parties’ direct and indirect contributions to the acquisition, conservation and improvement of those assets; the contributions of the parties aliunde to the marriage; and the proportions in which the parties’ assets and liabilities should be divided on a consideration of those matters.
In determining the matters referred to above, there is a question of how certain asserted “liabilities” to the husband’s parents and the husband’s brother might be taken into account. There is also a question of who should bear the responsibility for their payment to the extent that they are found to be liabilities.
The parties are further in dispute as to what allowance should be made in favour of the wife (each of them proposing that an allowance should be made) upon a consideration of the matters referred to in section 75(2) of the
Family Law Act 1975(Cth) (the Act”) and the form of orders necessary to give effect to that division.
The Court must also determine whether the resulting proposed orders would produce a just and equitable result as between the parties or whether, upon a consideration of the principles of justice and equity, some adjustment might be made to them.
Another issue which the parties contest is the date of separation. On the wife’s assertion, the parties separated in December 2009 but continued to live under the same roof until February 2011. On the husband’s assertion, the parties separated in July 2008 and continued to live under the same roof until February 2011 (apart from one three-month period when they lived separately).
Background Facts
Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
The husband was born in 1960 and is aged 52 years.
The wife was born in 1962 and is aged 51 years.
The parties commenced a relationship in around 1983.
The wife asserts that at the commencement of the relationship she was working full-time (the Court notes the husband’s assertion that the wife was working part-time and studying full-time to complete her degree studies). The husband was completing a traineeship as a tradesman, for which he received a full-time salary.
In February 1984, prior to the commencement of cohabitation, the parties purchased a property at C Street, Suburb D (“the C Street property”) for the sum of $115,000. The C Street property was financed by way of:
a)funds from the husband’s mother (“Ms I”) totalling $30,000 and
b)borrowed funds totalling $90,000 secured by two mortgages with the Commonwealth Bank of Australia (“CBA”).
The parties are in dispute as to whether the $30,000 provided by Ms I was a loan (as asserted by the husband) or a gift (as asserted by the wife). This issue is discussed further and determined in these reasons.
The C Street property was not in a liveable condition when it was bought and renovations were carried out before the parties moved in, which did not occur until after the parties married. Part of these renovations included converting the terrace house into two self-contained dwellings (one upstairs and one downstairs).
In June 1984 the parties married. They commenced cohabitation at the
C Street property at around this time, after some initial renovations to the property had been carried out.
Between 1984 and around 1996 members of the husband’s family resided with the parties at the C Street property, occupying the upstairs part of the property, for varying periods of time. The parties give conflicting evidence as to when and for how long each of these family members lived at the C Street property, however, it appears that:
a)Ms I lived there from 1984 for a little over 10 years
b)the husband’s brother, Mr H, lived there from 1984 for a couple of years and
c)the husband’s grandmother lived there from 1991 for a couple of years prior to moving into a nursing home.
In 1988 the wife’s father (“Mr J”) passed away. The parties agree that the wife received an inheritance from her late father’s estate but they dispute what the value of that inheritance was.
The wife asserts that she and her brother inherited a property in Suburb K (“the Suburb K property”), which she contends had a value of $200,000. The husband asserts that, upon Mr J’s death, the Suburb K property was transferred to the wife’s mother (“Ms J”) as a joint tenant and that it had a value of $100,000. According to the husband, in 1989 the parties borrowed money to purchase from Ms J a half share in the Suburb K property for $50,000.
It is the Court’s view that the assertions of the husband are probably more correct than those of the wife, based on evidence annexed to the affidavit of the husband filed on 5 July 2013, namely:
a)a letter dated December 1989 showing that a $50,000 residential property investment loan was raised from CBA to assist in the purchase of the Suburb K property and
b)a transfer form showing that the Suburb K property was transferred from Ms J to the wife and the wife’s brother, Mr L, in equal shares in March 1990 for the total consideration of $100,000.
Following the death of Mr J, Ms J gifted to the wife one-third of his half interest in three properties in Europe (“the European properties”). The remaining two-thirds were gifted to the wife’s siblings.
Some years later, the husband and wife purchased the interests in the European properties owned by Ms J and the wife’s siblings, together with an adjoining property owed by the wife’s cousin. The evidence of the parties as to how much they paid to acquire the additional interests in the European properties and when they did so is inconsistent.
In or around late 1989 the parties travelled overseas for over a year. The husband asserts that they borrowed $20,000 from Ms I whilst they were overseas. Upon their return in mid-1991 they both commenced working full-time.
In November 1991 the parties entered into an agreement with Ms I under which they acknowledged loans from her in the sum of $40,000 and $60,000. Under the terms of the loan agreement, Ms I was able to request repayment on 12 months’ notice of demand; the agreement also provided that it could be terminated in writing. The Court notes that the agreement in evidence before the Court bears an endorsement, signed by each of the parties to it, acknowledging its termination on 1 December 2004.
In around 1991 the husband commenced working at Company M, earning what he describes as a “good salary”.
In 1991 or 1992 the parties purchased a property at N Street, Suburb D (“the N Street property”). The husband asserts that the purchase price was $371,000 but the wife asserts that it was $377,000.
In 1993 and 1994 the wife completed a scholarship program sponsored by Company O. She was earning approximately $50,000 per annum at this time.
In 1995 the wife commenced working for Company P, earning approximately $95,000 per annum plus superannuation. At around this time the husband commenced working for Company Q, earning an annual salary of approximately $150,000 per annum.
In May 1996 the child E was born. The wife initially reduced her working hours to part-time but left the paid workforce around six months after E was born.
In or around 1996 the wife sold her interest in the Suburb K property to her brother Mr L for an agreed value, she says, of $172,000. The wife asserts that she received payment from Mr L in the following manner:
a)a cash payment of $109,000 upon the transfer of her interest
b)cash payments totalling $30,000 between 2001 and 2004 and
c)payments in kind by way of building work performed on the parties’ properties to the value of approximately $60,000.
The evidence of the husband is largely consistent with the above, save for his assertion that the value of the work completed by Mr L only totalled $30,000.
In 1996 major renovation work was undertaken at the C Street property and the parties left the property for three months. The renovations, which the wife says she managed, continued after the parties reoccupied the property in January 1997.
In December 1997 the child F was born.
In 1998 the wife started a consulting business called
Beatson Consulting Services which, she says, provided “[professional] services to businesses”. The wife asserts that running this business as a sole trader allowed her to generate income while being the primary carer for the children.
In or around late 1999 the N Street property was sold for the sum of $850,000.
In or around 1999 the wife took on a part-time role as a consultant for Company R.
In 2000 the parties travelled overseas with the children for around six months. The husband took a sabbatical and the wife took leave from her employment. The wife says that she wound down Beatson Consulting Services during this trip and that, following the parties’ return, the business was not as successful.
