Boucher & Mesnic
[2024] FedCFamC2F 1840
•18 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Boucher & Mesnic [2024] FedCFamC2F 1840
File number(s): SYC 6917 of 2023 Judgment of: JUDGE STREET Date of judgment: 18 December 2024 Catchwords: FAMILY LAW - PROPERTY – alteration of property interests - wife made the greater initial contributions – wife made the greater financial and homemaker contributions during the relationship- greater earning capacity of the wife - both parties have the physical and mental capacity for appropriate gainful employment wife to pay the husband the sum of $115,000 within 90 days – sale of property if default of payment to the husband – just and equitable Legislation: Family Law Act 1975 (Cth) Cases cited: Babett & Falconer (2015) FLC 98-067
Browne v Green [1999] FamCA 1483
Coghlan and Coghlan (2005) FLC 93-220
Dickons & Dickons [2012] FamCAFC 154
DJM v JLM (1998) FLC 92-816
Dovgan & Dovgan [2021] FamCA 306
Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143
Jabour & Jabour [2019] FamCAFC 78
Kildea v Kildea (2007) 38 Fam LR 347
Kowaliw & Kowaliw (1981) FLC 91-092
Manolis v Manolis (No 2) [2011] FamCAFC 105
Milankov & Milankov [2002] FamCA 195
Omacini and Omacini (2005) FLC 93-218
Perrin & Perrin (No 2) [2018] FamCAFC 122
Stanford v Stanford (2012) 247 CLR 108
Townsend & Townsend (1995) FLC 92-569
Division: Division 2 Family Law Number of paragraphs: 121 Date of last submission/s: 8 November 2024 Date of hearing: 7 November 2024 and 8 November 2024 Counsel for the Applicant: Mr J Cohen Solicitor for the Applicant: Alex Yun & Partners Counsel for the Respondent: Mr S Richardson Solicitor for the Respondent: Long Saad Woodbridge Lawyers ORDERS
SYC 6917 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR BOUCHER
Applicant
AND: MS MESNIC
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
8 NOVEMBER 2024
THE COURT ORDERS THAT:
1.That within ninety (90) days, the Respondent Wife shall pay the sum of $115,000 to the Applicant.
Sale in default of cash payment
2.That in the event the Respondent fails to make the cash payment to the Applicant as contemplated by Order 1, then within forty-two (42) days of such non-compliance, the Respondent will do all things necessary and sign all documents so as to cause the Suburb C Property located at B Street, Suburb C (‘Suburb C Property’) to be listed for sale as follows:
2.1 Within a licensed real estate agent as agreed between the parties in writing and failing agreement within seven (7) days then the Respondent will provide a list of three (3) real estate agents to the Applicant and the Respondent) is to, within seven (7) days of being provided that list, nominate one of those agents to sell the Suburb C Property;
2.2 With a solicitor or conveyancer to act on the sale of the Suburb C Property as agreed in writing between the parties and absent agreement within 7 days then the respondent shall forthwith provide a list of three solicitors/licensed conveyancers and the Applicant is to, within seven (7) days of being provided that list, nominate one of those solicitors/conveyancers to act on the sale of the Suburb C Property and advise the Respondent of such nomination
2.3 The reserve price for the auction, or sale price for private treaty, shall be as agreed between the parties, and failing agreement reached within seven (7) days of a request for instructions by the real estate agent, such price as recommended by the real estate agent, without further notice;
2.4 If the bidding at the auction does not reach the reserve price the parties shall negotiate with the highest bidders or any other interested person and effect a sale of the Suburb C Property at a price which is not less than 5% below the reserve price;
3.If the Suburb C Property fails to sell by auction within the first six (6) weeks of placing the property on the market for auction, the parties shall then forthwith do all necessary acts and things to list the property for sale by private treaty, unless otherwise agreed, with the listing price to be as agreed between the parties and failing agreement reached within seven (7) days of a request for instructions by the real estate agent, such price as recommended by the real estate agent, without further notice.
4.If the Suburb C Property remains unsold after a period of six (6) weeks whereby the property has been listed for sale by private treaty, the parties will do all acts and things and sign all documents necessary to immediately re-list the property for sale by public auction again, unless otherwise agreed, on a date nominated by the real estate agent and at a reserve price as recommended by the real estate agent.
