Bilson and Bilson

[2013] FamCA 966

FAMILY COURT OF AUSTRALIA

BILSON & BILSON [2013] FamCA 966

FAMILY LAW – PROPERTY SETTLEMENT IN RELATION TO MARRIAGE – Where the husband and wife cohabited for approximately 18 years – Where the parties dispute the date that cohabitation commenced – Where the parties’ contributions of income and effort during the marriage were found to be equal – Where the husband’s mother made financial contributions during the marriage and where the husband received a substantial inheritance from his mother’s estate shortly before the parties separated – Where the husband applied the inheritance funds to improve the parties’ net asset position – Where the value of the husband’s inheritance in dollar terms represented a large percentage of the net asset pool at the date of hearing – Where overall the husband’s s 79(4) contributions were found to be greater than the wife’s – Where the husband is seven years older than the wife but has a greater income earning capacity than the wife – Where a modest adjustment was made in favour of the wife under s 75(2).

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

APPLICANT: Ms Bilson

RESPONDENT: Mr Bilson

FILE NUMBER: SYC 2240 of 2011

DATE DELIVERED: 11 December 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 25, 26, 27 November 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Sansom

SOLICITOR FOR THE APPLICANT: Crawford Ryan Lawyers

COUNSEL FOR THE RESPONDENT: Mr Lethbridge SC

SOLICITOR FOR THE RESPONDENT: Haydon Fowler Corbett Jessop

Orders

IT IS ORDERED

1. That within three months of the date hereof, the husband shall pay to the wife by way of property settlement the sum of $665,466.

2. That simultaneously with the payment referred to in Order (1):

   (a)The wife shall sign all documents required to transfer to the husband all her right title and interest in the property known as B Street, Suburb C (“the Suburb C property”) being the land described in Folio Identifier …;

   (b)The husband shall cause the mortgage secured over the Suburb C property to the Commonwealth Bank (“the mortgage”) registered no. … to be discharged; and

   (c)The husband shall indemnify the wife from any and all liability in relation to the mortgage.

3. That in the event that the husband has not paid the whole sum referred to in Order (1) by the due date, then the parties will do all acts and things required to sell the Suburb C property and to pay the proceeds of sale in the following order and priority:

   (a)       To discharge the mortgage;

   (b)In payment to the wife of any money due to her pursuant to Order (1) together with interest on such sum as shall remain outstanding, calculated from the due date until the date of payment at the rate specified in the Family Law Rules 2004 (Cth);

   (c)       In payment of any agents’ commission and costs of sale; and

   (d)       The balance to the husband.

4. That other than as provided in these Orders, each party shall be solely entitled to any item of property, including any interest in superannuation, in his or her possession at the date of these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bilson & Bilson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2240 of 2011

Ms Bilson

Applicant

And

Mr Bilson

Respondent

REASONS FOR JUDGMENT

1. Before the Court are proceedings for property settlement arising out of the marriage between the applicant, Ms Bilson (“the wife”) and the respondent, Mr Bilson (“the husband”).

2. The parties met in mid-1990 and commenced to live together in the same home in March of 1992. Each of them had been married. The wife had a child, Mr D, who was aged six when the parties met. Mr D lived with the wife and spent almost no time with his father. The husband had two children: Mr E, then aged ten; and Ms F, then aged eleven. The husband’s children lived with him for five days each fortnight and half of the school holidays.

3. At the time the parties met, the husband was engaged in property settlement proceedings with his first wife which were resolved by orders of the Family Court of Australia made on 3 August 1990. After their property settlement proceedings resolved, the husband and his first wife continued to litigate in relation to issues of child maintenance, which were not resolved until August of 1992.

4. The parties married in 1994 and there is one child of their relationship, G, who is aged 17 years. They separated on a final basis on 19 September 2010 although there were a number of short separations prior to that time. After separation they shared the care of G.

5. At the commencement of the hearing the issues for determination were expressed to be the following:

   1.Whether the parties commenced co-habitation in 1990 or in March of 1992.

   2.The extent and value of the assets introduced into the relationship by the husband at the commencement of co-habitation.

   3.The value of gifts made by the husband’s mother during the parties’ co-habitation.

   4.The amount and disposition of the inheritance received by the husband on the distribution of his mother’s estate.

   5.The weight to be attached to the contributions of the husband’s mother having regard to the fact that they were made late in the relationship.

   6.Whether or not the wife is working to her full capacity such that an adjustment under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) is not appropriate.

