Berger & Berger
[2023] FedCFamC2F 1477
•20 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Berger & Berger [2023] FedCFamC2F 1477
File number(s): MLC 7603 of 2021 Judgment of: JUDGE GLASS Date of judgment: 20 November 2023 Catchwords: FAMILY LAW – PROPERTY - treatment of liability - assessment of contributions - whether adjustment is warranted Legislation: Family Law Act 1975 (Cth) ss 75, 79, 81, 117B
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06, 10.17
Cases cited: Adamson & Adamson (2014) FLC 93-622
Anson & Meek (2017) FLC 93-816
Biltoft & Biltoft (1995) FLC 92-614
Chapman & Chapman (2014) FLC 92-592
Elmanu & Elmanu (2022) FLC 94-116
Frederick & Frederick (2019) FLC 93-900
Fox v Percy (2003) 214 CLR 118
Kingston & Field (No 2) (2020) FLC 93-986
Lennon & Sanil (2020) FLC 93-962
Mellone & Mellone (2023) FLC 94-160
Stanford v Stanford (2012) 247 CLR 108
Phe & Leng (2019) FLC 93-887
Preston & Preston (2022) FLC 94-108
Prince & Prince (1984) FLC 91-501
Russo & Wylie (2016) FLC 93-747
Weir & Weir (1993) FLC 92-338
Division: Division 2 Family Law Number of paragraphs: 76 Date of last submission/s: 10 November 2023 Date of hearing: 9-10 November 2023 Place: Melbourne Counsel for the Applicant: Ms Swart Solicitor for the Applicant: Hartleys Lawyers Counsel for the Respondent: Mr Taghdir Solicitor for the Respondent: Family Law Life ORDERS
MLC 7603 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BERGER
Applicant
AND: MR BERGER
Respondent
ORDER MADE BY:
JUDGE GLASS
DATE OF ORDER:
20 NOVEMBER 2023
THE COURT ORDERS THAT:
1.Within 60 days, the Wife pay to the Husband the sum of $339,952.
2.Contemporaneously with the payment:
(a)the Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife at the expense of the Wife all of his right, title and interest in the real property situate at and known as B Street, Suburb C and being the whole of the land more particularly described in Certificate of Title Volume … Folio … ("the Suburb C property"); and
(b)the parties to do all such things and sign all necessary documents to discharge the existing mortgage over the Suburb C property and the Wife to refinance the mortgage into her name.
3.In the event the wife is unable to comply with paragraphs 1 and 2 within 60 days, the parties forthwith do all such acts and things necessary as may be required to cause the Suburb C property to be placed on the market for sale, after which it is to be sold ("the sale") at the earliest possible date.
4.To facilitate the sale of the Suburb C property:
(a)the nearest D Conveyancers be appointed to act as the conveyancer in the sale;
(b)the selling agent of the Suburb C property is to be determined by written agreement between the parties and if no agreement is reached within 14 days after the date, the selling agent is to be appointed by the President of the Real Estate Institute of Victoria or his or her nominee;
(c)the asking or reserve price of the Suburb C property be set by agreement between the parties in writing and failing agreement the asking or reserve price be set by the President of the Real Estate Institute of Victoria or his or her nominee; and
(d)as soon as practicable after the appointment of the selling agent the parties request a list of recommended repairs and essential works to be completed to prepare the Suburb C property for sale from the agent, with the costs to be borne by the parties in equal share.
5.The proceeds of sale of the Suburb C property be disbursed as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge any mortgage and any other encumbrances affecting the former matrimonial home other than any Caveats lodged by the parties or on behalf of the parties by their respective solicitors;
(c)thirdly, the sum of $339,952, together with interest calculated from the date of the Wife’s default with paragraphs 1 and 2 above in accordance with rule 10.17 of Federal Circuit and Family Court of Australia (Family Law) Rules 2021; and
(d)fourthly, the balance then remaining to the Wife.
6.Pending the sale of the Suburb C property:
(a)the Wife shall be solely liable for all outgoings on the former matrimonial home, including but not limited to mortgage repayments, rates, insurance, electricity, gas, water, and internet services and shall ensure that payments are made as and when they fall due;
(b)the Wife shall cooperate and take all necessary steps and execute all necessary documents as reasonably necessary to facilitate any inspections of the former matrimonial home by the selling agent and potential purchasers;
(c)the Wife shall maintain the former matrimonial home, including but not limited to keeping the property in a good, reasonable and presentable condition and state of repair for sale;
(d)other than to facilitate compliance with these Orders, neither party shall further encumber the former matrimonial home without the consent in writing of the other;
(e)the joint tenancy of the former matrimonial home is hereby expressly severed; and
(f)each party shall hold their respective interests in the former matrimonial home on trust in accordance with the provisions of these Orders.
