BONFILS & BABIN
[2020] FCCA 34
•13 January 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BONFILS & BABIN | [2020] FCCA 34 |
| Catchwords: FAMILY LAW – Property – de facto relationship – mature couple – short relationship – de facto husband provides almost entire financial contributions – wife makes small financial contribution – wife makes homemaking contribution – husband’s net assets exceed $4.5 million – wife has negative net equity – wife may have small undisclosed financial resource – husband opposes any property adjustment or submits no more than 4% – wife submits 10% of husband’s net assets – 6% property adjustment appropriate, just and equitable. |
| Legislation: Family Law Act 1975 (Cth), Part VIIIAB, ss.4AA, 90MT(1)(a), 90MT(4), 90SM, 90SF |
| Cases cited: FO v HAF [2007] 2 Qd R 138 |
| Applicant: | MS BONFILS |
| Respondent: | MR BABIN |
| File Number: | WOC 1046 of 2014 |
| Judgment of: | Judge B Smith |
| Hearing dates: | 22, 23 and 25 October 2018 |
| Date of Last Submission: | 25 October 2018 |
| Delivered at: | Sydney |
| Delivered on: | 13 January 2020 |
REPRESENTATION
| Counsel for the applicant: | Mr Rosic |
| Solicitors for the applicant: | Kells the Lawyers |
| Counsel for the respondent: | Mr Schonell |
| Solicitors for the respondent: | Diamond Conway Lawyers |
ORDERS
That within forty-two (42) days the respondent pay to the applicant the sum of $275,000 by way of lump sum property settlement.
In default of the respondent’s compliance with the payment referred to in order 1 above the parties shall, within a further fourteen (14) days of the forty-two (42) days specified in order 1, do all acts and things and sign all documents necessary to effect the sale of the property known as and situate at A Street, Town B (“the property”) in the State of New South Wales and more particularly described in Certificate of Title Folio Identifier …83 and for that purpose the following shall apply:
(a)that the parties list the property for sale by private treaty with such agent as the parties may agree to appoint and in default of agreement between the parties within seven (7) days with such agent as the President of the Real Estate Institute of New South Wales nominate (“the agent”);
(b)that the parties appoint such solicitor on the conveyance as the parties may agree to appoint and in default of agreement between the parties within seven (7) days with such solicitor as the President of the NSW Law Society or their delegate may Real Estate Institute of New South Wales may nominate. (“the solicitor”);
(c)the sale price of the property is to be mutually agreed upon by the parties or, in the absence of agreement between the parties within seven (7) days at the price nominated as fair market value appointed by the President of the New South Wales Division of the Australian Institute of Valuers and Land Administrators (Incorporated) (“the valuer”);
(d)the respondent is to cooperate in every manner with the agent and the solicitor and the valuer including, but not limited to:
(i)making keys available to the agent;
(ii)allowing for inspections of the property at all reasonable times requested by the agent;
(iii)ensuring the property including the grounds are in neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(iv)signing all documents requested in relation to listing the sale of the property;
(e)neither party may confer with any agent without the consent of the other party in relation to any right to any sole or exclusive agency in respect of the property or to any commissions;
(f)the respondent provide vacant possession of the property not less than seven (7) days prior to settlement of the sale of the property and on, or prior to, vacation:
(i)conduct a general clean the property and ensure it is left in a clean and tidy state; and
(ii)remove all items of furniture and effects and personal belongings; and
(g)the proceeds of the sale of the property be paid in the following manner and priority:
(i)in payment of agents’ commissions, advertising expense and legal expenses of the sale;
(ii)in payment of costs incurred if any in relation to the determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee.
(iii)in payment for such amount as is required to be paid to effect any discharge of the mortgage/s secured against the property;
(iv)in payment of any amount owing to the applicant pursuant to order 1 together with interest calculated from the date of default and in accordance with the Family Law Rules 2004; and
(v)in payment of any balance then remaining to the respondent.
That in the event a purchaser for the property is not found within three (3) months of the date the property is listed for sale pursuant to order 2 or as otherwise agreed, the parties shall do all acts and things and execute all such deeds, documents and instruments as may be necessary to list the property for sale by public auction at an agreed price and for that purpose the following shall apply:
(a)the applicant shall be and is hereby appointed as trustee for sale of the property to sell the property in accordance with these orders on behalf of the parties jointly, if and when required;
(b)in the event that the parties are unable to agree upon an auctioneer, the auctioneer shall be nominated by the Real Estate Agent marketing the property;
(c)such an auction take place within six weeks from the date of placing the property for sale by public auction or as soon as practicable thereafter;
(d)the reserve price for such auction be as agreed between the parties or failing agreement for more than seven (7) days, determined by the selling agent;
(e)the parties pay all auction expenses as requested by the selling agent as and when they fall due;
(f)the respondent shall do all such acts and things as may be necessary or recommended by the selling agent to properly present the property for sale and to make the property available for inspection by prospective purchasers;
(g)the respondent shall attend the auction and, if necessary, negotiate with the highest bidder at auction if the reserve price is not reached;
(h)upon completion of the sale by the auction the proceeds of sale are to be distributed in accordance with order 2(g) above; and
(i)the respondent provide vacant possession of the property not less than seven (7) days prior to settlement of the sale of the property and on or prior to vacation;
(i)conduct a general clean the property and ensure it is left in a clean and tidy state; and
(ii)remove all items of furniture and effects and personal belongings.
That in the event that the auction referred to herein is unsuccessful, the property is thereafter to be listed for subsequent auctions in accordance with the provisions of the above order and that upon completion of the sale by any subsequent auction the proceeds of sale are to be distributed in accordance with the above order.
In default of the respondent's compliance with the payment referred to in order 1 above and the sale of the property in orders 2-4 above the Court orders in the alternative:
(a)in accordance with s.90MT(1)(a) of the Family Law Act 1975, whenever a split-able payment becomes payable to the respondent from his interest in the C Pty Ltd self-managed known as C Pty Ltd Fund (“the fund”), the applicant is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using base amount of $275,000 and there is a corresponding reduction in the entitlement the respondent would have had but for these orders;
(b)That:
(i)the Court allocates, as required by s.90MT(4) of the Family Law Act 1975, a base amount of $275,000 to the applicant out of the respondent's interest in the Fund;
(ii)in accordance with s.90MT(1)(a) of the Family Law Act 1975, the Court:
A.creates an entitlement on the part of the applicant to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
B.makes a corresponding reduction in the entitlement to the respondent, or such other person to whom a split-able payment may be made, would have had in the fund, but for these orders; and
(iii)whenever the trustee of the fund makes a split-able payment out of the respondent’s interest in the fund, the Trustee shall do all such acts and things and sign all such documents as may be necessary to pay the entitlement created in order 5(ii)(B) herein in accordance with the requirements of the Family Law Act 1975 and the Family Law(Superannuation) Regulations 2001; and
(c)these orders have effect from the operative time and the operative time is four (4) business days after the service of these orders of the trustee.
