Bergman & Bergman (No 2)
[2022] FedCFamC2F 1652
Federal Circuit and Family Court of Australia
(DIVISION 2)
Bergman & Bergman (No 2) [2022] FedCFamC2F 1652
File number: BRC 220 of 2020 Judgment of: JUDGE O'SHANNESSY Date of judgment: 7 October 2022 Catchwords: FAMILY LAW – final orders – property application – disparate contributions over many years – each parent regarded his or her parenting contribution as more significant – finding of overall equality of contribution – funds applied to legal fees adjusted pursuant to sections 75(2)(a) and (o). Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 75, 79, 81
Taxation Administration Act 1953 (Cth) s 8AAG
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.06
Cases cited: Bergman & Bergman [2022] FedCFamC2F 1313
NHC & RCH (2004) FLC 93-204
Elias v Commissioner of Taxation [2002] FCA 1132.
Fields & Smith (2015) FLC 93-638
Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-143
Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932
Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518
Trevi & Trevi (2018) FLC 93-858
Division: Division 2 Family Law Number of paragraphs: 156 Date of hearing: 25-26 May 2022, 29 September 2022 Counsel for the Applicant: Mr M Drysdale KC Solicitor for the Applicant: Condon Charles Lawyers Counsel for the Respondent: Mr J Linklater-Steele Solicitor for the Respondent: Wilsons The Family Lawyers ORDERS
BRC 220 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BERGMAN
Applicant
AND: MR BERGMAN
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
7 OCTOBER 2022
THE COURT ORDERS THAT:
1.These Orders are made by way of alteration of property interests pursuant to Section 79 of the Family Law Act 1975 (Cth) (“the Act”).
J Street, Town K
2.That within ninety (90) days of the date of settlement of the sale of the N Street, Town O Property (as defined herein), the Applicant Wife (“the Wife”), and Respondent Husband (“the Husband”), do all acts necessary to transfer to the Husband, at the expense of the Husband, the whole of the Wife’s right, title and interest in the property located at J Street, Town K, more particularly described as Lot … on Registered Plan …, Title Reference … hereinafter referred to as "the J Street, Town K Property".
3.That unless otherwise provided for in these Orders, within ninety (90) days of the date of settlement of the sale of the Town K Property, and contemporaneously with the J Street, Town K transfer:
(a)the Husband do all acts and things necessary for the Husband to refinance the following loans secured over the J Street, Town K by the Commonwealth Bank of Australia into his sole name and effect a full discharge of the Wife’s liability:
(i)Home Loan Account Number …01; and
(ii)Home Loan Account Number …01;
collectively described as the “J Street, Town K refinance”; and
(b)the Husband to pay to the Wife as directed by the Wife, or the Wife to pay to the Husband as directed by the Husband, as the case maybe, such sum, (“the Payment”), as to the effect and to ensure that the Wife receives and/or retains 49% and the Husband receives and/or retains 51% of the net non-superannuation assets and liabilities available for division between the parties (calculated by reference to Annexure A).
4.That in the event that the Husband defaults on his obligations pursuant to Order 2 (the J Street, Town K transfer) and/or Order 3 (the J Street, Town K refinance and/or the Payment) of these Orders, then the J Street, Town K is to be sold and the parties do all acts and things to effect a sale of the J Street, Town K and by way of consequential arrangements for that default sale:
(a)the listing price and the reserve price for the J Street, Town K shall be as agreed between the parties, and failing agreement within fourteen (14) days, shall be as advised by a valuer nominated by the President of the Real Estate Institute of Queensland;
(b)the J Street, Town K be listed for sale by private treaty with a Real Estate Agent as agreed between the parties, and failing agreement within fourteen (14) days be listed with an agent nominated by the President of the Real Estate Institute of Queensland;
(c)the conveyancing agent or solicitor for the purpose of the default sale be as agreed between the parties and failing agreement within fourteen (14) days be a conveyancer nominated by the President of the Law Institute of Queensland;
(d)the parties shall co-operate in every way with the agent including without limiting the generality of the foregoing:
(i)making the keys available to the agent;
(ii)allowing inspection of the property at all reasonable times requested by the agent;
(iii)doing or saying nothing to hinder or prevent sale being effected;
(iv)ensuring that the property, including the grounds are in neat and clean condition and in good repair at the time of the inspection by the agent and prospective purchasers; and
(v)signing all documents requested by the agent in relation to the listing for the sale of the property;
(vi)authorising the Real Estate Agent and/or the auctioneer to keep each of the parties fully informed of all documents and information a vendor is entitled to;
(e)in the event that the J Street, Town K has not been sold on or before a date three (3) months from the date of listing for default sale by way of private treaty, then the Wife and the Husband do all such acts to procure a sale by public auction of the J Street, Town K upon the following terms:
(i)the auctioneer shall be as agreed between the parties, and failing agreement within fourteen (14) days shall be nominated by the President of the Real Estate Institute of Queensland;
(ii)the auction shall take place within one (1) month of the deadline date for the sale by private treaty;
(iii)the reserve price at auction, unless agreed upon by the parties, be as proposed by the auctioneer;
(iv)the parties each pay and be responsible for payment of auction expenses payable in the proportions of 51% by the Husband and 49% by the Wife;
(v)in the event that the bidding at auction does not reach the reserve price, the parties may negotiate with the highest bidder or any other interested person and effect the sale of the property at a price which is not more than 10% below the reserve price;
(vi)in the event that the property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the Wife and Husband shall do all acts necessary to procure a second auction within a further four (4) weeks of that date otherwise upon the same terms and conditions as applied to that first auction; and
(f)the parties shall each execute a contract for sale in the form prepared by the conveyancer having the conduct of the default sale at a price agreed upon by the parties, or in the absence of any agreement, at or above the price nominated by the valuer pursuant to Order 4(a) or the auctioneer pursuant to Order 4(e)(iii) or the price which is not more than 10% below the reserve price in accordance with Order 4(e)(v).
5.Pending the Payment, or the refinance or the default sale of the J Street, Town K as provided for in Order 3 or 4 of these Orders (whichever applies):
(a)the Husband is to be responsible for, attend to payment of and indemnify the Wife against the following in relation to the J Street, Town K:
(i)all payments and liabilities as and when they fall due associated with the following loans:
A.Home Loan Account Number …01;
B.Home Loan Account Number …00; and
(ii)all council rates, levies and water charges; and
(iii)all building and home and contents insurance.
6.That upon completion of the J Street, Town K default sale, the proceeds of sale be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the J Street, Town K;
(b)secondly, to discharge the following loans secured against the J Street, Town K by the Commonwealth Bank of Australia:
(i)Home Loan Account Number …01;
(ii)Home Loan Account Number …01; and
(c)such sum to the Husband as to ensure and effect that he receives and/or retains 51% of the net non-superannuation assets available for division (calculated by reference to Annexure A) LESS any amount in arrears owing any of the following loan accounts:
(i)Home Loan Account Number …01;
(ii)Home Loan Account Number …01; and
(d)the remainder to the Wife.
7.In the event that Wife pays for and/or meets any amount payable by way of arrears in relation to any of the following loan accounts pending the sale of the J Street, Town K, the Wife is to be reimbursed the total sum paid by her from the sum receivable by the Husband pursuant to Order 6(c).
L Street, Town M
8.That the Wife shall retain for her exclusive use and benefit, the real property at L Street, Town M, more particularly described as Lot … on Registered Plan …, Title Reference … hereinafter referred to as ("the L Street, Town M").
9.Contemporaneously with the transfer and refinance of the J Street, Town K, the Wife do all acts and things necessary to refinance the Home Loan Account Number …08 secured over the L Street, Town M by the Commonwealth Bank of Australia (“the L Street, Town M refinance”) and the Better Business Loan Account Number …70 (“the K property shortfall”) into her sole name and effect a full discharge of the Husband’s liability in relation to those loans.
10.That in the event that the Wife defaults on her obligations to make the Payment if any is required by these orders and/or pursuant to Order 9 of these Orders being the L Street, Town M refinance, then the L Street, Town M is to be sold and the Wife is to do all acts and things necessary to effect a sale of the L Street, Town M (“L Street, Town M default sale”) and by way of consequential arrangements for the purpose of effecting that default sale:
(a)the listing price for the L Street, Town M shall be as agreed between the parties, and failing agreement within fourteen (14) days, shall be as advised by a valuer nominated by the President of the Real Estate Institute of Queensland;
(b)the conveyancing agent or solicitor for the purpose of that default sale be as agreed between the parties and failing agreement within fourteen (14) days be a conveyancer nominated by the President of the Law Institute of Queensland;
(c)the L Street, Town M shall be listed for sale by private treaty with a Real Estate Agent as agreed between the parties, and failing agreement within fourteen (14) days, shall be listed with an agent nominated by the President of the Real Estate Institute of Queensland;
(d)the parties shall co-operate in every way with the selling agent including without limiting the generality of the foregoing:
(i)making the keys available to the agent;
(ii)allowing inspection of the property at all reasonable times requested by the agent;
(iii)doing or saying nothing to hinder or prevent sale being effected;
(iv)ensuring that the property, including the grounds are in neat and clean condition at the time of the inspection by the agent and prospective purchasers; and
(v)signing all documents requested by the agent in relation to the listing for the sale of the property;
(vi)authorising the Real Estate Agent and/or the auctioneer to keep each of the parties fully informed of all documents and information a vendor is entitled to.