7.Paragraphs 8 to 10 inclusive of these Orders are binding on Superannuation Fund 1 ("the Trustee") as Trustee of the Superannuation Fund 1 Trust, employer plan V Company Superannuation Plan ("the Superannuation Fund").
8.The base amount to be allocated to the Wife out of interests of the Husband in this Superannuation Fund (member number …) is $40,694 (“the base amount”).
9.Pursuant to Section 90XT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment becomes payable in respect of the interest of the said Husband in the Superannuation fund, member number …, the Wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 ("the Regulations") using the base amount and there be a corresponding reduction in the entitlement of the Husband.
10.Order 9 has effect from the operative date.
11.The operative date for the purpose of these Orders is the fourth business day after the day on which a certified copy of the sealed Orders is served on the Trustee of the Superannuation Fund.
12.The Husband be responsible for and indemnify the Wife, and keep her indemnified for any liabilities in his name including but not limited to all claims, demands, interests, rights, proceedings and judgements and the Husband make all payments, including but not limited to all costs, repayments, interest or other liabilities, as and when they fall due including but not limited to all credit cards and personal debts in his name, and any tax debts he may have.
13.The Wife be responsible for and indemnify the Husband, and keep him indemnified for any liabilities in her name including but not limited to all claims, demands, interests,
rights, proceedings and judgements and the Wife make all payments, including but not
limited to all costs, repayments, interest or other liabilities, as and when they fall due
including but not limited to all credit cards and personal debts in her name, and any tax
debts she may have.
14.In relation to the company E Pty Ltd ("the company"):
(a)the Wife retain all of the rights and interest in the company;
(b)the Husband relinquishes any claim he may have in relation to the company; and
(c)the Wife be responsible and otherwise indemnify the Husband and keep the Husband indemnified in relation to all liabilities associated with the past, or present running of the company including but not limited to loans, taxation liabilities incurred by the company prior to separation and any future taxation liabilities and the Wife on behalf of the company pay those liabilities as and when they fall due at the date of execution of this agreement.
15.In relation to the property situate at F Street, City G in Country H (“the Country H property”):
(a)the Wife retain all of her right, title and interest in the Country H property to the exclusion of the Husband;
(b)the Husband relinquishes any claim he may have in relation to the Country H property; and
(c)the Wife be responsible and otherwise indemnify the Husband and keep the Husband indemnified in relation to all liabilities associated with the past, or present in relation to the Country H property including but not limited to loans, taxation liabilities incurred in relation to the property prior to separation and any future taxation liabilities, and the Wife pay those liabilities as and when they fall due.
16.The Wife shall retain possession and interest in any motor vehicles in her possession and shall be solely liable for all outgoings with respect to her motor vehicle and shall ensure that all payments are made as and when they fall due.
17.The Husband shall retain possession and interest in any motor vehicles in his possession and shall be solely liable for all outgoings with respect to his motor vehicle and shall ensure that all payments are made as and when they fall due.
18.Unless otherwise specified in these Orders and except for the purpose of enforcing the payment of any moneys under these or any subsequent Orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party at the date of these Orders save as provided for in these Orders;
(b)any money standing to the credit of the parties in a bank account is to be retained by the party in whose name the account appears;
(c)each party hereby forgoes any claim they may have to any superannuation or pension benefit and /or any interest in any trust or deceased estate that is payable to or belonging to or owned by the other save as provided for in these Orders;
(d)all insurance policies are to become the sole property of the owner named therein;
(e)each party be solely liable for and indemnify the other against any liability in their sole name including but not limited to any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
19.All extant applications be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE GLASS:
Mr and Ms Berger commenced cohabitation in 2002, married in 2003, and ceased cohabitation in 2020. They divorced in 2022. They have two children, Mr X and Y, aged 18 and 14 years respectively.
Arising for determination are the parties’ competing applications for orders altering their interests in property. Both parties amended their proposals in closing address.
Mr Berger proposes the sale of the parties’ former matrimonial home in Suburb C. He proposes that he retain 45% of the value of the parties’ interests in property through a distribution of the sale proceeds. He also proposes a superannuation split from his interest in Superannuation Fund 1 in the amount of $38,525.
Ms Berger proposes that she retain the parties’ former matrimonial home and make a payment to Mr Berger such that he receive 38% of the value of the parties’ interests in property. She also proposes a superannuation split from Mr Berger’s interest in Superannuation Fund 1 in the amount of $43,544.
FACTUAL ISSUES
Unsurprisingly given the effluxion of time, a number of factual assertions made by each party is disputed by the other. As far as possible, findings will be made on the basis of the available contemporaneous material, objectively established facts, and the apparent logic of events.[1]
[1] Fox v Percy (2003) 214 CLR 118 at [31] per Gleeson CJ, Gummow & Kirby JJ.