6. At the commencement of the hearing, the husband sought to tender four lever arch files of exhibits to his affidavit. After some discussion, I admitted the folders into evidence but only on the basis that I would have regard only to those documents to which I was specifically referred in cross-examination or in submissions. Similarly, in the wife’s case, Counsel was advised that a lever arch file of documents annexed to her affidavit would be admitted on the same basis. Ultimately, I was not referred to any document in the wife’s folder and to but a few from the husband’s four folders.

7. At the commencement of submissions, the parties handed up a Joint Balance Sheet. There was a dispute between them as to the value of two properties.

8. In relation to the property at H Street, Suburb I, the husband contended that the value was $2 million. The wife accepted the valuation of the single expert valuer of $2.2 million.

9. In relation to the property at J Street, Suburb K, the husband contended for a value of his one-third interest of $475,000 as opposed to the single expert’s valuation of $510,000, which was accepted by the wife.

10. The parties have varying assertions as to monies which should be added back into the Balance Sheet and there was a dispute in relation to liabilities which were claimed by the husband as being joint liabilities for the purpose of the Balance Sheet.

WHEN DID CO-HABITATION COMMENCE?

1. The parties met in mid-1990. At the time they met, the wife was renting an apartment at L Street, Suburb I, (“L Street”) which was a two bedroom apartment which she shared with another person and her son, Mr D. The wife and Mr D shared a bedroom. The husband was living at a property at M Street, Suburb I (“M Street”). Whilst the wife was living at L Street the husband did not stay overnight at her home but they agree that she stayed overnight for one or two nights a week at his home.

2. In about mid-1991 the wife moved into a two bedroom unit in N Street, Suburb I. Thereafter they each agree that the husband stayed overnight at the wife’s apartment on one or two nights each week and the wife stayed over, with Mr D, at the husband’s apartment on one or two nights each week. During this period, each of them separately paid the rent on their respective residences and paid his or her living expenses. There was no suggestion on behalf of the wife that they shared any expenses or that they shared the care of their children.

3. I do not accept that during the period when the parties lived in separate residences prior to March of 1992 they were co-habiting for the purpose of these proceedings.

THE ASSET POOL

1. The Joint Balance Sheet prepared by the parties is reproduced below:

Ownership		Description	Wife value	Husband value
1	Joint	B Street, Suburb C	1,370,000	1,370,000
2	Husband	H Street, Suburb I	2,200,000	2,000,000
3	Husband	J Street, Suburb K (1/3)	510,000	475,000
4	Husband	O Pty Ltd	116,299	116,299
5	Husband	Shares	0	0
6	Husband	Savings	0	0
7	Wife	Savings	0	0
8	Husband	Shares in P Pty Ltd	4,000	4,000
9	Husband	Motor vehicle 1	10,800	10,800
10	Wife	Motor vehicle 2	11,100	11,100
11	Wife	Rental bond	1,640	1,640
12	Husband	Loans to Mr Q Bilson	3,955	3,955
13	Husband	Funds held by husband’s solicitors in trust on account of Counsel’s fees	40,000	40,000
TOTAL			$4,267,794	$4,032,794

ADDBACKS
Ownership		Description	Wife/de facto partner’s value	Husband/de facto partner’s value
14	Wife	Savings at separation – T Credit Union	0	7,105
15	Wife	Net sale proceeds 1 R Street, Suburb S	13,451	23,451
16	Wife	P distribution from sale of 2 R Street, Suburb S – 50 per cent	26,083	26,083
17	Husband	P distribution from sale of 2 R Street, Suburb S – 50 per cent	26,083	26,083
17 A	Husband	Legal costs paid	17,296	0
TOTAL			$80,952	$82,722

