Berry and Ingram
[2018] FamCA 192
•28 March 2018
FAMILY COURT OF AUSTRALIA
| BERRY & INGRAM | [2018] FamCA 192 |
FAMILY LAW – PROPERTY – Where there was a marriage that involved cohabitation for approximately 18 years – Where it is agreed that the superannuation should be divided equally with no adjustment – Where the wife otherwise made greater initial contributions – Where the wife received $441,953 post separation in the form of royalties – Where it is agreed that the wife’s financial contributions exceeded those of the husband – Where the husband made no contribution to a property owned by the wife – Where it is assessed that the husband made a 40 per cent contribution to other non-superannuation assets –Where the husband is of poor health and the wife has greater earning capacity – Where an adjustment of 22.5 per cent in favour of the husband is justified in relation to the non-superannuation assets.
| Family Law Act 1975 (Cth) ss 75(2), 79, 81 |
Browne and Green (1999) FLC 92-873
In the Marriage of Kennon (1997) FLC 92-757
In the Marriage of Lenehan (1987) FLC 91-814
In the Marriage of Norbis (1986) FLC 91-712
In the Marriage of Pierce (1999) FLC 92-844
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Zyk (1995) FLC 92-644
Kowaliw and Kowaliw (1981) FLC 91-092
Stanford v Stanford (2012) 247 CLR 108
| APPLICANT: | Mr Berry |
| RESPONDENT: | Ms Ingram |
| FILE NUMBER: | SYC | 7071 | of | 2013 |
| DATE DELIVERED: | 28 March 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 4, 5 & 29 September 2017 |
REPRESENTATION
COUNSEL FOR APPLICANT: | Mr Givney |
| SOLICITOR FOR THE APPLICANT: | Watson & Watson |
COUNSEL FOR THE RESPONDENT: | Mr Schonell |
| SOLICITOR FOR THE RESPONDENT: | Diamond Conway Lawyers |
Orders
Within 90 days the wife shall pay the husband the sum of $207,473.75, save that the sum may be reduced by the total of any amount owing by the husband to the wife in respect of the valuations prepared for these proceedings for the property at B Street, Suburb C, in the State of New South Wales being the land comprised in Lot … DP … (“the Suburb C property”) and for Ingram Pty Ltd.
In the event that the wife fails to pay the husband the sum owing pursuant to order 1 within the time provided then forthwith upon her default of order 1 the wife do all acts and things and sign all documents necessary so as to effect a sale of the Suburb C property for the best price reasonably available in the following manner:
(a)list the Suburb C property for sale by public auction within one month from the date of default of order 1 with such agent as the parties may agree to appoint and in default of agreement as to the agent within 14 days of the date of default of order 1 then such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the Agent”);
(b)the costs of and incidental to the appointment of the Agent be borne equally by the parties as and when same fall due;
(c)the reserve price for the purposes of such auction shall be $745,000 or such price as may be mutually agreed upon by the parties or, in the absence of an agreement reached within 14 days of the date of default of order 1, shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the Australian Property Institute (Inc) (“the Valuer”);
(d)the costs of and incidental to the appointment and valuation of the Valuer be borne equally by the parties as and when same fall due;
(e)the Valuer shall if requested by either the husband or the wife at a date three calendar months after the date upon which the Suburb C property is first listed pursuant to order 2 above and thereafter at three calendar monthly intervals until the property is sold, nominate a sale price other than the originally nominated sale price.
(f)the parties shall cooperate in every way with the Agent including (without limiting the generality of the forgoing):
(i)making the key 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 a sale being effected.
(iv)ensuring the Suburb C property including the grounds are in neat and clean condition at the time of inspection by the Agent and prospective purchasers.
(v)signing all documents requested by the Agent in relation to the listing for sale of the Suburb C property except a Contract or Agreement for sale which has not been authorised by the parties’ solicitors.
(vi)in the event that the bidding at the auction does not reach the reserve price the parties or such of them as attended the auction may negotiate with the highest bidder or any other interested person and effect a sale of the property at a price which is not more than 10 per cent below the reserve price, or at such other price as the parties agree upon in writing.
(vii)if the Suburb C property remains unsold, the wife shall do all acts and things and sign all documents necessary to immediately relist the property for sale by public auction again, on a date nominated by the said Agent and at such auction there shall be no reserve price unless otherwise agreed by the parties in writing.
(viii)the wife shall execute a Contract for Sale in the form prepared by solicitors having the conduct of the sale at the sale price.
(ix)the wife shall instruct a solicitor to act on the conveyance of the Suburb C property or failing agreement within a period of seven days the parties shall accept the nomination of a solicitor as appointed by the President for the time being of the Law Society of New South Wales.
(x)neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the Suburb C property or to any commission.
(xi)the party not in possession shall be entitled upon reasonable notice once per fortnight to enter and review the state of repair of the Suburb C property.
(xii)if the Agent shall certify in writing to the parties’ solicitors it is reasonably necessary for work specified in such notice to be carried out to the Suburb C property so as to assist in effecting sale and provided the costs of any such work is less than $1,000 either party may cause such work to be carried out and the costs thereof shall be borne by the party who elects to proceed with the work.
(g)the proceeds of sale of the Suburb C property be applied as follows:
(i)in payment of up to $163,000 towards any debt/s secured by mortgage over the Suburb C property;
(ii)in payment of the costs of sale including agent’s commission;
(iii)in payment of 36 per cent of the remaining proceeds to the husband, minus the total of any amount owing by the husband to the wife in respect of the valuations prepared for these proceedings for the Suburb C property and for Ingram Pty Ltd;
(iv)in the discharge of any remaining debt/s secured by mortgage over the property; and
(iv) in payment of the balance to the wife.
In accordance with paragraph 90MT(1)(b) of the Family Law Act 1975 (Cth):
(a)the husband is entitled to be paid the specified percentage out of the wife’s interest in the D Super;
(b)the wife’s entitlement in the D Super is correspondingly reduced by the force of this order; and
(c)the percentage specified for the purposes of this order is 50 per cent.
The Trustee of the D Super (“the Trustee”) do all such acts and things and sign all such documents as may be necessary to:
(a)calculate in accordance with the requirements of the Family Law Act 1975 (Cth) the entitlement awarded to the husband in the immediately preceding clause of this order; and
(b)pay the entitlement whenever the Trustee makes a splittable payment from the wife’s interest in the D Super.
Orders 3 and 4 have effect from the operative time and the operative time is seven days after the date these orders are made by the Court and those orders bind the Trustee.