In or around 2000 the parties paid the sum of $50,000 to Mr H and his wife, Ms H. The husband asserts that the money was later reinvested by Mr H and Ms H to the benefit of the parties under the terms of a share agreement, however, the wife disputes that this occurred. Mr H now claims that, arising from the above transactions, the parties are indebted to him in the sum of $73,376. The husband seeks to have the Court find that this is a joint liability. With respect to this issue the parties claim as follows:
a)the husband asserts that when Ms I gave the parties $30,000 in 1984, Mr H was entitled to a 50 per cent share of that sum. He then says that by the time Mr H requested his share of the funds in 2000, the principal sum plus interest had increased to $50,000.
b)the husband further asserts that in 2004 Mr H and Ms H reinvested the $50,000 in the acquisition of an 11per cent interest in a property owned by the parties at S Street, Suburb A (“the S Street property”). Annexed to the husband’s trial affidavit is an unsigned draft “Share Agreement”, which he says reflects this share arrangement.
c)the wife admits that $50,000 was paid to Mr H but denies that $50,000 was ever received back from him. While she admits to a share arrangement along the above lines being discussed, she does not recall that a share agreement was ever signed.
In or around 2001 the parties purchased a property at B Street, Suburb A (“the B Street property”) for the sum of $307,000.
In or around 2002 the parties purchased the S Street property (which property was the subject of the purported share arrangement with Mr H and Ms H in 2004). The husband asserts that the purchase price was $350,000 but the wife asserts that it was $302,000.
During 2002 and 2003 further renovations were carried out at the C Street property. The wife asserts that she obtained an Owner Builder licence and, with the help of her brother Mr L, built a double garage and an upstairs studio. By this time the wife had resigned from her position with Company R.
In 2004 Ms I moved into the S Street property. An agreement was prepared with the effect that she would pay to the parties $220 per week in rent in addition to some outgoings. Ms I procured Commonwealth rental assistance with respect to this property.
Between 2005 and 2006 the wife wrote and published a book titled “[Title Z]” which she says sold 1,000 copies.
In or around October 2007 the parties purchased a property at T Street, Suburb U (“the T Street property”) for $202,500. They borrowed against the C Street property in order to finance the purchase.
In 2008 the wife commenced working at Company V, earning a salary of $75,000 per annum.
In July 2008 there was an incident at the C Street property during which the wife asserts that the husband physically assaulted her. On the wife’s evidence, she sustained bruising to her face and hands and the children witnessed the assault. The husband agrees to an incident occurring but does not agree that he hit the wife. Rather, the husband asserts that the wife hit him.
The husband asserts that the parties separated in July 2008 but the wife contends that separation was not until December 2009. At any rate, the parties continued to reside under the same roof until 2010.
From October 2008 to January 2009, further renovations were undertaken at the C Street property. The husband asserts that he project managed this tranche of work.
In 2009 the wife left her position at Company V and commenced part-time employment in a new role.
In January 2010 the husband moved out of the C Street property and occupied the S Street property. Around three months later he moved back into the C Street property.
In April 2010 the husband was made redundant from his employment with Company Q. He received around $140,000 in payments from Company Q and the Australian Taxation Office (ATO) following his redundancy; of that sum, approximately $110,000 was paid into the parties’ CBA Viridian line of credit (“the line of credit”). The husband remained unemployed for around 15 months and says that he suffered from depression at this time due to the marriage breakdown and, to a lesser extent, his redundancy.
In or around 2010 the S Street property was sold. The net proceeds of $267,000 were deposited into the parties’ line of credit which thereafter was reduced to around $80,000.
In November 2010 the husband purchased a VW motor vehicle for the sum of $36,000. He withdrew $33,800 from the line of credit to purchase the car.
In February 2011 the husband moved out of the C Street property and commenced living in a rented apartment in Suburb W.
In or around mid-2011 the wife took in a boarder at the C Street property for board of $100 per week. A few months later the husband attempted to have the boarder evicted.
In July 2011 the husband started working at Company X. He asserts that he was promised significant commission for this employment but that he never received any commission.
In 2011 the husband, without the knowledge or consent of the wife, attended the C Street property and removed items of personalty belonging to the wife (including paintings, the wife’s will, legal correspondence, a computer, share certificates and other documents). The wife asserts that she was scared and notified the police, who informed her that it was probably someone she knew. She says that the husband initially denied removing the items but later conceded that he had come to the home and removed items.
In August 2012 the husband sold approximately $55,000 worth of shares in his name, applying the funds, he says, to credit card debts and legal fees. The wife since separation has sold approximately $58,000 worth of shares in her name.
In November 2012 final parenting orders were made, providing for a shared parenting arrangement with respect to both of the children.
In November 2012 the husband commenced his current employment with Company Y, earning a salary of $175,000 per annum.
In January 2013 orders were made by consent. The effect of the orders was that, inter alia:
a)the T Street property was to be sold with the net sale proceeds applied to meet joint expenses, in particular school fees and repayments on the line of credit and
b)the husband was to pay to the wife $175 per week in child support until a reassessment was conducted by the Child Support Agency (“the CSA”).
The T Street property did sell in May 2013 and the net sale proceeds were applied in accordance with the January 2013 orders.
In February 2013 the child E requested to live with the husband. She has lived with the husband since this time.
The wife asserts that in May 2013 E expressed a wish to return to live with her for two to three days per week and for half of the school holidays, however, the husband does not admit this.
The Orders Sought
The wife presented to the Court a proposed Minute of Orders (her final version dated 24 July 2013) and a document titled “Property Division Worksheet”, which set out a division of assets as identified by her which she proposes the Court give effect to.
In oral submissions, Counsel for the wife informed the Court that the orders sought by the wife would give effect to the following distribution of property:
a)the wife receives 62.5 per cent of the parties’ net assets not including superannuation interests and the husband receives 37.5 per cent thereof
b)the wife receives approximately 55 per cent of the parties’ superannuation interests and the husband receives 45 per cent thereof.
The husband presented to the Court a proposed Minute of Orders (his final version dated 22 July 2013) and a document titled “Property Division [Beatson]”, which set out a division of assets as identified by him which he proposes the Court give effect to.
In summary, the husband seeks orders which would give effect to the following distribution of property:
a)the wife receives 53.13 per cent of the parties’ net asset pool (not including a proposed settlement payment of $91,885 by the wife to the husband)
b)the husband receives 46.87 per cent of the parties’ net asset pool (not including a proposed settlement payment of $91,885 by the wife to the husband).
In oral submissions, Counsel for the husband informed the Court that the overall position of the husband was as follows:
… if the contributions are 52 per cent to the husband and 48 per cent to the wife and there’s a further adjustment of one or two per cent back to the wife in favour of 75(2) factors it would bring us back to 50/50.
The parties were both in agreement that the C Street property and the B Street property should be sold.