(e)in the event that the L Street, Town M has not been sold by or before a date three (3) months from the date of listing for sale by way of private treaty, then the Wife shall do all such acts necessary to procure a sale by way of public auction of the L Street, Town M upon the following terms:
(i)the auctioneer shall be as agreed between the parties, and failing agreement within fourteen (14) days shall be nominated by the President of the Real Estate Institute of Queensland;
(ii)the auction shall take place within one (1) month of the deadline date for the sale by private treaty;
(iii)the reserve price shall, unless agreed upon by the parties, be as proposed by the auctioneer;
(iv)the parties each pay and be responsible for payment of auction expenses payable in the proportions of 49% by the Wife and 51% by the Husband;
(v)in the event that the bidding at auction does not reach the reserve price, the parties may negotiate with the highest bidder or any other interested person and effect the sale of the property at a price which is not more than 10% below the reserve price;
(vi)in the event that the property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the Wife shall do all acts to procure a second auction within a further four (4) weeks of that date otherwise upon the same terms and conditions as applied to the first auction;
(f)the parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties, or in the absence of any agreement, at or above the price nominated by the valuer pursuant to Order 10(a) or the auctioneer pursuant to Order 10(e)(iii) or the price which is not more than 10% below the reserve price in accordance with Order 10(e)(v).
11.Pending the refinance or sale of the L Street, Town M as provided for in Order 9 or 10 of these Orders (whichever applies):
(a)the Wife be responsible for, attend to payment of and indemnify the Husband against the following in relation to the property:
(i)all payments and liabilities as and when they fall due associated with the Home Loan Account Number …08;
(ii)all council rates, levies and water charges;
(iii)all building and home and contents insurance; and
(iv)Better Business Loan Account Number …70 (the AK property shortfall)
12.That upon completion of the L Street, Town M default sale the proceeds of sale be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the L Street, Town M;
(b)secondly, to discharge the following Home Loan Account Number …08 secured against the L Street, Town M by the Commonwealth Bank of Australia and the Better Business Loan Account Number …70 (the AK property shortfall loan);
(c)thirdly, and in the event the 51/49 division of the non-superannuation assets and liabilities requires a payment by the Wife to the Husband by Order 3(b), to make such payment as is outstanding (if any); and
(d)fourthly, the remainder to the Wife.
N Street, Town O
13.The real property at N Street, Town O ("the Town O Property") is to be sold and the parties do all acts and things to effect a sale of the Town O Property and by way of consequential arrangements for the purpose of effecting that sale:
(a)the Town O Property shall be listed for sale by auction with a Real Estate Agent as agreed between the parties, and failing agreement within fourteen (14) days shall be listed with an agent nominated by the President of the Real Estate Institute of Queensland;
(b)the conveyancing agent or solicitor for the purpose of the default sale be as agreed between the parties and failing agreement within fourteen (14) days be a conveyancer nominated by the President of the Law Institute of Queensland;
(c)the parties shall co-operate in every way with the agent including without limiting the generality of the foregoing:
(i)making the keys available to the agent;
(ii)allowing inspection of the property at all reasonable times requested by the agent;
(iii)doing or saying nothing to hinder or prevent sale being effected;
(iv)ensuring that the property, including the grounds are in neat and clean condition at the time of the inspection by the agent and prospective purchasers; and
(v)signing all documents requested by the agent in relation to the listing for the sale of the property; and
(vi)authorising the Real Estate Agent and/or the auctioneer to keep each of the parties fully informed of all documents and information a vendor is entitled to.
(d)the Wife do all such acts necessary to procure a sale by way of public auction of the Town O Property upon the following terms:
(i)the auctioneer shall be as agreed between the parties, and failing agreement within fourteen (14) days, shall be nominated by the President of the Real Estate Institute of Queensland;
(ii)the auction shall take place within one (1) month of the date of these Orders;
(iii)the reserve price shall, unless agreed upon by the parties, be as proposed by the auctioneer;
(iv)the Wife and the Husband shall each pay and be responsible for payment of auction expenses payable in the proportions of 49% by the Wife and 51% by the Husband;
(v)in the event that the bidding at auction does not reach the reserve price, the parties may negotiate with the highest bidder or any other interested person and effect the sale of the property at a price which is not more than 10% below the reserve price;
(vi)in the event that the property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the Wife shall do all acts necessary to procure a second auction within a further four (4) weeks of that date otherwise upon the same terms and conditions as applied to the first auction;
(e)the parties shall each execute a contract for sale in the form prepared by the conveyancing agent having the conduct of the sale at a price agreed upon by the parties, or in the absence of any agreement, at or above the price nominated by the auctioneer pursuant to Order 13(d)(iii) or the price which is not more than 10% below the reserve price in accordance with Order 13(d)(v).
14.Pending the sale of the Town O Property as provided for in Order 13 of these Orders;
(a)the Wife is entitled to any rental or income from the Town O Property and is to be responsible for, attend to payment of and indemnify the Husband against the following in relation to the Town O Property:
(i)all payments and liabilities as and when they fall due associated with the Home Loan Account Number …04;
(ii)all council rates, levies and water charges; and
(iii)all building and home and contents insurance.
15.That upon completion of the sale of the Town O Property the proceeds of sale be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the Town O Property;
(b)secondly, to discharge the following Home Loan Account Number …04 secured against the Town O Property by the Commonwealth Bank of Australia; and
(c)thirdly:
(i)any surplus funds are to be paid as follows:
A.to the Wife, 49% of the net sale proceeds; and
B.to the Husband, 51% of the net sale proceeds.
(ii)any shortfall is to be paid by the parties in the following proportions on settlement:
A.by the Wife, 49% of the shortfall; and
B.by the Husband, 51% of the shortfall.
Sale of Properties
16.That in circumstances where the loans secured over the J Street, Town K and the L Street, Town M are cross-secured, in the event that either of those properties are required to be sold, the timeframe for compliance with Orders 3 or 9 (whichever is the case), is extended to a period of forty-five (45) days from the date of the settlement of the sale of the property that is to be sold.
17.If any property is required to be sold pursuant to these Orders, prior to the property being listed for sale, the parties arrange for a licensed contractor to complete any repairs necessary to put the property in a condition suitable for sale and for these purposes:
(a)the party who proposes the repairs, as the case may be, shall provide quotes to the other party from three (3) licensed contractors within seven (7) days;
(b)the other party will provide to the other (as the case may be) written acceptance of one of these quotes within seven (7) days of receipt of the quotes; and
(c)the Wife and the Husband shall each pay and be responsible for payment of the costs of undertaking the repairs in the proportions of 49% by the Wife and 51% by the Husband.
P Pty Ltd
18.That forthwith the parties in their capacity as Directors of P Pty Ltd do all acts and things and sign all documents necessary to wind up and deregister P Pty Ltd, including by:
(a)paying and being responsible for in the proportions of 49% by the Wife and 51% by the Husband, the discharge of all remaining liabilities (including any tax liabilities) of P Pty Ltd and any other costs including ASIC and accounting fees associated with the wind up and deregistration of P Pty Ltd; and
(b)if, after liquidation of the assets of P Pty Ltd and the discharge of all liabilities, there remains any net assets of P Pty Ltd, causing those net assets to be declared by way of dividend to each of the parties in the proportions of 49% to the Wife and 51% to the Husband.
19.That pending the wind up and deregistration of P Pty Ltd, the parties pay and be responsible for all operating costs including ASIC and accounting fees in the proportions of 49% by the Wife and 51% by the Husband.
Q Pty Ltd
20.That forthwith the parties in their capacity as Directors of Q Pty Ltd shall do all acts and things and sign all documents necessary to wind up and deregister Q Pty Ltd, including by:
(a)paying and being responsible for in the proportions of 49% by the Wife and 51% by the Husband, the discharge of all remaining liabilities and including any tax liabilities and including any tax liability of Q Pty Ltd and/or of the parties relating to Q Pty Ltd and any other costs including ASIC and accounting fees associated with the wind up and deregistration of Q Pty Ltd; and
(b)if, after liquidation of the assets of Q Pty Ltd and the discharge of all liabilities, there remains any net assets of Q Pty Ltd, causing those net assets to be declared by way of dividend to each of the parties in the proportions of 49% to the Wife and 51% to the Husband.
21.That pending the wind up and deregistration of Q Pty Ltd, the Wife and Husband shall pay and be responsible for all operating costs including ASIC and accounting fees in the proportions of 49% by the Wife and 51% by the Husband.
22.That the Husband indemnify and keep indemnified the Wife in respect of any unpaid taxation, costs, claims, interests, penalties and demands by the Australian Taxation Office and/or the Australian Securities and Investments Commission as a result of any reassessment of the tax payable by Q Pty Ltd for the financial year ended 30 June 2020 regarding the sale and purchase and/or sale of cattle by the Husband.
R Pty Ltd as trustee for The Bergman Family Trust
23.That the Wife shall retain for her exclusive use and benefit, her 10 ordinary shares in R Pty Ltd.
24.That as and from the date of these Orders, the Wife indemnifies and keeps indemnified the Husband against all or any manner of actions, suits, causes of action, arbitrations, debts, dues, costs, interest and demands both at law and in equity which R Pty Ltd as trustee for the Bergman Family Trust now has or may have at any time or times after the date of these Orders.
25.That as and from the date of these Orders, the Husband relinquishes and renounces any interest in the Bergman Family Trust and any entitlement to any further benefits from the Bergman Family Trust, whether those benefits be income or capital or of any other nature and the Husband shall, within fourteen (14) days of any request to do so by the Wife, sign any such document reflecting that relinquishment and renunciation.