Subject to these orders, as between the husband and the wife, the wife shall retain all interest in and entitlement to all other personal property of whatsoever nature and kind in her possession or control, as at the date of these orders including but not limited to, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name and all interest in life insurance policies and superannuation funds standing in her sole name;
Subject to these orders and as between the husband and wife, the husband shall retain all interest in and entitlement to all other personal property of whatsoever nature and kind in his possession or control, as at the date of these orders including but not limited to, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name and all interest in life insurance policies and superannuation funds standing in his sole name;
The parties hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to this order, the Registrar of the Family Court of Australia, Sydney Registry be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
The parties may restore the proceedings to the list in relation to the wording of these orders on application made within 28 days.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Berry & Ingram has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 7071 of 2013
| Mr Berry |
Applicant
And
| Ms Ingram |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings in relation to property settlement in the context of a marriage that involved cohabitation for approximately 18 years. The parties are Mr Berry (“the husband”) and Ms Ingram (“the wife”).
Applications
After the conclusion of the oral trial, the husband sought orders in terms of a revised minute of order sought that was provided on 5 October 2017. No leave was sought or granted to the husband to amend the orders he sought. The revised minute was provided together with supplementary submissions that were received pursuant to an order made on 29 September 2017. The revised orders sought are arguably less favourable to the husband than his earlier position. There has been no complaint on behalf of the wife in respect of the purported amendment and on that basis there is no apparent detriment to the wife in allowing that amendment. The orders sought on behalf of the husband in accordance with his revised minute are as follows:
1.That within 28 days the Respondent Wife pay the Applicant Husband the sum of $257,940.00.
2.The Wife shall upon receipt of royalties received from the production of [E] in accordance with the contractual arrangements that she has with [E] Investments Pty Ltd the Wife shall account and pay to the Husband one half of the royalties within seven (7) days of receipt and the Wife shall give all consents and authorities to enable the husband to receive one half of the royalty payments.
3.The Husband is at liberty serve a copy of these Orders on the Wife’s agent [F Group].
3.That in accordance with section 90MT(1)(b) of the Family Law Act 1975:
3.1The Husband is entitled to be paid the specified percentage out of the Wife’s interest in the [D Super];
3.2The Wife’s entitlement in the [D Super] is correspondingly reduced by the force of this Order; and
3.3The percentage specified for the purposes of this Order is fifty per cent (50%).
4.That the Trustee of the [D Super] (‘the Trustee”) do all such acts and things and sign all such documents as may be necessary to:
4.1Calculate in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Husband in the immediately preceding clause of this Order; and
4.2Pay the entitlement whenever the Trustee makes a splittable payment from the Wife’s interest in the D Super.
4.3That this Order has effect from the operative time and the operative time is seven (7) days after the date these Orders are made by the Court.
4.4That this Order binds the Trustee.
8.In the event that the Respondent Wife fails to pay the Applicant Husband the sum of $267,745.00 (sic) within the time provided for by Order 1 then:-
8.1That within 30 days of the date of these Orders the Wife do all acts and things and sign all documents necessary so as to effect a sale of [B Street, Suburb C], in the State of New South Wales being the land comprised in Lot … DP … (“the Property”) for the best price reasonably available in the following manner:
8.2List the property for sale by public auction within one (1) month from the date of these Orders with such agent as the parties may agree to appoint and in default of agreement as to Agent within fourteen (14) days of the date of these Orders then such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the Agent”) the costs of and incidental to such appointment be borne equally by the parties as and when same fall due;
8.3.The reserve price for the purposes of such auction shall be $750,000 or such price as may be mutually agreed upon by the parties or, in the absence of an agreement reached within fourteen (14) days of the date of these Orders shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the Australian Property Institute (Inc) (“the Valuer”) the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;
8.4.The Valuer shall if requested by either the husband or the wife at a date three (3) calendar months after the date upon which the Property is first listed pursuant to paragraph 2 above and thereafter at three (3) calendar monthly intervals until the Property is sold, nominate a sale price other than the originally nominated sale price.
8.5.The parties shall cooperate in every way with the Agent including (without limiting the generality of the forgoing):
8.5.1Making the key available to the Agent.
8.5.2Allowing inspection of the Property at all reasonable times requested by the Agent.
8.5.3Doing or saying nothing to hinder or prevent a sale being effected.
8.5.4Ensuring the property including the grounds are in neat and clean condition at the time of inspection by the Agent and prospective purchasers.
8.5.5Signing all documents requested by the Agents in relation to the listing for sale of the Property except a Contract or Agreement for sale which has not been authorised by the parties’ solicitors.
8.6In the event that the bidding at the auction does not reach the reserve price the parties or such of them as attended the auction may negotiate with the highest bidder or any other interested person and effect a sale of the Property at a price which is not more than 10% below the reserve price, or at such other price as the parties agree upon writing.
8.7If the Property remains unsold, the Respondent Wife shall do all acts and things and sign all documents necessary to immediately relist the Property for sale by public auction again, on a date nominated by the said Agent and at such auction there shall be no reserve price unless otherwise agreed by the parties in writing.
8.8The Respondent Wife shall each execute a Contract for Sale in the form prepared by solicitors having the conduct of the sale at the sale price.
8.9The Respondent Wife shall instruct a solicitor to act on the conveyance of the property or failing agreement within a period of seven (7) days the parties shall accept the nomination of a solicitor as appointed by the President for the time being of the Law Society of New South Wales.
8.10Neither party may confer on any Agent without the consent of the other party any right to any sole or exclusive agency in respect of the Property or to any commission.
8.11The party not in possession shall be entitled upon reasonable notice once per fortnight to enter review the state of repair of the Property.
8.12If the Agent shall certify in writing to the parties’ solicitors it is reasonably necessary for work specified in such notice to be carried out to the Property so as to assist in effecting sale and provided the costs of any such work is less than $1,000 either party may cause such work to be carried out and the costs thereof shall be borne by the party who elects to proceed with the work.
9.That the proceeds of sale of the property at B Street, Suburb C in the State of New South Wales be applied as follows:-
(i)In payment of any mortgage over the property.
(ii)In payment of the costs of sale including agents commission.
(iii)The sum of $257,940.00 and interest to the Applicant Husband.
(iv)The balance to the Respondent Wife.
10.That subject to these Orders, as between the husband and the wife, the Wife shall retain all interest in and entitlement to all other personal property of whatsoever nature and kind in her possession or control, as at the date of these orders including but not limited to, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name and all interest in life insurance policies and superannuation funds standing in her sole name;
11.That subject to these Orders and as between the Husband and Wife and the Husband shall retain all interest in and entitlement to all other personal property of whatsoever nature and kind in his possession or control, as at the date of these orders including but not limited to, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name and all interest in life insurance policies and superannuation funds standing in his sole name;
12.That the parties hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
13.That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to this order, the Registrar of the Family Court of Australia, Sydney Registry be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
The numbering of the revised minute is as appears in the original and I take it that the reference in paragraph 8 to $267,745 should be a reference to $257,940 to accord with paragraph 1.
The wife sought orders in terms of her minute of orders sought dated 27 September 2017 as follows:
1.That within thirty (30) days of the date of these Orders, the Wife pay to Husband in cash $45,753 representing fifty per cent (50%) of the value of [Ingram] Pty Ltd.