The Court usually refrains from making specific adverse credit findings if the legitimate disposition of the case can be achieved otherwise.[2] Here, both parties failed to cross-examine each other about a number of relevant disputed issues. It is accordingly necessary to make findings about the reliability of the parties’ evidence and the weight to be given to it.[3] Demeanour is an accepted forensic tool to which I may resort to help resolve uncorroborated conflicts in the evidence.[4]
[2] Adamson & Adamson (2014) FLC 93-622 at [89]-[90], quoting Carlson & Fluvium [2012] FamCA 32 at [165]-[169].
[3] Lennon & Sanil (2020) FLC 93-962 (“Lennon & Sanil”) at [27].
[4] Lennon & Sanil at [20].
Ms Berger submits that a general credit finding ought be made in her favour. She relies on inconsistencies in Mr Berger’s evidence in relation to shares held by him through his employer’s share plan. He deposes as follows:
The shares from my employer currently valued at $42,711 are a resource that are not available to me. I cannot liquidate these shares. If I resign from my employer I do not receive the shares. If I am terminated I do not receive the shares.[5]
[5] Mr Berger’s Affidavit filed 6 October 2023, paragraph 20.
Inconsistently, he gave oral evidence that the shares are available to him upon his resignation or retrenchment. Mr Berger had initially contended that his shares represented a financial resource, but conceded during the course of the hearing that they were his property. Mr Berger was cross-examined at some length on the topic. He gave evidence that he had relied on information received verbally from his human resources department and that the plan’s terms and conditions were gibberish to him. I accept that his failure to obtain a copy of the Share Plan Rules was the result of a misunderstanding by him.
I do not accept that the inconsistencies in Mr Berger’s evidence in relation to his shares generally impeach his evidence. His oral evidence was otherwise given in a thoughtful and considered manner. He was responsive to questions asked of him and made concessions that were unhelpful to his case.
The manner in which Ms Berger gave oral evidence was in stark contrast to Mr Berger. She required regular direction to answer the questions posed to her. Rather than answer questions, she regularly sought to give unrelated evidence. She was generally disinclined to concede anything she perceived to be adverse to her case. She made bald conclusory statements that she subsequently conceded were untrue.
Ms Berger also gave erroneous evidence to the Court. She had sworn an affidavit on 25 October 2023 misrepresenting a number of factual matters relating to the mortgage on a property in Suburb J. She failed to correct all of those errors in her evidence in chief, requiring Mr Berger’s counsel to spend significant time in cross-examination clarifying precisely what was erroneous in her affidavit.
More fundamentally, Ms Berger swore a Financial Statement on 25 October 2023 in which she deposed that “I have no income, property or financial resources other than as set out in this document”.[6] She also deposed in her affidavit filed the following day that she has not “received income or benefit from” an apartment in which she holds a one-third interest in Country H “for 26 years”.[7] She also therein deposes that “I do not derive any benefit from this property”.[8] She averred to the accuracy of both documents in her evidence in chief.
[6] Ms Berger’s Financial Statement filed 25 October 2023, page 1.
[7] Ms Berger’s Affidavit filed 26 October 2023, paragraph 58(h).
[8] Ms Berger’s Affidavit filed 26 October 2023, paragraph 139.
What emerged from Ms Berger’s evidence in cross-examination is that the Country H apartment currently generates rental income which is deposited into an account in Country H. She acknowledged that she has an interest both in that income and the account. Her depositions referred to in the previous paragraph are accordingly false. Her failure to make any enquiries as to the extent of the income or the value of the account is inconsistent with her duty of disclosure,[9] something she also deposes to having complied with in her Financial Statement.
[9] Federal Circuit and Family Court of Australia (Family Law) Rules 2021, rule 6.06.
I conclude that to the extent it is necessary to prefer one party’s uncorroborated evidence to the other’s, I prefer Mr Berger’s evidence.
STATUTORY FRAMEWORK
Pursuant to section 79 of the Family Law Act 1975 (Cth), I have a discretion to make such order altering the parties’ interests in property as I consider appropriate. I am prohibited from making an order unless I am satisfied, in all the circumstances, it is just and equitable to do so.[10] If I am so satisfied, I am required to consider the matters prescribed by subsection 79(4) of the Act and by the device of paragraph 79(4)(e), relevant matters referred to in subsection 75(2) of the Act.
[10] Family Law Act 1975 (Cth), s 79(2).
PROPERTY INTERESTS
It is necessary to begin by identifying, according to common law and equitable principles, the existing legal and equitable interests of the parties in property.[11] For reasons that follow, I find those interests to comprise the following:
[11] Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) at [37].