LIABILITIES
Ownership		Description	Wife/de facto partner’s value	Husband/de facto partner’s value	Separation balance
18	Husband	Mortgage 1 & 2/23 H Street, Suburb I – …	1,100,000	1,100,000	1,100,000
19	Husband	Mortgage 92-94 J Street, Suburb K – …	452,000	452,000	452,000
20	Joint	Mortgage B Street, Suburb C (fmh) – CBA Home Loan …	676,600	676,600	720,106
21	Husband	Tax – integrated client account	36,573	36,573	43,689
22	Husband	Rural Bank Agricultural Investment Loan	7,362	7,362	42,143
23	Husband	ANZ Visa	13,378	13,378	11,623
24	Husband	Medfin personal loan	34,523	34,523	35,350
25	Husband	AMEX	26,006	26,006	21,615
26	Husband	1/3 Property Loan – O Pty Ltd	38,085	38,085	84,000
27	Husband	Personal BAS and provisional tax instalments unpaid	11,861	11,861	0
28	Husband	Unpaid GST/BAS - J Street Suburb K	16,857	16,857	NK
29	Husband	Land tax	43,661	43,661	34,197
30	Husband	Income tax	3,362	3,362	69,903
31	Husband	CBA cheque account … overdraft (RMB 23 account)	3,858	3,858	6,609 cr
32	Husband	CBA cheque account … overdraft (RMB 1 account)	583	583	0

33	Husband	CBA “BLR 92-94 account” …	1,752	1,752	132 cr.
34	Wife	Loan from U Pty Ltd	0	0	0
35	Wife	Loan from Mr V	0	0	0
TOTAL			$2,466,461	$2,466,461	$2,607,887

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife/de facto partner’s value	Husband/de facto partner’s value
36	Husband	AMP	111,987	111,987
37	Wife	First State Super	97,833	97,833
38	Wife	AMP	1,640	1,640
39	Wife	NGS	5,988	5,988
TOTAL				$            217,448	$                217,448

1. The issues between the parties arising from the Balance Sheet will be dealt with in the order in which they appear, using the item number from the Balance Sheet.

   2. Value of 1 and H Street, Suburb I

2. These properties were valued by a single expert, Mr W. He was cross-examined but was unshaken in his evidence. I accept Mr W’s evidence that his methodology was appropriate and that the comparables upon which he relied support his conclusion. No submissions were directed to Mr W’s evidence by Senior Counsel for the husband, from which I infer that his evidence is to be accepted.

   3. Value of J Street, Suburb K

3. No cross-examination was directed to Mr W in relation to his evidence about the value of this property and I accept his evidence.

   11. The wife’s rental bond

4. The wife argues that the bond should not be taken into account as an asset. There is no suggestion that the bond will not be returned to her if she vacates the current leased premises or that it can be transferred to another leased property. In those circumstances, the bond is an asset.

   14. to 17A. – Add backs

5. Whether or not it is appropriate to “add back” amounts that have been received and dispersed by the parties is not a matter which is necessary here to determine.

6. The wife at separation held $7,105 in her credit union account. Since separation, she has had periods of long service leave (when she was paid) and periods of leave without pay when she was not paid and received a Centrelink benefit. She gave unchallenged evidence that she has borrowed money from her mother, her stepfather and her father to meet living expenses. I do not consider that she should be required to account for those funds in her account at separation.

7. The parties agree that they each received funds from various sales of property. In December 2011 the husband received $30,000 from his share of the sale of a property at X Street, Suburb K. From that sum he paid $17,296 to his solicitors. The balance was used to pay down other debt on property owned by him. The husband agrees that the amount paid for legal fees should be included as an asset and that sum will be added to the Balance Sheet.

8. The wife received $23,451 from the sale of the property at R Street, Suburb S. From that sum she paid $13,451 to her solicitors. She agrees that amount should be included as an asset and that sum will be added to the Balance Sheet.

9. The balance of $10,000 has been spent by her on living expenses. She was not challenged on that evidence and I do not consider that it is appropriate to bring that sum into account in the Balance Sheet.

10. Each of the parties received a partial property settlement of $26,083 from the sale of 2 R Street, Suburb S. They have each dealt with those funds as their own and I do not propose to bring them into account in the Balance Sheet.

    21. Husband’s tax - integrated client account

    27. BAS and provisional tax unpaid

    28. GST & BAS on Suburb K

    29. Land tax

    30. Income tax

11. On behalf of the wife it is submitted that these liabilities should not be included in the Balance Sheet. She submits that the husband has had the benefit of the relevant income and should have paid his taxes. The husband points out that he has used his income to reduce joint liabilities. For example, the mortgage over the Suburb C property has been reduced by $44,106; the O Pty Ltd property loan has been reduced by $45,935; the integrated client account with the Australian Taxation Office has been reduced by $7,166 and the income tax debt (item 30) has been reduced by $66,609.

12. The parties had agreed debts at separation of $2,614,626. The husband tendered documents to evidence the debts. Their present debts (excluding the husband’s overdraft which I propose to disregard as incurred after separation) total $2,460,268. Not all of those amounts will be allowed as debts for the purpose of the Balance Sheet but the amount illustrates that the husband has used his income and capital sums received to reduce debt.