With respect to the manner in which certain assets and liabilities presently held in the parties’ joint names or possession should be distributed, much of this had been agreed to by the conclusion of the hearing. Specifically, the parties were able to reach agreement as to how the following property should be divided:
a)shares held in the parties’ joint names – to be divided equally
b)funds in the parties’ joint CBA account – to be divided equally
c)furniture in the either party’s possession – to remain with that party
d)sporting and photography equipment in the husband’s possession – to remain with the husband
e)the University Scholarship Fund with respect to the children – to be divided equally with the parties to act as the Trustee of the fund for one of the children each
f)the Burial Licence and plot at Suburb G Cemetery – to be transferred to the wife
g)joint debts to Suburb G Council and to the parties’ accountant – to be divided equally and
h)family photographs in the husband’s possession – originals or copies to be provided by the husband to the wife.
The Orders which the Court proposes to make will give effect to the disposal and/or distribution of the above items as was agreed by the parties.
The Issues
The steps which the Court must consider in the application for property settlement under section 79 of the Act are as follows.
What is the property of the parties or either of them available for division between them?
Is it just and equitable for the Court to make any order altering the interests of the parties in their property, having regard to the fundamental propositions enunciated by the High Court of Australia in Stanford v Stanford [2012] HCA 52; (2012) 293 ALR 70?
If so, what is a just and equitable division of the parties’ joint and several property, having regard in accordance with section 79(4) of the Act to the direct and indirect financial and non-financial contributions of the parties to the acquisition, conservation and improvement of that property, together with the contributions of the parties otherwise to the welfare of the family?
To what extent, if any, should the division arrived at based on contributions be adjusted, having regard to any relevant matters to be taken into account by the Court under section 75(2) of the Act?
Is the overall result arrived at by the Court just and equitable or should there be some further adjustment to make it so?
Credit
The wife complained that the husband lacked honesty in disclosure and the husband complained that the wife likewise lacked honesty.
It is the Court’s view that the evidence of neither party was particularly satisfactory and the fact-finding process had attendant difficulty.
The findings may indicate where the evidence of one of the parties or their witnesses has been accepted in preference to that of the other.
Legal principles
The first step I must undertake is to identify the property of the parties or either of them available for division between them.
The Balance Sheet
At the hearing of this matter the Court was presented with a balance sheet which on the last day was amended to produce the balance sheet set out hereunder:
| ASSETS | ||||
| Ownership | Description | Wife/de facto partner’s value | Husband/de facto partner’s value | |
| 1 | Joint | [C street, Suburb D] | $2,250,000 | $2,250,000 |
| 2 | Joint | [B Street, Suburb A] | $690,000 | $690,000 |
| 3 | Wife | Share of land in [Europe] | $28,601 | $28,601 |
| 4 | Wife | Commsec CDIA share trading account | $4,142 | $4,142 |
| 5 | Wife | Commsec Share Portfolio | $17,650 | $17,650 |
| 6 | Joint | Commsec Share Portfolio | $8,200 | $8,200 |
| 7 | Joint | Santos shares | $20,000 | $20,000 |
| 8 | Joint | News Limited shares | $9,000 | $9,000 |
| 9 | Wife | CBA Dividend Reinvestment Plan | $83,000 | $83,000 |
| 10 | Wife | CSL shares | $6,500 | $6,500 |
| 11 | Wife | James Hardie shares | $21,200 | $21,200 |
| 12 | Wife | Westfield shares | $3,190 | $3,190 |
| 13 | Husband | Telstra Shares (1,032 shares at $4.94) | $5,098 | $5,098 |
| 14 | Wife | St George Bank account | $17,500 | $17,500 |
| 15 | Wife | Bendigo Bank account | $0 | $0 |
| 16 | Wife | Commonwealth Bank complete access account | $9,758 | $9,758 |
| 17 | Wife | CBA [Beatson] Consulting Services account | $3,273 | $3,273 |
| 18 | Wife | St George [Beatson] Consulting Services account | $65 | $65 |
| 19 | Joint | CBA Smart Access account | $5,178 | $5,178 |
| 20 | Husband | Westpac Esaver Bank account | $9 | $9 |
| 21 | Husband | Westpac Choice Bank Account | $4,879 | $4,879 |
| 22 | Husband | Commonwealth Bank Account | $200 | $200 |
| 23 | Husband | Commonwealth Bank Account | $17 | $17 |
| 24 | Wife | 2011 Subaru [motor vehicle] | $11,500 | $11,500 |
| 25 | Husband | 2011 VW [motor vehicle] | $17,600 | $17,600 |
| 26 | Wife | [Beatson] Consulting Services | Nil | Nil |
| 27 | Husband | Furniture | $1,000 | $1,000 |
| 28 | Joint | Sporting equipment | $2,500 | $2,500 |
| 29 | Husband | Photography equipment | $4,000 | $4,000 |
| 30 | Joint | Art work and valuables | $5,000 | $5,000 |
| 31 | Joint | Furniture | $13,750 | $13,750 |
| 32 | Joint | University scholarship fund | $20,000 | $20,000 |
| 33 | Joint | Plot at [Suburb G] Cemetery | $3,500 | $3,500 |
| Total | $3,266,310 | $3,266,310 | ||
| ADDBACKS | ||||
| Ownership | Description | Wife/de facto partner’s value | Husband/de facto partner’s value | |
| 34 | W | Moneys withdrawn from joint funds, proceeds of sale of shares and viridian line of credit since separation | Not known | Not known |
| 35 | W | Legal fees paid | $20,000 | $20,000 |
| 36 | H | Legal fees paid | $46,000 | $46,000 |
| 37 | H | Moneys withdrawn from viridian line of credit since separation | Not known | Not known |
| 38 | H | Proceeds of sale of shares | $55,000 | Nil |
| 39 | W | Proceeds of sale of shares | Nil | $58,063 |
| Total | $121,000 | $124,063 | ||
| LIABILITIES | ||||
| Ownership | Description | Wife/de facto partner’s value | Husband/de facto partner’s value | |
| 40 | Joint | Commonwealth Bank fixed mortgage | $493,552 | $493,552 |
| 41 | Joint | Line of Credit (CBA) | $206,000 | $206,000 |
| 42 | Joint | CGT on sale of [Suburb A] and [Suburb U] properties Husband’s liability (wife’s liability, if any, not known) | Not known | E$6,500 |
| 43 | H | Westpac Mastercard | $16,000 | $26,021 |
| 44 | Wife | Debt to Accountant | $2,500 | $2,500 |
| 45 | Joint | Debt to Accountant (for [Beatson] Super Fund) | $2,500 | $2,250 |
| 46 | Joint | Debt to [Suburb G] Council | $2,143 | $2,143 |
| 47 | H | Debt to [Mr H] | Nil | $73,376 |
| 48 | H | Debt to [Ms I] | Nil | $13,000 |
| 49 | Joint | Debt to [Ms I] | Nil | $79,000 |
| 50 | W | JB Hi-Fi Package Contract | $2,145 | $2,145 |
| Total | $724,840 | $906,487 | ||
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife/de facto partner’s value | Husband/de facto partner’s value | |
| 51 | Husband | [Beatson] Super Fund | 10% interest | $19,575 | $19,575 |
| 52 | Wife | [Beatson] Super Fund | 90% interest | $176,241 | $176,241 |
| 53 | Husband | -Spectrum Superannuation | Accumulation | $69,608 | $69,608 |
| -Commonwealth | Accumulation | $69,437 | $69,437 | ||
| - MLC | Accumulation | Nil | Nil | ||
| -BT | Accumulation | $112 | $112 | ||
| 54 | Husband | Other Super funds including [Company M], [Company BB] and [Company Q] | Unknown | Unknown | Nil |
| Total | $334,973 | $334,973 | |||
There are a number of issues arising from the balance sheet and each of these will now be dealt with.