Asset O'ship Value B Street, Suburb C Jt $1,700,000 less mortgage Jt ($483,347) NAB Offset Account #...59 H $370,150 Motor Vehicle 1 H $9,500 Shares H $37,698 Part Property Settlement H $100,000 One-third interest in Country H Apartment W $100,000 Motor Vehicle 2 W $18,000 Part Property Settlement W $100,000 Income Tax W ($46,890) Total non-superannuation interests $1,905,111 Superannuation Fund 1 H $224,410 Superannuation Fund 2 H $100,651 Superannuation Fund 3 W $243,674 Total superannuation interests $568,735 Total property interests $2,473,846
Mr Berger asserts that Ms Berger has a one-third interest in an apartment in Country H at F Street, City G worth $100,000 based on valuation evidence obtained by him to which no objection was taken. Ms Berger accepts that she has a one-third interest in the property, but contends its value to be $60,000.
Ms Berger did not challenge Mr Berger’s evidence that she failed to comply with Orders providing for the valuation of the property, having stated in correspondence that:
I am of the view the property is unlikely to be given a value for the purpose of the matrimonial asset pool for distribution. Therefore, to spend a few thousand euros on a valuation on a one-third share of a basic apartment seems wasteful.[12]
[12] Mr Berger’s Affidavit filed 6 October 2023, paragraph 81.
Ms Berger’s evidence in relation to her interest in the Country H apartment is contradictory. She deposes to her one-third interest in it having been transferred to her in 1997 by her father, but that she “cannot make claim to this right under [Country H] law”.[13] Inconsistently, she deposes that “to sell it I would need to initiate a costly legal dispute with my brothers”, which she contends would “likely exceed any financial benefit from the sale”.[14]
[13] Ms Berger’s Affidavit filed 26 October 2023, paragraph 58(h).
[14] Ms Berger’s Affidavit filed 26 October 2023, paragraph 137.
Contrary to her affidavit evidence, Ms Berger conceded in cross-examination that rental income from the property is deposited into a bank account in Country H in which she has an interest. She accordingly derives a present benefit from the property even if she chooses not to inform herself about it. I find no basis to discount the value of the property by reason of any difficulties Ms Berger might face in selling the apartment.
Ms Berger deposes that she has “investigated the average market price of a two-bedroom, one bathroom property in that area (based on the advertised market value of 13 similar properties) and assessed my one-third share of the [Country H] property cannot be anymore than $60,000.”[15] Certainly, she can give some evidence by way of admission as to the value of real estate owned by her, but the weight to be given to that evidence is very much less than the weight given to it by a professional valuer.[16] She neither objected to, nor challenged the professional valuation obtained for the property and relied on by Mr Berger. She failed to comply with Orders for the preparation of a joint valuation. Finding no basis to reject that valuation, I find the value of the Country H property to be $100,000, as expertly valued.
[15] Ms Berger’s Affidavit filed 26 October 2023, paragraph 139.
[16] Frederick & Frederick (2019) FLC 93-900 at [39].
Ms Berger asserts that her Higher Education Contribution Scheme debt of $59,292 ought be included as a joint liability of the parties. Mr Berger asserts it should not be so characterised. Although generally the value of the property of the parties is ascertained by deducting from the value of their assets the total value of their liabilities, it is open to not take into account unsecured liabilities.[17] The effect of not including a liability in that calculation is that Mr Berger is not called upon to contribute to the liability.[18]
[17] Biltoft & Biltoft (1995) FLC 92-614 at 81,124, 82,127.
[18] Prince & Prince (1984) FLC 91-501 at 79,076 per Evatt CJ, citing Af Petersens & Af Petersens (1981) FLC 91-095.
Ms Berger studied from mid-2015 before being receiving a qualification in early 2019. She now works as a professional. The parties jointly determined not to pay her tuition fees as they were incurred, electing to borrow necessary funds from the Commonwealth. Ms Berger is now solely benefiting from the qualification through her income and earning capacity. She is required to make repayments towards the liability only if she generates sufficient income to do so.
Ms Berger submits that the debt ought be treated as a joint liability because the family have benefited from her income as a lawyer, including through the payment of expenses for the children. I reject the submission. To the extent that the family have historically benefitted from the income, repayments towards the liability have already been made from that income.
I accept Mr Berger’ submission that the debt should attach to Ms Berger’s future income rather than being fixed as a debt of the marriage. Any present contribution by Mr Berger to the liability will increase the future income available to Ms Berger. In circumstances where the parties previously elected to pay Ms Berger’s fees from her income, I am not satisfied that Mr Berger should now effectively make a lump sum contribution towards their repayment. I will accordingly not include the liability as a joint liability of the parties.
Mr Berger asserts the value of his interest in Superannuation Fund 2 to be $100,651. Ms Berger asserts its value to be $101,550, however did not challenge Mr Berger’s evidence of its value. I find no basis to reject Mr Berger’s evidence of its value and accept his assertion.
The parties otherwise agree on the identity and value of their respective interests in property, including the add-back of funds received by each by way of part property settlement. Ms Berger abandoned her contention that other sums ought be added back.