5.The Respondent do all things and sign all documents necessary to cause the proceeds of the sale of the Suburb C Property to be distributed upon settlement of the sale of the said property in the following manner and priority:
5.1 In payment of the costs associated with the sale including but not limited to the agent’s commission, advertising and conveyancer’s fees;
5.2 In payment of any rates adjustment associated with the Suburb C Property;
5.3 In payment of such amounts as required to discharge any mortgage secured against the Suburb C Property and then close those accounts;
5.4 The balance to be divided as between the Applicant and the Respondent such that the Applicant receives $115,000 and the remaining balance thereafter to the Respondent;
5.5 In payment of the balance remaining thereafter to the Respondent.
6.That, except as otherwise provided in these orders and as between the parties, the Applicant be declared, to the exclusion of the Respondent, in law and in equity, the sole and beneficial owner of all other assets of whatsoever kind and nature held in his present name, possession and/or control, including but not limited to the following:
6.1 Funds held in any bank accounts registered in his sole name;
6.2 His superannuation interest(s); and
6.3 All other property and financial resources which the Applicant holds in his sole name, possession or control at the time of these orders.
7.That, except as otherwise provided in these orders and as between the parties, the Respondent be declared, to the exclusion of the Applicant, in law and in equity, the sole and beneficial owner of all other assets of whatsoever kind and nature held in her present name, possession and/or control, including but not limited to the following:
7.1 Funds held in any bank accounts registered in her sole name;
7.2 Her superannuation interest(s); and
7.3 All other property and financial resources which the Respondent holds in her sole name, possession or control at the time of these orders.
8.That, except as otherwise provided in these orders, the Applicant and Respondent shall each do all things necessary to indemnify and keep indemnified the other party in relation to all personal loans, credit cards and other liabilities in that party’s sole name or in joint names with another person who is not a party in these proceedings.
9.In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) top execute such deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
10.The Court declines to make any order as to costs under s 117 of the Family Law Act 1975 (Cth).
The Court reserves its written reasons.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE STREET
These are property proceedings that were commenced on 15 March 2023, by the applicant husband (“the husband”) seeking an alteration of property interests under s 79 of the Family Law Act 1975 (Cth) (“the Act”) against the respondent wife (“the wife”). The parties were married in 2017 and separated on a final basis on 3 October 2022.
The parties married in Country D and relevantly, as a couple, relocated to Australia in early 2018. In early 2021, there was a property purchased at B Street, Suburb C New South Wales, (“Suburb C”), for $636,000. The property was placed in the name of the wife with agreement by the husband. The issues agitated before the Court in relation to s 79 of the Act were, in summary, who made the greater financial contributions, who made the greater non-financial contributions, the amount of the initial contributions, the drawings that were made in respect of alleged add-backs, and whether there was relevant domestic violence that made the contributions by the wife more arduous during the relationship.
For the reasons that follow, the Court finds that it is just and equitable to alter the property interests of the parties. The Court finds that the wife made the greater initial contributions to the purchase of the property at Suburb C, and that her financial contributions in relation to that property were greater than that of the husband, including in substance paying, the outgoings after separation on a final basis for the real property and the mortgage payments. The Court finds that the wife made the greater non-financial contributions during the course of the relationship. The Court finds that the net property pool is approximately $326,000 and that the alleged add-backs, to the extent accepted by the Court should be taken into account under s 75(2)(o) of the Act, to which the Court refers below.
The Court finds the wife's greater financial contribution to the relevant property, and greater non-financial contributions, reflect an assessment of 65% in the wife’s favour of the net property pool reflecting an amount of $211,900. This would reflect an amount payable to the husband of 35% in the sum of $114,100. The Court has taken into account that a minor adjustment of just under 1% in the amount of $900 is warranted in the husband's favour given the greater earning capacity of the wife and the greater financial resources in terms of superannuation of the wife. The Court does not accept any adjustment should be made for the alleged family violence. This reflects an amount payable to the husband in the sum of $115,000.
Given the small size of the property pool and taking into account s 95 of the Act, the Court was satisfied that this was an appropriate matter in which to pronounce the Court's orders and reserve the Court's reasons. The Court is satisfied the alteration of interests by the orders made are appropriate. Further, the Court finds that it is just and equitable to alter the parties property interests by requiring the wife to pay the husband the sum of $115,000 within 90 days, and otherwise, orders for sale of that property and payment of the said amount to the husband from the proceeds of sale.
EVIDENCE
The following affidavits were read, with annexures treated as being in evidence:
(1)Affidavit of Mr Boucher dated 26 September 2024; and
(2)Affidavit of Ms Mesnic dated 22 October 2024.