S Pty Ltd as trustee for the S Pty Ltd Trust
26.That the Husband shall retain for his exclusive use and benefit, his 1 ordinary share in S Pty Ltd.
27.That as and from the date of these Orders, the Husband indemnifies and keeps indemnified the Wife against all or any manner of actions, suits, causes of action, arbitrations, debts, dues, costs, interest and demands both at law and in equity which S Pty Ltd as trustee for the S Pty Ltd Trust now has or may have at any time or times after the date of these Orders.
28.That as and from the date of these Orders, the Wife relinquishes and renounces any interest in the S Pty Ltd Trust and any entitlement to any further benefits from the S Pty Ltd Trust whether those benefits be income or capital or of any other nature and the Wife shall, within fourteen (14) days of any request to do so by the Husband, sign any such document reflecting that relinquishment and renunciation.
Rise and fall provision of remission of general interest charge
29.In regard to the potential remission of general interest charges on the Wife’s taxation (item 10, Wife’s Keep, of Annexure A) and the potential remission of general interest charges on the Husband’s taxation (item 9, Husband’s Keep of Annexure A), any application by either party for remission of the general charge to the Australian Taxation Office (“ATO”) be made on or before 31 December 2022 and disclosed to the other party, in a timely manner, the fact of that application and any document or information supporting it.
30.On or before 30 June 2023 each party disclose to the other any application for remission of any general interest charges on the taxation liability as described in Annexure A and in regard to any remission of general interest charge provided to the Wife or the Husband concerning their personal taxation liability as described in Annexure A then on or before two (2) calendar months after the provision of the remission of the general interest charges;
(a)in the event the Wife receives a remission of the general interest charge on the taxation liability as described at item 13 of the Wife’s Keep at Annexure A, or any part thereof, the Wife pay to the Husband 51% of the amount remitted to her of the general interest charge of that taxation liability; and/or
(b)in the event the Husband receives a remission of the general interest charge on the taxation liability as described at item 9 of the Husband’s Keep at Annexure A, or any part thereof, the Husband pay to the Wife 49% of the amount remitted to him of the general interest charge of that taxation liability.
Rise and fall provision of the Wife’s Unitholder Profit Entitlement
31.In regard to the Wife’s entitlement known as her Unitholder Profit Entitlement as at 31 March 2021, as described in annexure -2 to the affidavit of the Husband filed 28 September 2022 and being a sum included at item 2 of Annexure A, in the event that the Wife ultimately receives a sum in respect of that of that Unitholder Profit Entitlement on or before 30 June 2024, that is more or less $136,609, then;
(a)to the extent that the sum received is more than $136,609, by no later than 1 September 2024, the Wife pay to the Husband 51% of the amount received that is greater than $136,609, gross, and provide documents verifying same; and
(b)to the extent that the sum received is less than $136,609, 1 September 2024, the Husband pay to the Wife 49% of the amount received that is less than $136,609, gross, and the Wife provide to the Husband the documents verifying same.
Bergman Superannuation Fund
32.That forthwith and in accordance with Section 90XT(1)(b) of the Act, whenever a splittable payment within the meaning of Section 90XE of the Act becomes payable to or on behalf of the Husband from his interest in the Bergman Superannuation Fund, the Wife is entitled to be paid (by the Trustee of the Bergman Superannuation Fund) 100% of that splittable payment and there be a corresponding reduction in the entitlement the Husband would have had but for these Orders.
33.Immediately following the previous order, in accordance with Section 90XT(1)(b) of the Act, whenever a splittable payment within the meaning of Section 90XE of the Act becomes payable to or on behalf of the Wife from her interest in the Bergman Superannuation Fund, the Husband is entitled to be paid (by the Trustee of the Bergman Superannuation Fund) 50% of that splittable payment and there is a corresponding reduction in the entitlement the Wife would have had but for these Orders.
34.Orders 32 and 33 are to be applied sequentially as at the operative date.
35.The operative date is the date of transfer of the transferable benefits, which is to be completed within ninety (90) days of the date of these Orders.
36.That unless agreement in writing to the contrary, within 14 days following the superannuation split provided for in Order 33, the parties in their capacity as Directors of Bergman ATF Bergman Superannuation Fund shall do all acts and things and sign all documents necessary to wind up and deregister Bergman Pty Ltd and the Bergman Superannuation Fund, including by paying and being responsible for in equal shares, any other costs including ASIC and accounting fees associated with the wind up and deregistration of Bergman Pty Ltd and the Bergman Superannuation Fund.
37.That the Wife shall do all such acts and things and sign all documents as necessary, including but not limited to, exercising the request pursuant to r.7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the Wife's interests in the Bergman Superannuation Fund to a fund of the Wife's choosing in accordance with r.7A.13 of the Superannuation Industry (Supervision) Regulations 1994.
38.That the Husband shall do all such acts and things and sign all documents as necessary, including but not limited to, exercising the request pursuant to r.7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the Husband's interests in the Bergman Superannuation Fund to a fund of the Husband's choosing in accordance with r.7A.13 of the Superannuation Industry (Supervision) Regulations 1994.
39.That pending the wind up and deregistration of Bergman Superannuation Fund and Bergman Pty Ltd, the Wife and Husband shall pay and be responsible for all operating costs including ASIC and accounting fees equally.
40.The Wife and Husband shall do all such acts that are necessary for the splitting of the Bergman Superannuation Fund in accordance with these Orders.
41.The Wife and Husband shall equally pay and be responsible for the costs of implementing Orders 32 to 40 herein.
Retention of Property
42.The Wife retain for her exclusive use and benefit, the following property, and the Husband, where relevant and within fourteen (14) days of any request to do so, do all such acts as might be necessary to transfer to the Wife, at her expense, all his right, title and interest, if any, in and to the following property:
(a)the furniture and effects in her possession as at the date of these Orders;
(b)the plant and equipment in her possession as at the date of these Orders, including:
(i)the horse float; and
(ii)the tractor and bobcat;
(c)all funds owing to her from the Bergman Family Trust; and
(d)the funds held to her credit in all bank and other accounts in her sole name.
43.That the Husband retain for his exclusive use and benefit, the following property, and the Wife where relevant and within fourteen (14) days of any request to do so, do all such acts as might be necessary to transfer to the Husband, at his expense, all her right, title and interest, if any, in and to the following property:
(a)the furniture and effects in his possession as at the date of these Orders (save for as otherwise referred to in these Orders);
(b)the plant and equipment in his possession as at the date of these Orders;
(c)the horses in his possession as at the date of these Orders;
(d)the Motor Vehicle 1; and
(e)the funds held to his credit in all bank and other accounts in his sole name.
44.That within thirty (30) days of the date of these Orders, the Husband will make available for collection by the Wife (from the J Street, Town K), the following items, to the extent they can be identified and remain in his possession after diligent search:
(a)the anvil belonging to the Wife’s father;
(b)"T", the pony;
(c)brass horse/rider sculpture/trophy;
(d)steel and wooden chest inherited from the Wife’s grandfather;
(e)black/tan dressage saddle (custom fitted); and
(f)The Wife’s personal DVD collection.
45.That within thirty (30) days of the date of these Orders, the parties do all acts necessary to cause any funds held in any joint bank accounts to be transferred to the Husband and for the accounts to be thereafter closed.
46.That other than as is specifically provided for in these Orders, each party is the sole legal and beneficial owner of all other assets and/or financial resources of whatever description, wherever situated of which that party is the legal owner of or which is or are in the possession or control of that party as at the date of these Orders.
Retention of Liabilities
47.The Wife remain responsible for and indemnify the Husband with respect to the following liabilities:
(a)CBA Credit Card Number …42; and
(b)her personal tax and PAYG liabilities.
48.The Husband remain responsible for and indemnify the Wife with respect to the following liabilities:
(a)his personal tax and PAYG liabilities;
(b)any funds owing by him to his parents; and
(c)the funds owing by him to the S Pty Ltd Trust;
49.That other than is specifically provided for in these Orders, each party is solely responsible for an indemnifies the other with respect to any expenses, outgoings and obligations or liability related to any items of property which they receive and/or retain pursuant to these orders and any other liabilities in their respective sole names including any liabilities to the Commissioner of Taxation howsoever incurred.
Other Orders
50.That in the event that either party refuses or neglects to sign (within seven (7) days of a request to do so), any documents or do any act necessary to effect the terms of these Orders, the Registrar of the Court is hereby appointed pursuant to the provision of Section 106A of the Act to execute such documents on behalf of the defaulting party.
51.Any interim orders inconsistent with these final orders be and are discharged.
52.Any application for costs be filed and served within 14 days and any response to such application be filed and served within a further 14 days and, unless inappropriate (in which case the matter be requested to be listed for oral submissions) such application and response be by short written submission emailed to the Associate to Judge O’Shannessy.