2.That, in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
2.1the Husband is entitled to be paid the specified percentage out of the Wife’s interest in the [D Super];
2.2the Wife’s entitlement in the [D Super] is correspondingly reduced by the force of this Order; and
2.3the percentage specified for the purposes of this Order is fifty per cent (50%).
3.That the Trustee of the [D Super] (“the Trustee”) do all such acts and things and sign all such documents as may be necessary to:
3.1calculate in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Husband in the immediately preceding clause of this Order; and
3.2pay the entitlement whenever the Trustee makes a splittable payment from the Wife’s interest in the [D Super].
3.3That this Order has effect from the operative time and the operative time is seven days after the date these Orders are made by the Court.
3.4That this Order binds the Trustee.
4.That unless otherwise specified in these Orders, except for the purposes of enforcing payment of any money due under these or any subsequent Orders:
4.1each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at the date of these Orders including any jewellery, furniture, furnishing, shares whether in public or private listed companies and motor vehicles;
4.2monies standing to the credit of the parties in any bank account to be the property of the party in whose name such bank account is held;
4.3each party hereby foregoes any claim they may have to any superannuation benefit to or owned by the other;
4.4the party in whose name any such policy of superannuation or insurance stands shall be deemed to be the owner and the beneficiary of such policy to the exclusion of the other; and
4.5each party be solely liable for and indemnify the other against any liability, income or any item of property which that party is entitled pursuant to these Orders.
5.That each party pay their own costs of and incidental to these proceedings.
Documents Read
The parties relied on the following documents:
Documents relied on by the husband:
·Initiating Application filed 28 November 2013;
·husband’s affidavit sworn 30 March 2017;
·husband’s Financial Statement sworn 30 March 2017;
·affidavit of Dr G sworn 14 August 2017;
·affidavit of Ms H sworn 2 August 2017.
Documents relied on by the wife:
·Response filed 26 February 2014;
·wife’s affidavit filed 10 February 2017;
·wife’s Financial Statement filed 10 February 2017;
·affidavit of Ms H filed 2 August 2017.
The Hearing
The case was listed for final hearing over two days commencing on 4 September 2017.
The hearing could not be completed within those days and on 5 September 2017 the matter was adjourned for final submissions on 29 September 2017.
On 29 September 2017, final submissions were made and subject to the provision of supplementary written submissions, judgment was reserved. Supplementary submissions were provided to my chambers on behalf of the husband under cover of an email dated 5 October 2017. As is referred to above, attached to those submissions was the revised minute of orders sought on behalf of the husband.
Short History
The wife was born in 1958 and as at the conclusion of the hearing she was 58 years of age. The husband was born in 1954 and as at the date of the hearing he was 63 years of age.
The parties commenced cohabitation in 1995, were married in 1999 and separated June 2013.
There are no children of the marriage.
Background Facts
In 1981 the wife commenced working.
In 1994 the wife purchased an apartment at J Street, Suburb K (“the Suburb K apartment”) for $135,000. To fund the purchase $80,000 was borrowed from L Bank. The wife carried out renovations to the Suburb K apartment funded by way of a personal loan from L Bank of $30,000.
In 1995 the parties started living together.
In 1995 the husband was appointed as a General Manager in the NSW public service. He states that his salary was $165,000 per annum.
In 1996 the husband was appointed by the NSW Government to a new role He states that his salary of $165,000 per annum continued.
On 3 March 1997 the husband became bankrupt on his own petition.
In 1997 the wife ceased working.
In 1997 the husband closed his firm M Pty Ltd. At about the same time the parties incorporated Ingram Pty Ltd.
In 1997 the husband returned to consulting and advisory work and undertook contracts in his capacity as Business Manager of Ingram Pty Ltd.
In 1997 the husband commenced working as an advisor/facilitator.
In May 1998 the husband commenced work in other advisor/facilitator roles
In April 1999 the husband commenced work as an institutional reform advisor.
In 1999 the parties were married.
In around July 1999 the wife sold Company N shares for $10,000.
The husband’s employment terminated in late 1999/early 2000. Following this, the husband was subsequently employed as General Manager for Company O earning $55,000 per annum but this contract ended in 2000 or 2001. During this time the wife also worked for Company O.
On 4 March 2000 the husband was discharged from bankruptcy and he decided to wind up his sole trader consulting firm.
In April 2000 the wife purchased a property in her name located at P Street, Suburb Q (“the Suburb Q property”) for $205,000 using the equity on the Suburb K apartment. She borrowed $320,000 which was used to discharge the charge of $80,000 against her shares in the Suburb K apartment.
In the early 2000s the husband began to manifest his first symptoms of manic depression and bipolar disorder to the extent that it began to affect his work and life capacities. Starting in about 2000 the husband developed a range of crippling phobias and conditions.
In 2000 the police attended the Suburb Q property due to an incident involving the husband and a neighbour.
In 2001 the wife sold the Suburb K apartment for $305,000 applying the sale proceeds to: discharge the mortgage on the Suburb Q property ($285,000), commission to the selling agent ($5,000), stock ($5,000) and buying a Land Rover for the husband ($5,000). Following the sale of the Suburb K apartment the parties rented an apartment at Suburb R (“the Suburb R apartment”) for $525 per week.
In July 2001 the husband concluded his work as an advisor/facilitator.
It is the evidence of the husband that from January 2001 to June 2008 the husband worked within the public sector in various roles. Whatever that might mean, it is the husband’s evidence that he had no income after 2005.
In late 2001, the wife purchased a studio apartment in S Street, Suburb R (“the S Street apartment”) for $197,000. To fund the purchase the wife borrowed $345,000 from the National Australia Bank secured against the S Street apartment and the Suburb Q property. The $345,000 was applied towards the purchase monies ($197,000), stamp duty ($10,000), discharge of L Bank loan ($30,000), improvements to the Suburb Q property and general living expenses.
Between 2002 and 2003 the parties lived between the Suburb Q property and the S Street apartment.
In 2002 the husband rented an apartment in T Street at Suburb K (“the T Street apartment”).
In 2002 the husband was involved in an incident with a next door neighbour of the S Street apartment which resulted in the police attending. Nothing eventuated from this incident.
On one occasion in 2002 there was an incident where the wife asserts the husband smashed furniture, punched holes in the wall and destroyed a Chinese wooden cabinet. The husband stated in oral evidence that he has thrown and broken furniture in the past and that it is conceivable that he had an episode at around this time and destroyed the Chinese wooden cabinet. He also conceded that he has kicked holes in the walls in the past.
In 2003 the wife re-mortgaged the Suburb Q property borrowing $279,000 from the Australia and New Zealand Bank (“ANZ Bank”). The funds were deposited into an account in the wife’s sole name.
In 2004 the wife was contracted work on a project named E. She was paid $10,000 at the commencement of this contract and she received a further $10,000 in royalties over the next six months. Subsequent payments were irregular.