13. I accept the husband’s evidence that the land tax assessment arose as a result of a mistake made by the relevant government body. As a result of the mistake, a fresh assessment was issued giving rise to an amount in excess of that which the husband expected. In any event, the land tax is a charge upon the land and its payment cannot be avoided.

14. In all of those circumstances those debts should be included in the Balance Sheet.

    23. The husband’s Visa debt

    25. The husband’s American Express debt

15. The wife objected to the inclusion of those debts on the basis that they were incurred after separation and contained items of expenditure which were business related or personal to him. The husband gave evidence that business expenses were refunded by the business. However, at the time of separation, the husband had a Visa debt of $11,623 and an American Express debt of $21,615. There can be no argument that the balance at separation was other than a joint liability and I propose to include those debts as at the date of separation.

16. Consistently, I do not propose to include the wife’s debts to her parents in the Balance Sheet. They are post-separation borrowings for living expenses and will be taken into account in considering the s 75(2) factors.

17. Thus I find the assets and liabilities of the parties to be:

Ownership		Asset Description	Value
1	Joint	B Street, Suburb C	1,370,000
2	Husband	H Street, Suburb I	2,200,000
3	Husband	J Street, Suburb K (1/3)	510,000
4	Husband	O Pty Ltd	116,299
5	Husband	Shares in P Pty Ltd	4,000
6	Husband	Motor vehicle 1	10,800
7	Wife	Motor vehicle 2	11,100
8	Wife	Rental bond	1,640
9	Wife	Funds paid to solicitor from 1 R Street	13,451
10	Husband	Loans to Mr Q Bilson	3,955
11	Husband	Funds paid to solicitor from X Street	17,296
12	Husband	Funds held by husband’s solicitors in trust on account of Counsel’s fees	40,000
TOTAL			4,298,541

Ownership		Liability Description	Value
12	Husband	Mortgage H Street, Suburb I – …	1,100,000
13	Husband	Mortgage J Street, Suburb K – …	452,000
14	Joint	Mortgage B Street, Suburb C (fmh) – CBA Home Loan …	676,600
15	Husband	Tax – integrated client account	36,573
16	Husband	Rural Bank Agricultural Investment Loan	7,362
17	Husband	ANZ Visa	11,623
18	Husband	Medfin personal loan	34,523
19	Husband	AMEX	21,615
20	Husband	1/3 Property Loan – O Pty Ltd	38,085
21	Husband	Personal BAS and provisional tax instalments unpaid	11,861
22	Husband	Unpaid GST/BAS - J Street Suburb K	16,857
23	Husband	Land tax	43,661
24	Husband	Income tax	3,362
TOTAL			2,454,122

1. I therefore find the parties’ net assets excluding superannuation to be $1,844,419.

1. The parties each have superannuation. Neither asks for a splitting order. The husband has $111,987 in his fund and the wife has $105,461 in her fund. The individual amounts are set out in the table below. It is appropriate in this matter to deal with the disparity in their present entitlements in the context of the

   
   

   s 75(2) adjustment.

Member		Name of superannuation fund	Value
25	Husband	AMP	111,987
26	Wife	First State Super	97,833
27	Wife	AMP	1,640
28	Wife	NGS	5,988

SECTION 79(2)

1. The parties both seek an adjustment of their legal interests in their property. In circumstances where they will no longer have the joint use and enjoyment of that property, it is appropriate to make an adjustment.

THE PARTIES’ ASSETS AT CO-HABITATION

1. The parties commenced to live together in rented premises in Suburb I from March of 1992.

The wife

1. At the commencement of their co-habitation the wife owned a Toyota motor vehicle and had minimal savings and personal items. She had, what she describes as, a minimal entitlement to superannuation. For the reasons later expressed, her superannuation entitlement will be disregarded.

The husband

1. There is a dispute between the parties as to the husband’s assets at the commencement of co-habitation. On 5 May 1992, the husband swore an affidavit in proceedings relating to the maintenance of the children of his first marriage. He set out the property which he owned and his liabilities at that date. The husband deposed to having the following property:

   A.H Street, Suburb I

   For the purpose of these proceedings, that property had an agreed value at March 1992 of $520,000.

