Braddon and Braddon

FAMILY COURT OF AUSTRALIA

BRADDON & BRADDON

[2008] FamCA 1030

FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Just and equitable

APPLICANT:

Ms Braddon

RESPONDENT:

Mr Braddon

FILE NUMBER:

SYF

3398

2005

DATE DELIVERED:

28 November 2008

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Cohen J

HEARING DATES:

28-30 March 2007, 23-23 August 2007, 11 February 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Campton

SOLICITOR FOR THE APPLICANT:

BARKUS EDWARDS DOOLAN

SOLICITOR ADVOCATE FOR

THE RESPONDENT:

Mr M Twigg

SOLICITOR FOR THE RESPONDENT:

ADRIAN TWIGG & CO

Orders

That within on month the parties shall from the moneys including interest held on their behalf in the controlled moneys account in the name of the wife’s solicitor pending these orders pay:
(a)to GE Creditline and Network Finance the sum of $8500.00
(b)to the wife’s parents the sum of $89,426.00.
(c)to the husband the sum of $6,568.00
(d)to the wife the sum of $40,041.00
(e)to the husband 55% of the remainder.
(f)to the wife the remainder being 45% of the balance after payment in performance of (a), (b), (c) and (d).
It is hereby declared that neither party has any interest in the property or notional property or liability for the debts of the other party specified in paragraph 40 of the judgment of the Court published on 28 November 2008 in these proceedings.
Costs are reserved.

IT IS NOTED that publication of this judgment under the pseudonym Braddon & Braddon is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3398 of 2005