In mid-2004 the wife sold the Suburb Q property and the S Street apartment for $410,000 and $210,000 respectively as she was unable to maintain the mortgage repayments. The sale proceeds were applied towards the discharge of mortgage to NAB ($345,000) and discharge of mortgage to ANZ Bank ($279,000).
In 2005 the parties rented a small house at Suburb U for which the wife paid $250 per week.
In 2006 the husband commenced a research Ph.D.
In 2007 the parties rented a bigger house in Suburb U for $525 per week.
In 2008 the police attended the property at Suburb U due to an incident between the husband and a neighbour.
In mid-2008 to 2010 the parties moved from Suburb U to a house in Suburb V where the rent was $850 per week.
In 2010 while the parties were living at Suburb V, the wife called the Police from Suburb W Police Station as the husband was verbally abusing her. The husband was not charged.
In 2010 the wife’s parents were admitted to nursing home at Suburb X.
In 2010 the police attended the Suburb V property due to an incident between the husband and a neighbour. The husband states that this occurred as an elderly man had taken to staring at the wife under the pretext of completing a three point turn in his vehicle.
In July 2012 the parties rented a property at Y Street, Suburb X (“the Suburb X property”) which was close to the wife’s parents’ nursing home. The rent was $750 per week.
In October 2012 the husband was arrested and charged by Suburb Z Police for offenses of menace/harassment via public carriageway against his cousin, Paul Osborne. The husband was brought before the Local Court and Court proceedings resulted in a s 32 order under the Mental Health (Forensic Provisions) Act 1990 (NSW) and a treatment plan that the husband had to follow for three years.
In 2013 the wife’s parents moved from the nursing home in Suburb X to one in Suburb AA. The bond on the previous nursing home of approximately $342,000 was refunded to the wife’s parents and gifted to the wife. As a consequence of receiving this gift the wife was required to meet the difference between her father’s pension and that of the nursing home costs. This difference averaged $326 per week.
In May 2013 the wife purchased a property at B Street, Suburb C (“the Suburb C property”) for $571,000. She paid the $342,000 gifted to her by her parents plus stamp duty of $22,000 and borrowed $200,000 from the BB Bank.
In May 2013 the husband moved into the Suburb C property while the wife remained at the Suburb X property to pack up the house. The wife rented a separate work space at Suburb CC (“the Suburb CC property”) prior to the husband moving into the Suburb C property.
In mid 2013, the wife’s mother passed away.
The parties separated on 1 June 2013.
The wife deposes that a week prior to 1 June 2013 she gave the husband $1,000 and that she gave him $600 on 1 June 2013; $500 on 4 June 2013; and $600 on 13 June 2013. It was put to the husband in cross-examination that some of those advances were made by bank transfer and the husband responded to the effect that he did not have a bank account at that time. The husband acknowledged that the wife left him some money in the letter box ($500 or $600) but otherwise he denied receiving those sums.
On 6 June 2013 the wife called 000 as the husband sent her a text to say: “I am cold, weak, distressed and I’m not sure if I can continue anymore”.
On 7 June 2013 the husband sent the wife, via SMS, photos of himself holding a knife to his throat. The wife again called 000. The husband was taken by ambulance and admitted into the secure wing of the DD Town Mental Health Unit. The husband was released the following Tuesday 11 June 2013 into the wife’s care. The wife states that as she drove the husband to the Suburb CC property he verbally abused her and behaved in a threatening manner. Later that evening the wife drove the husband back to the DD Town Mental Health Unit but they would not readmit him. She then drove him to DD Town Police Station but was told it was not a police matter unless he was physically abusive. The husband stayed at a friend’s home that night and then moved into the Suburb CC property. At a time between 11 June 2013 and 29 June 2013 the husband readmitted himself to the DD Town Mental Health Unit. He remained there for two or three days.
The wife says that on her return to the Suburb CC property, some time after 11 June 2013, she found that a number of items were destroyed including her archival work, her Ingram business papers, tax receipts and family photos. The wife stated in her oral evidence that in the week after the husband came out of the DD Town Mental Health Unit she returned to the Suburb CC property to find the barbeque full of burnt documents, photos and work materials.
On 29 June 2013 the husband entered the Suburb X property via the back door. The husband accessed the wife’s computer and email account. Police attended on the property and the husband was asked to leave. At this time the police applied for an interim apprehended violence order. On 30 June 2013 the wife gave a statement to police that details incidents of the husband perpetrating verbal abuse, physical abuse and destruction of property. She also details the incident the day before when the husband entered her home. The interim apprehended violence order was later dismissed in Suburb Z Local Court on 4 March 2014.
On 15 July 2013 the husband moved into temporary accommodation at EE Street, Suburb FF.
The wife vacated the Suburb X property in late July 2013 and moved to the eastern suburbs.
In July 2013 the wife delivered to the husband via a relative a card with the address of a storage unit (“the storage unit”) along with keys for the storage unit. This storage unit contained some of the husband’s possessions.
On 4 September 2013 the wife sold the husband’s motor scooter for $5,078.75.
In December 2013 the husband rented an apartment in Queensland for six months.
During 2013 the wife received industry awards for her work.
In mid 2014 the wife’s father passed away.
In June 2014 the husband rented an under house storage area for eight months at GG Town with a bathroom and kitchen shared with four others.
In August 2014 the husband commenced paying the rent for the storage unit.
The parties were divorced with effect on 27 September 2014.
In 2014 the wife received further industry awards.
In March 2015 the husband rented a small house in HH Street, GG Town for six months.
In September 2015 the husband rented a small apartment at II Street, Suburb JJ.
In 2015 the husband won a prize for his work
In 2015 the wife received a further industry award.
In 2016 the husband won another prize for his work.
In December 2016 the husband relocated from Queensland to KK Town.
In 2016 the wife received further industry awards.
In January/February 2017 the husband was prescribed Diazepam and Prazosin and arranged a six session treatment plan with psychologists.
In early 2017 the husband relocated to Sydney.
The husband has the commercial release of his work in 2018.
Credit
The Evidence Of The Witnesses
There are some issues that fall to be determined solely by reference to the uncorroborated testimony of the parties. It is therefore necessary to made credit findings.
Neither of the parties was an entirely reliable witness. However, I did not detect a deliberate attempt by either of them to give false evidence.
As to the husband, he made many concessions about his abusive conduct. For example, the wife alleged that in late 2001 to early 2002 she suggested that he should get another job and the husband yelled obscenities at her. The husband agreed that may be true. He conceded that he may have kicked holes in walls once or twice during an episode albeit not as a conscious act of destruction. He conceded that he had thrown and broken furniture. It was put to him that on one occasion in 2002 when living at the T Street apartment he destroyed a Chinese cabinet and he responded to the effect “I remember that there was an episode and I became very sick...I had a major episode and another break down…and yes it’s conceivable that I did smash some furniture”.