   B.Y Street, Suburb Z

   The property at Y Street, Suburb Z, was owned by the husband but was security for payments ordered to be made to the husband’s first wife by way of property settlement. The property was also security for a loan of $195,000 to the ANZ Bank, that amount having been borrowed by the husband and advanced to his business partnership, and a further loan from P Pty Limited (“P”) of $55,000 secured by an unregistered mortgage over the property. P was a company in which the husband owned one share but which was primarily the operating company for the husband’s mother’s property interests. In November 1992 the husband sold the property at Y Street for $255,000 and used the proceeds of sale to pay to his former wife the sum of $252,000. He conceded in cross-examination that he did not receive anything from the sale proceeds. It was then necessary for the loan of $195,000 secured by way of mortgage to be resecured over a property owned by P at H Street, Suburb I, and the mortgage of $55,000 to P was then unsecured but not repaid. I therefore find that the Suburb ZRoad property had no net value at the commencement of co-habitation.

   C.AA Street, Suburb BB

   The husband owned a one-third interest in premises at AA Street, Suburb BB, the remaining two thirds being owned by his business partners. The husband in his affidavit of 5 May 1992 swore that his equity in the premises at AA Street was approximately $10,000. That estimate was accepted by the wife in these proceedings.

   D.M Street, Suburb I

   The husband in his affidavit relied upon for these proceedings, deposed to ownership of the property at M Street, Suburb I. I do not accept that evidence. In his affidavit sworn 5 May 1992, the husband said this in relation to the ownership of M Street, Suburb I:

   Fifty-five per cent interest in M Street, Suburb I. My mother [Mrs Bilson] owns a 35 per cent interest and my aunt [Ms CC] own a 10 per cent interest in the property. The premises were purchased for the sum of $315,000, my mother and aunt contributing the sum of $100,000 to the purchase price and the remainder namely $215,000 being raised by way of first mortgage secured on the property.

1. In cross-examination the husband said that the statement at “D” above was factually correct. Although the title was in the sole name of the husband, the husband said that there was an agreement that, upon the sale of the property, his mother and aunt would receive a return on their money proportional to the sale price. The husband gave no explanation for the change in his evidence.

2. Whilst there is a presumption of advancement arising out of the advance by the husband’s mother to the husband, that presumption is rebutted by the husband’s evidence that it was agreed that his mother would receive a return on her investment proportional to the sale price of the property. There can be no presumption of advancement between the husband and his aunt.

3. Accordingly, I find that the husband held the property at M Street as to 55 per cent and the balance for his mother, as to 35 per cent, and his aunt, as to 10 per cent. The mortgage of $215,000 was raised by the husband to purchase his interest in the property. There is no evidence that there was any equity in that property at the commencement of co-habitation.

4. The husband had an interest in four optometry practices:

   (i)     100 per cent interest in Bilson Optometrist “carrying on business at [H Street]”;

   (ii)    100 per cent interest in DD Pty Ltd, Optometrists “carrying on business at [EE Street, Suburb FF]”;

   (iii)     50 per cent interest in O Pty Ltd, “carrying on business at [GG Street, Suburb II]”;

   (iv)   A one third interest in JJ Pty Ltd, “carrying on business at [J Street, Suburb K]”.

5. The parties agreed that the Financial Statements of the practices at 30 June 1992, disclose the respective asset positions to be:

   Bilson Optometrist         debit ($141,770)

   DD Pty Ltddebit   ($18,413)

   O Pty Ltds (50 per cent)   $23,503

   JJ Pty Ltd (33.3 per cent)  $14,421

6. Thus the net agreed value to the husband of the optometry practices was a debit of ($122,259).

7. In addition it is agreed that the husband had:

   Credit loan account with DD Pty Ltd   $6,831

   Savings  $3,500

   AMP Insurance policy surrender value                  $8,500

   Furniture and household effects  $10,000

8. The husband had an interest in superannuation valued at $5,000. The wife also had an interest in superannuation. Having regard to the length of time which has elapsed and the difficulty in comparing the value of the husband’s fund to the value of the wife’s fund, I do not propose to include either fund as an asset at co-habitation.

9. The husband claims as an asset at the commencement of co-habitation a sum of money recovered in August 1996, more than four years after co-habitation. This sum was the net proceeds, after payment of legal fees, of proceedings to recover up to approximately $400,000 stolen from the husband’s practice by a former employee. The money was not recovered for some years after the parties commenced co-habitation and I do not regard it to be an asset at that time.