Assets
With respect to the parties’ artwork and valuables (item 30), the parties have agreed as to the division in specie of the artwork and accordingly it will not be included in the balance sheet.
Add backs
Each of the parties has included on their side of the balance sheet items of now non-existent property which they seek to have “added back” against the other.
In the recent case of Bevan & Bevan [2013] FamCAFC 116, the Full Court (per Bryant CJ, Finn and Thackray JJ) said as follows in relation to add backs at [79]:
79. We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
With respect to paid legal fees (which each of the parties in this case seek to have added back against the other), notwithstanding the comments made in Bevan, the jurisprudence of this Court informs us that this is a discretionary matter for the trial Judge: Chorn and Hopkins (2004) FLC 93-204 (“Chorn and Hopkins”) at [56]; affirmed in Gollings & Scott [2007] FamCA at [47].
In Chorn and Hopkins, the following comments were made in relation to paid legal fees at [56]–[60]:
56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59. Outstanding legal fees themselves are generally not taken into account as a liability.
60. If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.
Considering the comments made in Bevan, it is not in the Court’s view appropriate that it should embark on an attempt to divide non-existing assets, except to the very limited extent proposed by Chorn and Hopkins in relation to paid legal fees which, it is noted, both parties seek to have added back against the other.
In relation to the wife’s paid legal fees (item 35), the Court in exercise of its discretion has decided that the agreed sum of $20,000 should be added back against her.
As to husband’s paid legal fees (item 36), it seems agreed between the parties that the husband’s legal fees to the extent of $16,000 were paid by the husband drawing upon his credit card account. In those circumstances, the legal fees claimed in the so-called add back will be reduced by that amount (from $46,000 to $30,000) and the quantum of the liability of the husband claimed as a credit card debt (item 43) will be reduced by a corresponding amount.
Equally, the wife says that the husband did not have the needs which would justify the withdrawal of $55,000 from the proceeds of the sale of shares (item 38). The Court agrees that this withdrawal was unnecessary and, in accordance with general practice, this item will be removed from the balance sheet. The Court will however take into account the withdrawal and utilisation of the funds when it comes to consider matters arising under section 75(2)(o).
In a similar fashion the wife withdrew and utilised a sum of $58,063 from the proceeds of the sale of shares and the husband seeks to have this added back against her (item 39). The wife says that the sum was legitimately spent on necessary family expenses, including fees for the children at the private schools which they attend with the consent of both parties. Once again, the Court will not include this item in the balance sheet but will take the sum, its procurement and application into account in its consideration of matters under section 75(2)(o).
There was nothing elucidated from the parties in relation to the withdrawals from the line of credit (items 34 and 37) and the other matters referred to in item 34, other than that each of the parties had some “not known” recourse to it. In the absence of acceptable evidence as to the quantum and application of the funds withdrawn by either party, the Court proposes to ignore these items.
Liabilities
There was no expert evidence of the liability for Capital Gains Tax on the sale of properties at Suburb A (B Street) and Suburb U (T Street) as claimed by the husband (item 42). The Court was not provided with anything other than the husband’s estimate, which it cannot accept as evidence of the liability. Accordingly, this item will deleted from the balance sheet and the liability, if any, will rest where it falls.
With respect to the husband’s Westpac Mastercard debt (item 43), the wife submitted that it should be removed from the balance sheet, since it is a debt acquired post separation at a time when, she asserts, the husband could have funded a reasonable lifestyle without those funds. The Court agrees with the proposition and will remove the balance of the husband’s credit card debt.
With respect to the joint debt owing to the accountant for the Beatson Super Fund (item 45), there is a slight differential between the parties’ assertions. At the hearing the Court was informed that the husband’s figure of $2,250 was an error and that it should be $2,500. The Court accepts the latter sum and will include it on the balance sheet.
Asserted liability to Mr H
As to the debt of $50,000 said to be jointly owed to Mr H (item 47), the evidence of the husband is that the sum was paid by Mr H to the parties as part of an agreement entered into in or around 2004 between the parties, Mr H and his wife, Ms H.
No signed document was produced in evidence; however, a draft “Share Agreement” was annexed to the affidavit of Mr H filed on 5 July 2013 and to the affidavit of the husband filed on 5 July 2013. The wife says in her affidavit that she does not recall signing this document.
Apart from the draft share agreement and the statements of the husband and Mr H contained in their affidavits and made orally, the only evidence before the Court in relation to these funds is a bank account statement (bearing no account name) which shows an electronic transfer of $50,000 on 1 December 2004, the day on which it was proposed the agreement was to take effect.
Mr H has commenced proceedings for the recovery of the amount; however, he has not done anything to continue the proceedings at this time. Counsel for the husband conceded that those proceedings as presently pleaded were in a state of difficulty.
It seems to the Court that if the share agreement were found to exist, it is not certain that it would be valid to give effect to the transfer of an estate or interest in land. In any event, based on the unsigned document before the Court, the share agreement if it did exist contains a specific provision stating that it was to become “nil (sic) and void” in the event of “serious financial hardship or marriage disintegration” of either of Mr H and Ms H or of the husband and wife. It was acknowledged by both Mr H and the husband that indeed both of these marriages had broken down.
The Court was informed by Counsel for the husband that her client was prepared to offer an indemnity to the wife in respect of the liability but the Court was asked to take its existence into account elsewhere in its determination.
The wife in her evidence asserts that while there was discussion along the lines of the share agreement, it did not ultimately come to anything. Her evidence is that she has no recollection of the receipt of the money from Mr H. The wife made inquiries in relation to her account to substantiate her position and was told by her bank that the documents were not available. That she made these inquiries seems to suggest to the Court that perhaps she was indeed uncertain.
The Court was informed somewhat inferentially that the process of tracing would be too long and too expensive and too delayed to be pursued by Mr H.
On the limited evidence available, the Court does not find that the liability exists as asserted by the husband and Mr H. It seems clear that the only way for the Court to deal with the issue is to accept the offer of the husband to indemnify the wife and to take the amount into account as a contingent liability of the husband (although, even if the agreement were found to exist, having regard to its terms it is still only a possibility that the contingency would be fulfilled and the debt become a reality). If evidence that the payment had been put to use by the husband and wife had been available, the situation might have been significantly different.
On its face, if it were found that the agreement existed and the payment was made, there would be a total failure of consideration and, in those circumstances, Mr H would probably be entitled to have it repaid. The evidence is insufficient however to establish the existence of the agreement and the making and receipt of the payment to the credit of the parties. The matter is one which can be resolved elsewhere.