However, the husband was unable to give reliable evidence on many matters. Much of his affidavit was expressed in general terms and was unhelpful and much of it was struck out. The husband has not completed an income tax return for many years and he produced no bank statements. It is the husband’s evidence that he does not have a clear recollection of several events during the marriage and since, including of his own behaviour during those events. When asked about those events during cross-examination he speculated about what he might have done. It is the husband’s evidence that many of his records were or are retained by the wife. It was the husband’s evidence that he took no steps to obtain records in order to establish facts associated with the financial history of the marriage.
The wife was not a good witness. In relation to one question she responded “no”, “I don’t know” and then “no” in the space of a few minutes. She said that the husband had wiped her work from her computer system including back up records and then said in response to a subsequent question that she did not know if the records had been completely wiped but that she could not find those records. The wife said that the husband was abusive throughout the parties’ relationship and then said that things were all right for the first 10 years. Much of her evidence was in very general terms and although corroborative evidence was available to her, she called no such evidence. For example, she did not subpoena the police records in relation to four attendances made by police on the parties’ premises over the years. She was asked about that and responded to the effect that she did not know that she had to call that evidence. The wife called no lay witnesses to corroborate her evidence about the extent of the husband’s abuse. The wife was asked about that in cross‑examination and responded to the effect: “I have many friends that would have accompanied me here today and stood up and beared (sic) witness to what has happened to me over the years but I didn’t want to put them through it.” She then indicated that her brother-in-law was in the Courtroom during the trial and suggested that he could give the required evidence. No explanation was given for her having failed to call her brother-in-law to do so. I can infer that, at least as to the police and the wife’s brother-in-law, they were not called because their evidence would not have assisted the wife’s case.
That said, as is referred to above, the husband conceded many incidents of inappropriate and violent behaviour by him.
Otherwise the Court is left with the common ground evidence.
The Law
The Approach in Proceedings under Section 79
In the context of these proceedings s 79 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides:
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
….
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; …
….
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.
There is no controversy about the preliminary aspect of the requirement created by s 79(2) of the Act as to whether any order should be made. As was observed in Stanford v Stanford (2012) 247 CLR 108 the preliminary just and equitable requirement is often readily satisfied. Here the parties’ relationship has broken down and they live apart. Most of the assets of the marriage are currently in the control of the wife. Both parties have invoked s 79, seeking a property settlement. I note the exhortation in s 81 of the Act to as far as practicable, “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the parties have relief under s 79.
I turn to the task of identifying just and equitable orders that will alter the interests of the parties in property. There is no mention of steps or stages in s 79, let alone of the sequence set out in (a) – (d) below.
I will address the following matters:
(a)make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;
(b)identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
(c)identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) (“the other factors”) including, because of s 79(4)(e), the matters referred to in s 75(2) of the Act so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and
(d)consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The property of the parties
In determining what order is appropriate, it is necessary to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values. The husband and wife settled a joint balance sheet as follows:
Assets
Owner Description Value 1 W Suburb C property $745,000 2 W Motor vehicle $10,990 3 W BB Bank account …80 $6,534 4 W Ingram Pty Ltd $91,506 5 W Jewellery $10,000 6 W Household contents $2,500 7 W Artworks $5,000 8 W Shareholders Loan – Ingram Pty Ltd $10,585 9 H Personal property $16,000 10 H Commonwealth Bank … 72 $1 Total $898,116
Liabilities
Owner Description Value 1 W Mortgage - Suburb C property $163,000 2 W Credit cards – NAB Visa and CBA MasterCard $10,000 3 H MasterCard CBA $2,200 4 H Telstra $1,642 5 H Valuation cost re Suburb C property ($1,028.50) as to half $514 6 H Valuation cost re Ingram Pty Ltd ($7,700) as to half $3,850 Total $181,206
Superannuation
Owner Description Value 1 W D Super Accumulation $89,102 Total $89,102
There are no issues about the items on that balance sheet or their value. There remains, however an issue about royalties that could be received by the wife in the future. I will address that issue separately.
The net assets have a value of $806,012 of which $89,102 is in the form of superannuation and $716,910 is in the form of non-superannuation assets.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it that the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) FLC 91-814; In the Marriage of Norbis (1986) FLC 91-712; In the Marriage of Zyk (1995) FLC 92-644. Neither of the parties advocated a global approach to the assets. The husband’s case was argued on the basis of four pools of assets:
Assets
Value
The Suburb C property
$582,000 ($745,000 - $163,000)
All non-superannuation assets
$134,910 ($153,116 – $18,206)
Superannuation
$89,102
Royalties
Not known
As I understand the argument made in the husband’s case, s 79 should be applied to four pools of assets because:
·the wife made the only contribution to the Suburb C property;
·the contributions to the remaining non-superannuation would be found to be 45 per cent by the husband;
·the contributions to superannuation were equal and there should be no adjustment to the superannuation entitlements; and
·future E project royalties should be dealt with in specie.
The wife’s case was argued in a not dissimilar way. She contends that there is no evidence of future E project royalties and opposes any orders about them. She agreed that the superannuation should be divided equally by splitting order and she agreed that the husband made no contribution to the Suburb C property.
E Project Royalties
Although no value is ascribed to them, it is the husband’s case that the wife has a valuable future resource in the form of potential royalties from her work for Project E. In 2004 the wife entered into an agreement with E Investments Pty Limited. Under that agreement the wife is entitled to royalties when the project expands to the United Kingdom, Europe, USA, New Zealand or Australia. She is entitled to those royalties based on her original work. That is to say, she is not required to do any further work in order to receive the royalties. Since the parties separated in 2013 the wife has received $441,953 in royalties under that agreement. Of that amount for example $170,166 was received in 2016 but only $64,394 was received in 2017. It is the wife’s evidence that she has not been told of any future development of E in the locations covered by the agreement.
It is the wife’s case that she alone is entitled to any royalties received and that the husband has no legitimate claim to them. As I refer to later in these reasons, there is a dispute between the parties about the extent, if any, of the husband’s contributions to the wife’s professional work. I am satisfied that, if not all, the overwhelming proportion of contributions to that work was made by the wife. Importantly, in any event as far as the wife knows, there will be no future royalties under the E agreement. The husband’s solution to this issue is that rather than any adjustment to the existing assets for the possibility of future income from this source, any future royalties should be dealt with in specie. He seeks an order that within seven days of receipt of any future royalties under the E agreement the wife shall give all consents and authorities to enable the husband to receive one half of the royalty payments. It is submitted on behalf of the husband that the wife has not met obligations of disclosure in relation to this issue. She gave instructions to the single expert valuer in relation to Ingram Pty Ltd to the effect that there are no future productions in train, of which the wife is aware. On that basis the valuer excluded from his valuation any significant future royalty income under the agreement.
Obviously, on those facts I cannot find that there will be future royalties under the agreement or even that it is probable that there will be such future royalties. As to the wife’s obligation of disclosure, she gave the evidence that was available to her and she was not challenged on it. Of course it is difficult to prove a negative. The other problem with this issue is that the husband has been responsible for threatening behaviour against the wife and something that potentially ties the parties together for years into the future would be undesirable. The order proposed by the husband could require a level of interaction and communication into the indefinite future. In that regard s 81 of the Act reflects the legislative intention to separate the finances of the parties where practicable.