10. Thus the husband had assets of $436,572.

11. The husband’s liabilities at the commencement of co-habitation were as follows:

    Mortgage over H Street to ANZ Bank of $330,000

    Unregistered mortgage in the sum of $55,000 from P

    A Visa card debt of $4000

    Outstanding tax in the amount of $28,582

12. The total of the husband’s liabilities was $417,582.

13. I therefore find that the net assets of the husband at the commencement of co-habitation were $18,990.

CONTRIBUTIONS THROUGHOUT CO-HABITATION

1. When the parties commenced co-habitation in March of 1992 the wife’s son Mr D lived with them. The husband’s children, Mr E and Ms F, lived with him five days a fortnight and for half of the school holidays. At the end of 1992 the husband’s first wife moved to Queensland and Ms F moved to live with her mother, returning to stay with the husband during school holidays. Mr E lived with his father, the wife and Mr D. Both Mr D and Mr E lived as part of the family until each of them had completed their education, started to work and become independent.

2. There is a dispute between the husband and the wife about the extent to which the husband provided financial support for Mr D. The wife gives evidence that the husband refused to provide for Mr D to the same extent that he provided for Mr E. The wife’s mother, Ms KK, gave evidence that she, from time to time, provided money for Mr D, specifically paying for tuition in physics for a year and helping the wife pay for school expenses, books, trips and soccer boots for Mr D. However, it is not disputed that Mr D lived in the home which was rented by the husband and the wife and for which the expenses were paid jointly from their respective incomes.

3. Neither is it disputed that the wife performed home making and parenting functions in relation to Mr E and in relation to the family generally.

4. The wife worked until she was pregnant with G. There is a dispute between the parties about whether she stopped working at the beginning of 1995, as she contends, or at the end of 1995, as the husband contends. Whenever it was that the wife stopped working, she then commenced to work in the husband’s practice and nothing turns upon that dispute. When the wife was pregnant, and later, when G was small, the wife worked in the optometry practice.

5. In January 1997 the wife completed a TAFE course and was able to put that course into practise in her work for the business.

6. In 1997 the parties agreed that the wife would return to her previous employment. She obtained a casual position to begin at the start of 1998, initially working three days per week and then working fulltime.

7. In 2005 the wife undertook a course of study to become further qualified and successfully completed a Master’s Degree. During that period, when she was studying, she was paid her full salary and her university expenses were paid by her employer.

8. The wife continued working up until the parties separated and thereafter.

9. Throughout the whole of the course of the parties’ relationship, the husband worked in the various businesses and, although he was the superior income earner, both the husband and the wife contributed their income to the enterprise of the marriage and, as the husband properly conceded, “it was a team effort and she was a member of the team.”

10. In July 1999 the parties purchased a property at B Street, Suburb C (“the Suburb C property”) for $585,000 subject to a mortgage of $461,000 to the Commonwealth Bank of Australia (“CBA”). In order to assist with the purchase, the husband’s mother offered to give the parties $100,000, she having given similar amounts of money to the husband’s other siblings. In addition to that amount, the husband’s mother extended a short term loan of $45,000 so that the husband would not have to sell shares which he then held.

11. The parties renovated the property. The wife says, and I accept, that she was not aware of the financial details of the renovations, as the husband managed their finances, and that he did not tell her how the renovations were to be paid for. The husband says, and I accept, that the renovations were paid for by advances from his mother totalling $275,000 together with a further drawing on the mortgage of $300,000.

12. In 2003 the husband purchased the property located at H Street (the property situated above the husband’s business in H Street). The husband’s evidence is that he purchased the property from P for $325,000 by refinancing the CBA Better Business loan #1 with the CBA Better Business loan #2.

13. In 2007 the husband, in partnership with two others, acquired a one-third interest in a property at J Street, Suburb K. The husband in his affidavit sets out evidence that the purchase price of $1,356,000 was fully funded by a loan from Medfin Finance.

14. Much has been made in the affidavits of each of the parties of the minute detail of financial transactions which were undertaken in the course of their co-habitation. In places they do not agree. I do not find it necessary to make any findings about the minutiae of the parties’ financial transactions. Each of them agrees that each contributed the whole of their earnings to the enterprise of their family. Neither asserts any financial wrongdoing on the part of the other.

15. In those circumstances it is not necessary to deal in detail with what each of them asserts to be the financial history of the marriage. What they had at the commencement of co-habitation is clear. What they had achieved at the time of their separation is also clear.