That as between the applicant and respondent and subject to the above orders the applicant and respondent shall each respectively retain all interest and entitlements to all of their other property and liabilities.
Any party who seeks to be heard on costs is to contact Chambers with prior notice to the other party within twenty-eight (28) days of these orders to have the matter re-listed for hearing on the question of costs.
IT IS NOTED that publication of this judgment under the pseudonym Bonfils & Babin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
WOC 1046 of 2014
| MS BONFILS |
Applicant
And
| MR BABIN |
Respondent
REASONS FOR JUDGMENT
1. Introduction
This is an application for an adjustment of property interests pursuant to Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).
The applicant, Ms Bonfils (“the wife”) born … 1957, is aged 62 and works in sales. She lives in Sydney.
The respondent, Mr Babin (“the husband”) born … 1956, is aged 63 and is self-employed. He lives at his house at A Street, Town B in D Region (“the house”).
It is common ground that the parties met in about November 2009, commenced spending weekends together from 11 January 2010, commenced cohabitation at the husband’s house on 15 February 2011, and finally separated on 17 September 2014.
When the parties met in November 2009 the wife was aged 52, employed 5 days per week including Saturday in sales earning approximately $800 net per week in roles she had held for approximately 7 years, and was sharing a 2 bedroom apartment with a female friend in Sydney for $250 per week. She had less than $100 in the bank, her furniture and personal items and about $40,000 in superannuation. Her position at co-habitation in February 2011 was effectively the same.
When they met the husband was 53. He lived in the house and owned and operated E Pty Ltd Pty Ltd (“E Pty Ltd”) as well as having considerable superannuation. E Pty Ltd in turn owned a business (“the business”) which it operated and which employed the husband paying him a salary of approximately $1,000 net per week. The house, E Pty Ltd, the business and his superannuation combined gave the husband a net worth in the range of $4 million or above.
There were no children of the relationship. The wife has no children. The husband has a son, Mr F aged in his early 30s, from a prior relationship. There is no evidence that Mr F is financially dependent on the husband.
There was no contest that there was a de facto relationship relevantly enlivening the jurisdiction of the Court.
There is a dispute about the length of the de facto relationship. The wife alleges it began in January 2010 and so was 4 years and 9 months long. The husband alleges that it began at cohabitation and so was 3 years and 7 months long. On any view it was a relatively short relationship.
The wife seeks orders for an alteration of property interests. The husband opposes any such orders.
The wife’s case, in summary, is that:
a)whilst she did not bring significant financial assets to the relationship that she contributed all the assets she had;
b)she gave up her job and life in Sydney and moved to Town G, where she acted as the primary homemaker at the husband’s request and on the understanding that he would be the financial provider and she a homemaker;
c)she did not work during the de factor relationship because he did not want her to;
d)she did not engage in waste as alleged or misappropriate a credit card;
e)she used the parties money as provided, primarily, by the husband to make purchases with his consent for their mutual benefit;
f)the husband’s subsequent regret at the expenditure during the period is not a basis for a finding of waste by her; and
g)the wife’s receipt of benefits during the course of the relationship is not equivalent to a form of “interim distribution” to be set off against her contributions or a basis for not adjusting the parties property interests.
The husband’s case, in summary, is that:
a)it was a short de facto relationship;
b)the wife’s financial contributions were nominal compared to the husband’s;
c)the wife’s homemaking contributions were nominal, in particular as he continued to paid for a cleaner after she moved in;
d)the wife engaged in wasteful spending of the husband’s money during the relationship;
e)the wife used one of the husband’s credit cards without his knowledge or consent to make certain purchases during the relationship;
f)the wife’s financial position post relationship is the same as before;
g)the wife did not fully disclose her financial position and resources; and
h)the wife received more financial benefits during and from the relationship than she contributed and that this is a significant factor to be taken into account in considering whether or not it is appropriate, just and equitable to make any order for the alteration of property interests.
All of these issues were in dispute to a greater or lesser extent.
If an alteration is found to be appropriate the wife seeks an alteration of property interests so that she receives 10% of the husband’s net property including superannuation, based on 5% contributions pursuant to s.90SM of the Act, with a 5% adjustment pursuant to s.90SF of the Act, with the husband to retain 90% of the property. In this context it is noted that the wife has substantial net equity.
The husband submitted, without concession and in the alternative, that if an alteration were found to be appropriate it would result in the wife receiving no more than 2-4% of the husband’s net property pool including superannuation.
The wife submitted the net asset pool including superannuation was in the range of $5,877,834. The husband submitted it was $4,466,596. The principal difference related to a $1,300,000 loan taken out post-separation by the husband as part of a business and superannuation restructure.
The wife seeks orders that the alteration be paid by cash payment which the husband can do by accessing his superannuation fund, or in the alternative from the sale of the house, as a last alternative by way of a superannuation splitting order.
The husband seeks orders that the application be dismissed.
Both parties seek orders that each party otherwise retain their own possessions and liabilities. Both seek costs.
2. Length of the relationship
The evidence
The evidence was that after meeting through friends in November 2009, the parties dined together a number of times and spoke regularly on the telephone. In December 2009 the husband invited the wife to his company’s Christmas party at his home.
After that they had regular, the wife says almost daily, telephone contact. The wife’s evidence was that they went to 2 other Christmas parties together in Sydney.
Telephone contact continued through late December while the husband was on holiday in Country H. During that period the husband asked the wife whether she’d like to spend a weekend with him when he returned in January 2010 and she agreed.
On his return the husband, and Mr F, picked the wife up from work on 9 January 2010 and drove her to the house where she stayed the weekend sharing his bedroom. She returned to her house on Monday 11 January 2010. Her evidence was that they formed a sexual relationship “not long after”.
After 11 January 2010 the parties commenced spending most weekends together. The wife would get a lift to Town I with a girlfriend after work on a Saturday and the husband would meet her there and drive to the house where she would stay Saturday evening to Monday morning. She would catch a train home with the husband going to work. Some weekends they took trips away together, and they spent some time together in Sydney mid-week and on some other weekends when the husband would pay for a hotel room.