EXHIBITS
The following exhibits were tendered into evidence in the proceedings:
(1)Exhibit A: Applicant’s Balance Sheet
(2)Exhibit B: Applicant's Tender Bundle
(3)Exhibit C: Applicant’s Financial Statement dated 15 September 2023
(4)Exhibit D: Applicant's Financial Questionnaire dated 15 September 2023
(5)Exhibit E: Respondent’s Tender Bundle
(6)Exhibit F: Respondent's Financial Statement dated 29 October 2024
(7)Exhibit G: Respondent's Financial Questionnaire dated 22 October 2023
(8)Exhibit H: Respondent's Further Tender Bundle
CHRONOLOGY
Date Event 1981 The Applicant Husband is born 1986 The Respondent Wife is born 2017 The Parties are married in Country D 2018 The Parties relocate from Country D to Australia 2018 The Applicant Husband is injured in a motor vehicle accident Early 2021 The Parties purchase a property located at B Street, Suburb C NSW for $636,000 Late 2022 The Parties receive $47,867.60 for compensation from insurer for Husband’s injury 2022 Applicant Husband’s father dies 3 October 2022 The Parties Separated on a final basis 4 October 2022 The Applicant Husband withdrew $49,500 from the joint account and notified the Respondent Wife
The Respondent Wife transferred the remainder of the joint account to her account
Early 2024 The Parties Divorce APPLICANT HUSBAND’S EVIDENCE
The parties met each other in 2016 and married in 2017. The parties separated in early October 2022, and they divorced in early 2024.
The husband alleges that from mid-2017 to early 2018 the parties were provided a free rental apartment as part of their employee benefits.
The husband identified that in early 2018 the parties arrived in Australia and paid approximately $590 for accommodation in a Suburb E share house for a week and $500 for accommodation in Suburb F share house for two weeks.
The husband identified that in early 2018 the parties rented a property in Suburb G. It is alleged that the property was provided to the parties rent-free. The husband alleges that after securing employment, the parties began paying $450/week in rent from mid-2018 out of the parties joint ANZ account.
Between mid-2018 to early 2021, the husband asserts that the parties rented an apartment in Suburb H. It is alleged that rent was initially priced at $500/week but was later reduced to $450/week as a result of COVID-19. The husband alleges that the first 10-months of rent until mid-2019 was paid by him.
The husband identified that he was in good health prior to a traffic collision in Sydney in mid-2018. The husband alleges to have sustained occasional chronic pain in his body.
The husband indicated that he returned to work following the accident in mid-2018. The husband stated that all medical expenses and lost wages related to the motor vehicle accident were covered by CTP insurance and private health insurance.
The husband identified that the insurance claim for the motor vehicle collision settled around mid-2022.
The husband identified that in early 2021, the parties jointly purchased the Suburb C property with monies transferred from Country D, savings accumulated in Australia and a loan from Westpac. The husband asserts that a loan of $508,800 was secured from Westpac Bank in both party’s names. The husband referred to the Suburb C property being purchased solely in the wife’s name due to financial constraints.
The husband identified being informed in late 2024 that his father had fallen and was taken to the hospital and needed surgery.
The husband alleges that in late 2022 parties verbally agreed to use the husband’s compensation money to pay for his father’s hospital and funeral expenses. The husband contends that the wife transferred $30,000 from their joint ANZ savings account to their joint ANZ living expenses account.
The husband identified that he has been admitted to hospital for medical conditions following his father’s death.
The husband indicated that on 4 October 2022 he transferred $49,500 from the parties joint ANZ savings account to his personal ANZ account without informing the wife. The husband alleges that on that same day, the wife transferred the remaining balance of $82,755.43 from the parties joint ANZ savings account without informing him.
The husband asserts that on 31 October 2022 he received an email from the wife claiming that he had two weeks to collect his belongings from the Suburb C property otherwise she would dispose of them. The husband claims that on 18 November 2022 he informed the wife of his current health issues and inability to return to Australia.
The husband claims that the parties agreed to transfer the title of Motor Vehicle 1 from the husband to the wife for $11,000. The husband asserts that that payment was never made.
The husband identified that he received his belongings via a courier on 10 March 2023, however, contends that there are missing items amounting to approximately $5,600.
The husband asserts that he deposited approximately $71,760.00 into the parties joint Country D bank account.
The husband referred to the wife depositing a total of 24,102,058 Country D currency into the parties joint Country D Bank account.
The husband asserts that he spent approximately 5,400,000 Country D currency on the parties wedding and approximately 10,000,000 Country D currency on the honeymoon.
The husband deposed that his salary was deposited into the parties joint ANZ account and was used to pay the parties rent until separation. The husband alleges the wife did not share her salary until the end of June 2019.
The husband claims that the parties purchased the property at Suburb C NSW for $636,000.
The husband outlined that the parties incurred additional expenses after purchasing the Suburb C property that were paid for using the parties joint ANZ account.
The husband claims that he received a sum of $47,867.60 from CTP insurance as compensation for the motor vehicle collision in mid-2018.
The husband referred to providing approximately $223,000 from his salary into the parties joint ANZ living expenses account. Additionally, the husband identified that he received $10,820 from Centrelink as compensation for wage loss due to the COVID-19 lockdown.
The husband alleges that he was responsible for household tasks and maintenance such a cooking and wall repairs whilst living in Australia.