ANNEXURE A
Ownership WIFE RETAINS (‘WIFE’S KEEP’) Finding of value ASSETS 1 Wife The L Street, Town M $775,000.00 (or as realised on default sale) 2 Wife U Pty Ltd ATF Bergman Family Trust,
exc horses, inc firm proceeds & UPE of $136,609
$342,441.00 3 Wife Horses held in Bergman Family Trust $225,975.00 4 Wife Tractor and bobcat $21,200.00 5 Wife Furniture and Plant - L Street, Town M $12,575.00 6 Wife Horse Float $15,000.00 7 Joint CBA …29 $3.00 8 Wife CBA Account …04 $34.00 9 Wife Funds held in solicitor’s Trust Account Not included 10 Wife Potential Remission of General Interest Charges (Rise & Fall) Not included 11 Wife Legal fees and outlays paid by Wife (section 75(2)) Not included Total Assets $1,392,228.00 LIABILITIES 12 Joint CBA Home Loan …08 (L Street, Town M) $281,156.00 (or as realised on default sale) 13 Wife Personal Tax Liability $302,834.00 Joint CBA Home Loan …70 (Town K shortfall) $46,985.00 14 Wife CBA Credit Card …42 Not included 15 Wife GST Payable on Sale of Horses Not included 16 Wife Tax Payable on Further Funds Received From Sale $55,111.00 Total liabilities $686,086.00 NET NON- SUPER’N ASSETS: WIFE’S KEEP $706,142.00
Ownership HUSBAND RETAINS (‘HUSBAND’S KEEP’) Finding of value 1 Joint J Street, Town K $1,475,000.00 (or as realised on default sale) 2 Husband V Pty Ltd ATF Bergman Trust $78,590.00 3 Husband Furniture and Plant –J Street, Town K $35,720.00 4 Husband Horses at J Street, Town K $22,725.00 5 Husband H Truck $9,000.00 6 Husband Excavator $10,000.00 7 Husband CBA Account …84 $0.00 8 Husband motor vehicle 1 $12,500.00 9 Husband Remission of General Interest Charges (Rise & Fall) Not included 10 Husband Legal fees and outlays paid by Husband Not included Total Assets $1,665,620.00 LIABILITIES 11 Joint CBA Home Loans …01 & …01 (J Street, Town K) $533,966.00 (or as realised on default sale) 12 Husband Loan owed to W Trust $11,911.00 13 Husband Personal Tax Liability $32,038.00 Joint Tax liability of the winding up of Q Pty Ltd (included at Order 20) Not included Total Liabilities $577,915.00 NET NON- SUPER’N ASSETS: HUSBAND’S KEEP $1,065,620.00 ALL NET NON-SUPER’N ASSETS & LIABILITIES $1,771,762.00 SUPERANNUATION
Member Name of fund Type Agreed value 3 Wife Super Fund 1 SMSF $189,512.00 4 Husband Super Fund 2 SMSF $111,693.00 Husband Unallocated super - ATO N/A $3,375.00 Total All Superannuation $304,580.00 TO BE SOLD/WOUND UP
Ownership Description Finding ASSETS 1 Wife Town O Property To be realised 2 Joint Q Pty Ltd $0.00 3 Joint P Pty Ltd $0.00 LIABILITIES 4 Joint CBA Home Loan …04 (Town K) $129,765.00 (or as realised on default sale) [Numbering is copied from W10]
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 Bergman & Bergman (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
RES TEMPORE REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
These are the “settled” reasons of an oral judgment given four working days after the end of the case. Passages from precedent cases, legislation and written submissions referred to in oral judgment have now been included in these “settled” reasons. The transcript of the oral reasons has been settled for grammar and to avoid repetition.
The question I must determine is how the property of Mr Bergman (‘the Husband’) and Ms Bergman, (formerly known as Ms Bergman) (‘the Wife’) is to be adjusted pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”).
The relationship began with cohabitation of the parties in 2005 and ceased on or about 30 June 2019. The parties married in 2008 and were divorced about 20 months after separation, on 14 February 2021. The Wife is 41 years of age and is a self-employed finance professional. The Husband is 43 years of age and an tradesman. The parties have two children. The oldest, now 12 years, was born in 2010, and the youngest, now 10 years, was born in 2012. The children live in an equal shared care arrangement by agreement.
The Proceedings
The Wife issued proceedings in this Court on 9 January 2020. A short summary of that litigation is at [2] of the first judgment in this matter, anonymised as Bergman & Bergman [2022] FedCFamC2F 1313. That judgment was a ruling as to reliance by the Husband upon an adversarial expert report served mere days before the third Final Hearing. It was listed for the purpose of determining the value of the parties' horses, with the bulk of those horses being in the possession of the Wife.
The matter was heard by videolink over 25 and 26 May 2022 and was adjourned part-heard to accommodate the jointly retained single expert and the adversarial expert, to confer about the value of the horses and for further evidence or agreement about taxation matters. Both parties were represented by solicitors and counsel throughout the Final Hearing.
The matter had originally been estimated to take two days of Court time. When matters exceed the time for which the matter has been fixed, for whatever reason, the finding of a further day or days is not without difficulty. I adjourned the matter part-heard to a day when time was set aside for judgment writing and Counsel was available. That hearing day had to be vacated when I became ill with COVID-19. The next day that was available to the Court and when both Counsel would be available was 29 September 2022. The hearing then proceeded over that day and neither Counsel sought to further cross-examine the other party, although further affidavits were relied upon and further documents tendered in evidence.
Over the adjourned period, between May and September of 2022, the parties reached agreement as to the value of the parties' horses and no further evidence or document from the two valuers about the horses' value was provided. Taxation matters were largely, but not entirely, agreed. I am grateful for the hard work of the solicitors involved in reaching agreement about the value of the horses and the agreement of that fact was of considerable assistance to me in the efficient conduct of the case.
At the conclusion of submissions on Thursday, 29 September 2022, I indicated to the parties I would deliver judgment ex tempore the following afternoon. Because other business of the Court listed that day took much longer than I had optimistically anticipated, I was unable to deliver that judgment ex tempore and the matter was adjourned to Wednesday, 5 October 2022, at 3.15 PM.
On the morning of 5 October 2022, following inquiries from my Chambers the previous day as to whether or not objections said to be agreed were relied upon or pressed, a further document, being a noted up version of exhibit W2, that became W13, was provided at 9.15am on that morning. That necessitated marking up of the two respective affidavits to which objection was taken and careful reading to ensure that material now agreed to be struck out would not be taken into account. Oral reasons were delivered with draft orders on 5 October 2022 and final orders were made after parties’ lawyers had considered whether the draft orders reflected the oral reasons.
Material relied upon
The Wife relied on the following documents:
·Financial Statement - 31 May 2021
·Affidavit of Ms Bergman - 31 May 2021
·Affidavit of Ms X - 31 May 2021
·Case Outline - 7 June 2021
·Affidavit of Ms Bergman - 14 June 2021
·Affidavit of Mr Y - 24 November 2021
·Affidavit of Ms Z - 24 November 2021
·Affidavit of Ms Bergman - 3 December 2021
·Affidavit of Mr AB - 7 December 2021
·Affidavit of Ms Bergman - 13 May 2022
·Response to Application in a Proceeding - 23 May 2022
·Affidavit of Ms Bergman - 23 May 2022
·Further Amended Initiating Application - 24 May 2022
The Husband relied on the following documents:
·Further Amended Response - 24 November 2021
·Affidavit of Mr Bergman - 24 November 2021
·Financial Statement - 24 November 2021
·Affidavit of Ms Z - 24 November 2021
·Affidavit of Mr Y - 24 November 2021
·Application in a Proceeding 18 May 2022
·Affidavit of Mr Bergman - 18 May 2022
·Affidavit of Mr C - 18 May 2022
·Affidavit of Mr Bergman - 20 May 2022
The following exhibits were tendered as exhibits for the Wife:
·W1 Submissions re adversarial Expert, 25 May 2022
·W2 Objections to evidence, 25 May 2022
·W3 Company AC records re Wife’s horses 26/11/2, 26 May 2022
·W4 2 page bank statement Company AD CBA # …49, 26 May 2022
·W5 Solicitors letters x 2 re details of bloodlines June 2020, 26 May 2022
·W6 W financial statement filed 9/2/2020, 26 May 2022
·W7 Each parties’ statement of costs that are in existence at this point in time, 26 May 2022
·W7 (updated) Each parties’ statement of costs that are in existence at this point in time, 29 September 2022
·W8 Joint Asset and Liability Statement, 29 September 2022
·W9 Minutes of Orders Sought by Wife, 29 September 2022
·W10 Joint Asset and Liability Statement with “keep”, 29 September 2022
·W11 Wife’s Outline of Submissions, 29 September 2022
·W12 Court’s email about promised objections documents sent 4 October 2022 at 9:35am AEDT, 5 October 2022
·W13 Updated objections document received 5 October 2022 9:15am AEDT, 5 October 2022
·W14 Emails re clarification of objections received 5 October 2022 at 9.58am AEDT, 5 October 2022
·W15 The Wife’s Trust Statement received 29 September 2022 (incorrectly marked as W11)
The following exhibits were tendered as exhibits for the Husband:
·H1 Balance sheet filed 24 May 2022, 25 May 2022
·H2 H tax statements for years ending 2020 and 2021, 26 May 2022
·H3 H Financial statement filed 27/2/2020 (see part N), 26 May 2022
·H4 Costs agreement between H & his solicitors, 26 May 2022
The following exhibits were tendered as exhibits for the Court:
·C1 Summary of position of parties on 26 May 2022, 29 September 2022
·C2 Aide Memoir, 29 September 2022
·C3 Draft final orders and Annexure A, 7 October 2022
In regard to the objections as ultimately agreed in the W13 document, some observations need to be made. The objections were drafted for the commencement of the hearing in May 2022. Some of the objections were ultimately pressed at the conclusion of the hearing. The objections originally raised were never referred to again by Counsel, save for the briefest mention in the May hearing. It was indicated that a document was going to be sent to Chambers.
Objection, for example, was taken to paragraph 41 of the Husband's trial affidavit and annexure 2. This is somewhat ironic because, in the Wife's material, without objection from the Husband, the contexts of paragraphs 41 are repeated verbatim and relied upon. Similarly, annexure 2, being the report or what purported to be a report by the valuer (Mr AE) was objected to on the basis of hearsay (and conceded by the Husband), but was annexed to an affidavit relied upon the Wife. Knee-jerk reactions to possibly objectionable material should be avoided.