The wife’s evidence was that just prior to Christmas 2010 the husband called and asked her to move in with him. During their discussions she alleged that he said “[f]or the amount of hours you work and the peanuts you get paid you can live with me and I’ll look after you”, and that she need not worry about losing her job or trying to find work in Town G because, “I will look after you. You don’t need to worry.” Her cats were invited too. She said that after these conversations she was “excited at the thought of our relationship progressing to us potentially living together.”
The husband’s evidence was that the wife raised the prospect of marriage, which he did not agree to, and then proposed moving in with him in the alternative. His evidence was that it was the wife who raised the fact that she did not earn much and pressed the issue and that “I was not keen on the idea of [the wife] moving in with me.” His evidence was he eventually relented after the wife promised she would never sue him or make a claim against his property, and that he only agreed to her taking a 12-month break from work.
Whatever the background, the wife moved in to the house with the husband on 15 February 2011.
Parties submissions
The wife’s submission is that the de facto relationship commenced from 11 January 2010 when “the parties started spending most weekends together” and was 4 years and 9 months in length. The wife submitted that from that time they were living together on a genuine domestic basis, albeit primarily in different residences because they lived in different cities, with a clear public element including by the knowledge of the husband’s son, employees and friends that they were together.
The husband submitted that as at 11 January 2010, the wife’s evidence did not meet the test in s.4AA of the Act to establish that they were living together on a genuine domestic basis, merely that the parties were dating. The husband submitted that the wife’s evidence about her excitement about their relationship “progressing to potentially living together” in late 2010 was indicative of a dating phase prior to the formation of a de facto relationship which only commenced when the parties commenced co-habiting.
Finding
The wife bears the onus of establishing that the de facto relationship commenced on or about 11 January 2010.
The wife did not submit, in the alternative, that there may have been a point in time between the commencement of spending weekends together and co-habitation at which point in time the nature of the relationship may have changed from dating to a de facto relationship, and so there was no argument other than it was one date or the other. In those circumstances it is not open to the Court to consider whether or not there may have been a point between the 2 pro-offered dates when a de facto relationship may have formed, or to do other than make a finding concerning the position as at 11 January 2010.
The wife relied on FO v HAF [2007] 2 Qd R 138 to establish that cohabitation is not an essential element of a de facto relationship, particularly where parties live at a distance. That is uncontentious. However, the case is distinguishable on the facts.
Having regard to the 2 month duration of the relationship at 11 January 2010, the absence of any common resources, the then lack of any degree of financial interdependence or of joint ownership or use of property, the fact that this was the first time the parties had shared a bedroom and was prior to a sexual relationship commencing, the absence of any objective evidence of a commitment to a future mutual shared life, or of any evidence of a public reputation beyond that of a girlfriend and boyfriend relationship, I find that the wife has not established that there was a de facto relationship as at 11 January 2010.
I find that the evidence establishes that at that date there was a nascent relationship which had the potential to and indeed did become a de facto relationship, but that the parties were not yet in a de facto relationship.
Accordingly, I find that the de facto relationship commenced on 15 February 2011 and concluded on 17 September 2014, and was relevantly a relationship of 3 years and 7 months.
Issues not requiring findings
I note the conflicting evidence about whether it was the husband or the wife who suggested cohabitation. Ultimately, the parties agreed to cohabit and entered into a de facto relationship. The determination of this factual issue is not necessary to the determination of any legal issue and therefore does not require determination.
I note the husband’s evidence that he only agreed to cohabitation because the wife agreed she would not bring proceedings. Even if such discussions occurred they have no legal effect and do not require decision. I note that in the context of the evidence, below, that the wife later declined to sign a binding financial agreement.
3. What was the property pool at trial
Overview
The parties agreed that that the house was worth $1,150,000. It was also agreed the husband had a bank account of approximately $2,500.
It was agreed that he wife had a total of $98 in a bank account.
The value of furniture and effects for each party was not agreed. The husband estimated the value of his at $5,000 and the wife’s at $20,000. The wife estimated the value of hers and the husbands at $2,000. In the absence of any reliable evidence or substantive submission from either party on this issue the Court is left in a difficult position. As the husband makes a concession against interest of $5,000 I will allow that. The wife’s concession against interest is $2,000 but values her furniture at the same value as the husband’s. Doing the best I can I find that on the balance of probabilities, noting the items of furniture and effects the wife does have, it is likely that the wife’s furniture and effects are of at least a similar value to the husband’s, and that the higher figure is likely to be a better representation of the value of all of these items in the possession of each party. Accordingly, on balance, I assess $5,000 as the value of each party’s furniture and effects.
There was a dispute between the parties, dealt with below, about how the husband’s interest in his business which was transferred to the trust, post-separation, and the loans incurred during that restructuring, should be dealt with. However, both parties agreed that business was worth $1,948,481 and should be included. On that basis there are total assets of $3,111,079 of which the husband owns 99.9%.
The husband’s self-managed superannuation fund, to which it was agreed he has access by reason of his age, was worth $2,828,183 and the wife’s superannuation was $9,450. That is total superannuation of $2,837,633 of which the husband has access to 99.9%.
Both parties agreed the pool should include superannuation assets and, as noted above, the husband agreed it should include the assets of the trust, which owns the business.
There is a debt of $1,280,542 secured over the trust’s assets and included in the husband’s balance sheet, on the basis that the trust’s assets are dealt with as the husband’s assets. The loan was not accepted by the wife as an item which should be included. For reasons set out below I find that this loan is correctly included in the balance sheet and this assessment.
The husband took a $100,000 loan, post-separation, from his mother. The wife accepted the loan occurred but she argued there was no reason for the husband to take it and no evidence he needed to repay it. However, the husband’s mother was on affidavit and was not required for cross-examination, and if he had not taken that loan then he would have used his own funds for the purpose for which it was used so reducing assets. In those circumstances I accept that there was a loan for $100,000. The husband’s liabilities are therefore $1,380,542.
The wife had a liability of $10,111 to the National Australia Bank, which was agreed. She established loans from her mother of $83,520, and alleged loans from friends of $23,000. The husband reasonably conceded in submission that the Court could consider these post-separation debts despite issues of proof. That is to say, that the total liabilities are $116,631.
Husband’s post separation business restructure
There was an issue between the parties as to how to deal with the value of the business owned during the relationship by E Pty Ltd and sold post-separation to the trust and an associated loan.
The husband’s position was that all that occurred was a restructuring which did not alter the husband’s overall net financial position.
The wife submitted that the husband had in effect distributed to himself $1,300,000 which needed to be taken into account in terms of an “addback”, or by way of a consideration, and as such, these were monies which he had had the sole benefit of and disbursed.