The husband in cross-examination gave evidence, in part, using an interpreter and, in part, in English. It was apparent that the husband had a reasonable grasp of English, but not as good a grasp of English as the wife. The husband, in the course of cross-examination, was asked questions about paragraph 10 of his affidavit and the initial contributions in paragraph 10a of his affidavit. The husband contended that he had saved 51,100,000 Country D currency before the marriage “and transferred from my sole [Country D] Bank account ending […07]”. There was no bank account statement that supported that amount in fact being transferred.
The husband was cross examined about inaccuracies in his financial statement and an account with a balance of zero not referred to in the balance sheet. The husband was cross examined about using his income for living expenses and saving the wife’s income. The husband agreed the deposit from the Suburb C property was from funds the husband brought from Country D and the money each were earning in Australia. From April 2021 until October 2023 the husband’s income was available to contribute to the mortgage and since October 2022 the wife has lived there and been solely responsible for the mortgage repayments, and that the repayments have gone up.
The husband was cross-examined about allegations of family violence by the wife. The husband accepted not long after they were married there was an argument, screaming and that his wife scratched his face and that he grabbed her hand to show her the wound in the bathroom and that both were angry.
The husband did not accept that the wife provided greater financial initial contributions or indeed greater non-financial contributions in his cross-examination. The husband did accept, after initial unresponsive answers, that the wife had the greater income for each of the years 2018 to 2022.
It was put to the husband that he transferred amounts to his family without the consent of the wife. The wife was the primary contact in relation to the acquisition of the property at Suburb C, and in relation to helping the husband recover compensation in relation to a personal injury that he suffered. The husband was also asked about outstanding legal fees and what legal fees had been paid. The husband said most of his income is going to legal fees and denied he is receiving support from friends. The husband was also asked about the summary of transfers to family members in Exhibit E.
RESPONDENT WIFE'S EVIDENCE
The wife identified that she is an Australian resident and works as a professional.
The parties were married in 2017, separated on a final basis in October 2022 and were divorced in early 2024.
The wife indicated that the parties met in Country D in 2016 and remained in Country D for 9 months before arriving in Australia in early 2018.
The wife recalled beginning work as a professional within two weeks of moving to Australia.
The wife referred to the husband being involved in a motor vehicle accident in mid-2018 and being hospitalised with injuries.
The wife identified that the parties jointly purchased the Suburb C property and registered it solely in her name.
The wife recalled being informed by the husband that his father was sick and travelling to Country D in late 2022 to visit.
The wife recalled the husband being hospitalised due to a lack of sleeping and eating following his father’s death.
The wife alleges that in late 2022 she received a text message from the husband informing her that he would withdraw $49,500 from the parties joint account to pay for his father’s funeral expenses.
The wife identified that she withdrew the remaining balance in the parties joint bank account into her personal bank account.
The wife recalled returning to Australia without the husband in late 2022.
The wife alleged that the husband was aggressive towards her and would throw household objects at her when the parties were in Country D between mid-2017 and early 2018.
The wife alleges that between December 2021 and early 2022 the husband, following an argument about his family, became enraged and dragged the wife to the bed and proceeded to choke her.
The wife further alleges that the husband would strike himself when angry and in 2022 blamed the wife for him striking himself telling the wife “I am hitting myself because I cannot hit you. You or other people will call the police if I hit you, and I will be in trouble. It is better if I hit myself and die. Then you will be blamed”.
The wife alleges that the husband would threaten her when angry and that she experienced financial abuse throughout her relationship with the husband.
The wife outlined the assets she brought into the marriage including furniture and home appliances.
The wife recalled that at time of the parties marriage she had approximately $18,836 in her savings account, whereas the husband had approximately $29,715. The wife alleged that she had $10,000 in her ANZ account, whereas the husband had no savings.
The wife indicated that she accumulated a superannuation total of $35,696 in both Australia and Country D and asserted that the husband accumulated a total of $22,062.
The wife contended that her initial her financial contributions were greater than that of the husband.
The wife deposed that from mid-2017 to early 2018, the parties agreed to save the husbands income and use her income to pay for daily expenses, such as, food, utilities and other household costs. The wife indicated that the savings amount to approximately $3,838.
In May 2017, the parties agreed to open a Country D joint bank account and transferred a total of $19,189.00 into the account through various transactions.
The wife identified receiving $5,659 as severance pay from her employer in early 2018 and depositing it into her bank account. The wife acknowledged that she transferred the severance pay into the parties joint account in early 2018. The wife alleged that the husband’s severance pay was transferred into his personal bank account and sent to his family members.
The wife expressed a belief that the 2-month rent-free accommodation provided by her friend is a contribution provided by her.
The wife stated that her income from 2018 to 2022 was significantly higher than the husbands at $345,328 compared to the husbands taxable income of $229,832.
The wife identified that the parties purchased the Suburb C property in early 2021 for $636,000. The wife identified transferring $60,017.02 and $75,468.89 from her personal bank accounts to the parties joint savings account and deposited those funds to the real estate agent’s trust account.