In terms of the objections, I can indicate that I have marked up the Husband's affidavits with those objections where those matters are conceded and not taken into account the paragraphs and the significant number of objections that were both pressed and conceded.
THE STANDARD OF PROOF
In these reasons, statements of fact are findings of fact. Findings are made on the balance of probability. I apply section 140 of the Evidence Act 1995 (Cth) (“the Evidence Act”) which states as follows:
(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b)the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
In Fox v Percy (2003) 214 CLR 118, a High Court case concerning the skid marks of a Kombi van on the correct side of the road, at [31], when discussing the drawing of conclusions about truthfulness and reliability solely or mainly from the appearance of the witnesses, the plurality observed:
[31] …in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events…
[citations omitted]
In Fox v Percy, the trial judge had found the rider of the horse to be a more reliable witness than the driver of the Kombi Van, the issue being upon which side of the road the accident happened. The High Court had to interfere with that judgment because by determining which side of the road the accident happened, by reason of the apparent reliability of the witnesses, the first instance decision was wrong because the skid marks of some 50 metres were incontrovertibly and indisputably in evidence before the trial judge, and they demonstrated at all material times, the Kombi van had been on its correct side of the road. That is the context to that observation at [31].
The parties were the only witnesses that were cross-examined. I must note the number of affidavits in evidence-in-chief and the number of paragraphs of those different affidavits. Senior counsel submitted the following, at paragraphs 14 of the outline of submissions:
14.What emerges in case such as Dickons [Dickons & Dickons (2012) 50 FamLR 244], Wallis & Manning (20117) FLC 93, 759 at [20], Singerson & Jones (2014) FamCAFC 238 and Jabour & Jabour (2019) FLC 93-398 is that the task of the decision maker is that all contributions as identified under s79 need to be properly weighed and considered, including non-financial contributions.
I accept that submission.
The Wife’s case was, as stated by senior counsel;
15.What emerges from an analysis of the relationship in this instance is that a factual evaluation of matters both during cohabitation and subsequently, leads inexorably and inevitably to an assessment of contributions that weighs heavily in the Wife’s favour. That is not to minimise, downplay or give insufficient weight to the contributions made by the Husband both during the relationship and post its end. Rather, it involves an orthodox application of the principles established by the High Court over 30 years ago in Mallett (supra) and which remain undisturbed.
It was contended by senior counsel that I should regard the Wife as more reliable than the Husband in evidence as to the contested matters, because of what he pressed upon me. The reliability of the Wife's evidence and the unreliability of the Husband.
Under cross-examination, the Wife was responsive to the questioning most of the time. On occasion, the Wife's demeanour when cross-examined caused me to conclude that the Wife was guarded in regard to evidence where she perceived that the answer to the question asked may contend against her. On occasion, the question needed to be repeated to ensure that the Wife answered the question asked. When the question was so repeated, the Wife would usually provide a responsive answer. Further, there is a chain of events regarding the disclosure of the Wife's position concerning the further payment from the firm, where she previously held an interest, which causes me, together with her demeanour as a witness, to conclude that the Wife is not more reliable in her evidence in regards to disputed events than the Husband.
The Husband deposed that the Wife took two overseas trips while he cared for the children. He said each trip was of a month. The incontrovertible evidence of the records of the Wife, which were not contested, showed that those trips were not each of a month, but each of approximately 10 days. Based on that, it was asserted that I should regard the Husband's evidence as unreliable. The Husband, as a witness, was largely responsive to the questions asked. However, it became clear from the efficient cross-examination of the Husband, that he had deposed to matters he was not wholly aware of in his affidavit-in-chief, including matters of opinion. I find that whilst his belief was genuine, he was deposing to matters of which he did not have the understanding that the affidavit purported he had. I formed the opinion that on technical matters regarding financial records, the Husband had agreed with the matters prepared by the drafter of the affidavit.
In the end, the matters upon which the parties disagree, which I will cover later and is largely their respective roles within the relationship, do not amount to a significant matter for me, as I will explain when I come to section 79(4) of the Act ‘contributions’.
There are two aspects to reliability, one is truthfulness and the other is accuracy of recollection. Together they combine to make reliability. In my determination about the comparative reliability of the party's evidence I do not take into account the Wife's move of position in regard to her horses, said by her to be valued at about $34,000 at the time of the May hearing (and based on the opinion of a jointly retained single expert) to the agreed figure that was provided in an exhibit to me of a joint asset statement being W8 and refined to W10 on the last day of the hearing before me in September 2022.
That is a significant movement of position and a significant movement of position in an asset pool of non-superannuation assets of $1.7 or $1.8million. I do not take that into account in regard to reflecting on the Wife's credit because she was not cross-examined about that matter and the agreed position was arrived at by negotiations, as I understand it, between the parties' solicitors. I do not intend to go behind those negotiations and agreement that the parties' solicitors reached. I will not speculate about the various matters that were contained within that ultimate compromise.
The Wife’s case
The significance of those disputes can be found when I summarise in short parameter the Wife's case.
The Wife's case was that initial contributions should be regarded as about equal or, to the extent that they were different, the difference should be regarded as de minimis. The Wife's case was thereafter that during the relationship, and particularly during the time of the parties' care of the children and after, she should be regarded as making a greater contribution. It was said to the tune of an adjustment of 5% in her favour, or a 10% disparity between the parties, on account of their respective contributions.
Her contribution was said to be greater because of her role in the care of the children at the same time as her role within the business or profession - and her role in her own business within the finance profession. That was separate to but overlapped with her role in her partnership and later unit holding within a firm. It was said in substance that the quality of the Wife's contributions significantly exceeded the qualities of the Husband's contributions over that period, and demonstrated by the significantly higher income that she had earned.
The Husband’s case
The Husband's case was that, by agreement between the parties from soon after the birth of the first child, he had become the primary caregiver and that, in accordance with that, he had reduced his employment to part-time and, at the request of the Wife, did not earn any significant income. Who was the primary caregiver during the relationship, to the extent that it is possible to determine such a thing, was a matter seriously in dispute between the parties. Each gave evidence and expressed their opinions about it. In the end, I do not find, in regard to those disputed matters about parenting and contribution via employment, that one is more reliable than the other. That does not impede the decisions that I make for reasons that will become apparent later.
The Husband's case in regard to the Wife selling her interest in the firm without notice to him, save for the short notice between indicating that an agreement has been reached, and then executing the documents about a week later, was that this was a manipulative strategy on the part of the Wife to strategically advantage herself in the proceedings and that I should take that into account.
SIGNIFICANT FINANCIAL EVENTS
The Husband had purchased a dwelling in 2003 for $130,000 ('the AF property') with the assistance of mortgage borrowings for about 80% of the purchase price. He retained that property after the parties cohabited until it was sold in 2009 for $250,000.
The Wife had purchased a property in 2004 for $300,000 ('the L Street, Town M' property) with the assistance of mortgage borrowings for about 90% of the purchase price. The Wife retained the L Street, Town M property throughout the relationship, and following separation moved to live there and still does. When the Husband purchased the AF property in 2003 he used his savings or money available to him of about $26,000. When the Wife had purchased the L Street, Town M property in 2004 she had used savings or money available to her of about $30,000. The Husband alleges, and the Wife disputes, that by the time cohabitation commenced in 2005 the AF property had increased in value by $30,000 and that her property, the L Street, Town M property, had not increased in value.
When the parties commenced cohabitation the Wife was employed as a graduate finance professional and the Husband was a qualified tradesman. The Wife worked as an employee finance professional in different roles until late 2008 or early 2009. The Husband continued work as a full time employee until 2012 when he commenced self-employment.
At about the time of cohabitation, the Husband purchased another property ('the AG property') for about $150,000, funded entirely by borrowings secured against that property and the AF property. It is possible, and indeed likely, that the AF property had risen in value to some extent by this time to facilitate the borrowings necessary to fund 100% of the purchase price of the AG property. It is possible that between purchase and cohabitation, the Wife's L Street, Town M property had increased in value to some extent. It is not disputed that neither the Husband nor the Wife have the necessary expertise to provide a reliable expert opinion as to the value of either or both of those properties as at the time of cohabitation.
In 2007 the Wife purchased another property ('the AH property') for the sum of $138,000, funded entirely by borrowings.
The parties married in 2008. Soon after, in late 2008 or early 2009, the Wife commenced self-employment as a finance professional and also commenced her separate specialist business in the finance field ('the Wife's business'). The Husband continued in paid employment as an employee.
In 2009 the Husband sold the AF property, and it is common ground that the proceeds of sale were applied to reduce the mortgage over the AG property, which the Husband still retained. Also in 2009, on a contract basis the Wife commenced work for the Firm ('the firm').
Early in 2010 the parties established their own Self-Managed Super Fund ('the Super Fund 1’) and rolled their existing superannuation benefits into that fund which they still conduct. In the middle of 2010 the parties' eldest child, now 12 years old was born. Both parties were involved in the care of their eldest child thereafter but they disagree as to the extent of and significance of the other in parenting their children.
In 2011 the parties purchased the J Street, Town K, then a block of land, and in 2012 built a dwelling on that property that became the matrimonial home. Since separation the Husband has continued to reside in the property and intends to retain it if he is able to.