Given the state of the evidence, the Court proposes to accept the husband’s proposal to indemnity the wife against the debt and it will remove the item from the balance sheet. That said, it will take into account the contingent liability of the husband when considering those matters which the Court is required to consider under section 75(2).
Asserted liabilities to Ms I
As to the amount of $13,000 said to be owed to Ms I by the husband (item 48), that sum by common accord was borrowed by the husband post separation. The Court will not include it in the balance sheet but will take the debt into account as a continuing debt of the husband when considering matters relevant under section 75(2).
In relation to the debt said by the husband to be jointly owed to Ms I (item 49), the amount provided by her to the parties is only agreed by the wife to the extent of sums of $20,000 and $30,000.
The wife and the husband agree that the amount claimed, whatever the quantum, is statute barred in any event. The Court however accepts that at least $50,000 was provided by Ms I and that it was utilised by the parties. The Court proposes to remove this item as a liability but to take it into account as a contribution made on behalf of the husband in its consideration of his entitlement to property based on contributions under section 79(4), balancing it appropriately with the other contributions made by each party.
Superannuation
The superannuation items listed on the balance sheet are agreed save for those listed as being from “other Super funds including [Company M], [Company BB] and [Company Q]” (item 54), for which the wife asserts an “Unknown” value and the husband asserts a “Nil” value.
There is insufficient evidence for the Court to find that these superannuation interests have any value and, accordingly, the Court will remove the item from the balance sheet.
It was suggested that the Court should contemplate division of the superannuation entitlements of the parties as a separate pool.
In Coghlan and Coghlan (2005) FLC 93-220 at [61]–[65] the Full Court stated that the “preferred approach” was to consider the parties’ contributions to superannuation interests separately from the list of other assets. That said, however, it was held that a trial Judge ultimately has discretion as to how superannuation interests are to be treated in any particular case.
In the more recent case of Paul & Paul (2012) FLC 93-505 (“Paul & Paul”), the Full Court said as follows at [47]:
47. The applicable legislation itself does not mandate a particular approach. The Full Court provides a suggested approach to be followed in cases involving superannuation interests. It is simply a suggested approach, although one which, in our view, has merit.
In Paul & Paul, a party appealed the decision of a Family Law Magistrate in Western Australia who had considered the parties’ superannuation interests together with their other assets. In dismissing the appeal, the Full Court held as follows at [51]:
51. True it is that his Honour neither separated the superannuation interests from the other assets nor specifically addressed post separation contributions to superannuation in his judgment, yet in so failing, in our view, he did not fall into appellable error. He had made it clear he was aware of the two different types of interests but appropriately here, over this long marriage dealt with them together.
In the Court’s view, having regard to the length of this marriage and to the direct and indirect contributions of the husband and wife overall to the property of the parties or either of them, including their superannuation interests, the Court will deal with the matter on the basis that there is one pool. In proceeding in this way, the Court will of course take into account each party’s contribution, both during marriage and post separation, to superannuation entitlements.
Having regard to the determinations above, the Court finds that the balance sheet should be adjusted as follows:
| Assets | ($) |
| C Street, Suburb D (j) | 2,250,000 |
| B Street, Suburb A (j) | 690,000 |
| Share of land in Europe (w) | 28,601 |
| Comsec CDIA share trading account (w) | 4,142 |
| Comsec Share Portfolio (w) | 17,650 |
| Comsec Share Portfolio (j) | 8,200 |
| Santos shares (j) | 20,000 |
| News Limited shares (j) | 9,000 |
| CBA Dividend Reinvestment Plan (w) | 83,000 |
| CSL shares (w) | 6,500 |
| James Hardie shares (w) | 21,200 |
| Westfield shares (w) | 3,190 |
| Telstra Shares (1,032 shares at $4.94) (h) | 5,098 |
| St George Bank account (w) | 17,500 |
| Bendigo Bank account (w) | 0 |
| Commonwealth Bank complete access account (w) | 9,758 |
| CBA Beaton Consulting Services account (w) | 3,273 |
| St George Beaton Consulting Services account (w) | 65 |
| CBA Smart Access account (j) | 5,178 |
| Westpac Esaver Bank account (h) | 9 |
| Westpac Choice Bank Account (h) | 4,879 |
| Commonwealth Bank Account (h) | 200 |
| Commonwealth Bank Account (h) | 17 |
| 2011 Subaru motor vehicle (w) | 11,500 |
| 2011 VW motor vehicle (h) | 17,600 |
| Beatson Consulting Services (w) | 0 |
| Furniture (h) | 1,000 |
| Sporting equipment (j) | 2,500 |
| Photography equipment (h) | 4,000 |
| Furniture (j) | 13,750 |
| University scholarship fund (j) | 20,000 |
| Plot at Suburb G Cemetery (j) | 3,500 |
| Total | $3,261,310 |
| Add backs | |
| Legal fees paid (w) | 20,000 |
| Legal fees paid (h) | 30,000 |
| Total | $50,000 |
| Total assets and add backs | $3,311,310 |
| Liabilities | ($) |
| Commonwealth Bank fixed mortgage (j) | 493,552 |
| Line of Credit (CBA) (j) | 206,000 |
| Debt to Accountant (w) | 2,500 |
| Debt to Accountant (for Beatson Super Fund) (j) | 2,500 |
| Debt to Suburb G Council (j) | 2,143 |
| JB Hi-Fi Package Contract (w) | 2,145 |
| Total | $708,840 |
| Superannuation | ||
| Name of fund | Type of interest | |
| Beatson Super Fund (h) | 10 per cent interest | 19,575 |
| Beatson Super Fund (w) | 90 per cent interest | 176,241 |
| Spectrum Superannuation (h) | Accumulation | 69,608 |
| Commonwealth (h) | Accumulation | 69,437 |
| MLC (h) | Accumulation | 0 |
| BT (h) | Accumulation | 112 |
| Total | $334,973 | |
| Total assets, add backs and superannuation | $3,646,283 | |
| Less liabilities | $708,840 | |
| Total net asset pool (incl. add backs and superannuation) | $2,937,443 | |
Whether the parties’ property interests should be altered
The wife and the husband were married for approximately 25 years but are now separated. The consortium vitae is at an end. The mutuality that was attendant between the parties during their marriage, including a significant measure of fiscal unity and cooperation, no longer exists.
There will be no common use of property henceforth, and the parties have no agreement as to how their assets should be held having regard to these events. The arrangements made for the ownership of property are not sufficient for the purposes of the husband and wife upon breakdown of their marriage.
In the circumstances, the Court finds that it is just and equitable to make an order adjusting the property interests of the parties, including their interests in superannuation.
It is to be noted that this was a long marriage, where contributions of a differential nature were made by or on behalf of the parties over a period of
29 years from the commencement of cohabitation to the date of the final hearing.