The wife accepted that the husband received $47,867.60 in compensation from his insurer for his injury in late 2022.
The wife alleged that she was solely responsible for mortgage repayments and other living expenses such as property maintenance and bills for the Suburb C property.
The wife referred to finding gainful employment in Australia and assisting the husband in obtaining employment.
The wife deposed that she managed and organised all relevant documents in securing the husbands compensation from his insurer, preparing the husband’s visa and securing the parties the rental property in Suburb H.
The wife stated that she managed the mortgage application for the Suburb C property.
The wife identified that the husband was transferring money to his family following their marriage. The wife recalled confronting the husband about the transactions in 2020 with the husband becoming violent and aggressive towards her.
The wife alleges that the husband would transfer between $500 to $1000 each month asserting that between 1 September 2019 and 30 September 2022 the husband transferred his family approximately $39,697 from the parties joint ANZ account. The wife further contends that the husband transferred $26,174 to his family between June 2017 and 2 September 2019.
The wife asserts that the total amount unilaterally transferred by the husband is approximately $115,371.
The wife recalled the husband being completely immobile for a period of 6 months.
The wife asserted that she did not transfer the funds to her personal account.
The wife identified that the husband’s medical expenses were not all covered by CTP insurance and that all remaining expenses were paid by the parties.
The wife deposed that the parties took out a joint mortgage to support the husband’s visa application and that she never agreed to use the parties’ funds to pay for the husband’s father’s hospital and funeral expenses.
The wife stated that the parties paid for their wedding and honeymoon equally.
The wife stated that she did not agree to transferring $561 per month to the husband’s family and that he did so without her consent. The wife was cross-examined about the transfers to her family members and about an alleged agreement in Country D, as to who was to pay the living expenses and the alleged agreement in Australia, as to who was to pay the living expenses. The wife said that it was a mutual decision to come to Australia. The wife was cross-examined about the late production of particular accounts and particular transactions. The wife was cross-examined about an email dated 31 October 2022 which was not consistent with the family violence allegations advanced by the wife.
SUBMISSIONS
The Court received case outlines from both Counsel and an aide-mémoire from Counsel on behalf of the wife. The husband’s Case Outline sought an overall division of 50% each, with no future adjustment. The husband’s Case Outline contended the husband made the greater financial contribution to the Suburb C property and assessed contributions 55% by the husband and 45% by the wife. Mr Cohen, on behalf of the husband, contended that the contributions, financial and non-financial, were effectively equal, and submitted that the amount identified in the cost notice held in a trust account, on behalf of the wife, should be added back into the asset pool.
The Court raised with Mr Cohen, the potential adverse credibility finding against his client, in relation to the initial contributions as impacting on the Court's assessment as to who made the greater financial and non-financial contributions. Mr Cohen sought to explain paragraph 10a of the husband’s affidavit as reflecting a transfer from a combination of sources. The Court does not accept that explanation, and it adversely impacts on the assessment under the credit of the husband in relation to his contributions, both financial and non-financial. Mr Cohen embraced the proposition that the net asset pool should be treated as being in the order of $326,000.
The Court raised with Mr Cohen the potential alteration of property interests reflecting greater financial contributions and greater non-financial contributions to the wife, reflecting an amount of 35% in favour of the husband, which would reflect an amount of $114,133. Mr Cohen was informed that the Court contemplated making a minor adjustment in favour of the husband, given the greater earning capacity of the wife, the greater financial resources of the wife, and that the Court proposed a potential alteration of $115,000 in favour of the husband. Mr Cohen accepted that such an adjustment would be just and equitable.
No order was sought in respect of the superannuation pool. The Court had earlier identified that the superannuation pool, over the course of the relationship, appeared relatively balanced, and no submissions were advanced for a superannuation split in the final submissions.
The wife’s Case Outline submitted a two-pool approach should be adopted treating superannuation as a separate pool and alleged an overall contributions based assessment of the non-superannuation pool of 70%/30% favouring the wife and invited a 76%/33% split of the superannuation. On a single pool approach the wife alleged an assessment of 75%/25% including all her add-backs and excluding the husband’s add backs. It was also alleged that the elements had been made out to satisfy the Kennon principle and a contributions allowance in favour of the wife. It was alleged there should be no alteration of interests in favour of the husband.
The wife’s Case Outline addressed the add-backs contended for in the balance sheet being the withdrawal of $49,500 by the husband from the joint account, an alleged reduced value in the sum of $56,871 and an add back of $6,700 in relation to insurance compensation received by the husband. It was submitted that the husband’s alleged add backs in relation to the wife were not appropriate.