The background facts are that the business assets owned by E Pty Ltd were valued at $1,948,481 on 31 May 2017. Those assets were sold to the trust in February 2018 for $2,000,000. The value of those assets therefore remain on the balance sheet, as the trust and the business it owns are on the balance sheet at $1,948,481, on the husband’s case.
The trust funded that purchase with a $1,300,000 loan from J Bank and with the creation of a loan account liability to the husband of $700,000.
The original $1,300,000 loan is on the husband’s balance sheet now at $1,280,542, as noted above.
Of that $1,300,000 loan:
a)$300,000 was used to pay off a $300,000 loan, which was previously secured over the house. The home is on the balance sheet. The former $300,000 loan over the home is not on the balance sheet. In respect of that $300,000 in liabilities it has therefore merely moved on the balance sheet from being a $300,000 loan secured over the house to being $300,000 of the loan secured over the assets of the trust;
b)$1,000,000 was paid to the husband’s superannuation fund. The husband’s superannuation fund in effect went from $1,828,183 to $2,828,183. The increased liability of $1,000,000 which is on the balance sheet is matched by a balancing increase in superannuation; and
c)As noted above, the parties agree that their superannuation can and should be taken into account when assessing the total pool.
If the husband had not borrowed that money there would be $300,000 of additional liabilities by way of a mortgage over the home and $1,000,000 less in superannuation in the husband’s account. In this way it is clear that the re-structuring involved taking on additional net debt of $1,000,000 which was included in the additional superannuation. The benefit the husband received from the borrowed $1,300,000 is entirely captured by the balance sheet. If the corresponding liability, now slightly lower, at $1,280,542, is not taken into account it would overstate the husband’s net financial position.
I note for completeness that the remaining $700,000 of the transfer price is included as an asset of the husband’s, by including the full assets of the trust, and without treating that $700,000 as a liability against those assets. That is the course proposed by the husband.
During the course of submissions, the above nature of the counter-balancing transactions, as set out above, became clear.
I am satisfied that what occurred was a legitimate re-structuring, as set out above, and that the additional net assets match the additional net liabilities.
In those circumstances, so long as husband’s superannuation and the value of the trust are included for consideration, which the husband agreed and submitted they should be, there is no basis for proceeding on the basis that either the assets of E Pty Ltd or the $1,300,000 loan monies have not been accounted for.
Finding
I note that the husband had paid legal costs from his superannuation fund and the wife had borrowed money for and liabilities for costs. No party suggested that any allowance needed to be made for this issue on the balance sheet. No submissions were made by either party that costs should be considered as an “add-back”, or otherwise. The parties proceeded on the basis that only the matters referred to above should be taken into account on this issue. The parties are entitled to conduct the proceedings on that basis.
On that basis I find that the husband’s overall financial position at trial is $3,111,079 in assets, including the assets legally owned by the trust, less $1,380,542 in liabilities including, legally, the liabilities of the trust, for the net assets of $1,730,537, plus superannuation of $2,828,183, totalling to $4,558,720.
The wife’s overall financial position at trial, on the same basis is $98 plus superannuation of $9,450 less debts of $116,631, and totals to a negative position, namely, -$107,083.
I find that the relevant pool for consideration is, as the wife submitted, the husband’s net asset pool, noting the wife’s negative net equity and nominal superannuation. Given the values involved, and my ultimate findings, the exclusion of the wife’s assets and liabilities does not make any substantial difference to the result.
4. What were the parties respective contributions
Financial positions at cohabitation
The husband brought to the relationship the net assets and liabilities which form his current asset pool. The precise valuations at the date of co-habitation are not established. However, these are the same assets valued at the hearing, the short period of the relationship, the fact that the wife does not contend that she directly contributed to the maintenance or increase in their values over time, and the wife’s nominal assets, the absence of specific valuations at the date of cohabitation is not a substantial deficiency in the husband’s case.
The husband’s earnings, which he set as the owner of his business, were approximately $1,000 net per week.
The wife brought to the relationship personal property including, inter alia, 2 beds with side tables which were placed in spare rooms, chests and drawers and a lounge suite, crockery and glassware and other items including her personal items. She had approximately $17 in the bank and approximately $40,000 in superannuation.
The wife was also earning approximately $800 net per week.
Financial contributions
The husband’s financial contributions were in the range of the net financial position as set out above plus about $1,000 per week of net income.
The wife then ceased work and took up homemaking duties.
In 2012 the wife became eligible to retire and access her superannuation. On 19 October 2012 the wife withdrew $42,733.33 which was the entirety of her superannuation.
The wife also wanted to contribute what she could financially to the relationship. For that reason she paid $10,000 to the husband’s card as her contribution to the family finances. She also paid $8,432 towards a holiday the parties took to Country K from 11 January 2013 and the husband paid the remainder of the costs for that trip. Her evidence was that she was going to spend some money on dental work but decided not to. She spent the remainder of her superannuation money on items for both of the parties across the rest of the relationship. Part of that expenditure was on the cats which she then considered to be the parties cats.
The wife’s financial contributions were in the range of $42,700. The fact that these payments were made was not put in contest.
The husband’s evidence and submissions were the wife’s use of her superannuation should not be considered to constitute financial contributions the basis that it was a “folly” or “reckless” for the wife to use her superannuation in this way, given her limited resources, and/or that the parts of the payment relating to the cats were her payments for her cats and not for the benefit of the parties. These submissions are dealt with further below.
I note the conflicting evidence, referred to under heading 2, “Length of the relationship”, above, about whether the agreement was that the wife should cease work for a year or permanently. It was agreed that the wife should cease work on cohabitation, which she did. There is no evidence to suggest that after a year the husband made any complaint or effort to have the wife try to return to work. In any event, the Court is concerned with the contributions that were made. As a finding does not affect the legal position this issue does not require determination.
Welfare of the family including as homemaker
The husband worked 5 to 6 days per week in his business. Prior to cohabitation, the husband had a cleaner who was paid $100 per week. His evidence was that as the wife was not to be working he did not see that a cleaner was required, but that the wife insisted so he agreed.
The husband’s evidence was that he did not know what the wife did while he was at work.
The wife’s evidence was that Mr F was still living in the house when she moved in, but moved out not long after. She cooked for Mr F and did his washing during the short period he was there. The house was quite large. From the time she moved in she cleaned the house daily, including dusting, cleaning windows, cleaning blinds, vacuuming, cleaning fly screens, mopping and doing the other chores. She agreed that there was a housekeeper paid for by the husband for 2 hours of cleaning per week.