Section 79(4) contributions
Initial contributions
The wife had no assets or liabilities at the commencement of cohabitation.
The husband asserts that at the commencement of cohabitation he had $30,000 in the bank, being the loan from Ms I, and no liabilities.
With respect to the $30,000 from his mother, the husband’s evidence is that the money was transferred to him by his mother in late 1983 or early 1984 to enable the husband and wife to obtain a bank loan to purchase the C Street property. Either way, the Court notes that this was only a matter of months before the parties married and commenced cohabitation.
On the husband’s evidence, the arrangement with his mother was that Mr H was to be paid 50 per cent of the loan sum plus interest whenever he was ready to purchase a property. This occurred in 2000 when Mr H requested that he be paid his 50 per cent share of the $30,000 plus interest. By that time, the amount owing to Mr H had increased to $50,000.
The Court notes that, while this initial contribution by the husband enabled the parties to purchase the C Street property (now their most significant asset) and must accordingly be seen as a significant contribution, this must be viewed in the context that significant interest accrued on the liability to Mr H, which was discharged approximately 15 years later.
Contributions during cohabitation
It seems clear that for most of the relationship the husband was the primary breadwinner and applied his income to the benefit of the family. The wife similarly applied her income to the benefit of the family when she worked in paid employment and otherwise attended to the care of the children.
It was agreed by the husband that the wife was the primary carer for the children during the marriage. In his affidavit material, the husband made the following statements as to the wife’s departure from the workforce in 1996/97:
In 1996, after [E] was born, [the wife] and I discussed our finances and agreed [the wife] would stay at home until both children were in primary school rather than the children attending child care or being cared for by family members. Once both children were in primary school, it was agreed [the wife] would return to full-time employment.
It also appears to be the case that the wife kept accounts for the parties and was the primary manager of the household funds during the marriage. She was supported in her position by the husband when he was, having regard to the demands of his work, available to do so.
It is clear that the development of the wife’s career was to some extent subordinated to the fulfilling of her role as primary parent and homemaker, which both she and the husband accepted by agreement. Equally, the development of the husband’s skills and earning capacity was made possible by the wife fulfilling the role she had in the marriage, which freed the husband from the responsibility of performing those tasks.
With respect to the funds provided by Ms I to the parties, it seems that, although she is a statute-barred creditor and no item has been included on the balance sheet as a liability to her, she nevertheless made a contribution to the acquisition by these parties of significant wealth. That, on the positive side, needs to be taken into account as a contribution on behalf of the husband.
The wife draws the Court’s attention to the benefits which she says accrued to Ms I as a result of agreements made between her and the parties. The husband, however, points to the benefits conferred on the parties by reason of his mother’s occupancy of their home, namely: contributions to outgoings (for the S Street property), cleaning, minor gardening and child minding from time to time.
It is also accepted by the Court that the husband’s brother Mr H enjoyed a period of rent-free occupancy at the C Street property. He was later paid the sum of $50,000 by the parties, which represented the value of one half of the initial contribution made by Ms I plus interest which accrued over a period of 15 years.
It must also be noted here that the wife received an inheritance in her father’s estate following his death in 1988. As part of this inheritance, the wife received an interest in the European properties. The wife’s interest in the European properties expanded some years later, after the parties purchased the interests in those properties held by other family members. The present value of the European properties is slightly over $28,000. This does not comprise a substantial asset of the parties when considering their overall pool, however, this contribution has nonetheless been considered as one on the wife’s part.
Although the wife claims that she also received a half share in the Suburb K property as part of her inheritance in Mr J’s estate, she appears to have instead received an invitation to purchase a half share in that property from her mother the following year, at less than market value. The parties sold the wife’s half share in the property to Mr L approximately seven years later, realising some financial benefit.
During the period of cohabitation various renovations were undertaken to properties owned by the parties, which no doubt increased the value of those properties substantially.
The wife says that she managed the renovation of the C Street property in 1996/97. She further asserts that for three months while the parties vacated the property they lived with her friend and her mother.
With respect to the renovation of the C Street property in around 2002/03, the wife says that she contributed the following:
(a)Arranged the architectural drawings.
(b)Organised the engineer.
(c)Went through the process of having the plans approved by Council.
(d)Arranged the various trades to attend and complete the work.
(e)Made the design choices in consultation with the architect for the finishes, details and design issues that came along.
(f)Supervised the construction work.
(g)Checked the quality of the build by the trades involved.
(h)Dealt with the invoicing and payment for the project.
(i)Coordinated the ordering and supply of the materials on site.
Following completion of the above, the wife says that she managed the external and landscaping works undertaken in 2004, using “various contacts of [her] family and particularly [her] brother, [Mr L], to arrange for the completion of the work”.
The husband says that between October 2008 and January 2009 he project managed more renovation works at the C Street property, despite the fact that he was working full-time. He asserts that his contribution included the following:
·attending morning and afternoon meetings with the sight (sic) foreman
·discussing and making decisions on fittings
·painting the majority of the exterior of the house
·painting the interior of the new room
·managing the complete interior fitout
·fitted gutter guard with my brother-in-law
·managed council inspections
·arranged payments
·organised suppliers
It is clear from the above that both the wife and the husband were involved in projects designed to improve the C Street property, perhaps to varying degrees at different times, but no doubt to the full extent they were each able, given the other commitments they had to work or to care for the children.
With respect to the parties’ investment properties, it appears that the wife made a greater contribution than the husband to the acquisition and improvement of those properties and she should be recognised for these efforts. In particular, the wife made a significant contribution in terms of purchasing investment properties and then organising and managing renovations to them. The wife says that much of the work she did was completed with the help of her brother, Mr L. In addition, when these properties were rented, the wife took charge of managing agents and dealing with tenancy issues as they arose.
The wife’s contribution in this regard to the N Street, B Street, S Street and T Street properties would have taken considerable time and resulted in substantial gains for the parties. That is not to say that the husband made no contribution to the parties’ investment properties, but that the wife’s contribution in this regard was clearly greater.
Post separation contributions
As was pointed out by Counsel for the husband, the parties did not commence to effectively separate their affairs until 2011. Indeed, during both the period of cohabitation and after separation, the wife continued with the role which she had undertaken during the marriage of primary homemaker and parent.
The husband was, as already noted, the breadwinner during the marriage. In the post separation period, he also contributed his redundancy package to the reduction of joint debt, although his entitlement to that redundancy package was in part by reason of his ability to obtain gainful employment within the period of cohabitation.
Since separation, the child F has spent equal time with the parties and it appears that this arrangement will continue.
Despite the terms of the final parenting orders made in 2012, which were intended to effect a shared parenting arrangement, the child E requested to live with the husband earlier this year. Since February 2013, E has lived with the husband full-time. The wife asserts that E has expressed a wish to return to live with her for two to three days per week, however, the husband denies this and the Court cannot on the evidence be satisfied that this will occur.
Some complaint was made by the wife about the husband’s contribution to the expenses of the children post separation. The Court is informed that the husband has met the assessments of the CSA when notified, however, it is noted that his income has increased significantly since the earlier child support assessments were undertaken in 2011 and 2012.