The wife’s aide memoire dated 8 November 2024 put submissions as to the credit of the husband and accepted that funds in trust can be included as an asset. The submission pressed for the add backs in relation to the withdrawal of $49,500 by the husband and the estimated $65,871 transferred by the husband to family members. No superannuation splitting order was pressed in relation to the separate pool of superannuation. An adjustment of 8-10% was advanced if there were no add backs on the grounds of alleged family violence, disclosure issues, wastage and the husbands alleged paid legal fees and familial support in Country D.
Mr Richardson, on behalf of the wife, proposed overall assessment of 38% to the husband and 62% to the wife, and contended that the $38,000 in the trust account should be notionally allocated to the unpaid work and work in progress. Mr Cohen contended that the add-back sought in the balance sheet should be included and sought adjustments in favour of the husband for alleged family violence, alleged disclosure issues and alleged wastage.
In substance, Mr Cohen advanced that the alteration of property interest should reflect a payment by the wife to the husband of the sum of $62,000.
After the judgment was reserved a further purported submission by letter dated 27 November 2024 on behalf of the wife, signed by an associate on behalf of a partner of the wife’s solicitors, was sent to the Court seeking to put submissions to vary the final orders made and attaching a document in support of the submissions.
No leave was given to put further submissions after the reasons were reserved and there was no error in the orders pronounced to be corrected under the slip rule. Rather the submissions appeared to seek to re-agitate the substantive orders made. Where the reasons are reserved, whether or not final orders have been pronounced, it is not proper practice to put any further submissions without leave of the Court or without the consent of the opponent.
All family legal practitioners should be well aware that there should otherwise be no communications sent to the Court after reasons are reserved and that doing so can give rise to professional complaint. No consent of the opponent was given.
The letter dated 27 November 2024 should not have been sent to the Court, after reasons were reserved and without the consent of the other party. The Court has accordingly disregarded the further purported submission that should not have been sent to the Court after reasons were reserved.
PRINCIPLES IN RELATION TO ALTERATION OF PROPERTY INTERESTS
In respect to the parties dispute regarding the division of their property these proceedings, s 79 of the Act sets out the following:
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), at [35] confirmed that before an order is made adjusting the parties property the court is required to make a determination that it is just and equitable to do so. That determination is to be made, however, not as a discrete or preliminary issue but requires the Court to consider the matters set out in section 79(4) of the Act.
In the leading case of Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143, the Full Court held at [39] that, in considering the matters set out in section 79 (4) of the Act the preferred approach was to adhere to the following four steps:
(a)Identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)Identify and assess each of the parties’ financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)Assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)Step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
That approach had been endorsed many times: see, for example, Manolis v Manolis (No 2) [2011] FamCAFC 105 at [63] (per Coleman, May and Ainslie-Wallace JJ); Kildea v Kildea (2007) 38 Fam LR 347 at [104] (per Finn, May and Boland JJ); Coghlan and Coghlan (2005) FLC 93-220 at [22] (per Bryant CJ, Finn and Coleman JJ) and [142] (per O’Ryan J). However, as the High Court noted at [35] in Stanford, s 79(2) of the Act provides that the Court shall not make an order altering the interests of the parties to the matrimonial property, “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the Court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property.
The Full Court in Perrin & Perrin (No 2) [2018] FamCAFC 122 cited at [57]–[58] with approval, the decision in Babett & Falconer (2015) FLC 98-067 at [44]:
Within the family law context, those comments [in respect to the adequacy of reasons] should be seen as reinforced by the fact that the nature of the s 79 inquiry is, in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and which, effectively as a corollary, requires a "broad-brush approach”. (Citations omitted)
Is it just and equitable to make a property adjustment?
Contributions
The Court is required to make an assessment of the nature and quality of the totality of the parties’ contributions throughout the entirety of their relationship, together with their contributions in the period subsequent to their separation. In [29] Dickons & Dickons [2012] FamCAFC 154, [14] (Bryant CJ, Faulks DCJ, Murphy J); Jabour & Jabour [2019] FamCAFC 78, [61] (Alstergren CJ, Ryan and Aldridge JJ). See also Dovgan & Dovgan [2021] FamCA 306, [347] (Harper J), which restates the need to holistically assess contributions following the case of Dickons, and that ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.
Addbacks
In general, aCourt exercising discretion pursuant to s 79 of the Act will assess the property of the parties as at the date of the final hearing. An exception to this general principle arises where theCourt notionally add-backs property to the asset pool which has already been dissipated. This concept was explained by the FullCourt in Milankov & Milankov [2002] FamCA 195 at 113:
In several circumstances, well identified by the cases, this first step often involves including in the “pool of assets” items which no longer exist but which in order to do justice and equity to the parties need to be notionally considered in determining what a fair share of the existing pool of assets should be...Frequently this involves a notional consideration of assets which have been in the possession of one of the parties at some time after separation but which have been dispersed for that party’s own use.