MS BRADDON

Applicant

And

MR BRADDON

Respondent

REASONS FOR JUDGMENT

The property issues between the parties have largely been limited by agreement on the identity and value of their assets and liabilities. The assets which have been the subject of agreement are:
Balance of sale proceeds, W home (joint)   $168,546.00 plus interest
Husband’s car   $21,000.00
Husband’s household contents   $9,000.00
Husband’s paid legal costs (notional)  $17,672.00
Wife’s home, T property                     $650,000.00
Wife’s car  $15,000.00
Wife’s household contents  $9,728.00
Wife’s paid legal costs (notional)  $98,641.00
Wife’s savings  $360.00
Total               $989,947.00
The debts which have been the subject of agreement are:
GE Creditline and Network Finance (joint)  $8,500.00
Husband’s credit cards  $3,511.00
Husband’s debt to CBFC  $21,000.00
Husband’s debt to his parents   $10,000.00
Wife’s credit cards  $3,000.00
Total               $46,011.00
It has been agreed that the wife’s paid legal costs are $98,641.00. These have been regarded as notional property already advanced to the wife. This is incorrect because the wife’s parents lent the wife the whole sum. Either the loan must be deducted or the $98,641.00 not regarded as notional property and the loan ignored. The latter course is more consistent with the principal which I shall apply that any legal costs paid by a party should not be met directly by the other part without an order under s.117 of the Act.
There is a dispute over valuation of the wife’s jewellery. It has not been the subject of an expert valuation. The husband values it at $5,800.00. The wife says she does not know its value but gave evidence of the cost price of the most significant items. No item cost more than $2,000.00. Some were purchased many years ago and others more recently. The wife’s evidence of the total cost is that it is about $5,800.00. The only alternatives are to refuse to attribute a value to these objects because they have not been formally valued or to accept the evidence as to value and find their value to be $5800.00. To do the former is more likely cause injustice than to do the latter because the jewellery is likely to be more than the nominal value. I shall regard the jewellery as worth $5,800.00
The husband has superannuation agreed to be worth $401,776.00 gross. Its net value depends on when it is to be taken. There is dispute about when it will be taken. The husband was aged close to 52 years when the hearing concluded but is quite unwell. He claims he is unable to work. He has been granted an invalid pension. The evidence is that if he is determined by his superannuation fund to be permanently disabled from employment he is eligible to take his superannuation in a cash lump sum. The rules of the fund require him to apply to the trustees of the fund and provide evidence from two treating doctors of his disability. He intends to do this.
There is before the Court evidence from two of the husband’s treating doctors. Dr E, his G.P., says he is “unfit for employment in any but a limited sedentary capacity, for example voluntary work” due to symptoms arising from congestive cardiac failure and depression. His specialist, Prof. R, is the director of the Hypertrophic Cardiomyopathy Clinic at the Royal Prince Alfred Hospital and is renowned expert in the field of hypertrophic cardiomyopathy, the technical term for the husband’s heart condition. Prof. R wrote his report in May 2006. He had, by then, been made redundant from his fulltime job in early 2006 although he had not worked since 28 October 2005, when he collapsed at work. He had been employed in a non-clerical capacity which did not involve heavy labour. Prof. R was of the view that the husband “can return to work in a clerical type of position involving no manual activities. Whether his depression would allow him to return to work at this time is up to his psychiatry consultant to determine…I would not regard him as sufficiently disabled to be prevented from working due to his cardiomyopathy. My advice would be for him to start in a part-time capacity and to see how he manages and then proceed to a full-time position if he is able to cope with part-time employment.”
Prof. R wrote this as a result of examining the husband in April 2006. Now, he has not worked since October 2005, has never had clerical employment and was, in early 2007, granted an invalid pension after a medical examination by a Centrelink appointed doctor. Prof. R last reviewed the husband in August 2007 although there is no later report from Prof. R than the May 2006 report. Assuming that Prof. R has not changed his mind as a result of his last examination of the husband, one must ask: Where is this job which will allow the husband to have a part time trial and progress only as far as his health will allow? It is not likely to be found.
The husband had the opportunity to apply to take him superannuation but until late 2007 he had not done so. In early 2008 he applied to take his superannuation. He did not know if his application would be successful. If he is able to take it before he reaches 55 years old he will have to pay $42,128.00 in tax. If he waits until he reaches 55 years; that is, in April 2011, he will pay only $9,230.00 in tax. His superannuation will become tax free if he does not take it until he is 60 years old.
One might think it would make good sense for the husband to wait until 2011 to apply for his superannuation. However, the husband’s illness has affected his attitude to this. I accept, because I have had the advantage of seeing him give evidence, that he is very concerned about the prospect that his life might end soon and suddenly. I think, in all the circumstances, it was reasonable for the husband to apply to take his superannuation when he did. He was in sufficiently straitened circumstances in early 2008 to seek a $12,000.00 cash distribution from the fund held from the balance of proceeds from the sale of the former matrimonial home. An order was made to provide each party with $12,000.00 and for its character to be decided at the hearing. His situation must have also played a part in driving him to apply to draw his superannuation. He will need to have funds to purchase a home. Without the cash from the superannuation, he will not be able to afford one irrespective of the order for distribution of property I might properly make. It is probable that the husband will have already obtained or will soon succeed in obtaining his superannuation in cash. He is likely to receive or to have received $359,648.00 ($401,776.00-$42,128.00).
The wife’s Counsel argues that because the husband spent funds he held at separation or received after it, these should be regarded as capital. He submits this capital should be written back and regarded as an advance to the husband in his entitlement to property. The funds are:
AGL shares  $5,300.00
Redundancy payment   $113,000.00
Tax refund   $7,500.00
Partial property settlement   $40,000.00
Bank credit  $22,432.00
Total               $235,932.00
When the parties separated in mid 2004 the husband’s wages continued to be banked into a joint account and both parties resorted to it for their living costs until March 2005. The husband ceased working because of his health in September 2005. He says and seems to believe he received about $113,000.00 net in cash as termination pay and rolled over $60,000.000, possibly in addition to the $113,000.00 into a superannuation fund. His non-documentary affidavit evidence and oral evidence about this is ambiguous. The wife’s legal advisers seem to have accepted this claim without questioning it or knowingly accepted it because the error favoured the wife. At separation the husband held AGL shares. He subsequently sold them for about $5,300.00. By March 2007 the husband had received a tax refund of $7,500.00 for the 2005/6 financial year.
On 21 October 2005 the parties obtained consent orders which permitted the sale of the former matrimonial home at W. It was sold in August 2006 for $855,100.00 giving $507,000.00 clear.. The wife used $300,000.00 of this to discharge, in part, a loan her parents took to permit her to purchase a home at T. The husband was paid $40,000.00 from the proceeds of sale of W property. This is the $40,000.00 which the wife submits he has spent or failed to disclose or account for in a manner which makes it proper for it to be added back as a notional asset. When the husband swore an affidavit on 15 March 2007 he, among other things, swore that he had a total of about $22,432.00 in two accounts with a credit union. This is the final sum which the husband is said to have failed to account for.