The wife’s evidence was that she was responsible for the preparation of the “vast majority” of the evening meals cooking 5 nights per week. The parties ate out for some dinners and lunches. She also washed and ironed for the parties most days, though not his work clothes. She did the shopping for the household and the husband accompanied her to shop on weekends.
The husband put in contest in cross-examination of the wife the extent to which she undertook housework given there was a cleaner 2 hours per week, and also his mother terminated the cleaner when she moved in with him post separation.
The wife’s evidence was that a large 3 bedroom household could not be entirely operated on 2 hours per week of cleaning.
In summary the wife’s submissions were that she made a substantial homemaking contribution to the welfare of the family. This included by moving from Sydney, giving up her established job, apartment and life and by becoming the homemaker. She cooked for the parties, though not every day, washed the husband’s casual, but not his work, clothing, which he had cleaned at work, cleaned the house with the help of a cleaner who worked only 2 hours a week to assist her, assisted the husband in improving his furniture by using her judgment and experience to select fabrics, purchased groceries and clothes for both parties and did other purchasing, arranged holidays, and focussed on the home domain in a traditional format of relationship so they could both enjoy a far more comfortable and rewarding home and personal life together.
The husband submitted that the wife’s contribution as a homemaker was limited as there was a cleaner, and as they would eat out twice a week and the other 5 days the wife might cook, but sometimes they also ate take-away so that she did not establish just how much cooking she did, and as she did not make the husband breakfast, as he did not eat breakfast, or lunch, on weekdays, although she said she offered, and, because she did not drive, the husband took her to do the shopping and they shopped together. It was conceded that the wife did all of the washing and ironing for the parties, excluding the husband’s work clothes which were laundered at work 6 days a week.
In my view the husband’s evidence and submissions did not address the wife’s overall contributions in this domain. His submissions regarding the cleaner, which were heavily pressed, did not deal with the daily cleaning and tidying involved in maintaining a house as opposed to the 2 hours a week, or usually more for a house of that size, involved in core weekly cleaning.
Further, his submissions did not deal with her arrangement of social activities for the benefit of the parties. For example, he complains that she spent $46,126.57 of his money on holidays for the 2o of them during the relationship, dealt with further below. The inference is that there was no utility in her actions in arranging the holidays or that he had no benefit from these holidays despite attending on them with her and apparently enjoying them at the time.
I accept the wife’s evidence on this issue. She did not overstate the requirements of maintaining such a household and fairly acknowledged many of the propositions put to her in cross-examination. In coming to this conclusion I have carefully considered my adverse credit finding against the wife, below, regarding an undisclosed potential financial resource. However, considering the competing evidence and considering the realities of homemaking I am satisfied that her evidence on this issue was credible.
In coming to this conclusion I also have in mind my findings on the reliability of the husband’s recollection and perceptions of past events, as set out below, in relation to the allegations made of unauthorised use of a credit card and of waste. Considering all of that evidence and the evidence on this topic, I find that the husband’s evidence on this issue is clouded by his emotional response in the period post-separation.
5. Did the wife engage in unauthorised use of a credit card?
The husband made a very serious allegation of the unauthorised use of a credit card by the wife. He alleged that without his knowledge or consent she took a credit card which she was not authorised to use from the console of his car and used it to purchase upholstery worth $7,032.70 and curtains worth $5,205.80.
The wife denied taking his credit card from the console of the car and using it for this purpose without his consent.
This unfortunate allegation took up some portion of the trial.
During cross-examination of the husband the fundamental flaws in the allegation became apparent. In summary, it was apparent that the wife did not need to take a further credit card from the husband as she already had a credit card linked to his account with sufficient funds to make the purchase, the wife had, as discussed in detail below, been given her own credit card linked to the husband’s account and had used it without reservation to make similar purchases, and the husband had in fact been in the upholstery shop at Town L from which the purchases were made with the wife.
The husband should be given some credit for his concessions during cross-examinations.
I am satisfied, by reference to the husband’s oral evidence and in particular his concessions and similar concessions made in respect of his case on waste below, that this serious allegation was not made by the husband maliciously or with the intent to falsely smear the wife as a fraud.
I am instead satisfied that the husband’s evidence on financial issues has been clouded by emotions which have impaired his post-separation perception, recollection and interpretation of events.
Whilst in the wake of the break-down of an intimate relationship this revised perception is easy to understand, in my view it does mean that the Court is required to treat the husband’s perceptions of past financial events with some caution.
6. Did the wife engage in waste using the husband’s credit card?
The husband’s evidence was that he had proposed giving the wife $500 per week housekeeping but that she wanted access to his accounts and that as he “…wanted the relationship to work and expected that [the wife] would only use the card to the limit of $500 per week” he gave her a credit card linked to his.
The husband’s case was conducted on the basis of wasteful expenditure of his money by the wife during the relationship through the use of this credit card to make purchases and withdraw cash.
This evidence was also said to go to establish financial contributions made to the wife for her sole benefit during the relationship, including in respect of items she retained, which was said to go to the question of whether it was appropriate or just and equitable to make a property adjustment at all.
As part of his case, a schedule pursuant to s.50 of the Evidence Act 1995, identifying expenditure through her linked credit card, purporting to establish the extent of the waste, was prepared. The husband’s opening written submissions summarised the case.
His case was that he had paid unspecified amounts at the commencement of the relationship for the wife’s accrued unpaid storage fees and the removalist’s fees to bring her to the house, for unspecified medical and physiotherapy bills for the wife, and for her then outstanding debt of $600.32 to Debt Collection Company M. These were not contested
It was alleged that the wife withdrew, inter alia:
a)$118,087.91 in cash during the relationship “to which the respondent has received no benefit”;
b)$18,471.41 for clothing for the wife retained by her post-separation “…to which the respondent has received no benefit”;
c)$23,138.19 in grooming and treatment “for the applicant’s cats”;
d)$50,483.31 on house homeware and furniture retained by the wife post-separation including the $7,032.70 for the upholstery which was said to be obtained using a misappropriated credit card, as noted above;
e)$3,213.34 on the applicant’s gym membership “to which the respondent has received no benefit”;
f)$46,126.57 on holidays;
g)$6,016.70 on the wife’s hair; and
h)$9,108.80 on jewellery for the wife.
As with the allegation of misappropriated credit card, this claim collapsed during the hearing.
On his own evidence the husband became aware from about 25 February 2011, that is to say only 10 days after the parties commenced cohabitation, of her spending in Sydney on physiotherapy and clothes. This was specifically brought to his attention by the accounts manager of his business who paid his personal cards as part of her duties. He said he raised the issue with the wife but that she dismissed his concerns. His own evidence is that he was aware of cash withdrawals being no later than April 2011 and that these were also brought to his attention each month by his accounts manager.