In 2012 the parties' second child was born. Soon after, the parties retained external tradesmen and contractors to build a dwelling on the J Street, Town K and both were involved in decisions about design. In addition, the Husband and his father worked in the building of the dwelling, including the trades work and fitting out of the kitchen and bathroom. The Husband contends that his substantial unpaid work on the J Street, Town K would have cost something in the order of $200,000 had he not undertaken that work. That figure is in dispute and I do not have sufficient evidence to satisfy me on the balance of probabilities that that sum was saved by the Husband's work. Further, while he was working on the former matrimonial home he wasn't working in paid employment. However, I do accept and I find that the parties were financially advantaged by the work, whatever the extent of it, that the Husband undertook on the J Street, Town K. The building of the dwelling was funded in part, by the sale of part of the AG property to the Super fund 1, that property having risen in value in the meantime.
Also in 2012 the Wife entered into a partnership in the Firm. The Wife contends that her duties in the partnership did not impede her homemaking and parent duties because she worked from home, and the Husband contends that it was necessary that he undertake the bulk of those roles, and work less in paid employment, because of the Wife's attendance to her work.
Also in 2012 the Husband ceased salaried work, become self-employed and operated as a sole trader. The Wife contends that the Husband worked longer hours in building his self-employed business and that she undertook more of the parenting duties. The Husband alleges the reverse. Neither alleges that thereafter the other was not diligently involved in either paid work, farming, building, renovations or parenting. The mix of those roles undertaken by each until separation is in dispute.
At this point the parties are in sharp disagreement about the Husband's employment from 2012 and the consequences of that. The Husband asserts that it was agreed between the parties that he would leave full-time employment as an employee and work part time, self-employed, in order to look after the children. He asserts that he was thereafter the primary caregiver as the Wife continued in full-time employment and he in part-time employment. The Wife says there was never any such agreement and that it was only much later in the relationship, closer to separation, that she noticed that the Husband was not working the hours that she expected. She states that although she acknowledges the Husband sharing in the care of the children, she asserts that she was effectively working three full-time jobs; being the primary care of the children (although assisted by the Husband), her full-time job at the Firm with long hours as a finance professional and the separate work of the Wife's business (although this overlapped with her work at the Firm).
It is common ground that from about 2017 the parties arranged their working hours to suit the children's working arrangements. Although not conceding that the Husband was the primary carer, the Wife concedes that she largely undertook the morning routine and the Husband largely undertook the afternoon routine of school drop off and pick up, homemaking and parenting. I am unable to find that caring for the children in the morning is more important or significant pursuant to section 79(4) of the Act.
In 2016 the structure of the Firm changed and was enlarged. The Wife, via the Bergman Family Trust that she had arranged, effectively became the 50% owner of a much larger practice. Notwithstanding that, I will continue to refer to that different and larger business as the Firm. The Wife paid $700,000 for her share of this different and larger firm and borrowed about $680,000 to do so. Thereafter there was a significant increase in the income that she received, notwithstanding she, or the Bergman Family Trust, needed to service the borrowings required to purchase that share.
Utilising her skills, the Wife managed the income distribution and tax matters of the parties and that included distribution of income to each of them.
I find that after the interest in the new and larger Firm was purchased, the Wife worked even longer and later hours than previously. I infer that the younger child would have commenced school soon after this purchase and thereafter both children were at school.
In early 2019 the parties purchased the AK property for a total of about $1,230,000 together with a mob of cattle. The AK property was divided into two lots with one lot purchased by the Trustee of Super Fund 1 and the other lot purchased in the parties' personal names. The whole of the purchase price was funded by borrowings cross collateralised over all of the parties' properties.
In June 2019 the parties separated, and the Husband says on 30 June 2019, which would be an appropriate date for a finance professional. Thereafter, the Husband lived at the J Street, Town K and the Wife at the L Street, Town M. At some later time the Wife re-partnered with Mr AL and he also lives at the L Street, Town M with his son from a prior relationship.
The Wife continued working in the firm and parenting the children. Reasonably soon thereafter the parties agreed on an equal shared care arrangement. The Husband continued self-employed work in his business and as homemaker and parent to the children when the children lived with him.
On 9 January 2020 the Wife commenced proceedings for property settlement in this court. At that time she deposed to earning about $405,000 per annum.
At some point soon after the end of the financial year of 2020, the Wife determined, without consulting the Husband as to what she proposed or the impact on him, that the retained earnings in one of the parties' entities needed to be distributed by way of divided equally to each of the Husband and Wife. This created a taxation liability of about $30,000 for the Husband and I infer a similar amount for the Wife. The Husband viewed and views this unilateral arrangement as unnecessarily creating a taxation liability for him and was part of a strategy to financially overwhelm him so that he was unable to retain the J Street, Town K. Because the Wife had vaguely floated a suggestion that the entity would need to be wound up, the Wife asserts that she had consulted the Husband and further that the dividend distributed on paper only crystallised a pending or latent taxation liability and she asserts that it was sensible and proper to do that at that time. I have no evidence, despite there being plenty of time to obtain same if necessary, that the distribution of retained earnings from the entity (undertaken unilaterally) increased overall the tax liability. I do not find that this created or increased a liability that would, in any event, have come home to roost sooner or later and I find there is no evidence that the unilateral undertaking increased or created a liability that would not otherwise exist.
In November 2020, the single expert retained to value the parties' respective business interests released his report. Also in November 2020, the AG property was sold and about $146,000 of those proceeds were applied to the Super Fund and the remainder applied to debt.
On 16 February 2021 the parties attended mediation and made disclosure of documents and financial information to each other and experts were retained to value the businesses. However, the parties were unable to reach agreement about the division or alteration of their properties. Each blamed the other for the expensive predicament of litigation that they were in and each alleged that the other had not made full and frank financial disclosure. Orders were made listing the parties' dispute for Final Hearing on 28 June 2021.
In or about late February or early March 2021, the Husband became aware of an advertisement by the firm seeking a full-time finance professional. On 11 March 2021 he caused his solicitors to write to the Wife's solicitors enquiring whether the advertised role reflected an expansion of the firm or whether the Wife was reducing her work hours. On 22 March 2021, 11 days later, the Wife's solicitors advised that the Wife had reached an in principle agreement for the sale of her interest in the firm. That advice outlined that the sale price was to be $850,000 and that that sum was to be disbursed by way of about $609,000 to discharge the borrowings obtained to purchase the interest (back in 2016) and about $241,000 was to be paid to the Wife over four years under a vendor finance arrangement at 4% interest. Further, there would be about $58,750 tax payable as a result of the profit on that sale.
That sale came to pass when the necessary documents were executed on 31 March 2021. The 22 March letter (annexure 6 to the Husband's 24 November 2021 affidavit) described the intended sale, but made no mention of any further payment or entitlement of the Wife from the firm. On 22 April 2021 (annexure 7 to the Husband's 24 November 2021 affidavit) the Wife's solicitors provided a summary of the effect of the sale which was that the Wife would receive $4,791 per month plus interest over the next 48 months, in repayment of the loan of the unpaid purchase price.
The voluminous, detailed unit and share of sale agreement, deed of loan and security of agreement was provided by the Wife to the Husband. But no mention was made in the letter disclosing the arrangement and enclosing the documents of any further payment or entitlement of the Wife from the firm. At this time, the Wife's solicitors were complaining of the Husband's alleged failure to provide full and frank disclosure.
Further, whether or not the Wife was aware of it at the time, by this time she was pregnant with her child with Mr AL, with whom she had re-partnered. That child was born in 2021.
A careful reading of the unit and share sale agreement provided on 22 April 2021 would disclose a thing called the Unitholder Profit Entitlement (“UPE”) which was defined as;
Unitholder Profit Entitlement means the balance of the vendors accumulated share of profits up to completion, calculated in accordance with generally accepted accounting principles, less the vendors accumulated distributions.
Further, clause 5.8 provided as followed;
5.8 Unitholder Profit Entitlement
The parties acknowledge and agree that the Vendors Unitholder Profit Entitlement will be paid to the Vendor as agreed between the parties in writing.
On 28 May 2021, three days prior to filing her first trial affidavit and without notice to the Husband, the Wife sold her then existing four-wheel-drive motor vehicle for $52,000 and arranged the purchase, on 100% finance, of a brand-new motor vehicle of the same type as the one just sold. The Finance commitment was $1,852 per month over 48 months with a balloon of just under $66,000.
For the purpose of the Final Hearing, then listed on 28 June 2021, the Wife filed a trial affidavit on 31 May 2021 that, at paragraphs 14 to 22, dealt in apparently careful detail with the consequences of the sale of her interest in the firm. The unit and share sale agreement, including clause 5.8 was annexed to that affidavit. However, no reference whatsoever was made to any sum that was, or may be, due to the Wife as a consequence of her accumulated share of profits, or what is described as the UPE. Further, the Wife being the vendor and a finance professional, made no reference whatsoever to what she asserted or had calculated such entitlement would be or should be. Her Financial Statement, filed contemporaneously with the trial affidavit, describes her income as rent from (I infer) the AH property, which was less than the mortgage payment secured on the property, and otherwise as $778 per week. It was silent about the potential or likely accumulative share of profits. The Wife described as an asset the loan, due to her from the entity that had conducted her sale in the firm, as $273,000. That loan was more than the $241,000 balance of the purchase price that was, at that point, to be paid by instalments as described in the letter of 22 March 2021 and confirmed in the 14 April 2021 letter referred to above.