The first of the above amounts to be received by the husband was his termination payment. The non-documentary affidavit and oral evidence on balance seems to assume that the husband received $113,075.00, and had that sum in cash to spend but also received another $60,000.00 which was rolled over into a superannuation fund. This is notwithstanding a document which is annexed to the husband’s affidavit sworn 4 October 2008. It is in a bundle of documents marked ‘A’. The fourth document in ‘A’ is what appears to be a standard form headed “Separation Figures” which states the details of the payment the husband received in about October 2005 as a result of his employment being terminated. This document, if read carefully, makes it perfectly clear that this is not what occurred. The husband did get more than $113,075.00 altogether, but not $60,000.00 more. He actually received $132,235.19, $71,411.00 of which was in cash. The balance, $60,824.19, was rolled into a superannuation fund called L Fund. The deposit of the latter sum is proven by annexure ‘B’ to the same affidavit. The thing which seems to have confused the husband and others is the reference to $113,075.57 in the separation figures document. It is the amount the husband would have received if he had not rolled over the $60,824.19 because $19,159.63 in tax would have been deducted from the $132,235.19. It was not actually deducted because the $60,824.00 was invested in a superannuation fund. Thus, the husband need only explain how he spent $71,411.00, not $113,075.00.
This revelation undermines the wife’s claim that when the husband falsely said in paragraph 137 of his principal affidavit that he received $100,000.00 he was attempting to deceive by understating the sum he really received, $113,000.00, and has concealed the existence of some of this cash fund. He actually received $71,411.00 in cash, so he overestimated his receipt.
The husband was not in employment after October 2005. His affidavit evidence is that from November 2005 until October 2006 he spent about $118,000.00 and, of this, his current wife contributed $7245.00, leaving his own expenditure at $111,000.00. None of this expenditure appears to have been exceptional. He swore his Financial Statement on 4 October 2006. By this time he had received the $40,000.00 from the sale of W property and had $42,163.00 in cash funds but had credit card debts of about $12,000.00 and had been receiving income of about $200.00 per week.
The $7,500.00 tax refund and $5,300.00 from the sale of shares were received not long before March 2007. In the husband’s affidavit sworn 14 March 2007 he says he used the funds from the AGL sale, the $5,300.00, to pay some of his visa credit card account which had been in debit for $7,890.00 in October 2006 but was, at the time of the affidavit, $1,658.00 in debt. It is also inferred by the same part of the affidavit and by the Statement of Financial Circumstances that the tax refund was also used to reduce his mastercard credit card debts from $11,976.00 to about $3,500.00. The remaining debt would be accounted for by the credit cards being in continuing use to meet ordinary living costs.
From October 2005 to March 2007, the husband received $71,411.00, $40,000.00, $12,800.00 and about $200.00 per week or about $15,600.00; that is, about $139,811.00 in all. In that time he spent about $111,000.00 on living in addition to accumulated credit card debts which amounted to about $12,000.000 up to October 2006. In March 2007 he still had $22,432.00 in credit union account deposits yet had discharged the $12,000.00 in credit card debts. Thus he spent $123,000.00 ($111,000.00 + $12,000.00) and still had $22,432.00, a total of $145,432.00. The statement which is part of Exhibit ‘L’ clearly demonstrates how, by 13 July 2007, by entirely appropriate and unexceptional drawings, all but about $1,225.00 ($785.00 + $440.00) of the $22,432.00 was expended. He would also have received $200.00 per week or another $5000.00 from the start of March to mid July 2007. This is all perfectly consistent with his receipt of $139,811.00 plus $5000.00, or about $145,000.00 which I find is all accounted for.
Given these matters, the wife’s claim that there has been a failure to account cannot be accepted. I find it highly likely that he spent what he received in termination payments on unexceptional and justified living costs other than the $60,024.00 which was rolled over. His claimed level of expenditure can be compared with the level of his expenditure between June 2004 and March 2005. During that period he spent $64,500.00. None of this has been alleged to be waste. Even though the $40,000.00 was advanced to the husband from the sale of matrimonial property, it should not be added back because it was expended on ordinary living, as was his disability income, tax refund, share sale proceeds and the cash he obtained as termination pay.
There is one aspect of the husband’s expenditure on what would otherwise have become property which could have been available for division between the parties which warrants questioning and, therefore, examination. The husband is now married to Ms M. She has a Holden Commodore car with personalised number plates of the husband’s initials. When the parties separated the husband was the owner of this car. He sold it to his wife in January 2005 for $7,500.00. Ms M paid the $7,500.00 by making monthly instalments on furniture the husband had purchased on credit after separation. The husband received the benefit of the $7,500.00 which went to his necessary living costs. The car was worth $15,000.00 at the time of hearing. In fairness, the $7,500.00 extra should be added back and regarded as a distribution to the husband as part of his share of the matrimonial property. I shall take that course.
In December 2007, the parties were each paid $12,000.00 from the fund held in trust pending final orders which came from the sale of the former matrimonial home. The characterisation of this payment was reserved as part of the determination of final property orders. The husband needed the $12,000.00 to meet urgent obligations. A similar sum was paid to the wife because it was regarded as a pragmatic solution to the problem created by making an interim payment to one party only where the principal evidence in the property proceedings was already before the Court and there had been an agreement on the identity of most of the property to be divided including the sum from which the $24,000.00 was obtained. In the circumstances, although no additional evidence has been put before the Court on the amount still held in trust and I have not been told how and to what extent the $12,000.00 advanced to the wife has been used, I shall simply regard the $12,000.00 paid to each party as having been spent on ordinary living. The wife was, after all, earning little income and is more likely than not to have to use it on day-to-day living, as the husband did. The $168,546.00 which is agreed to as an asset includes this $24,000.00 so it should be reduced in value by a $24,000.00 deduction.
There is a very significant issue over moneys which the wife’s parent’s provided to her. The wife and her father say that in 1997 and 1998 the wife’s parent’s lent the parties $89,426.50 which has not been repaid, is due to be paid and should be regarded as a current debt. The husband says the whole amount was a gift.
The wife’s affidavit evidence is to the effect that in February 1997 the parties purchased W property for $295,000.00. It is in the same street and only a few doors away from the wife’s parent’s holiday home in which the parties were living at the time. They had about $140,000.00 from the sale of their previous home and borrowed $150,000.00 from a bank. The W home needed and warranted extensive expansion and renovation. These were paid for by the wife’s parents. The wife says the loan agreement was oral and took place before the purchase of the home when, in the presence of both parties, this conversation took place:
[The wife’s father]: We’ve lent [the wife’s sisters] money to help them purchase their homes and it’s only fair that we do the same for you. So if that is going to help with the renovations, we will lend you the money.
You understand that this is a loan? But it doesn’t need to be repaid unless you sell the house or you two divorce.
Husband: I understand that [name]. But it’s not likely to happen.
The wife’s father, in his affidavit, has set out what he says is his recollection of the conversation which comprises the agreement. There is no realistic doubt that the wife and her father did not collaborate before instructing the wife’s solicitor on the drafting of their affidavits. The wife’s father’s version is quite different from that of the wife. He says there were two conversations, one before and one after the W property purchase. The first conversation is:
Wife: [the husband] and I found a property that we like but it needs some renovations and we won’t be able to afford it. We will already be taking out a big mortgage to buy it.
[Wife’s father]: Well, we can lend you the money for the renovations that it needs if you like.
The wife’s father inspected the property and realised it needed a lot of work and said to the husband and wife together:
[Wife’s father]: We’re still happy to lend you the money for the renovations, but if you sell the house for any reason, for example if you want to live somewhere else or if you were to separate, we want the money back.
Wife: We understand that it’s a loan. If we sell the property, or God forbid, we divorce, you will get your money back.
[Wife’s father]: We don’t want any interest on the money, just the capital.