While he now says that he argued about these withdrawals with the wife he continued to accept them.
The husband’s evidence was that he had a binding financial agreement prepared and gave it to the wife without notice, but that as she would not sign it he did not raise it with her again.
The husband, a successful businessman in his 50s, was fully aware of the spending which was occurring, and elected to allow the wife to continue spending at that level. There is no submission that he was incompetent or subject to undue influence. He was in a de facto relationship formed on the basis that he would be a financial provider and she would be a homemaker. He continued the relationship with the full knowledge of the spending that was occurring and did not terminate that spending, as he could have at any time, by cancelling the credit card, because, as he said, he “wanted the relationship to work”. Such are the accommodations people make to maintain relationships.
The case that the spending identified was solely for the wife’s benefit was unsustainable. It became clear, for example, that some of the purchases of clothing identified were made in men’s stores of brands the husband liked and wore. This was supportive of the wife’s case that she used the credit card for purchases for the family. In this regard it became apparent that the s.50 schedule and the husband’s case on this issue merely assumed that what was purchased by the wife was probably for her sole use and benefit unless it was self-evidently not so on the face of the credit card records. Accordingly the s.50 schedule was shown to be not a document that could be relied upon to establish the case sought to be made.
The husband’s case is the money spent on holidays was for the wife’s benefit, but he participated in these holidays with her.
The other expenses, such as $3,213.34 on the applicant’s gym membership were agreed to by the husband as part of his role as the financial provider in a relationship were the wife was not working so they could live together and she could be the homemaker.
The husband was of the view that the wife paying approximately $150 per month for hairdressing appointments was excessive. There is no evidence to support this proposition.
The husband’s evidence was that he agreed to the wife bringing the cats, “…however, [he] was not prepared for the subsequent expense that her cat’s required.” I do not accept that the husband not being prepared for the expense, which he nevertheless was aware of and allowed to be paid, constitutes waste. Nor does it justify treating the expenditure on the cats as a form of financial payment to the wife during the relationship.
Again, the husband deserves some credit for making concessions about many matters during cross examination, and this influences my view that the faulty basis of much of the s.50 schedule was not due to intentional malice in the presentation of his evidence, but to a faulty perception of past events compounded by the failure to undertake the extra-ordinary level of detailed forensic analysis that would have been required to determine whether each individual purchase or cash withdrawal on her linked card was for the sole benefit of the wife, for the husband, or for them jointly.
In terms of the question of additional property retained by the wife, post-separation it does appear that she retained items including jewellery and any additional value of upholstery, but the value of the jewellery and the upholstery, as opposed to, or the new purchase prices, were not established by the husband. The husband bore an evidentiary onus on this issue which was not, in my view, met.
I give no weight to the husband’s argument that when considering whether or not the wife’s expenditure was wasteful or excessive the relevant reference point was his weekly income of approximately $1,000 per week from his business rather, than his overall financial position.
In summary, the husband was clearly aware of and made the decision to accept the wife’s spending as part of the accommodation of their relationship. His subsequent regrets about the amounts involved or about his decision to continue the relationship in the face of her declining to enter into a binding financial agreement are not grounds which establish waste. Nor is there any factual basis established for a finding that these payments, or some of them, were effectively payments to the wife, which either make it inappropriate to make a property adjustment or which should be weighed in effect against the extent of the adjustment.
The husband offered a lifestyle consistent with his overall financial position in a traditional breadwinner & homemaker format, and the wife enjoyed that lifestyle with him.
I find that the husband’s case on waste and excessive, or unauthorised, expenditure by the wife is not established.
I find that the husband has not met the onus to establish that assets retained by the wife post-separation constitute an identifiable value of items acquired by her from him relevant to, and appropriately to be taken into account in determining, either whether an adjustment is appropriate, just and equitable, and if it is what that adjustment should be.
7. Post separation positions
The wife
The wife had no money at separation. She has borrowed to move and to support herself. The wife rented a 2 bedroom property for $600 per week. The wife was on Centrelink benefits and struggled to pay her rent.
In April 2015 the wife obtained employment in sales earning $674 gross and $600 net per week, working 4 days per week as part-time. Her income remains the same.
Her evidence is that her parents continue to provide her with $580 per week, as otherwise she has no funds left after paying her rent.
The husband submitted that the wife was in precisely the same financial position that she was in before cohabitation and to the extent she is not that is because she is working 4 rather than 5 days per week as she previously did, and is living alone in a 2 bedroom apartment, rather than sharing a 2 bedroom apartment as she previously did.
To the extent the wife no longer has the superannuation fund, she entered the relationship with the husband’s submissions, considered further below, which are that this was the result of her own “folly” or “recklessness” in contributing her meagre funds to the relationship.
The husband
The husband’s financial position did not change relevantly post-separation and is as set out above.
8. Does the wife have an undisclosed financial resource?
A significant portion of the husband’s cross-examination of the wife went to ascertaining the source of certain cash payments received into her bank account prior to, during and after the relationship.
As noted below, whilst some payments were explicable by reference to payments from the wife’s mother or friends, the wife could not explain a large number of the payments and in particular cash payments into her account. The wife’s mother gave evidence and the wife conceded that this evidence confirmed that the wife’s mother did not make all of the identified payments.
The husband submitted that these unexplained payments represented an undisclosed financial resource necessarily giving rise to an inference that the wife had not disclosed her true financial position.
The wife was taken through her bank account statements for an account ending in …10. The bank accountant records commenced 24 April 2010 and continued through to 31 July 2018.
Pre cohabitation: April 2010 – 14 February 2011
The wife was asked questions about the cash deposits during the period from 24 April 2010 until 14 February 2011.
These were in the sums of mainly $150, $200, $250, $300 and some of $400, $450, and $500 with deposits being made 2-3 times per month. The last cash payment was on 11 February 2011 just prior to the wife moving to live with the husband.
During that period of 10 months, there were cash deposits of just over $10,000, or approximately $250 per week.
While some of the payments may have come from the wife’s mother as they correspond with, for example her birthday, the wife was unable to provide any explanation for where the other cash deposited to her account came from. Her answers when taken through her bank statements were that she could not remember.
At one point, the wife gave evidence that it could have been commissions paid as cash from her employer, however she had previously given evidence she was not paid in cash, and there was no explanation offered why a company who paid her salary by direct electronic transfer would pay commissions by cash. She then said that she would not have been so silly as to receive cash for work and then put it in a bank account and not declare earnings. That latter evidence had the “ring of truth”.