The wife criticises the husband for not promptly informing the CSA of changes in his financial affairs. Similarly, the husband criticises the wife for not telling the CSA of the change in E’s place of residence in January this year (and the husband concedes that he has also not informed Centrelink or the CSA of the change in living arrangements).
In his affidavit filed on 5 July 2013, the husband asserts that he has paid a total of $5,406.94 in child support since the commencement of 2013. The husband also asserts that, in addition to child support, he pays (or has paid) the following expenses for the children:
(a)Mobile telephone costs for both children
(b)Purchase of sporting equipment and clothing
(c)Purchase of new computer for [E]
(d)Provision of pocket money for expenses such as spending money for going out with friends
(e)Purchase of formal tickets and big day out tickets
(f)School uniforms
(g)School books
(h)Tutoring for [E]
(i)Clothing for [E]
The Court is given to understand by the husband that it is his intention to meet half of the children’s school fees in addition to the ongoing child support payments.
Conclusion based on contribution
All in all, I assess the contributions of the husband and wife to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of both or either of them, to be 51.5 per cent to the husband and 48.5 per cent to the wife.
Section 75(2) considerations
The relevant matters for consideration under this subsection in this case are as follows.
The husband is aged 52 years and appears to be in good health.
The wife is aged 51 years and complains of suffering from depression and anxiety. No medical evidence was produced in relation to her condition.
The wife suggests in her evidence that she has suffered from a lack of confidence and low self-esteem since 2005 but that this became “more acute” following the alleged assault against her by the husband in July 2008. She asserts that since that incident, she has not functioned as effectively in the workplace and has had difficulty dealing with what previously were considered by her to be simple issues. The wife also seemed to suggest that her condition was in part due to the pendency of these proceedings.
Notwithstanding the above, the wife informed the Court that she intends to seek employment next year consistent with what she sees as her duty to her children. There is no evidence of any continuing impairment of the wife’s health and the Court has no doubt the finality of these proceedings will assist her to remove that as a cause of her complained condition, if it be a cause.
The husband’s capacity to earn is clearly greater than that of the wife, although the wife does have a capacity for gainful employment. She has experience in a financing area and a clear record of employment in that field. While she says that opportunities exist for employment in that area, she informs the Court that the income on offer in that area is at the lower end of the scale for similar jobs in other industries.
Recently the wife has worked as a manager three days per week for an income of approximately $50,000 per annum (or $953.76 per week) for those three days. Based on those figures, the Court finds that the wife has an earning capacity for full-time work on a direct pro rata basis to probably in excess of $80,000 per annum.
It is the Court’s view that, as the dependency of the children decreases and the wife puts this legal battle behind her, the wife will within a fairly short time be able to return to work. It is noted that her own evidence was that she would do so “next year”.
The husband has a demonstrated capacity to earn a solid income in his industry and he presently works in a marketing role within that industry. He has also worked in sales. The husband is presently in the ranks of junior executives and has a gross salary of $175,000 per annum. His package provides benefits of close to $200,000 per year including superannuation.
Part of the husband’s employment involves the right to be considered for a discretionary bonus. On this note, the husband says that such bonuses do not exceed 30 per cent and do not usually reach that sum. He also says that there is no guarantee that bonuses are paid.
Having regard to the husband’s comments about the hours he works, he appears to be devoted to his employment and to have been able to secure a steadily increasing income. He asserts that his area of marketing tends to involve contract work; nevertheless, it is probable that his skills and experience in sales and marketing would stand him in good stead in any application of them.
The property of the parties is as set out above. The parties have each had some financial resources in addition to their earning capacity, which is demonstrated in the support they have received from their families. Whether that support can and will continue is uncertain and it is unlikely to be to the same extent.
The Court’s determination of the parties’ property entitlements based only on a consideration of contributions, the wife would receive net assets totalling $1,424,660 and the husband would receive net assets totalling $1,512,783.
The child E presently resides with the husband and the child F with the wife. The wife asserts that E has asked that she return to live with the wife and the husband asserts that she has said she wishes to stay with him. No definitive finding can be made on that issue, other than that the parties have had and no doubt will continue to have a close interest in and a desire to continue in a supporting role for both of the children.
E is 17 years old and F is 15 years old. Given their age, their dependency on the husband and wife at the present level will not continue for too long into the future. That said, however, the parties appear to agree that it is likely that both children will study at university and, if that is the case, they will require continuing support while obtaining their tertiary qualifications.
Each of the parties has filed statements of their financial affairs. The Court finds that some of their expenditure which might well have been commonplace during the cohabitation is not presently reasonable. Without detailing that expenditure, it seems that the parties need to accept that two people living separately cannot live as cheaply as they could living together, and that there necessarily must be a reduction in the standard of living that they and the children can enjoy in the changed circumstances. No-one in the family is immune from the financial effects of marriage breakdown.
Each of the parties will have liabilities for the costs of these proceedings. The husband, in addition, has a liability to his mother of $13,000 which was not included on the balance sheet but will be taken into account under this subsection.
The children are presently attending private schools, which schools they were enrolled at with the consent of both parties. It is the view of the parties that the fees and costs of the children must be shared. It is clear that, absent an adjustment under s 75(2), this obligation would by a margin be more easily borne by the husband than the wife.
The wife has no duty to maintain any person other than herself and the children. She and the husband have a responsibility to support the children until at least they are 18 years. No doubt each of them will feel obliged to assist so far as they are able to do so each of the children through their university career if indeed that career is undertaken.
The wife is in receipt of Family Tax Benefits Parts A and B through which she receives the benefit of $141 per week. There is no evidence of any other pension, allowance or benefit applicable to either of the parties under a law of the Commonwealth or a State.
There is evidence of the parties’ entitlements to superannuation which is as set out above and of which the Court is aware.
These parties have separated and are divorced and their standard of living is unlikely to be maintained at the level that they enjoyed prior to the separation. With the adjustment proposed to be made in these proceedings, it is the finding of the Court that each of them will be able to live at a standard of living that is reasonable subject to the wife re-engaging in full-time employment in the near term.
There is not from either party a proposal that they wish to engage in vocational training or education to improve their earning capacity.
The husband’s mother, who has an enforceable debt against the husband for the sum of $13,000, is not likely to be disadvantaged in her position as a creditor by the making of these orders. The most significant other creditors are secured creditors and, in the case of each of the parties, the amount provided for by the orders which the Court proposes to make will be such that no creditor would be denied the ability to recover debt. The husband has offered an indemnity for any successful claim made by his brother and the Court has taken into account the contingent liability of the husband to his brother as a factor in determining a just and equitable result.