It is not proposed by either party that royalties form part of the balance sheet but for the reasons given I will not make an order that directly acts on the wife’s receipt of future E royalties.
Finally, it is my understanding that the wife has entitlements under other agreements to royalties in respect of work she has done unrelated to the E costumes. No application is made in relation to any such royalties. Presumably there was a focus on the E royalties because they have involved very substantial payments compared to other royalties received. As a matter of logic, however, if there was to be a claim of this type one would expect that it would be made in relation to all royalties.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions by and on behalf of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a …. homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[1] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the husband and wife in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of husband and wife.
[1] In the Marriage of Shewring (1987) l2 Fam LR 139.
There is a significant aspect of the wife’s case that seeks to rely on the idea of negative or destructive conduct by the husband and or an argument as to the import of that conduct for the assessment of the wife’s contributions.
It is argued for the wife that the husband’s conduct warrants consideration of an argument such as that raised in In the Marriage of Kennon (1997) FLC 92-757 (“Kennon”). From the judgment of the majority in that decision comes the following passage about the impact of certain conduct on the assessment of contributions at 84,294:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79.
There is no real assertion by the wife, nor any complaint on behalf of the husband, that there were contributions that the wife could have made that she did not make because of the husband’s conduct. However, there is an available argument along the lines of the second limb of the approach identified in Kennon, that the wife’s contributions were made more onerous because of the conduct of the husband.
The wife deposed that during the period she lived with the husband his behaviour affected her creative ability and concentration which made it difficult for her to apply herself to her work as she was unable to sleep, suffered constant headaches and nausea, could not concentrate to produce work on scheduled timetables, and suffered high blood pressure and anxiety. She deposed that depending on the husband’s daily moods, she lived in fear of his threats to destroy her work or kill her dog. She says that the husband rarely accompanied her to work functions and that they did not go out together socially. Anything she did in public was generally criticised (by him) and turned against her when she returned home. Between 2005 and 2010 the wife was overseas on work commitments for about four months of each year albeit not for continuous periods. The husband would call the wife on a daily basis, abuse her and hang up during different times when she was working overseas. That caused the wife to lose sleep, drained her energy and affected her concentration. It ultimately reduced the amount of work that the wife could undertake. The wife says that at a social level the husband isolated her from her friends, who she rarely saw, by insisting that they live away from the city even though that caused the wife significant travel difficulties as she was obliged to travel from Suburb Q or Suburb U to the city where she worked.
As is referred to earlier in these reasons, the husband concedes some violent and destructive conduct. In addition, I accept the substance of the wife’s case about the husband burning her records and other possessions at the Suburb CC property at the end of the marriage. The wife was very upset when asked about her allegations of the burning of her photographs and materials. She responded about this in cross-examination to the effect that she “returned there to find the barbecue full of all of my belongings half burnt including photographs of my recently deceased mother, all of my photos of my whole life, all of my work materials…everything on every job I’d ever had. Anything that meant anything to me was in that fire and it was out in the middle of the open and if it wasn’t burnt it was wet or it was destroyed”. The wife said that “everything related to my work and my business was taken to there [at the Suburb CC property]”. The wife’s evidence was not challenged and had the ring of truth about it.
The husband was cross-examined before the wife and when he was asked about burning and destroying all of the wife’s costumes he initially responded to the effect that he did not believe that to be true. He clarified when asked to explain that:
The accusation relates to a period where I was in the middle of a hypomanic episode and I arranged to have myself admitted to the Mental Health Unit at [DD Town] Hospital. I believe you or your client actually subpoenaed all my records for that period. I was extremely unwell, I’d been left in the middle of nowhere and isolated and I don’t have adequate recall because I was at the top end of hypomania
It was put to the husband that he went to the Suburb CC property and took his wife’s papers and other things and burned them. The husband responded to the effect: “I don’t think I could have done it without somebody calling the fire brigade. It was in [Suburb CC] for goodness sake!”. He was pressed again and agreed that it was not impossible that he had burned the wife’s records and other things but he had no recollection of it.
The wife was not a witness to the burning of her possessions and was only able to give circumstantial evidence. The husband did not concede that he burned the wife’s possessions at the Suburb CC property but agreed that it was possible that he had done so. The husband was at the property at the relevant time. He has been responsible for aberrant, destructive behaviour. He does not have clear recollection of events, including significant events. There is no indication of any other person who had the opportunity and who could be motivated to destroy the wife’s possessions. On balance, it is probable that the husband was responsible for destroying by fire the items at the Suburb CC property.
As outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.
The Full Court in Browne and Green (1999) FLC 92-873 said at 86,360:
44.We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.
Without dismissing the impact of the husband’s behaviour on the wife, on balance, the Kennon approach is not relevant here. It is common ground that the husband had and has impaired mental health. The wife gave evidence to the effect that the worst of the behaviour was late in the marriage. There is little concrete evidence about the extent of the impact of the behaviour on the wife’s capacity to make contributions. In relation to the specific incidents mentioned the wife’s contributions were likely made more onerous, but taken together there will be no application of the approach taken in Kennon in these proceedings.
Based on the parties’ submissions there is a level of agreement about the pools to which the s 79(4) considerations should be applied. Although variously expressed it seems agreed that the only assets to which the husband has made a contribution are the non-superannuation pool of assets excluding the Suburb C property.
As to the wife’s superannuation it is agreed that there will be a splitting order in favour of the husband based on 50 per cent of the wife’s interest. I take it from the parties’ submissions that the 50 per cent interest is claimed on the basis of contributions and that there should be no adjustments for the non-contribution factors in s 79(4).
It is common ground that the only contribution made to the Suburb C property was the contribution made by or on behalf of the wife.
I turn then to the question of the contributions to the non-superannuation pool of assets excluding the Suburb C property.
Section 79(4)(a) Contributions
Financial contributions to property, both direct and indirect were made by each of the husband and wife.
There is a dispute about whether the husband made any significant initial contribution. He contends that he brought into the relationship about $50,000 in savings. The wife disputes that claim and there are no records or other corroborative evidence to support the husband’s claim. In this regard I note that only two years after the commencement of cohabitation, the husband was made bankrupt. I do not accept that the husband had $50,000 in savings when the parties started living together.
It is common ground that at the commencement of cohabitation the wife owned the Suburb K apartment and a motor vehicle. In around July 1999 the wife sold Company N shares for $10,000. The wife subsequently sold the Suburb K apartment for $305,000 in 2001.
There is the question as to the import of an imbalance in initial contributions. In In the Marriage of Pierce (1999) FLC 92-844 (“Pierce”), the Full Court was dealing with a challenge to a property settlement judgment in which there was a finding that contributions favoured the husband 55 per cent to 45 per cent by the wife. The Full Court addressed interpretations of previous judgments which were said to give rise to the concept of the erosion of an initial imbalance of contributions. The Full Court said at 85,881:
28.In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo(unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J at page 10).