The wife’s parents had already made a loan to their other daughter, C. It is evidenced by a written agreement between C and the wife’s father which was made in May 1987 and drafted by a solicitor. In it, C agreed to repay $69,500.00 advanced by her father to her so she and he could purchase a home for her in equal shares on sale of the property. C still lives in this property and has not repaid any of the $69,500.00. C is not married, has no children and was at the time of the hearing about 45 years old. In 1997 the wife’s father also lent their daughter, H, $87,000.00 to purchase a home. This was after the agreement with the parties. He did not require a formal agreement with H because he thought it would be unfair of him to do so as he had not required one with the parties.
The wife’s father sought legal advice before finalising the agreement with the parties. His lawyer drafted a written form of agreement which he advised the wife’s father would entitle him to be repaid on demand. He was not prepared to impose such a term on the parties. The wife’s father also arranged for his solicitor to prepare mortgages to secure the loans to E and the parties. E’s was to secure $65,000.00 and the parties’ was to secure $67,000.00. The parties and the wife’s father originally believed the parties’ renovations would cost about this much. He did not persist with the mortgages because they provided for repayment on demand and, in the wife’s father’s view, did not reflect to actual agreement between himself and the parties. He said in his oral evidence-in-chief that this was for repayment to become due on the sale of the home at W or on the parties’ separation. Both he and his wife also arranged for codicils to their wills to be drafted. Neither executed the codicils.
In his affidavit the husband alleged that at the time of sale of the parties’ previous home, before they moved temporarily into the wife’s parents’ holiday home but after they had decided to purchase the W home and had formed a plan for the renovations, the wife’s father told the parties “We have decided that we’re going to give you the money to do all of the renovations. You get a quote and we will pay it’. Earlier he had said “You don’t need to borrow any more money. We have decided to give you some money to carry out the renovations”. He also told them that he and his wife were prepared to fund somewhere between $60,000.00 and $80,000.00 because they wanted the parties to be able to have the type of lifestyle the wife’s parents had had. The wife’s parents were very comfortably off and the wife, according to the husband, had always expected to live with him in the style she had been accustomed to when she lived with her parents.
In January 2006 the wife bought a home at T. An order for sale of the W home had been made on 21 October 2005 but it had not been sold by then. The T home plus some necessary repairs cost approximately $683,000.00 in all to purchase. To enable the purchase, the wife borrowed $720,000.00 from her parents. The loan was formalised by a deed giving the wife’s parents the right to lodge a caveat on the title. By the deed, the wife is obliged to repay the loan and interest now that W property has been sold. All of this fund was obtained by the wife’s parents borrowing it on security of their home. Their liability for interest on the loan was originally about $3000.00 per month. Subsequently the wife’s parents made gifts of $25,000.00 and $30,000.00 to her. None of these was used to repay any part of the $89,000.00. When the W home was sold in mid August 2006, the wife used $300,000.00 of the proceeds of sale to repay part of her parents’ loan on T property but paid nothing toward the $89,000.00. Consent orders had been made allowing the $300,000.00 payment. They also provided for the $40,000.00 the husband received from the proceeds of sale.
The husband suggests that the $300,000.00 would, in part, have been used to repay the $89,000.00 if it had been a loan. That it was wholly used toward payment of the $720,000.00 loan and because the other two loans; those for $25,000.00 and the $30,000.00, were also not used to pay back the $89,000.00, it is said to be shown to be a gift rather than a loan.
I find this argument to be so weak it cannot reasonably be accepted. The $25,000.00 and $30,000.00 loans were made for specific purposes. The idea that the wife’s parents might make these loans so the wife could repay another loan to them, jointly due from both parties, is unrealistic. It is equally as unrealistic to suggest that the proceeds of sale of W property might, in preference, be used to discharge the $89,000.00 loan rather than part of the interest bearing bank loan of $720,000.00. Even though, in theory, a repayment of the $89,000.00 could have been made to the wife’s parents with the balance of the $300,000.00 to pay off part of the bank loan, I can think of no reason why this course might be preferred by the wife and her parents over the course which was taken. To regard such a situation as a reasonable likelihood is also unrealistic.
On payment of the $300,000.00 the interest was reduced. By the hearing it was running at $600.00 per week, roughly. Rather than require repayment of the $89,000.00 when the parties separated, the wife’s parents lent her more money and, when the W home was sold, again did not require repayment as required by the agreement although they did obtain the $300,000.00 part repayment. The wife’s father made it clear in his oral evidence that he will not require further payment of what is owing on the T home unless and until the wife’s circumstances change to permit her to have a home and have money over which she no longer needs. He has never made a demand for the $89,000.00 despite the conditions which would entitle him to make the demand having eventuated.
In his oral evidence the husband corrected his claim that the first time he spoke to the wife’s father about the $89,000.00 was shortly before moving to the holiday home. He said he intended to swear that it was shortly after moving into it. He said he first discovered that the wife’s parents wanted repayment in April 2005.