JUSTICE AND EQUITY
Both parties seek an alteration of their property interests in order to finally determine the financial relationships between them.[19] Implicit in both parties’ requests for the Court to make an order is an acceptance that the making of an order would be just and equitable.[20] I consider it to be just and equitable to make a property settlement order because there will no longer be the common use of property by the parties,[21] and in order to sever their joint proprietary interest in the Suburb C property, along with their joint liability to the mortgagee.[22]
[19] Family Law Act 1975 (Cth), s 81.
[20] Russo & Wylie (2016) FLC 93-747 at [54].
[21] Stanford at [42].
[22] Preston & Preston (2022) FLC 94-108 at [38].
CONTRIBUTIONS
I am required to take into account the parties’ financial and non-financial, direct and indirect, contributions to the acquisition, conservation or improvement of property.[23] I am also required to take into account the parties’ contributions to the welfare of the family.[24]
[23] Family Law Act 1975 (Cth), s 79(4)(a-b).
[24] Family Law Act 1975 (Cth), s 79(4)(c).
Mr Berger contends that contributions ought be assessed at 55% in favour of Ms Berger. Ms Berger contends that contributions be assessed at 57% in her favour. The task of assessing contributions is a holistic one, involving the assessment of all types of contributions before, during, and after the parties’ cohabitation.[25] Individual aspects of the parties’ contributions should not be separately assessed.[26]
[25] Chapman & Chapman (2014) FLC 92-592 at [101] per Strickland & Murphy JJ; Anson & Meek (2017) FLC 93-816 at [29].
[26] Elmanu & Elmanu (2022) FLC 94-116 at [12] and the cases there cited.
Whilst the parties did not commence cohabitation until mid-2002, Mr Berger gives unchallenged evidence that the parties started combining their finances in late 2001 and early 2002 when he started paying for significant construction costs on a property at K Street, Suburb L, owned by Ms Berger.
In early 2002, the K Street property was valued at $210,000 and in mid-2002 was subject to a mortgage of $53,621. From mid-2001 until mid-2002, a home was being constructed on the property. Mr Berger accepted in oral evidence that in the event the property was 85% complete it was valued at $305,000. He denied that the property was more than 75% complete at the time of its valuation in early 2002. No contrary evidence was adduced by Ms Berger. I find the equity in the property at the time the parties combined their finances to have been $156,379.
To the extent that Ms Berger had been given any cash by her father and applied it to the construction of the K Street property from 1999 to 2001, those contributions are reflected in the valuation of the property in early 2002.
In 2002, Ms Berger also jointly owned an interest in 1 M Street, Suburb L, with her brother. The property was then valued at $215,000. Ms Berger claims the entirety of that value as her initial contribution apparently because of her comment in parentheses that “my brother retained [2 M Street]”.[27] Mr Berger’s evidence that Ms Berger jointly owned the property at 1 M Street with her brother in 2002 was neither challenged nor directly contradicted. Indeed, Ms Berger gives evidence that the 1 M Street property had been purchased by her and her brother for over $60,000, of which she paid half the price. I find the value of Ms Berger’s interest in 1 M Street property at the commencement of the parties’ relationship to have been half its value, namely $107,500.
[27] Ms Berger’s Affidavit filed 26 October 2023, paragraph 58(e).
Ms Berger also then owned her one-third interest in the Country H apartment, although no evidence is adduced as to its then value. She also then owned a block of land at N Street, Suburb P. Mr Berger concedes the value ascribed to the land by Ms Berger of $25,000. It is common ground that Ms Berger also then owned shares worth $7,237 and had savings of $2,500.
I accordingly find the value of Ms Berger’s initial contribution to have been $298,616, along with the unknown value of her interest in the Country H apartment.
At the commencement of the parties’ relationship, Mr Berger owned a property at Q Street, Suburb R worth $320,000. It was subject to a mortgage of $86,840, with the result that he then had equity in the property of $233,160. He also had a one-fifth interest in a property at S Street, Suburb T which was sold 12 years later yielding proceeds of $74,554, which funds were applied to joint purposes.
Mr Berger gives unchallenged evidence that he had savings of $30,000 in a bank account at the commencement of the relationship. He also deposes to then having $70,000 in a savings account. It is common ground that no document has been produced corroborating the latter assertion. Mr Berger gave evidence that he does not have any such bank statement in his possession, having left his documents in the former matrimonial home upon separation. He also gave unchallenged evidence that he doesn’t have access to the documents. Ms Berger accepted in oral evidence that she does not know the balance of Mr Berger’s savings account. She is accordingly not in a position to deny Mr Berger’s evidence. It was not suggested to Mr Berger that his evidence was false, nor were any alleged inconsistencies in his earlier evidence put to him in cross-examination. I find no basis to reject his evidence as to the value of his savings at the commencement of the parties’ relationship.