29.In the instant case, his Honour identified what he described as the greater initial financial contribution of the husband and his post separation contribution, but, in our view, he failed to properly assess such contributions. The period of cohabitation was ten years. At about the date of the marriage the husband had very significant assets. His Honour found that the husband had assets to the approximate value of $226,000. At the date of the trial, the parties had assets of a net value of $319,190 which included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution.
30.There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them. In this case his Honour failed to adequately, or at all, assess these contributions. In our view he failed to properly weigh the greater initial contribution of the husband, with all other relevant contributions, and seems not to have had regard to the use made by the parties of the husband’s greater initial contribution.
31.The finding and assessment that the contributions of the parties during cohabitation should be regarded as equal was, in our view, open to the trial judge. Given that assessment, we are of the view that in assessing the totality of the contributions of each of the parties as being 55% by the husband and 45% by the wife, his Honour, notwithstanding the observations of Stephen J in Gronow v Gronow (1979) FLC 90-716 at 78,848-78,849; (1979) 144 CLR 513 at 519, on the facts of this case, failed to attach sufficient weight to the greater initial financial contributions of the husband, and to his contributions post separation in caring for the children.
32.Accordingly, we are of the view that, in assessing the respective contributions of the parties from the commencement of cohabitation to the date of hearing as being 55% by the husband and 45% by the wife, the discretion vested in his Honour miscarried and the appeal should thus be allowed.
The Full Court in Pierce went on to re-exercise the discretion under s 79 and found that the contributions favoured the husband 70 per cent compared to 30 per cent by and on behalf of the wife.
In my view the imbalance in the parties’ initial contributions should be given significant weight, particularly given that the ultimate asset pool is of modest value.
Each of the parties had income from paid employment during the marriage. The husband’s income from his personal exertions fluctuated. He asserted that he was earning $165,000 per annum when the parties started living together. By 2000 he was receiving $55,000 per annum but he had no income from early 2005.
The wife practiced her trade and had a substantial income throughout. It is the husband’s case that he assisted the wife in running her business, by assisting with administration and by taking up some of the duties that had or would be normally undertaken by an agent. The wife does not concede the husband’s claims. I find that, if not all, the overwhelming proportion of contributions to the wife’s professional work came from the wife.
The wife received income from royalties after separation to the value of $441,953.
It is agreed that the wife’s financial contributions exceeded those made by and on behalf of the husband.
Section 79(4)(b) Contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
There was little attention given to contributions of this type.
Section 79(4)(c) Contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage. There are no children of the marriage. It is alleged by the husband that the parties regularly entertained and that he was responsible for cooking. The wife did not agree with the husband’s evidence.
No probative findings can be made about homemaker contributions.
Conclusion on Contribution
It is submitted on behalf of the husband that his contributions to the non-superannuation assets excluding the Suburb C property should be assessed at 45 per cent. It was submitted on behalf of the wife that the husband’s contributions to those assets should be assessed at 40 per cent.
The contributions made to this class of assets far exceeded their current value. Nevertheless, within the parameters of the parties’ arguments on this issue, in my view the husband’s contributions to those assets would be properly recognised at 40 per cent with the wife’s contributions at 60 per cent.
The other matters in Section 79
It is agreed that there should be no adjustment made to the contribution based outcome in respect of the superannuation assets. Therefore other factors in s 79(4) can only be relevant to the non-superannuation assets. Those factors are as follows.
Section 79(4)(d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. It is likely, given the modest pool of assets, that each of the parties will be focused on trying to secure appropriate accommodation. In the husband’s case that may not be practicable. To that extent it may be that the husband will want to apply his property settlement to supplementing his income.
Section 79(4)(e) - Section 75(2) factors
The relevant matters in s 75(2) of the Act would seem to be paragraphs (a), (b) and (f).
(a) the age and state of health of each of the husband and wife;
The husband is 63 years of age and has been diagnosed with Complex Post Traumatic Stress Disorder. Dr G is a Consultant Psychiatrist in private practice and he commenced treating the husband in January 2009. Although the husband had ceased to regularly attend on Dr G, Dr G interviewed the husband in February 2017 and provided a treating practitioner’s report about the husband for the purposes of these proceedings. Dr G’ report is dated 31 March 2017. In that report he said that the husband had been incapacitated for the previous three and a half years and particularly over the previous six months. Dr G was told by the husband that he had suffered depriving circumstances over the previous three and a half years and that had caused constant disorientation and disruption. He had had no effective therapy, changes of address, bad housing and no financial resources.
It is common ground that the husband has behaved in erratic and manic ways, particularly in recent years.
The wife is 59 years of age and she is in good health.
(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;
The wife’s income is $2,466 per week made up of salary of $1,575 in wages; $520 in rent from a tenant at the Suburb C property; $288 (for the wife’s work through her company, Ingram Pty Ltd); and $83 in fringe benefits from her company. In addition Ingram Pty Ltd pays $20 in outgoings and $30 in rent, petrol and telephone charges for the wife.
The wife’s expenditure totals $2,487 per week, made up of $547 in tax; $700 in rent; $42 on rates, levies and outgoings on the Suburb C property; $151 in mortgage payments on the Suburb C property; $40 on household insurance; $70 on employment disability insurance; $20 on motor vehicle insurance and $15 to register a motor vehicle; $40 on MasterCard repayments and $862 on other expenses. The other expenses include $250 on food; $50 on household supplies, $20 on gas; $40 on electricity; $37 on telephone; $40 on petrol; $20 on motor vehicle maintenance; $20 on fares/parking/tolls; $50 on clothing and shoes; $50 on medical, dental and optical; $175 on entertainment and hobbies; $10 on chemist/pharmaceuticals; $20 on dry cleaning; $50 on books and magazines; $10 on gifts and $20 on hairdressing and toiletries.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
It is not suggested that the wife is not fully exercising her earning capacity.
The husband’s income is $503.80[2] per week in the form of the Disability Support Pension. He spends $536.50, including $250 in rent, $70 for a storage unit, $46.50 in repayments of a Centrelink loan, $20 in MasterCard repayments and $150 on all other expenditure. In relation to that last figure, the husband sets out living expenses in Part N of the Financial Statement totalling $170 per week. He spends $80 on food, $10 on household supplies, $30 on telephone/internet, $20 on fares/parking, $10 on clothing and shoes and $20 on chemist and pharmaceuticals.
[2] There are various entries in the Financial Statement but Note 2 on page 13 explains the situation.
The evidence about his assets and liabilities is addressed above.
It is suggested that the husband has some earning capacity. On the evidence about the husband’s health, he is not likely to be readily taken up by an employer. The husband has not had any meaningful income in many years. The husband is older than the wife and at an age when many retire from the paid workforce.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out above what there is of the evidence in relation to the parties’ expenses.