On consideration of all the evidence on this issue and judging it not as though the arrangement, whatever it was, was a commercial one, but in its real context; that of an arrangement which was made within a family where all parties were optimistic about its likely benefits and each party was hopeful that the interpretation of its terms by the other would be beneficial to his or her interests and expectations and each was probably unwilling to put any assumptions he or she made about the terms in writing because of the reasonable fear that to do so might offend another party and undermine relations between them, I am of the clear view that the money was lent, not given, and that it was lent on the understanding by all that if the marriage between the parties broke down it would be repayable on sale of the home. The documents the wife’s father instructed his solicitor to draft but which were left unexecuted strongly support this conclusion. I am also satisfied that the wife’s parents will not require repayment of the $89,000.00 if it will impose what they regard as undue hardship upon the wife, just as they will not require repayment of the balance due from the $720,000.00 loan except in the same circum stances. But the issue of when repayments are required should not detract from the fact that these debts are actually owing. The issues over repayment timing are matters which are to be dealt with by the Court under s.75(2) of the Act. I shall, for the purpose of deciding what the net assets of the parties are, include the debt of $89,426.50 as a contribution made to the parties’ assets on behalf of the wife.
When the wife’s father gave evidence in March 2007 he said that $677,900.00, approximately, was the capital amount of the loan which he and his wife had taken to allow T property to be purchased. He also said the interest until the end of March 2007 would be $46,660.00 and that he and his wife had also lent the wife $5,117.00 for other costs involved in the purchase. As the hearing was not finalised until February 2008, another 11 months of interest would have run. The interest would have been on $377,900.00. As the evidence is that interest on $677,900.00 was about $3000.00 per month, a reasonable 5.4% p.a., the interest on $377,900.00 was probably about $1672.00 per month (377900÷677900 x 3000). In the 11 months this would have amounted to about $18,400.00, so by the time of the hearing the wife would have owed her parents about $448,077.00 including the $5117.00 as a result of buying T property. $65,060.00 of this would have been interest on the bank loan.
The bank loan was taken out by the wife’s parents and agreed to by the wife without any agreement by the husband despite his subsequent consent to the wife drawing the $300,000.00 from the proceeds of sale of W property to reduce the T property loan. There is real unfairness created by the wife’s unilateral decision to buy T property in the circumstances. The former matrimonial home at W was sold because the interest of about $2500.00 per month was unaffordable to the parties due to the changed circumstances resulting from the separation and the husband’s illness and unemployment. It was unreasonable for the wife to then indulge herself by purchasing a home where the interest payable would be $3000.00 per month before sale of W property. She expected to be able to use the $450,000.00 towards the T property debt once W property was sold. The original agreement between the parties which resulted in the $300,000.00 being paid was for $450,000.00 to be available to the wife from the proceeds of sale of W property. The husband consented to this. This still would have required a borrowing of $227,900.00. She now owes twice that on the purchase. She took a risk by buying T property and was ultimately only able to pay $300,000.00 off. She was then left with interest of about $1672.00 per month in circumstances where the husband could not purchase a home for himself.
More significantly, the purchase of T property was not justified by the amount of property the wife might reasonably receive pursuant to s.79. At this stage one can safely predict that approximately $700,000.00 net, including notional assets, will be available for division under s.79. It seems that the husband’s advisors could predict something like this when the husband agreed to allow her to use $450,000.00 to buy a home before W property was sold on the basis that $450,000 of those proceeds would be released to her. In her Counsel’s closing address he submitted that there should be no s.75(2) adjustment but that the wife’s contribution was 60% if, as has occurred, she failed in her submission that the $40,000.00 received by the husband should be regarded as having been advanced to him as part of his share of the net assets and notional assets and added back as a notional asset.
60% of $700,000.00 is $420,000.00. If the wife is successful in gaining an order of that magnitude, not all of it would be able to be used toward the cost of a home. Some of it, about $50,000 gross, not including the $98,641.00 in paid legal fees, will be reflected in property and notional property which will be unavailable for such use. Thus, the wife should not be regarded, as against the husband, as being entitled prior to division and prior to sale of W property to spend more than she could afford and thereby impose an unreasonable interest drain on the parties’ as yet undistributed assets. I accept that it would have been reasonable of the wife to spend to $450,000.00 on a home, but not more. I accept this sum because the husband agreed to release it for the purpose of purchase of a home by the wife. Yet she spent $683,000.00 before having sold W property for only $855,000.00 which gave the parties $507,000.00 clear. They and she could not afford what she spent even though it was reasonable that she might borrow part of the purchase price. I find that, as against the husband, she should be regarded as having wasted the interest on everything she borrowed to purchase the T property over $450,000.00 because the parties could not reasonably afford to meet it up to hearing.
Accordingly I shall only allow the wife to claim, against the husband as a debt to her father, the interest on $450,000.00 until the $300,000.00 was paid and thereafter, the interest on $150,000 until the hearing. I am quite satisfied that it was reasonable for the wife to purchase a home when she did because she needed to house herself and the child U and the interest on borrowing for a reasonably priced home would probably be much the same as her rent except for the short period before the sale of W property.
If the interest on $677,700.00 was $3000.00 per month between purchase in mid January 2006 and the sale of W property in mid August 2006 it is reasonable to allow $450,000.00÷$677,900.00 x $3000 for the seven months period which is, in total, approximately $14,000.00. For the remaining period until hearing which is 18 months, the calculation is 18 x 3000 x 150,000÷677,900 which equals about $12,000.00. Thus, I shall only allow deductions from the parties’ gross assets of $26,000.00 and not $65,050.00. The stamp duty on purchase was $24,774.00 on the basic purchase price of $650,000.00. On $450,000.00 it would have been about $17,151.00. Using the same fundamental reasons I shall reduce the properly allowable cost of purchasing the property by $7,623.00. The allowable debt due to the wife’s parents is $401,394.00 ($677,900 - $7623 + $26,000 + $5117 - $300,000)