I accordingly find the value of Mr Berger’s initial contribution to have been $333,160, along with the unknown value of his one-fifth interest in the S Street property.
Mr Berger applied substantial savings to the construction of the property at K Street. He also spent substantial time at the property after hours working as a building manager, overseeing work, helping tradespeople as a labourer, and clearing the property of materials. His evidence on those topics was unchallenged and I accept it.
Throughout the parties’ marriage, Mr Berger was employed full time as a technician for U Company and then V Company. His salary has been maintained at approximately its current level of $93,500 for the last 15 years.
During the parties’ marriage, Ms Berger was employed in various positions both in the private and public sector. She took maternity leave at the time of the children’s births. She was primarily responsible for the care of the parties’ children and was the homemaker. I accept Mr Berger’s unchallenged evidence that the parties equally shared parenting and homemaking tasks when he was not working. He cared for the children while Ms Berger was studying at night from late 2015 until early 2019.
Between 2003 and 2009, Ms Berger received funds from her father. She deposes to the amounts totalling approximately $192,000. Her evidence was not the subject of any successful challenge in cross-examination, although she accepted that she does not know to what extent those funds represent rental income from the Country H apartment. Mr Berger did not disagree with Ms Berger’s evidence in cross-examination. He accepted that funds received from Ms Berger’s father benefited the parties’ family. I accept Ms Berger’s evidence that she received approximately $192,000 from her father during that period.
In 2006, the parties’ acquired a property at W Street, Suburb J. The purchase was wholly funded through borrowing secured by mortgage. It was subsequently rented out by the parties.
In 2007, Ms Berger received a cheque of $100,000 from her father. Mr Berger deposes that the funds were applied to renovate the properties at 1 to 2 M Street with Ms Berger’s brothers. Ms Berger deposes that the funds were applied to the K Street mortgage. It is unnecessary to resolve the dispute in circumstances where in either case, the funds were applied to joint purposes. Mr Berger gives unchallenged evidence which I accept, that he assisted with the renovations at 1 to 2 M Street in 2009 and 2010, which renovations were otherwise financed through borrowings of $220,000 secured against the K Street property. The parties subsequently received rental income from 1 M Street.
In 2009, the Suburb R property was sold generating net proceeds of approximately $400,000. Mr Berger’s evidence that the funds were applied to the Suburb J mortgage was not the subject of successful challenge. Ms Berger accepted in oral evidence that she did not know where the proceeds of sale were applied. I accept Mr Berger’s evidence.
In 2014, the parties sold the Suburb J property, generating proceeds of approximately $790,000.
In 2014, the parties purchased the Suburb C property at a price of over $1,200,000. The purchase was funded from the parties’ savings and a loan of approximately $700,000. Mr Berger’s evidence that the proceeds of the Suburb J property were applied to the purchase was not challenged and I accept it.
In 2017 and 2018, Ms Berger deposes to her father gifting her further sums totalling $45,000. Mr Berger deposes that she only received $10,000 at that time, which was applied to the purchase of items for the church in Suburb Z. I prefer Mr Berger’s evidence which was not successfully challenged in cross-examination.
In 2019, Ms Berger brought legal proceedings against her brother in relation to the properties at 1 to 2 M Street. She gave evidence that she was awarded the sum of $110,000 for the action, of which approximately $50,000 was applied to legal fees. Although Mr Berger deposes to her having to pay up front legal fees of $60,000, he also deposes that the settlement funds received amounted to $66,168 in mid-2020. Because the payout related primarily to rental income received from an asset owned by Ms Berger at the commencement of the relationship, it is unnecessary to resolve the factual controversy. A further outcome of the proceedings is that Ms Berger became the sole owner of the 1 M Street property.
In 2019, the parties sold the K Street property, generating net proceeds of sale of $285,607. Those funds were deposited into an offset account in Mr Berger’s name. By 21 September 2020, when the parties ceased cohabitation, those funds had been depleted to $126,341. Ms Berger put to Mr Berger that withdrawn funds were spent on the family, including both parties and their two children. He accepted the proposition. She suggested to him that the money had been spent at the rate of approximately $10,000 per month, excluding mortgage repayments. It was then suggested to Mr Berger that expenditure had increased to $14,000 per month after the parties ceased cohabitation, excluding mortgage repayments for the Suburb C property occupied by Ms Berger and rental payments for the home occupied by Mr Berger.
Mr Berger gave oral evidence that he purchased a bike for $3,000 and an appliance for approximately $2,000, as well as other furniture to set up a whole new home for himself. He denied that his expenditure was excessive. He also gave evidence that Ms Berger had retained one of the same appliance. I am not satisfied that Mr Berger’s subsequent expenditure of the remaining proceeds of sale of the K Street property was excessive given the parties had spent more than half of the proceeds prior to the cessation of their cohabitation. Mr Berger’s evidence as to the specific application of those funds was not challenged. That itemised expenditure is not excessive in the circumstances.