During cohabitation: 15 February 2011 to 17 September 2014
In this period there were also a small number of cash deposits in similar sums. The first in this period was 4 months later, on 17 June 2011 for $400. A year later in June to August of 2012 there were 3 cash deposits totalling $600. Then there was a cash deposit of $500 in February 2013, of $200 in May 2013, and of $1,000 in December 2013. The next was $1,000 in August 2014 and a final deposit just at the end of $2,500 on 19 September 2014.
There was a suggestion by the husband that the last 3 payments, totalling $4,500, might have involved the wife skimming the husband’s money by cash withdrawals in anticipation of a break-down of the relationship, although that has not been established to the necessary standard on the evidence. However, if that were the case, the unexplained cash payments across the period were of approximately $1,700.
In any event, there was clearly a substantial change and reduction in the pattern and amounts of cash deposits during this period.
Post separation: 18 September 2014 – 31 July 2018
There were unexplained cash payments of:
a)$500 on 21 October 2014;
b)another on 5 November 2014;
c)another on 3 December 2014;
d)$1,000 on 17 December 2014;
e)$3,000 on 21 January 2015;
f)$500 on 6 February 2015;
g)$3,000 on 11 February 2015;
h)$300 on 25 February 2015 and 11 March 2015;
i)$400 on 4 March and on 25 March 2015;
j)$2,400 on 30 March 2015; and
k)$1,000 on 8 April 2015.
The wife was on the “Newstart Allowance” during this period. She commenced working 4 days per week in April 2015 at about the time the payments ceased.
The evidence establishes unexplained cash payments during this period of 9 months of just over $13,000, or approximately $333 per week.
I note that subsequent cash payments into the wife’s account were agreed to be from her mother and part of the loan referred to above.
Finding
The husband’s submission was that the wife did not provide candid evidence in this regard and has chosen, for her own reasons, not to disclose the source of these funds. The wife’s primary submission was that this was up to 8 years ago and she cannot remember.
Given that the wife was living on a modest wage during the pre-cohabitation period it is not credible that she would not have noticed she was receiving an additional amount of $250 per week net into her bank account, all of which she was spending.
Similarly, it is not credible that she did not know that she was receiving approximately an additional $333 per week net to her bank account during the period she was struggling to live on Newstart, again, all of which she was spending as it was received.
In this context, I accept the husband’s submission, citing Black & Kellner (1992) 106 FLR 154 and Weir & Weir (1992) 110 FLR 403, that this must be taken into account when assessing both whether it is just and equitable to make any alteration of property interests, and, if so, of the alteration to be made.
The husband’s submission was that this non-disclosure would form a strong basis for a finding that there should not be any adjustment of the parties property interests. The wife submitted, in the alternative, that these were not significant sums in the context of the asset pool in this case, that the payments had ceased on the wife obtaining employment in 2015, and that even if the husband’s submission was accepted the facts were distinguishable from cases in which a wealthy party hides assets.
I accept the husband’s submission that this adverse credit finding means that the wife’s other evidence must be treated with some caution, and note my comments about this above.
I accept the husband’s submission, that it should be inferred from the patterns of payments, including the fact that they broadly seemed to stop during the relationship when the wife moved in with the husband and then recommenced when she returned to Sydney, that the wife had an undisclosed financial resource probably in Sydney.
It is clear that the payments basically ceased when the wife commenced living with the husband, restarted when they separated, and ceased again when she returned to employment in 2015.
That does not mean that the wife does not possibly have the capacity to revive this source, and that is a factor which must be taken into account in this case. The uncertainty about that cannot favour the wife in these circumstances.
However, it is also correct as was submitted for the wife that the sums involved if available to her again are established at a range of perhaps $250-$333 per week or say $300 per week. Whilst that is not insignificant given the wife’s current earnings, nor should it be given too much significance when considering the net property pool involved and what is represented by each percentage point of that pool, although in that latter regard the uncertainty about the potential must weigh against the wife.
9. Section 90SF(3) factors
The parties are both in their early 60s. The wife takes medication for asthma and high cholesterol, but is otherwise in reasonable health. The husband did not submit on his health. They are each fit to continue in their present employment.
The wife’s earnings are about $600 net per week. As she has exercised the bulk of her capacity and given her age and her financial circumstances, I accept that she has not been able to secure an additional days’ work so far and is not intentionally under-utilising her capacity.
The husband’s earning capacity was submitted to be equivalent to the $50,000 net per annum he pays himself for conducting his business. That was not challenged in cross-examination. However, his employment is more secure than the wife’s, and he is likely to be able to continue in it, subject to his health, for as long as he chooses.
There is a significant difference in the property and financial resources of each party, as set out above. The wife has negative net equity and the husband has approximately $4,500,000 available to him, including a house free of any encumbrances, reducing his weekly living expenses. The husband’s position will be negatively impacted to some extent by any order made and the effects of that impact will need to be considered when considering what, if any, property adjustment should be made.
There is no evidence that either party is liable to support another person.
No submissions were made in respect of the other factors.
10. Is it just and equitable to make an order adjusting property interests?
The wife submitted the Court would be satisfied that it is appropriate, just and equitable, to make a property adjustment order within the relevant principles and that failing to do so would render an injustice to the wife, citing Stanford v Stanford (2012) 247 CLR 108.
The essence of the wife’s case as summarised by her counsel was that in respect of financial matters:
“[s]he put everything that she had into the relationship. It mightn’t have been a great deal, and that's why it is at this point of the proceedings the submissions that’s being made to the court is that the contribution equates to a mere five per cent.”
I accept the wife’s submission that she put all of her superannuation and everything disclosed into the relationship. The undisclosed financial resource cannot be forgotten.
I do not accept the husband’s submission that no weight should be given to the known contribution because “…on a bit of a folly she cashed that superannuation in early…” or that “…she decided on a folly…”, that she was “going to spend [her] money on a holiday” and that she also said, “[w]ell, I actually want to pay $10,000 to Mr Babin as a contribution”.
Nor do I accept the husband’s submission that the $10,000 payment to his credit card should be dealt with as a form of accounting transaction where she merely “paid for some of the cats” costs.
In hindsight it may have been, as the husband submitted, “reckless” for the wife to commit her entire financial wealth to the relationship given her precarious financial position if the relationship broke down. However, her actions must be viewed in the light of the then existing relationship and her desire to share her meagre assets with the husband, as he was sharing his with her. It is difficult to see how the husband can now seek to criticise her for contributing what little she could.
Further, the husband took part in the holiday which he criticised, the husband accepted the $10,000 transfer and did not return it to the wife as he could have at the time, the husband agreed to have the cats and he consumed his share of the other purchases made for the parties joint benefits with the remainder of her superannuation.