The above findings require some additions to and subtractions from the agreed property, namely:
Wife’s paid legal costs   ($98,641.00)
Wife’s Jewellery  $5,800.00
Husband’s superannuation net  $359,648.00
Written back notional asset on sale of car by husband                $ 7,500.00
Debt to wife’s parents (joint)  ($89,426.00)
Allowable debt due by wife to her parents for T property ($401,349.00)
Adjustment to W property sale proceeds   ($24,000.00)
The result is net property and notional property having the value of $703,413.00 plus interest, available for division. This is made up by:
Joint assets
Balance of sale proceeds of W property    $144,546.00 plus interest
Joint debts
GE Creditline and Network Finance           $8500.00
Debt to wife’s parents   $89,436.00
$97,936.00
Joint net             $46,610.00 plus interest
Wife’s assets
Car  $15,000.00
Household contents  $9,728.00
T home   $650,000.00
Savings  $360.00
Jewellery   $5,800.00
$680,888.00
Wife’s debts
Allowable debt on T property   $401,349.00
Credit cards  $3000.00
$404,394.00
Wife’s net                  $276,494.00
Husband’s assets
Car  $21,000.00
Household contents   $9000.00
Paid legal costs (notional)  $17,672.00
Superannuation  $359,648.00
Writeback on sale of car (notional) $7,500.00
$414,820.00
Husband’s debts
Credit cards  $3,511.00
CBFC  $21,000.00
Parents  $10,000.00
$34,511.00
Husband’s net $380,309.00
The husband had been married and divorced and had two children when he commenced to live with the wife in 1983. He was born in April 1956 so was, when the hearing was completed in early 2008, approaching 52 years of age. The children of his first marriage are a son, who was born in late 1979 and a daughter, who is nearly two years older, having been born in early 1978.
The husband had been a qualified tradesman who had his own business which included contract work for a large company. When the parties commenced living together the husband had ceased working as a tradesman because of a back injury and had taken a job with the City Council. This included the right to reside in a Council provided home. His qualifications and experience, probably of at least five years, is likely to have assisted in obtaining the job. Cohabitation commenced when the wife moved into this house with the husband. She was undertaking a full time beautician’s course at the time and was not in paid employment. The husband’s wage was about $40,000.00 p.a. With this job and his subsequent jobs, his qualifications contributed to his employability and, therefore, the level of his earnings and must be regarded as a contribution he brought into the relationship.
The parties married in August 1985 and had two children, J who was born in November 1987 and U who was born in June 1996. The parties separated on 7 June 2004 when the husband left the former matrimonial home at W.
Originally, the husband’s children from his first marriage lived with their mother and the husband had weekend contact. In early January 1985 he was granted interim custody. They lived with the parties thereafter until the husband and his ex-wife agreed, about three years later and after continuous dispute, that they should live the husband. The parties were divorced on 19 September 2005.
When the parties commenced living together the husband had significant savings; $11,000.000, and owned land worth $25,000.00 which was not encumbered. He had other assets worth about $9,000.00. He also had a chose in action; a workers compensation entitlement which, when it was realised in 1985, provided him with $49,000.00 net. The wife had a car which she says was worth $5,000.00 and $2,000.00 in savings.
The parties built a home on the land the husband owned. It costs about $57,000.00, of which $30,000.00 was borrowed from the bank. The parties have made an error which is habitually made in proceedings of this nature. Each seems to believe he or she can obtain an advantage by claiming or denying one was the source of funds which were accumulated from earnings. Here the husband pointedly says some of the costs of the home came from his earnings after cohabitation commenced. The wife pointedly says part of the costs came from an additional $10,000.00 borrowed from a credit union. As I shall take into account the assets the parties brought into the relationship and their earnings from the start of it until the hearing, to give any additional credit for the source of the funds to purchase the home would be double counting unless it came from a different source to each of these. It does not matter whether it was bank borrowings which were paid off after marriage or after marriage savings which were used to fund the construction of the home. There are other attempts by the parties to claim double credit for contributions. I shall not attribute credit twice to any contribution. The manner of spending their funds, provided they were not wasted, is irrelevant even if, as here, the parties’ standard of living is particularly relevant.
Both parties did the ordinary things involved in having a home built by a project home builder including helping to keep the site clean and tidy. The husband did much more, however. Apart from the plumbing and drainage, he landscaped, laid concrete and painted the house inside and out. In 1987 the parties decided to renovate their home. They spent $30,000.00, most of which came from the husband’s workers’ compensation payment. The husband worked on the renovations including all the plumbing which was installed when an in ground pool was built. His efforts on the original construction and the renovations took up nearly every weekend for six years.
In 1990 the parties went on a holiday to the United States. The cost of their airfares was met by the wife’s father. This must be regarded as contribution to the parties’ assets on the wife’s behalf because the parties benefited by having the holiday without any reduction in their savings or increase in indebtedness which would have occurred if they had paid their own fares. In 1992 the wife’s father met the costs of the parties and the child J to stay three nights at good class accommodation in Cairns. This, too, should be treated in the same way, as should the return airfares to New Zealand for the parties which the wife’s father paid in 1993.