In 2020, Mr Berger’s parents gifted the parties $15,000 in cash and also gave each of the parties’ children $5,000, all of which was retained by Ms Berger.
In 2022, Mr Berger received a victims of crime payment of $17,000 which he applied to living expenses and legal fees. Ms Berger sensibly abandoned any suggestion that such funds should be added back as a notional asset. Although the bank statement revealing the payment had been disclosed by Mr Berger, the source of funds was not disclosed by him until after Orders were made in July 2023. Whilst it would have been preferable for him to disclose their source at an earlier point in time, he had not concealed the receipt of the funds. He gave unchallenged evidence that he supplied a document from the relevant Tribunal about his payout to his lawyers as soon as he had it. That document was disclosed to Ms Berger on 5 January 2022. He gave oral evidence that he thought the bank statement he had produced disclosed the source of the funds. Although that belief was false, it does not establish that Mr Berger deliberately failed to disclose funds received by him. In the absence of Ms Berger establishing deliberate non‑disclosure by Mr Berger, I am unable to be unduly cautious about making findings in her favour.[28]
[28] Phe & Leng (2019) FLC 93-887 at [69]; Weir & Weir (1993) FLC 92-338 at 79,593.
After the parties’ separation, Mr Berger has paid child support for the children. He gives unchallenged evidence that he has contributed to all the children’s expenses, “including essential items, clothes and school needs”.[29] Whilst Ms Berger is at pains to point out the extent to which she has contributed to the children’s costs, without any quantified evidence of the costs incurred by Mr Berger, I am unable to accept her conclusion that she has overwhelmingly met the children’s expenses. That is so despite Mr Berger’s acceptance that he insisted on Ms Berger meeting Mr X’s mobile phone and Y’s sport costs.
[29] Mr Berger’s Affidavit filed 6 October 2023, paragraph 89.
In early 2023, the M Street property was sold. The proceeds of $573,166 were deposited into the parties’ joint offset account. Their respective part property settlement payments were withdrawn from that account, along with payments towards Mr Berger’s rent. Both parties incurred expenditure after separation and I am not satisfied that Ms Berger’s payment of some outgoings relating to the real properties is a matter to which significant weight ought attach.
Ms Berger’s documents seek credit both for the value of her initial contribution and subsequently realised income or capital generated from the same assets. As was suggested to her in cross-examination, so much would be to double-count the contribution of those assets. Further, to focus on direct financial contributions made at some historical point in time and measuring them as a percentage of the current pool is irrelevant to an assessment of contributions. To do so “…is the antithesis of a holistic assessment, contrary to longstanding authority, and is incapable of equitable application to other equally important non-financial contributions such as homemaking and parenting.”[30]
[30] Mellone & Mellone (2023) FLC 94-160 at [59].
I am satisfied that a holistic assessment of the parties’ relevant contributions to their non-superannuation assets over the course of their 18 year relationship results in their assessment in favour of Ms Berger in the proportion of 55%. In dollar terms, the finding reflects a conclusion that Ms Berger has contributed approximately $190,500 more than Mr Berger.
Neither party made specific submissions with respect to the parties’ interests in superannuation. Mr Berger’s material suggests he contends that the parties’ contributions to superannuation ought be assessed equally. Ms Berger gave oral evidence that she sought an equalisation of the parties’ superannuation. I infer that she also contends for an equality of contributions to that class of asset. Given Mr Berger cashed out superannuation worth $39,400, which accrued prior to the parties’ relationship, I am satisfied that an equal assessment of the parties’ contributions to superannuation is appropriate.
PARAGRAPHS 79(4)(D, E, F AND G) AND SUBSECTION 75(2) FACTORS
Mr Berger is currently 50 years old. He is employed as a technician with V Company and earns approximately $96,000 per annum. His income has been stable for an extended period of time, and it was not suggested that his future earning capacity exceeds his current income.
Ms Berger is currently 49 years old. She is employed as a professional in the public sector. Her salary is $84,626 per annum. She takes advantage of a fringe benefit scheme which has the result that her net income after tax is more than Mr Berger’s. Her enterprise agreement provides for 2% pay increases each year. Her current pay band ranges from $75,669 to $97,921 per annum. With further experience, Ms Berger will be entitled to apply for a more senior position at her employer, remunerated between $97,922 and $122,400 per annum. I find her to have a greater future earning capacity than Mr Berger.
Ms Berger failed to disclose both her rental income from the Country H apartment and her interest in a Country H bank account. I find that non-disclosure to have been deliberate and improper, with the result that property settlement orders may make more generous provision to Mr Berger.[31] However, I infer that given the average rental yield for similar apartments is 3.5% per annum, the undisclosed funds and income available to Ms Berger are likely to be relatively modest.