The Husband did not accept that the Wife had made full and frank disclosure of her interests, arising from the sale in the firm. On the second day of the sittings where the matter was first listed for Final Hearing, and pressed further in a letter of 29 June 2021(annexure 6 to the Wife’s second trial affidavit of 3 December 2021), the Husband pressed for the details of the Wife’s calculations and communications relating to the UPE at clause 5.8. As described in the Wife's second trial affidavit filed 3 December 2021, at [26] to [38], over the period 28 July 2021 to 17 November 2021, letters from the Wife's solicitors refuted any suggestion of her failing to provide all the relevant documents and also recited that on 1 September 2021 the firm had indicated that, in fact, the Wife (by the Bergman Family Trust) had been overpaid her UPE in the sum of $22,465. Hence rather than there being a sum due to her, the firm was alleging, she said, that she owed them.
On or about 8 December 2021, for a second time, the matter was listed for Final Hearing. The Wife filed a further affidavit for the purpose of that Trial. No further calculation of the UPE was given. On 24 May 2022, the Wife filed an outline of case and in that document referred to the 1 September 2022 issue or possibility of the $22,465 being due back to the firm.
The long and the short of it is that when the matter came before me for two days in May, it proceeded on the basis that it was possible that some money may have to go back to the firm. However, the Wife's commercial solicitors had on 18 March 2022 proposed to the firm that she be paid an additional $179,000 for the UPE. I so infer from the terms of the 19 September 2022 letter annexed to the Husband's affidavit of 28 September 2022.
It is common ground that the letter of 18 March 2022 was not disclosed. It is not contested that the first notice the Husband had of that letter or proposal was on 26 September 2022, days before the resumption of the hearing and after the Husband had made further inquiries to the Wife and sought the issue of the subpoena. The long and the short of it is that it was then disclosed that the firm was proposing that the Wife be paid a further $139,609, and the Wife proposed for the purpose of these proceedings that be treated as an asset and otherwise added or included in the assets of the joint balance sheet. These events, together with the Wife’s demeanour as a witness, cause me to question the reliability of the Wife’s evidence and to not regard the Wife’s evidence as more reliable than the Husband’s.
The other development between May and September 2022 was that there was a negotiated agreement that the horses would be regarded as $225,000, not the $34,000 as the jointly retained single expert had opined and the Wife had accepted.
THE APPLICABLE LAW
The law to be applied is as follows from the Act:
Section 79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
…
Section 75Matters to be taken into consideration in relation to spousal maintenance
(1)In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).
(2)The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
…
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
…
Stanford v Stanford
I note that post-separation the Husband has been paying the sum of $500 per month towards that liability, as I understand it, to keep the bank quiet.
The local tax liability
There is then what was described as the loan owned to Q Pty Ltd. That is in fact the taxation liability to the Q Proprietary Limited in the sum of $30,384. The Husband complains of that taxation liability, and says, in the circumstances of how it arose, he should not have any part of it. I am not satisfied on the balance of probabilities that any part of that liability has been increased by the manner in which the Wife conducted it. Indeed, it may have been minimised by her handling the matter as she did. I note that she seeks that that liability be paid in the same proportion as the overall assets, which on her case, is fifty-fifty.
It is appropriate, in my view, that that liability be dealt with the same as the other liabilities that arise in the winding up of Q Pty Ltd, and hence that liability will be included at the order which deals with Q Pty Ltd.
Hence, I think that is all of the disputes about the nature of the pool.
Form of orders
The draft orders contain, largely, the format sent to me by the Wife in a form that the Husband's counsel advised could be “lived with.” They include Annexure A, which is essentially a formulaic approach. Because of that, I wish to release the orders in draft form, so that the parties' solicitors can carefully ascertain that there is no item omitted from the table that should have been included, or was agreed to be included, or that there was not an arithmetic error in it.
On those assumptions, that will mean that the Wife's keep is about $705,000. The Husband's keep is about $1,065,620. The non-superannuation pool is about $1,770,836. In addition to that, the parties have the superannuation of $304,580, but will be subject to the rise and fall provisions that I have discussed, and there is likely to be the shortfall on the AH property, which also will be shared by the parties in the proportions determined overall. Hence I find that the assets and liabilities as set out in what will be Annexure A to the orders, are as follows;
ANNEXURE A
Ownership WIFE RETAINS (‘WIFE’S KEEP’) Finding of value ASSETS 1 Wife The L Street, Town M
(or as realised on default sale)$775,000 2 Wife R Pty Ltd ATF Bergman Family Trust,
exc horses, inc firm proceeds & UPE of $136,609$342,441 3 Wife Horses held in Bergman Family Trust $225,975 4 Wife Tractor and bobcat $21,200 5 Wife Furniture and Plant - L Street, Town M $12,575 6 Wife Horse Float $15,000 7 Joint CBA Account ending in …29 $3 8 Wife CBA Account ending in …04 $34 9 Wife Funds held in solicitor’s Trust Account Not included 10 Wife Potential Remission of General Interest Charges (Rise & Fall) Not included 11 Wife Legal fees and outlays paid by Wife (section 75(2)) Not included Total Assets $1,392,228 LIABILITIES 12 Joint CBA Home Loan (L Street, Town M)
(or as realised on default sale)$281,156 13 Wife Personal Tax Liability $302,834 Joint CBA Home Loan (Town K shortfall) $46,985 14 Wife CBA Credit Card ending in …42 Not included 15 Wife GST Payable on Sale of Horses Not included 16 Wife Tax Payable on Further Funds Received From Sale $55,111 Total liabilities $686,086 NET NON- SUPER’N ASSETS: WIFE’S KEEP $706,142
Ownership HUSBAND RETAINS (‘HUSBAND’S KEEP’) Finding of value 1 Joint J Street, Town K
(or as realised on default sale)$1,475,000 2 Husband V Pty Ltd ATF AM Trust $78,590 3 Husband Furniture and Plant –J Street, Town K $35,720 4 Husband Horses at J Street, Town K $22,725 5 Husband H Truck $9,000 6 Husband Excavator $10,000 7 Husband CBA Account ending in …84 $0 8 Husband Motor Vehicle 1 $12,500 9 Husband Remission of General Interest Charges (Rise & Fall) Not included 10 Husband Legal fees and outlays paid by Husband Not included Total Assets $1,665,620 LIABILITIES 11 Joint CBA Home Loans J Street, Town K
(or as realised on default sale)$533,966 12 Husband Loan owed to W Trust $11,911 13 Husband Personal Tax Liability $32,038 Joint Tax liability of the winding up of Q Pty Ltd (included at Order 20) Not included Total Liabilities $577,915 NET NON- SUPER’N ASSETS: HUSBAND’S KEEP $1,065,620 ALL NET NON-SUPER’N ASSETS & LIABILITIES $1,771,762 SUPERANNUATION
Member Name of fund Type Agreed value 3 Wife Super Fund 1 SMSF $189,512 4 Husband Super Fund 2 SMSF $111,693 Husband Unallocated super – ATO N/A $3,375 Total All Superannuation $304,580 TO BE SOLD/WOUND UP
Ownership Description Finding ASSETS 1 Wife Town O Property To be realised 2 Joint Q Pty Ltd $0 3 Joint P Pty Ltd $0 LIABILITIES 4 Joint CBA Home Loan …04 (Town O)
(or as realised on default sale)$129,765 [Numbering is copied from W10]
Step Two: section 79(4)(a),(b) & (c), contribution
The Husband's case is that he made a greater initial contribution by bringing in an equity of about $83,000. $65,000 of that being from the AF property, and $17,000 from a Motor Vehicle 2. He says the Wife only brought in an initial contribution of $33,000, with $30,000 from the L Street, Town M, and a motor car worth $3000. The Wife does not accept the Husband's opinions about the value of the AF property and his motor car at cohabitation. Further, it is implicit in the Husband's case that between 2003 and 2005 his property increased by about 23% or $30,000, but the Wife's property purchased for $300,000 did not increase in value at all.
The Wife says her contributions included her hard work and long hours in her roles as a homemaker, parent, running her own business, managing the parties' self-managed superannuation fund, assisting the Husband's business and working in the firm. She argues that she should be regarded as contributing overall for the purpose of section 79(4) of the Act in proportions of 45/55. That would give the effect that her contribution, she says, should be regarded as 20% to 25% more significant than the Husband's or that in regard to contribution she should be regarded as getting the first 10% and the balance divided equally. The Wife undertook these roles, as well as working in the garden and caring for and training her horses, and that is not disputed.
The Husband asserts that overall his work and contributions during the relationship, including what he says is his greater role in the parenting and care of the children, mean that he should be regarded for the purpose of 79(4) as contributing equally in the period during the relationship and since separation.
I am satisfied that each party genuinely regards their roles and work in parenting the children as more significant than the other's.
As to his contribution during the relationship and since separation, the Husband refers to his work in full-time and part time paid employment, his homemaking role and his caregiving role as the primary carer of the children. He asserts that his contribution should be regarded as equal to the Wife's over the same period. The Husband asserts his greater initial contributions ($83,000 against $33,000) back in 2005 would mean that his contributions overall should be regarded as about 52.5/47.5, or the equivalent of a 5% disparity between the parties. The Wife denies that there is any disparity of initial contribution. She says further that even if the Husband was correct and did bring in $50,000 more assets back in 2005, such disparity is de minimis given the length of the relationship and, I infer, the multitude of her contributions over the 17 years since. The pool is about $1,700,000 to $2,100,000 of non-superannuation and superannuation assets.