In 1995 the husband sold shares for $11,000.00. He had received these as a consequence of his employment with AGL after he left the Local Council. He also sold a boat he owned. The parties’ home mortgage debt, which was $16,000.00, was discharged by resort to the proceeds of the share sale and some of the proceeds of the boat sale.
In mid 1996, at about the time when the wife’s parents gave the parties $25,000.00, they decided to sell their first home and purchase a home closer to where the husband was by then working for AGL. The net amount received was about $150,000.00. About $10,000.00 of this was used to pay out a car loan. The parties moved to the wife’s parents’ holiday home at W on 31 October 1996. They continued to live in this home until renovations at their newly purchased home had been competed on Christmas Eve 1997. This home had been purchased in February 1997. The parties had had the benefit of living in the holiday home rent free for about 14 months. The wife’s parents also paid the outgoings for services and utilities including electricity and gas. This was a substantial contribution made by the wife’s parents on her behalf.
The newly purchased home was also at W. It cost $295,000.00. $140,000.00 came from the sale of the first home and $150,000.00 was borrowed from a bank. As has been discussed, $89,000.00, approximately, came from the wife’s parents by way of an interest free loan which has not yet been paid. The interest free element of the loan is also a significant contribution to the parties’ property made on behalf of the wife.
In addition to the renovations and extensions carried out originally, in 1998 the parties undertook further work on the former matrimonial home. The funds for the work came from extending the mortgage debt to $220,000.00. The work was carried out solely by the husband over the next few years. The necessary materials cost about $50,000.00. One job alone involved major effort. Over a period of 10 weeks the husband built a retaining wall by digging the foundation and laying more than 300 concrete blocks weighing 30kg each. He took four weeks leave to start the work then finished it on weekends.
In 1997 the wife’s father again paid for air fares for the parties. They flew to Noosa. This was yet another contribution made to the parties’ property by the wife’s parents on her behalf. It is irrelevant that the husband was somewhat lacking in enthusiasm for this holiday and others because the holidays involved additional expense which the husband felt the parties could not afford. They accepted the contributions. The wife’s parents also contributed over the years to the child J’s school fees to the extent of about $12,000.00. In mid 1998, they paid all the expenses for the parties, the children J and C to holiday with them in Bali for a fortnight. This contribution was followed in 2001 by the gift of $30,000.00 made on behalf of the wife. In 2001, all four had their expenses for a Fijian holiday paid for by the wife’s parents and in 2003 the same was done for a holiday in New Caledonia. Each of these acts of generosity was a contribution her parents made on behalf of the wife. In 2004 the wife’s father lent her $9,000.00 in two loans to fund part of the costs of a car for herself and one for the child J. I do not know when the loans were repaid, but presume they must have been because they are not listed as debts.
In 2002 more improvements to the W home were undertaken solely by the husband. He reconfigured its grounds so that the weekly maintenance he had previously undertaken was reduced from about 7 hours to one. In 2003, after his heart condition had been diagnosed the parties engaged tradesmen to do further work on the property at a cost of $15,000.00.
The husband relies on the work he has done in improving and maintaining the family home as contributions which must be recognised by the Court pursuant to s.79. It is likely that he spent a significant part of most weekends making these contributions. He also says he has done work on the wife’s parents’ home and their holiday home. There is no need to itemise the work because he valued it at $25,000.00 altogether. I accept this value because all the work was within the ambit of his trade. I also accept that by doing this work he must have helped maintain and/or create the goodwill which resulted in the wife’s parent’s contributions to the parties. Accordingly, the husband’s efforts to help his parents-in-law by doing trade work must be included in his contributions to the parties’ property.
Part of the husband’s case appears to be a claim which is akin to an allegation that the wife has committed waste by insisting on a more lavish lifestyle to that which the husband would otherwise have had the family leave. He seems to suggest that, because of it, the parties have less to share under s.79 than they would have had if they had lived more modestly. The only factor which could, in the light of this claim, realistically determine whether or not waste has been committed is the current financial situation of the parties. If their current circumstances were straitened it might be possible to characterise the parties’ lifestyle, which was comfortable rather than lavish even though they spent more than average on holidays and cars, as wasteful. But they still have about $700,000.00 net to share between them. They are not well off, but are not impoverished. Had they not separated they would be reasonably comfortable.
I am certainly not satisfied that waste has occurred. Within reason, the way people live, if it is within their means as it was here, is a matter of taste or choice. Their choice, as here, may reduce their standard of living in the event that they eventually live separately. They are nevertheless entitled to make such a choice. In this instance had the parties remained together, they could not be said to have reduced their quality of life to an unreasonable extent by earlier having a higher quality of life. It is not the Court’s function to set narrow standards of ability to properly afford everyday activities. The Court looks at what has occurred, not at what might or should have occurred, if what occurred is within reasonable limits, as it has been here. They could not be expected to conduct their lives in the expectation that they might divorce.
The wife, too, argues that the husband has committed waste by delaying the sale of the W home. As interest on the loan accrued at $2,500.00 per month, approximately, she says the delay on sale she alleges he caused has unreasonably cost the parties a considerable amount of money which has been wasted. The husband says the wife refused to rent the home for three months and, as the parties should have done this, she, by this refusal, committed waste.
The husband and wife had agreed at the time of separation that the wife would continue to live in the W home until the child J was to complete her HSC in November 2005. On 21 October 2005 consent orders were made for its sale. These provided for sale by private treaty within three months after the property was listed for sale by an agent agreed to by the parties within 21 days of the order or, in default of agreement, appointed by the President of the Real Estate Institute of NSW. In default of sale by private treaty, it was to be auctioned. The sale price or auction reserve was to be as agreed between the parties or, in default, as set by a valuer appointed by the President of the Australian Property Institute. A solicitor to be agreed was to act for the parties on the sale.
The parties did not agree on the sale price. The husband originally wanted the property auctioned. The parties then agreed to advertise the property for sale without nominating a sale price, but to seek “expressions of interest”. Nothing in the orders made in October 2005 prevented the parties from attempting to sell the property without nominating a price, but if it did they could, by agreement, consensually depart from the orders by adding to them, as they did. The parties had not, once it was advertised for sale by expression of interest, agreed on a sale price. They did not sell the property by 19 December 2005. They then agreed to list it for sale at $1.25m.