16. Each of the parties contributed to the fullest extent of which they were capable to both the financial and physical benefit of their family and their various business enterprises. The wife brought into the marriage a child of a prior relationship and the husband brought into the marriage two children, only one of whom substantially lived with the parties during the marriage. Each of them contributed to the parenting of their daughter, G, and they conducted their marriage as a joint enterprise. Accordingly, I find that their personal contributions during co-habitation were equal.

GIFTS BY THE HUSBAND’S MOTHER

1. On 30 June 2003 the husband’s mother signed a document in which she agreed to forgive advances made to the husband and his siblings. The total amount which was forgiven by the husband’s mother was $270,000 which included the mortgage of $55,000 secured over H Street, the amount of $20,000 which had been retained by the husband on the sale of M Street and the monies which had been advanced for both the purchase and the renovation of the Suburb C property.

2. Although at the commencement of the proceedings these transactions appeared to be an issue, at the conclusion of the husband’s cross-examination they appeared to have been conceded.

THE HUSBAND’S INHERITANCE

1. The husband’s mother died on 7 August 2007. The husband commenced to receive distributions from her estate on 26 February 2008 when he received $100,000 and those distributions continued with some regularity until the final distribution in about March of 2011. The total of the amount conceded to have been received by the husband from his mother’s estate is $862,330.60. Of that amount, all but $11,750 had been received prior to separation.

2. It was not ultimately in dispute that the whole of the money which was received by the husband from his mother’s estate was applied to the joint enterprises of the family’s businesses, investments and living expenses.

THE HUSBAND’S FURTHER FINANCIAL CONTRIBUTIONS

1. In the course of their relationship, further money came into the family which, the husband claims, was a contribution solely by him.

2. In August 1996 the husband, by litigation, recovered $43,301 from an employee who had stolen up to approximately $400,000 from him. The husband claimed that the whole of the theft took place before the parties co-habited. The wife claimed that the theft continued until 1994. Neither was challenged about that issue.

3. The wife gave evidence, unchallenged, that she had worked for many hours with the husband from about 1994 when he became aware of the theft. Her evidence was not challenged. Together with the husband, she checked record cards, checked till rolls, entered them into computerised spread sheets, cross checked the till rolls against the record cards to see whether attendance correlated with a payment.

4. They analysed records of takings in periods when the employee was on holidays, or days when she did not work, against records when she was working, to compare relative takings for those periods.

5. The wife’s unchallenged evidence is that the process took the parties six months to complete.

6. The wife’s unchallenged evidence is that she supported the husband in the process of the litigation.

7. In those circumstances, I consider the contribution of $43,301 to be a joint contribution.

8. In July 1993 the husband sold a further share of the optometry practices (which were then restructured) to Mr LL for $117,442. That sum was paid to the husband by instalments between 1 July 1993 and 30 June 1994. There is no suggestion from the husband that the sale was other than for proper value. The husband claims that this sum should be regarded as a contribution by him.  

9. If the value of the husband’s practices improved between co-habitation and the time of the sale to Mr LL, then that increase in value occurred during co-habitation. Therefore, I do not consider that the money received from Mr LL is a contribution from the husband solely.

10. Between 1997 and 1999 the husband received shares in AMP Limited, valued at $28,835, as a result of the demutualisation of the AMP Society. He retained the insurance policy. He also received 2,265 HHG shares in 1997, again as a result of the demutualisation of AMP Society. He asserts that, because the shares were allotted as a result of his having owned the insurance policy with AMP Society, the value of the shares should be regarded as a contribution by him. The husband did nothing to bring about the demutualisation of AMP Society. I regard the shares as being a windfall and not a contribution attributable to the husband.

11. Similarly, I regard the allocation to the husband of NRMA shares in June 2000 as a windfall.

12. During the course of co-habitation the husband’s mother, through P, lent money to the parties at a rate of interest which was expressed to be 3 per cent below the current bank rate. The parties saved $18,770 in repayments. I accept this is a contribution by the husband’s mother.

CONCLUSION ON CONTRIBUTIONS

1. In a net asset pool of $1,844,419 the contributions made by the husband’s mother total approximately $1,151,101. Of that sum, the inheritance of $862,331 came late in the marriage. The first payment from her estate was received in February 2008 and, by the time the parties separated in 2010, all but $11,750 had been received.

2. The contributions by the husband’s mother deserve significant recognition in a relationship where all of the other contributions were approximately equal.