It seems that throughout this marriage the husband has devoted himself to the breadwinner role. The wife whilst earning an income at various times was by common consent the carer of the children. The wife’s contribution to the ability of the husband to earn an income, develop his skills and gain his professional reputation was significant, and he could not have achieved that but for the role which the wife fulfilled. In this way not only did the wife make a significant indirect contribution to the earnings of the husband, but she also contributed to his earning potential. She similarly made an indirect contribution to the redundancy payment utilised by the husband to reduce the parties’ liabilities after separation. Clearly some of the entitlement to that redundancy payment was built up during the cohabitation of the parties and in the post separation period when the wife continued her primary role as carer for both children.
To the extent that the discharge of parental responsibility has an effect on the development or loss of earning capacity in the parties it must be acknowledged. The role that the wife fulfilled during the marriage has not removed her earning capacity, but she may have developed a greater earning capacity than she now enjoys had she not applied herself to the role assigned to her. The husband, for the present time, is contributing indirectly to the earning capacity of the wife in that he is primarily responsible for the care of E. The parties each wish to continue in their roles as parents and each is fulfilling that role. The wife says that there is likely to be a change in the way that parental responsibility is discharged in the near future, but the Court does not find that it is possible to say that is true on the evidence before it.
The wife has not re-partnered. Although it appears that the husband has a new relationship, there is no evidence before the Court of the financial effect on him of that relationship. In Part E of his Financial Statement filed on 5 July 2013 there is no other person listed as an income earner in his household.
The Court takes into account the orders it proposes to make under the provisions of section 79 and the benefits that accrue to each of the parties thereby.
As noted previously in these reasons, the husband has a contingent liability to his brother, which is the subject of the indemnity he offers to the wife. The Court will take that contingent liability into account in determining the appropriateness of any adjustment under s 75(2)(o).
The Court will also take into account as matters relevant to s 75(2)(o) the funds which the parties utilised from the proceeds of the sale of shares post separation (approximately $55,000 by the husband and approximately $58,000 by the wife), which were not added back against the parties on the balance sheet.
The Court will in the circumstances of this case take into account all of the matters referred to above as factors relevant to an adjustment under s 75(2).
Conclusion on section 75(2)
For all the reasons referred to above and in particular the superior earning capacity of the husband, the Court assesses that there should be an adjustment to its assessment of the contribution-based entitlement in the order of 7 per cent in favour of the wife.
On the found net asset pool of these parties, that will afford the wife an additional entitlement of $205,621.
The Court finds that in all the circumstances of this case and, without limiting the generality of its considerations under section 75(2), the inferior earning capacity of the wife in particular, such an adjustment is necessary to produce a just and equitable result as between these parties.
Overall division of assets
The above determination will see the wife receive 55.5 per ceent of the parties’ net assets and the husband receive 44.5 per cent thereof.
Just and equitable
The above division of assets above will see the wife receive $1,630,281 worth of net assets and superannuation interests and the husband receive $1,307,162 worth of net assets and superannuation interests.
In the circumstances of this case, I determine that result to be just and equitable.
Orders which should be made
I propose orders which will give effect to the following division.
The wife will receive:
| Assets | ($) | |
| One-half of gross sale proceeds of the C Street property | E 1,125,000.00 | |
| One-half of gross sale proceeds of the B Street property | E 345,000.00 | |
| Share of land in Europe | 28,601.00 | |
| CommSec CDIA share trading account | 4,142.00 | |
| Wife’s CommSec share portfolio | 17,650.00 | |
| One-half of the joint CommSec share portfolio | 4,100.00 | |
| One-half of the Santos shares | 10,000.00 | |
| One-half of the News Limited shares | 4,500.00 | |
| CBA Dividend Reinvestment Plan | 83,000.00 | |
| CSL shares | 6,500.00 | |
| James Hardie shares | 21,200.00 | |
| Westfield shares | 3,190.00 | |
| St George Bank account | 17,500.00 | |
| Commonwealth Bank complete access account | 9,758.00 | |
| CBA Beatson Consulting Services account | 3,273.00 | |
| St George Beatson Consulting Services account | 65.00 | |
| One-half of the CBA Smart Access account | 2,589.00 | |
| Subaru motor vehicle | 11,500.00 | |
| Furniture in the wife’s possession | 13,750.00 | |
| One-half of the University Scholarship Fund | 10,000.00 | |
| Burial Licence at Suburb G Cemetery No. … | 3,500.00 | |
| Legal fees paid by the wife | 20,000.00 | |
| Wife’s interest in the Beaton Superannuation Fund | 176,241.00 | |
| Settlement adjustment to be paid by the husband to the wife | $65,964.50 | |
| Total assets (incl. superannuation) | $1,987,023.50 | |
| Liabilities | ($) | |
| One-half debt to accountant (joint) | 1,250.00 | |
| Wife’s debt to accountant | 2,500.00 | |
| · | One-half of the debt to Suburb G Council | 1,071.50 |
| · | JB Hi Fi package contract | 2,145.00 |
| · | One-half of the mortgage to Commonwealth Bank | 246,776.00 |
| · | One-half of the Line of Credit to the CBA | 103,000.00 |
| · | Total liabilities | $356,742.50 |
| Total net assets (incl. superannuation) | $1,630,281.00 |
The husband will receive:
| Assets | ($) |
| One-half of gross sale proceeds of the B Street property | 1,125,000.00 |
| One-half of gross sale proceeds of the C Street property | 345,000.00 |
| One-half of the joint CommSec share portfolio | 4,100.00 |
| One-half of the Santos shares | 10,000.00 |
| One-half of the News Limited shares | 4,500.00 |
| Telstra shares | 5,098.00 |
| One-half of the CBA Smart Access account | 2,589.00 |
| Westpac Esaver Bank account | 9.00 |
| Westpac Choice Bank account | 4,879.00 |
| Commonwealth Bank account | 200.00 |
| Commonwealth Bank account | 17.00 |
| VW motor vehicle | 17,600.00 |
| Furniture | 1,000.00 |
| Sporting equipment of the husband | 2,500.00 |
| Photography equipment | 4,000.00 |
| One-half of the University Scholarship fund | 10,000.00 |
| Legal fees paid | 30,000.00 |
| Husband’s interest in the Beatson Superannuation Fund | 19,575.00 |
| Spectrum Superannuation accumulation fund | 69,608.00 |
| Commonwealth Bank accumulation fund | 69,437.00 |
| BT accumulation fund | 112.00 |
| Total assets (incl. superannuation) | $1,725,224.00 |
| Liabilities | |
| One-half debt to accountant (joint) | 1,250.00 |
| Debt to Suburb G Council | 1,071.50 |
| One-half of the Commonwealth Fixed Mortgage | 246,776.00 |
| One-half of the Line of Credit CBA | 103,000.00 |
| Settlement adjustment to be paid by the husband to the wife | 65,964.50 |
| Total liabilities | $418,062.00 |
| Total net assets (incl. superannuation) | $1,307,162.00 |
I certify that the preceding one-hundred and ninety-four (194) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 2 September 2013.
Associate:
Date: 2 September 2013
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Civil Procedure
Legal Concepts
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Remedies
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Costs
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Jurisdiction
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Procedural Fairness
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Statutory Construction
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Injunction
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