In Omacini and Omacini (2005) FLC 93-218 at 79,617, the Full Court identified three categories where it may be appropriate to notionally add back an item of expenditure, as follows:
(1)Where the parties have expended money on legal fees: see DJM v JLM (1998) FLC 92-816 at [85]-[262];
(2)Where there has been a premature distribution of matrimonial assets: see Townsend & Townsend (1995) FLC 92-569 at [81]-[654]; and
(3)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at [76]-[644], including:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Despite these commonly accepted categorisations it is important to observe that add-backs are a purely discretionary matter for the Court exercising its discretion pursuant to s 79. The Full Court in Browne v Green [1999] FamCA 1483 at 44 stated that:
We agree...that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.
BALANCE SHEET
| Ownership | Description | Applicant Husband’s Value | Respondent Wife’s Value | Court’s Findings | |
| ASSETS | |||||
| A | ANZ account #...31 (as at 29.10.24) | $38,870 | $38,870 | $38,870 | |
| A | Country D Bank #...07 (as at 29.10.24) | E$1,500 | E$1,500 | E$1,500 | |
| A | Motor Vehicle 2 | $11,000 | $15,000 | $11,000 | |
| R | Motor Vehicle 1 | $11,000 | $8,000 | $11,000 | |
| R | Trust Account | NK | $38,000 | $38,000 | |
| R | B Street, Suburb C NSW | $720,000 | $720,000 | $720,000 | |
| R | Westpac account #...01 (as at 29.10.24) | $70 | $70 | $70 | |
| R | ANZ account #...95 (as at 29.10.24) | $470 | $470 | $470 | |
| R | ANZ account #...15 (as at 29.10.24) | Nil | Nil | Nil | |
| SUB-TOTAL | $782,910 | $821,910 | $820,910 | ||
| ADDBACKS | |||||
| A | Husband’s unliteral withdrawal | Nil | $49,500 | $0 | |
| A | Husband’s transfer to his family members | $24,000 | E$65,871 | $0 | |
| A | Insurance compensation | Nil | E$6,700 | $0 | |
| R | Wife’s transfer to her family members | $17,000 | Nil | $0 | |
| R | Wife’s unilateral withdrawal from joint account | $82,755 | Nil | $0 | |
| SUB-TOTAL | $123,755 | $122,071 | $0 | ||
| LIABILITIES | |||||
| R | Westpac Home Loan (Westpac Mortgage Statement) | $494,815 | $494,815 | $494,815 | |
| SUB-TOTAL | $494,815 | $494,815 | $494,815 | ||
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Applicant Value | Respondent Value | |
| A | Super Fund 1 | Accumulation | $28,836 | $28,836 | $28,836 |
| A | Country D Super | Accumulation | E$26,858 | E$26,858 | E$26,858 |
| R | Super Fund 1 | Accumulation | $113,304 | $113,304 | $113,304 |
| SUB-TOTAL | $168,998 | $168,998 | $168,998 | ||
| TOTAL NET ASSETS INCLUDING SUPERANNUATION | $457,093 $496,093 $495,093 | ||||
SUPERANNUATION
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Applicant Value | Respondent Value | |
| A | Super Fund 1 | Accumulation | $28,836 | $28,836 | $28,836 |
| A | Country D Super | Accumulation | E$26,858 | E$26,858 | E$26,858 |
| R | Super Fund 1 | Accumulation | $113,304 | $113,304 | $113,304 |
| SUB-TOTAL | $168,998 | $168,998 | $168,998 | ||
FINDINGS AND CONCLUSIONS
The Court finds that the net assets of the parties and financial resources are as identified in the Court Finding column in the above balance sheet.
The Court prefers the evidence of the husband in relation to the withdrawal of the $49,500 from the joint bank account and finds that it was done with the knowledge and consent of the wife. The Court also accepts the husband's evidence that that amount, in substance, reflected the compensation payment for his future economic loss that he suffered in relation to his injuries. The Court does not accept that that amount should be treated as an add back but takes it into account under s 75(2)(o) of the Act. The Court accepts that there were transfers of funds to family members by both the wife and the husband but is not satisfied that there should be any add back in relation to those amounts, but the Court will take them into account under s 75(2)(o) of the Act. The Court prefers the husband’s evidence as to the amount that he transferred to his family members being in the order of $24,000 and finds this occurred with the consent of the wife and should not be treated as an add-back. The Court finds that the wife did transfer funds to her family as alleged by the husband in the order of $17,000. The Court does not accept that the insurance compensation should be treated as an add back and finds it was spent on living expenses by the husband.
The Court accepts that the wife withdrew $82,755 from the joint account and accepts the evidence of the wife that it was used to pay the mortgage, outgoings, as well as the wife’s living expenses. The Court does not regard the amount of $82,355, as one of a matter of discretion that should be treated as an add back but takes it into account under section 75(2)(o) of the Act.