3. The husband contends for an adjustment in his favour of 70 per cent or a differential of $737,767. Having regard to his mother’s contribution of approximately $1.15 million, late in the marriage, I consider that adjustment to be appropriate.

SECTION 75(2)

1. Each party contends for an adjustment in his or her favour arising from relevant s 75(2) factors. Neither seeks to rely on the care of their daughter, G, which they share approximately equally.

2. For the wife it is contended:

   (a)She is a salaried worker and earns a lesser amount than the husband. Even if she were to work for five days a week, rather than four as she currently does, and as the husband contends she is able, she would not earn as much as he does.

   (b)She does not have the opportunities for cash management that the husband has as a self-employed professional.

   (c)She will not be able to continue to work beyond statutory retirement age, unlike the husband who can work for as long as he either wants or is capable.

   (d)The husband has had the occupation of the matrimonial home and she has paid commercial rent.

   (e)She will have to repay the loans from her parents and step-father totalling $21,235. In contrast, the husband’s liabilities have substantially been taken into account in the Balance Sheet.

   (f)She will retain her superannuation entitlement of $105,461 to which she will have access when she reaches retiring age.

3. For the husband it is contended:

   (a)He is 58 years of age and the wife is 51.

   (b)His income is not vastly superior to hers. I note that the wife in her Financial Statement, unchallenged, deposes to an income from employment of $69,004. The husband’s estimated income for the year ended 30 June 2013 is $85,000. The husband in his Financial Statement sworn 28 June 2013 (items 9 and 11) deposes to an income from the businesses of $2,760 per week or $143,520 per annum. In addition, he has a net income from his various rental properties. Although the husband conceded that the income before tax from the rental properties was approximately $40,000 per annum, the calculation of his Senior Counsel in submissions suggested that the figure was more likely to be approximately $13,000. For the purpose of comparison, the husband’s income is approximately $157,000 which is more than double that of the wife.

   (c)The wife chooses to work only four days each week when full time employment is available to her. There is no dispute that the wife has chosen to leave one employer system and work in the for another. If she chooses to return to her previous employer a position must be found for her, albeit that she will have no say in the locality where she will be placed. There is no evidence of any factor that prevents her from returning to her previous employer where she earned approximately $80,000 per annum full time. However, even if she were to do so, her income is still approximately half that of the husband’s income.

   (d)He will retain his superannuation entitlement of $111,987 to which he might be entitled to access when he reaches 60 years of age, depending on his continued working arrangements and the legislative regime then in place in relation to superannuation.

4. In addition to the above, the husband submits that possible fees he may incur through separate litigation relating to his partnership should be taken into account in the consideration of the s 75(2) adjustment. The circumstances of that litigation are as follows.

5. The husband and Mr LL (as Defendants) are presently engaged in Supreme Court litigation with their partner (the Plaintiff) who is suffering from a serious illness. The subject matter is a disability insurance payment. The husband and Mr LL on the one hand, and their partner on the other, cannot agree on how the funds should be apportioned.

6. There has been mediation and the parties’ respective positions appear to be $100,000 apart.

7. The husband and the wife have agreed that, for the purpose of these proceedings, the value of the husband’s interest in the partnership is $116,299. The husband and Mr LL have incurred legal and accountancy fees which are the liability of their partnership and which I assume have been taken into account in reaching the agreed value.

8. The husband and Mr LL may incur further costs in the Supreme Court litigation. In the event that the matter goes to trial, the Plaintiff may be unsuccessful and will pay costs. Having regard to the present position of the parties in negotiations, as a matter of commercial reality, the matter may settle.

9. Taking all of above s 75(2) matters into account, I consider that there should be a modest adjustment under s 75(2) in favour of the wife of 7.5 per cent. The value of the adjustment, representing a disparity of 15 per cent, is $276,663.

JUST AND EQUITABLE

1. In terms of what the parties will receive overall, the disparity is 25 per cent or, in real terms, $461,105.

2. The wife will receive 37.5 per cent of the net assets or $691,657. She has assets in her possession of $26,191 and thus the husband will be required by the Orders to pay her $665,466. He will be allowed three months to arrange his affairs so as to borrow that sum and, in default, the Orders will provide for the sale of the Suburb C property.

3. In the circumstances of this case, and for all the reasons set out above, I consider that the Orders proposed to be made will produce a just and equitable result as between these parties.

I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 December 2013.

Associate: 

Date:  11 December 2013