[31] Kingston & Field (No 2) (2020) FLC 93-986 at [106] and the cases there cited.
Pursuant to final parenting Orders, Mr X is to live with his parents in accordance with his wishes. Mr Berger deposes to Mr X spending ten nights per fortnight with him and four nights per fortnight with Ms Berger. However, he gave oral evidence the Mr X is basically living week about between his parents. Consistent with that oral evidence, Ms Berger avers to Mr X spending approximately equal time with each of his parents. I find Mr X to be spending approximately equal time with each of his parents. Mr X will not finish high school until the end of 2024. He lives with autism, attention deficit hyperactivity disorder and another mental health condition. Services are provided to him as a result of National Disability Insurance Scheme funding.
Y has been living with Ms Berger and spending time with Mr Berger for five nights per fortnight on Mr Berger’s unchallenged evidence. I prefer his evidence to Ms Berger’s evidence that Y spends either four or five nights per fortnight with her father.
Mr Berger pays child support as administratively assessed. Ms Berger gave exaggerated and false evidence that he makes no contribution to the support of the children. Not only does he pay child support, he also contributes to their support during the time they live with him.
Although Ms Berger is presently providing more care for Y than Mr Berger, she has greater net income than him, and greater future earning capacity. She has also failed to disclose her interest in a Country H bank account and her rental income from the Country H apartment. On balance, I do not consider that any adjustment to the contributions findings is warranted on account of the relevant factors.
CONCLUSIONS
In order for Mr Berger to retain 45% of the value of the parties’ non-superannuation assets, he needs to retain assets worth $857,300. He currently has assets worth $147,198, and will retain the sum of $370,150, being the balance of the joint offset account pursuant to interim Orders made on 10 November 2023. He accordingly requires a further cash payment of $339,952.
Ms Berger seeks an opportunity to re-finance the Suburb C property and retain it as part of her property settlement. In order to do so, she will be required to fund a payment to Mr Berger of $339,952 and discharge the existing mortgage of $483,347, being a total of $823,299. Ms Berger gave oral evidence that she can borrow $330,000 from a bank and $420,000 from a friend. She also currently has savings of approximately $85,000. She may accordingly be able to afford the necessary re-finance and payment to Mr Berger. I accordingly consider it unnecessary to give further consideration to her submission that her ability to retain the former matrimonial home should sound in some adjustment in her favour.
There is some force in Mr Berger’s submission that Ms Berger appears unable to afford such a refinance. However, I am not satisfied any prejudice to Mr Berger is such that Ms Berger should be deprived of the opportunity to do so. He will retain the totality of the current offset funds and no longer contribute to repaying the mortgage secured against the Suburb C property. In the event Ms Berger is unable to raise sufficient finance by the due date she proposes, I consider it just and equitable for the property to be sold as sought by Mr Berger.
In cross-examination, Ms Berger proposed that in the event the property was required to be sold, such sale not occur until the conclusion of the 2024 school year. She gave oral evidence she considered it preferable not to disturb the children’s schooling next year. I am not satisfied that amounts to a sufficient basis to delay Mr Berger receiving his property settlement entitlement, even if interest accrues on the outstanding payment to him. Ms Berger made no submissions in support of her position. I am not satisfied it is just and equitable to delay any sale in the event Ms Berger is unable to procure sufficient finance.
Ms Berger neither made submissions about, nor adduced evidence in relation to Mr Berger’s proposal for the mechanism by which any sale is to occur. I find his proposal to be just and equitable in the circumstances, save that I will provide for the payment to him from the proceeds of any sale the sum ordered to be paid to him by Ms Berger.
Section 117B of the Act prescribes that interest is payable at a rate which is prescribed by rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on any payment from the date on which the order takes effect. I will specifically provide for the payment of interest at that rate from the proceeds of sale in the event Ms Berger defaults in her obligation to pay the ordered sum to Mr Berger.
An equalisation of the parties’ superannuation requires a superannuation split of $40,694 from Mr Berger’s interests to Ms Berger’s. I prefer the formulation of orders proposed by Mr Berger of which I have evidence of procedural fairness having been afforded to the superannuation trustee.
Mr Berger proposes specific orders providing for the parties to retain particular assets and indemnify each other with respect to them. Ms Berger made no submissions with respect to the proposal. She seeks similar relief. I am satisfied that the relief sought by Mr Berger is just and equitable.
Mr Berger seeks multiple orders that otherwise provide for the parties to retain their bank accounts, superannuation entitlements and other possessions. I will make only the order that is more comprehensive in nature. The relief sought by Ms Berger is to similar effect.
The order sought by Mr Berger for the parties to do all things necessary to give effect to the orders is unnecessary and I decline to make it. I consider the relief sought by Ms Berger for a default order for the signing of documents pursuant to 106A of the Act to be similarly unnecessary.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Glass. Associate:
Dated: 20 November 2023
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