The Court has taken into account the property of the parties at the commencement of the relationship and the two sources of funds for acquisition of the Suburb C property. The Court finds the husband’s evidence in relation to the transfer of Country D 51,100,000 was an exaggeration and the answer to the question as to what of any bank statement to support the proposition was evasive. The Court has taken into account that the affidavit, in English, is not the husband’s primary language, but finds that the amount referred to was an exaggeration that impacts on the Court's assessment of the husband’s credit, adversely to the husband. The Court finds that the failure to disclose the funds held in trust adversely impacts of the credit of the wife. The Court finds that the wife made the greater financial contributions to the acquisition of the Suburb C property, being the principal asset in the net pool. The Court finds that the wife made the greater financial contributions throughout the relationship of the parties.
In respect of this second step the Court also finds that the wife made the greater non-financial contributions throughout the relationship, and that the wife made a greater contribution in the capacity of homemaker and to the welfare of the parties during the relatively short matrimonial relationship of about 5 years. Assessing these contributions to the net property of the matrimonial relationship the Court finds the wife’s greater contributions are reflected in an apportionment 65 % in favour of the wife and 35% to the husband. This would reflect an amount of $114,100 to the husband.
The Court finds that it is not able to make findings favourable to the wife in the present case in relation to those allegations. The Court notes, in that regard, the seriousness of the nature of the allegations and the contemporaneous emails of the wife that do not support the nature of the domestic violence advanced in the wife's affidavit and in fact contradict the same. There should be no Kennon adjustment in this case. The Court does not accept that the payment of the husband’s legal fees warrants any adjustment, does not accept that there was any wastage and does not accept that he has any other financial support to warrant any adjustment as submitted on behalf of the wife. The Court does not accept that the disclosure issues support existence of any other assets to be taken into account.
Turning to the third step, the Court has taken into account the effect of the proposed order by the Court and finds that it would not adversely impact on the earning capacity of either party to the marriage.
The Court finds in relation to s75(2) (a) that the husband is 43 years of age and the wife is 36 years of age. The Court finds both parties are of reasonable health, although the Court accepts the husband suffered an injury.
The Court does not accept that that injury has an ongoing material impact on the future earning capacity of the husband. The Court appreciates that the husband did receive compensation for future economic loss, however the Court does not accept that the evidence supports the husband having a diminished earning capacity.
In relation to s 75(2)(b) of the Act, the Court finds the income of the parties is about $1700-1800 per week by the husband, working as a professional and $2,201 per week by the wife. The Court accepts that the husband pays Country D tax annually on his salary. The property is identified above in the balance sheet. The Court finds that the parties have financial resources in the nature of the superannuation referred to in the above balance sheet.
The Court finds that both parties have the physical and mental capacity for appropriate gainful employment and will continue to be employed. The Court finds that the wife has a greater income earning capacity.
In relation to s 75(2)(c) of the Act, this provision has no application.
In relation to s 75(2)(d) of the Act the Court has taken into account that the husband, who lives with his mother and sister, with the husband contributing about $2000 per month to the shared household expenses, is able to support himself on his current income and finds that the wife is able to support herself on her current income.
In relation to s75(2)(e) the Court finds neither party is responsible to support any other person. Albeit the Court accepts that each party have and continue to help their respective family.
In relation to s75(2)(f) other than the superannuation identified in the above balance sheet neither party is in receipt of any pension, allowance or benefit.
In relation to s75(2)(g) the Court is satisfied that the proposed orders permit a standard of living that is reasonable in the circumstances. The Court would not be so satisfied in the payment to the husband were to be any lesser amount.
In relation to s75(2)(h), (j), (l), (n), (p) and (q) have application. Nor is s79(2)(ha) relevant.
The Court has taken into account the duration of the marriage of about 5 years under s75(2)(k).
The Court has taken into account the husband cohabiting with his mother and sister and the contribution he makes to expenses referred to above, in relation to s79(2)(m). The Court has taken into account the terms of the orders to be made in relation to the property of the parties under s75(2)(n).
In relation to s79(2)(o) the Court has taken into account the draw down by the husband and wife referred to above. The Court has also taken into account the greater financial superannuation resource of the wife under s75(2)(o) and her greater income. The Court has also taken into account under s75(2)(o) the small size of the net property pool. Section 79(4) (f) and (g) not relevant. Taking all these matters into consideration the Court finds a small adjustment just under 1% in the sum of $900 should be made in favour of the husband.
Turning to the fourth step the Court must consider whether the outcome is just and equitable. Having taken into account all of the above matters the Court is satisfied that the proposed orders are appropriate and that the alteration of property interests of the parties is just and equitable.
It is for these reasons that the Court made the above declaration and orders.
I certify that the preceding one hundred and twenty-one (121) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street. Associate:
Dated: 18 December 2024
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