(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;
I have referred to the evidence about superannuation and pension entitlements.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is no meaningful evidence in relation to the standards of living of the parties. That said, it would be reasonable for each of the parties to live with dignity and with some level of comfort, if that is practicable.
(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;
The husband commenced studying for a Ph.D. in 2006 but I understand that he has discontinued those studies. I am not sure that the husband had in mind a remunerative purpose for those studies in any event. There is no evidence to suggest that either party intends to undertake further studies or to open a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
No creditor is identified who might be unable to recover debt. The BB Bank has security for its loan.
(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;
There is a significant issue between the parties about this. The husband would have it that he was substantially involved in the establishment and running of the wife’s professional practice. The wife concedes some small contribution but says that the husband’s influence overall was not a positive one. It is impossible to make an assessment about the net impact of the husband on the wife’s income, earning capacity, property and financial resources.
(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;
It is not possible to link the earning capacities of the parties to the fact or duration of the marriage.
(l) the need to protect a party who wishes to continue that party’s role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
Neither of the parties is cohabiting with someone.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties or vested bankruptcy property in relation to a bankrupt party;
This is not relevant.
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii)
This is not relevant.
(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;
Nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There is no such agreement.
Section 79(4)(f)
Beyond those referred to above, there are no relevant orders made under the Act.
Section 79(4)(g)
This is not relevant.
Conclusion
It is the husband’s case that there should be an adjustment in his favour of 27.5 per cent in respect of the pool of non-superannuation assets because of:
(a)the receipt by the wife of the Suburb C property and various royalty payments after separation;
(b)the differential between the parties on their contribution based entitlements;
(c)the poor state of the husband’s health;
(d)the husband’s incapacity for paid employment; and
(e)the wife’s capacity to work.
It is submitted on behalf of the wife that there should be no adjustment in favour of the husband in respect of any of the assets. The relevant matters under s 75 is said to be that the parties are of a similar age and from the wife’s case outline document dated 28 August 2017 there are the following factors:
(a)after separation the wife has paid down the parties’ credit card debts and her tax liabilities in their entirety;
(b)after separation the wife maintained the mortgage on the Suburb C property and all other associated costs with no assistance from the husband;
(c)the husband, contrary to medical evidence filed to date, has demonstrated a capacity to work. He nevertheless continues to assert that he has no income and cannot work;
(d) the wife has limited earning capacity due to her age and the nature of the industry in which she works;
(e)the wife’s health is otherwise good; and
(e)the wife has financial resources from royalties paid for the “E project” and other commissions.
In my view the relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above, are:
·a property settlement based on contributions alone would heavily favour the wife;
·the husband’s health is poor and whatever restrictions or limited duration may apply to the wife’s earning capacity she is likely to have a greater earning capacity than the husband; and
·there may be further royalties received by the wife from her past work.
Those factors argue for an adjustment in favour of the husband. In my view the allowance should be substantial. I will make an adjustment of 22.5 per cent. The net non-superannuation assets have a value of $716,910. An adjustment of 22.5 per cent represents about $161,304.75 and will make a difference between the parties of twice that sum.
Just and Equitable
The net assets have a value of $806,012 of which $89,102 is in the form of superannuation and $716,910 is in the form of non-superannuation assets.
It is agreed that the wife’s superannuation interest will be addressed by a splitting order in favour of the husband based on 50 per cent of the interest.
Of the non-superannuation assets, $582,000 represents the Suburb C property and $134,910 is the balance. If the husband is to receive 40 per cent of that balance he will receive $53,964. An adjustment of $161,304.75 will bring him to $215,268.75 from the non-superannuation assets. That will leave the wife with $501,641.25 from those assets.
Of the pool of assets identified by me, the husband has the benefit of and would like to retain:
Owner Description Value 1 H Personal property $16,000 2 H Commonwealth Bank …72 $1 3 H MasterCard CBA -$2,200 4 H Telstra -$1,642 5 H Valuation cost re Suburb C property ($1,028.50) as to half -$514 6 H Valuation cost re Ingram Pty Ltd ($7,700) as to half -$3,850 Total $7,795
In order to bring him to $215,268.75 in net assets he would need to receive a further $207,473.75.
That would leave the wife with:
Owner Description Value 1 W Suburb C property $745,000 2 W Motor vehicle $10,990 3 W BB Bank account …80 $6,534 4 W Ingram Pty Ltd $91,506 5 W Jewellery $10,000 6 W Household contents $2,500 7 W Artworks $5,000 8 W Shareholders Loan – Ingram Pty Ltd $10,585 9 W Mortgage - Suburb C property -$163,000 10 W Credit cards – NAB Visa and CBA MasterCard -$10,000 11 Payment to the husband -$207,473.75 Total $501,641.25
The wife will need some time to attempt to raise the funds to pay the husband and the parties have agreed on 90 days. If she cannot raise the necessary funds the Suburb C property will be sold and the husband can be paid from those proceeds.
I may be wrong but I assume that the amounts owed by the husband for his share of the valuations of the Suburb C property and Ingram Pty Ltd are owing to the wife. Those amounts total $4,364. In the orders I will make provision for those amounts to be deducted from any payment to be received by the husband from the wife or from the net proceeds of sale of the Suburb C property. In order to deal with the likelihood that net value of the property would be different to the net value allocated to it for these proceedings, I will provide for a division of balance of the net proceeds in the proportion that $207,473.75 bears to the net value allocated to the property in these proceedings of $582,000. I will round that proportion up to 36 per cent.
On 27 September 2017, D Super confirmed[3] that it had no objection to a splitting order in the form proposed on behalf of the wife. I will make the splitting order in accordance with that form.
[3] Exhibit 8
Conclusion under Section 79
This was a marriage and cohabitation that spanned 18 years and contributions were made by each of the parties. The wife made significantly greater initial contributions in that she owned the Suburb K apartment at the commencement of the relationship. She also received significant assets following separation in the form of $441,953 in royalties. It is agreed that the wife’s financial contributions exceeded those of the husband. It is agreed that the husband made no contribution to the Suburb C property. The contributions have been assessed as 60 per cent to the wife and 40 per cent to the husband in relation to the other non-superannuation assets. An adjustment in favour of the husband of 22.5 per cent in relation to the non‑superannuation assets is justified by reference to the non-contribution aspects of s 79(4) of the Act, including the wife’s stronger capital position, the husband’s poor health and the disparity in earning capacity between the parties. The superannuation is to be divided equally.
In my view the orders giving effect to those calculations will reflect a just and equitable division of their property.
I have taken the general form of orders from the husband’s proposals. I will however, provide for the parties to bring the matter back within 28 days after the orders are made to address any problems identified in the form of those orders.
I certify that the preceding one-hundred and eighty-one (181) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 28 March 2018.
Associate:
Date: 28 March 2018
Berry and Ingram [2018] FamCA 192
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