I accept that the Husband genuinely has the opinion that the dollar amounts and effect of the parties' initial contributions are as he asserts. However, I must be persuaded on the balance of probabilities of those facts to take them into account. It is not enough that I conclude that what the Husband asserts as to the value of his initial contributions could be right or might be right. I am not persuaded the Husband has the expertise and knowledge in 2022 to accurately describe the value of motor cars in 2005 and the increase in real estate between 2003 and 2005 as to the property purchased for $130,000 and/or between 2004 and 2005 as to the property purchased for $300,000. If I were so satisfied, I would not, in any event, attribute the first 5% of this pool, roughly some $100,000 or so, to that disparity of initial contributions giving the overwhelming weight of contributions of both parties over the subsequent 17 years.
The dispute between the parties as to the relative importance of different contributions is an arid one. Both parties made significant contributions by working in paid employment, in their self-employment, in their account management and self-managed super fund management, in their hobbies, in their farm work, in their real estate investments, in working on their properties, in taking risks in borrowings, in taking care of the children and the household, and in supporting each other while the other did such work.
For the purpose of section 79(4) of the Act, that either of them had a particular passion or interest in an aspect of that farm work, such as the Wife's passion for her horses and the enjoyment she took from it, neither decreases or increases their respective contributions. If the Husband took more enjoyment from working on the farm, improving the J Street, Town K and caring for the children than he did from his paid employment while the Wife was engaged in other tasks or activities, that neither increases nor decreases the parties' respective contributions for the purpose of section 79(4) of the Act.
From start to finish the parties brought in to the relationship real properties, sold one of them and applied the proceeds to debt, purchased four other properties (the AG property, the AH property, the J Street, Town K and the AK property), built a home on one of those properties, bought and sold cattle and horses, acquired machinery to use on and improve the properties, successfully set-up a self-managed superannuation fund, raised horses, raised two children now aged 12 and 10, and one of them bought and sold a share of business for a profit and worked in that business. Over that journey the parties have been quite successful, financially, professionally and as parents.
In this case I find that the parties now look back on that journey through the grief and frustration of the breakdown of their marriage and their dispute about property division since. They have difficulty recognising the very significant contribution over many years that the other party has made in different ways.
I do not accept the Wife's account and her opinion of the parties' respective contributions being more reliable than the Husband's account or his opinion of those matters. I do not accept that hard work in one occupation of itself warrants greater weight pursuant to section 79(4) over a period of contribution of 17 years. That is so whether one is more or less physically arduous than another or more or less well-paid than another. Paragraph [43] of Fields & Smith (2015) FLC ¶93-638 is as follows;
43. If it is necessary to make the point again, and to highlight it for the purpose of this appeal, we add our endorsement to what has been made clear in the authorities referred and to the Full Court’s comments in [52] of Hoffman, that the words of s 79 do not provide endorsement for any category of contribution related to any class of property (for example, high wealth) being, by virtue of that category or class, more valuable or important that another. In each case the contributions made by the parties must be evaluated in the context of the facts particular to that case.
I do not start with a presumption of equality of contribution, and acknowledge that the extent and quality of all of the parties' contributions over the whole of the relationship and since must be examined and had regard to. The Wife earned a higher income in her employment, worked longer hours and spent more time in the garden and with her many horses than the Husband did in those activities. The Husband had a decent and helpful income in his employment and worked shorter hours than the Wife did, but spent more time in renovation and trades work on the various properties, the building of the J Street, Town K and in farm work, including fencing, than the Wife did. If either of them were not doing one thing, they were doing another. Both of them were only ever in one place at one time.
Taking into account all of the evidence I find that both parties have worked hard and diligently over many years including as income earners, farmers, equine carers or trainers, property investors and borrowers, home builders, and homemakers and parents. I find that overall, from start to finish, contributions pursuant to sections 79(4)(a), (b) and (c) of their different direct and indirect contributions, including as homemaker and parents, should be given equal weight and for the second step of the orthodox four-step approach will be regarded as fifty-fifty of the non-superannuation assets.
I have regarded the parties' superannuation differently. I note that the Husband sought a division whereby he received about 58.5% of the parties' superannuation. The parties' superannuation has been contributed to in the same manner as the non-superannuation assets. For the same reasons as set out I regard the parties as having contributed equally to the totality of their superannuation, notwithstanding that the Wife has earned a greater income.
Step 3: section 75(2) factors
Now turning to step 3 or section 75(2) factors. The Husband contends that I should find that at this time the Wife has a significantly greater earning capacity than he does and on account of that greater earning capacity I should make a 5% to 7.5% adjustment in his favour on non-superannuation and, as I understand it, on superannuation assets. I must have regard, in any event, to the nature, form and characteristics of the assets that are to be dealt with.
Because of the parties' ages, and the fact that they will be in employment and caring for the children for many years, the simple reality is that it is many years before when they will be able to retire and enjoy that superannuation. What the superannuation balance of each party will be by the time they come to use it will depend on a number of things including what they earn in the meantime, but also what other decisions they make in regard to investment of superannuation and what the prevailing government provisions are as to when they can access their superannuation.
In all of those circumstances I regard section 75(2) factors as not warranting any adjustment on the superannuation position.
In regard to the non-superannuation assets, the current circumstances are that the Wife is working in limited circumstances. The Husband complains and seeks that it be recognised that she has sold her interest in the high-income business for a strategic purpose. However, the fact is the Wife has sold the business. The income of the Wife at the moment is less than the Husband's. The Wife has a baby who will soon be 1 year old. I am unable to find that she has any significant financial support from her current partner. The Wife has sold the business that previously provided the high income. However, the proceeds of sale, that is, the profit part after repayment of the loan, including the unpaid UPE of $136,609, will be paid to her over the next two and a half or three years, and the period of the payment of the $136,609 or the greater amount, whichever it is, has not yet been determined.
I acknowledge that in the very long run it is likely that the Wife will have a higher income than the Husband. I accept the senior counsel's argument that section 75(2) is not a matter of social engineering to ensure some form of equality in perpetuity or over the very long run. I have regard to all of the section 75(2) factors. The Husband agitated for an adjustment in his favour solely on the basis of the Wife's conduct of the sale of the business and the income-earning capacity. I am not satisfied that I should make an adjustment on account of those matters. That is particularly so when as a result of the concessions of the Wife, whether those concessions were hard fought or extracted at great pain and expense from her.
At Stage 1 of this matter I have included as an asset income and/or receipt of capital payments, however they depend on what the Wife is to actually receive over the next two or three years, or maybe longer. Notwithstanding the Husband's role as homemaker and parent, he still has his expertise as a tradesman and will continue in it.
That then leaves whether any adjustment should be made on account of the disparity of legal fees paid. The Wife has significant unpaid legal fees of about $80,000, and the Husband has significant unpaid legal fees of about $106,000. The Wife has by application of her income earning capacity and her ownership of the business been in a position to pay substantially more legal fees than the Husband has. I have determined that it is not appropriate or just and equitable to treat that disparity or the totality of both parties' legal fees as an asset.
I take into account the circumstance that the Wife has in fact been able to pay those legal fees by the ownership of a business built up during a long relationship wherein both parties were making significant contributions. I also have regard to section 75(2)(b) of the Act (the income, property and financial resources of the parties) which in my view includes the paid legal fees and the source from whence those fees have been paid. I also have regard to section 75(2)(o). In those circumstances, that calls for an adjustment pursuant to section 75(2), but on a conservative basis.
Were the paid legal fees to be included as an asset in the pool, on a contribution basis, the Husband would be indirectly provided with about $51,000 in his pocket. I have concluded that is not appropriate. However, I do have regard to what that sum would be in determining what the appropriate adjustment would be. I also, in this regard, take into account that in the long run the Wife is likely to have a greater earning capacity and that she has determined not to have that earning capacity right now.
The overall pool of non-superannuation assets is about $1,770,000, subject to the rise-and-fall provisions and subject to the extent of the loss in the AK property. It is likely to be about $1,740,000. 2% of that is about $35,000. A 2% disparity between the parties on account of those paid legal fees and the source of the payment, in my view, is appropriate, painting with a broad brush, pursuant to section 75(2)(b) and (o). Hence, I will make a 1% adjustment under section 75(2) that will overall give a disparity of 2% between the parties. That will ultimately be more or less depending on the rise-and-fall provisions, although they are expected to be of a modest dimension, if any at all.
For the reasons stated, it is not appropriate to make any adjustment under section 75(2) in regard to the parties' superannuation.
Step Four: Conclusion, calculations and just and equitable?
Taking all of the evidence and submissions of the parties into account I find that it is just and equitable pursuant to section 79 of the Act for the parties' non superannuation property to be divided 51% to the Husband and 49% to the Wife in the form as provided in the draft orders.
In a pool of roughly $1,771,762, the end result of applying the orders and the ‘Keep’ provisions will be approximately, but not precisely, that about $903,000 (51%) of the pool will go to the Husband. The Husband's ‘Keep’ is about $1,065,000. Hence, that will require him to make a payment to the Wife of about $162,000 for the purposes of these orders.
I should add, in regard to the rise-and-fall provision of the general interest charge remission controversy, these orders do not compel the Wife to make any such application. It is not intended that it compels her to make an application. However, if she does and she receives a remission, the effect of that is that the Husband must be paid 51% of that, and the same applies in regard to any excess over the $136,609 in regard to the settlement of the firm.
As discussed with counsel, because of the complexity and number of moving parts of the orders, I will release the orders in draft form to enable the parties' solicitors to check the details, the arithmetic and, in particular, Annexure A of these orders to ensure that they accord with these reasons.
I certify that the preceding one hundred and fifty-six (156) numbered paragraphs are a true copy of the Res Tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 30 November 2022
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