Any “recklessness” does not diminish from the contribution.
Nevertheless, objectively viewed, any assessment the wife’s financial contribution can be considered to be no more than 1% compared to the husband’s contributions on the established facts.
The significance of this financial contribution to this issue is not the amount, but that her commitment of her all of her superannuation resources has left her with no, or a significantly reduced, financial protection against the future, or a time when she can no longer work.
I am also satisfied that the wife contributed through her homemaking contributions, as set out above. Again, in the context of the husband’s financial contributions and the relatively short term of the relationship the percentage to be allocated to that contribution must be relatively small given the size of the husband’s financial contribution, and this will be considered further below: see also Quinn v Quinn (1979) 37 FLR 168.
Nevertheless, it is relevant to this issue that across a period of 3 years and 7 months, which is a short but not a nominal period, that the wife did contribute through her homemaking.
For reasons set out above there is no finding of misappropriation of a credit card or of waste. The wife enjoyed the standard of living the husband’s financial position allowed them both to enjoy.
The husband submitted that justice and equity did not require any property alteration for a number of reasons.
The husband submitted that the wife had returned to her pre-cohabitation career and earnings. However, that is not entirely accurate. The wife had a secure full-time position for 7 years pre-cohabitation but struggled to find a job for a period post-separation and has only managed to obtain 4 days per week work. The loss of up to $120-150 per week net by reason of the loss of her prior 5 day per week employment has more practical negative consequences for a low income earner, with negative equity, such as the wife. She incurred post-separation debts at least in part due to that unemployment and subsequent and on-going under-employment.
The husband submitted that the wife living in a 2 bedroom apartment herself at $600 per week rather than sharing, at age 62, which she had been doing when they met, was “…waste, wantonly spending money, being reckless, being negligent.” The wife’s evidence, when asked whether that expenditure was appropriate, was that when the matter was over she would be moving but “[she] can’t afford to move from there now.”
While there is some merit in the submission, noting that the wife could have rented a single bedroom or studio apartment or rented out the second bedroom to pay a rent more in line with her present means, I do not accept that the wife’s conduct in this regard relevantly disentitles the wife from a property adjustment or impacts the pool which is under consideration, which is the husband’s net asset pool.
The husband also submitted that an adjustment was not appropriate because the wife had already received significant financial benefits from the relationship due to the husband being “…very generous over the course of the relationship…” and having “…paid enormous amounts of money for holidays and jewellery and otherwise completely supported her…” While there is no doubt that during the course of the relationship the husband was very generous with his money, which he now regrets, the husband’s case in this regard relied on his evidence and case as to waste, and assertions that the value of jewellery and other items at hearing was the same as the new purchase price. I have dealt with those arguments above.
I am satisfied that the nature and extent of the expenditures referred to were consistent with the husband’s means, not merely his income, and that the parties jointly enjoyed this lifestyle with his consent.
I am not persuaded that the benefits the wife received during the course of the relationship would make it inappropriate to adjust the parties property interests.
Whilst the wife’s evidence with regards to the cash payment received was unsatisfactory and has given me pause, considering the totality of the material on balance I am not satisfied that this alone would outweigh the other factors which go to supporting the making of an adjustment, although the non-disclosure is clearly relevant to the amount of any adjustment.
Having regard to all of these matters, on balance I am satisfied that an adjustment of property interests is appropriate, just and equitable, and that failing to make any an adjustment would render an injustice to the wife.
11. What adjustment would be just and equitable?
Wife’s submission
The wife’s submission was that her contributions during the relationship were equal to 5%, and that the s.90SF factors favour her to the extent of allowing an additional 5% allocation to her with such a small adjustment reflecting the short relationship, so that there should be an adjustment in her favour of 10% of the husband’s net property including superannuation.
That would be in the range of 10% x $4,558,720 = $455,872, although I note that the submission was made based on the wife’s assessment that the pool would be at least $1,300,000 higher so that the sum sought was effectively $600,000.
Husband’s submission
The husband’s submission, if an adjustment is allowed, is that the wife’s contribution was minimal noting the short period of the relationship and the fact that the relevant assets were already acquired and the husband continued working, even accepting the financial contribution by way of superannuation and some homemaking was done with the assistance of a cleaner. It was submitted to be total contributions of 1-2% at most.
In terms of the s.90SF factors, it was submitted that because the husband was only earning $50,000 per annum, and in particular because of the wife’s undisclosed financial resource, the adjustment for these factors would also be no-more than 1-2% rather than the 5% sought by the wife.
Accordingly, although the husband also submitted this was a case in which a percentage contributions analysis was not necessarily appropriate given the size of the pool, citing Cook & Langford (2008) FLC ¶93-374, the husband submitted that if any adjustment is appropriate it would be no more than 4% in total. That would be in the range of 4% of $4,558,720 = $182,349.
Finding
I broadly accept the husband’s submission that in terms of financial contributions the wife’s contribution can be assessed at no more than 1%, however the wife’s homemaking duties across this period were greater than the husband submitted, noting I accepted the wife’s evidence on that issue. On that basis, I would assess a contribution of 2.5-3.5% by the wife compared to 96.5-97.5% by the husband. I adopt fractions because of the small percentages and the large pool.
For the reasons set out above, the s.90SF factors clearly favour the wife and prima facie the wife’s submission that 5% is appropriate is not unreasonable. However, I must take into account the unsatisfactory evidence around the cash payments and the prospect that an unknown degree of financial resource may yet be available to the wife, even though there is no evidence it has continued since 2015. On this basis I would assess an adjustment in the range of 2.5-3.5%.
The determination of a precise percentage and precise amount and their translation into a figure defy mathematic precision. Having all of the above in mind, and considering not only the percentages but the total figure, I find that the appropriate adjustment is in the range of 6% of the husband’s net assets or 6% of $4,558,720 = $273,523.20.
I find that a property adjustment from the husband to the wife of $275,000 would be just and equitable.
12. Orders
The husband is to pay $275,000 to the wife.
Otherwise each party will be confirmed in their respective assets and debts.
The husband has the capacity to pay this sum as cash, if he chooses to, as he has access to his superannuation fund, and accordingly he should be afforded that opportunity. If he does not make that payment within 28 days then there will be consequential orders for the sale of the house, and, failing that, a superannuation splitting order.
If any party seeks to be heard on costs they are to notify chambers and the other party within 28 days in order to have the matter listed.
I certify that the preceding one hundred and eight-nine (189) paragraphs are a true copy of the reasons for judgment of Judge Bruce Smith
Associate:
Date: 13 January 2020
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