The wife says she only agreed to the course taken to this point because the husband stubbornly wished to take that course. She did not have to agree and could have insisted that the orders made in October be adhered to. Her failure to do so was as much the cause of any breakdown in the scheme set by the orders and any delay, unless sale of it would have been delayed in any event, as the husband’s wish to depart from the orders. By early May 2006, after various agreed price changes and a change of agents by agreement and a decision by the wife to press for sale by auction there had been no sale. I simply cannot understand upon what basis the wife complains. Any loss suffered by delay was the fault of both parties if fault is the correct description of their actions and I think it is not.
Ultimately, the parties did not sell the property until 11 August 2006. The wife had moved to the T property when it was purchased in January 2006. It was sold for $855,000.00 giving the parties $507,000.00 clear. The wife seems to blame the husband for loss due to the ultimate price. I do not understand how she can justify this. Just one offer, made in late 2005 before a sale price had been agreed, had been better than the sale price. It was for $900,000.00 and both parties agreed not to accept it. The wife seem to think that because, from time to time, she wanted to sell the home using a lower listing price than the husband, where in each instance that price was much higher than the best offer and by April 2006 was still $995,000.00, a price recommended by the selling agent, the husband caused loss which would not have occurred if he had done as the order required and/or as she wished. This is a ridiculous assertion which I reject. There is no evidence which I can accept to cause the Court to believe the home could have been sold for more if the parties would have complied with the orders or done as the wife wished despite the $900,000.00 offer. The failure to obtain a higher offer than $900,000.00 should have indicated to the wife what she could afford to borrow to purchase T property and expect the husband to bear in interest on the borrowing.
The property, in theory, could have been let for three months during the interval between the wife’s move to T property and sale. It was not practical to do this because the parties could not know when it would be sold. Even a letting for three months may have inhibited or delayed sale and settlement. One cannot say whether the property could have been let for three months. If it could, there was a risk that the tenants might cause detriment to it. There is no evidence to satisfy me that if the house was let it would assist a sale. I do not accept the husband’s claim that the wife’s refusal to permit a letting was wasteful.
On leaving the former matrimonial home the husband boarded in S. He had met his current wife, Ms M, at work in 2002, but did not go to live with her. She lived with her husband in Sydney. In September 2004 she left her husband and, with her children, moved into a rented unit in Y. While she was living there, in October 2004, the husband borrowed $22,000.00 to buy the furniture that Ms M eventually paid the $7,500.00 in instalments for as the cost of the car she obtained from the husband.
The wife alleges the husband purchased this furniture for Ms M and thereby wasted the $22,000.00. The husband says he put most of the furniture into storage because he intended to rent a two bedroom unit so the child C could have overnight contact with him but was delayed in obtaining such contact. He says he only put a couple of items into Ms M’s then home. Ms M’s evidence was not very supportive of the husband’s case on this.
I find it difficult to accept that he bought furniture and put it into storage, but I do not regard this as important. He and Ms M commenced living in a house in D in April 2005. The husband says he and Ms M did not commence to live in a defacto relationship until about February 2006 but that the furniture he bought was eventually all moved into the house at D. Whether or not this was before the defacto relationship commenced is also irrelevant. The husband bought it interest free for the first four years, so purchasing it too early has not cost the parties any interest. I am quite satisfied that by the time the parties commenced living in a defacto relationship, whenever that may have been, the husband had the use of all the furniture and needed it to rebuild his life. None of the expense on the furniture was wasted.
The wife also claims that the Y unit was leased in the husband’s name, not that of Ms M, and that he paid Ms M’s rent, thereby committing further waste. I believe Ms M, who said she paid her own rent but that the unit was rented in the husband’s name because she had no credit rating. I also accept that while the parties were living in D but not living as a defacto couple they each contributed to the rent and other costs of living there.
A last minute contribution was made by the wife’s parents when they paid off a $3,000.00 portion of her credit card debts at Christmas 2006.
In February 2007 the husband, Ms M and her younger daughter moved to a rented home in T. The husband and Ms M married in April 2007. On 23 July 2007 the husband borrowed $10,000.00 from his parents for ordinary living expenses. Interest is not payable on this loan. It has not been repaid and is a contribution to the parties’ property on the husband’s behalf. It is to be repaid upon the s.79 determination being made. He had, when he first left the former matrimonial home in June 2004, borrowed $15,000.00 from his parents, interest free. $3000.00 of this was repaid from his termination payment in late 2005. Presumably the balance has been repaid. This loan is to be treated as a contribution on behalf of the husband.
The husband was in employment for the whole period from the commencement of cohabitation until 24 October 2005, more than 22 years. He went from earning about $40,000.00 gross per annum with the use of a home to earning $96,490.68 p.a. gross ($1855.59 x 52) in that time. One can make a very rough estimate of his total income over the 22 years by multiplying his average income ($68,245.00) by 22 which comes to about $1.5m. In about 1988 and 1989 he had two jobs so he earned more than this figure, but not much more because the second job was for two or three nights each week for two or three hours each night. Since ceasing his paid work the husband has received a disability pension of about $178.00 per week.
The wife first obtained employment after moving to live with the husband. Before that she was receiving government benefits. She worked fulltime in a shop until January 2005, and reduced her paid working hours because the husband’s children commenced to live with the parties. She continued working part time until a short while before the child J was born in November 1987. She only remained unemployed for three or four months. She then returned to work in the shop part time; in the first four months, each second weekend on both Saturday and Sunday, then with additional days during the week. This regime lasted until mid 1996 just before the child C was born. She then stayed out of the paid work force for about 21 months and in March 1998 commenced as a shop assistant in W. She worked there for a total of 19½ hours each week spread over three days. She continued to work in this way until June 2004 when she commenced working five days each week from 9am to 3pm at a shop. She retained this job until the hearing. In October 2005 she commenced courses in specific aspects of beauty therapy and in February 2006 was able to obtain part time work at a beauty salon from 4.30pm to 8.30pm each second Thursday evening and from 9am to 2pm each third Saturday. From the 1992/3 financial year to the 2004/5 financial year, inclusive, she earned $206,383.00 gross but she had worked consistently with only short breaks when she had babies since near the start of the relationship. She was earning about $395.00 per week from her job at the time of the hearing. She was training in beauty therapy at the time the parties commenced living together and has done further similar training since then. Her training has probably assisted her to obtain and retain employment and has increased her earnings and earning capacity.
The paid work the wife did was in addition to the effort she made as a homemaker and parent. From the start the wife helped care for the husband’s children from his first marriage when he had contact with them. From January 1985 until the father’s daughter left home at about 16 years of age; that is, for nine years and in the father’s son’s case until he reached 18 years, although by the time of the hearing the father’s son was still living with the wife. The wife cared for these children as she cared for her own children. The child J reached 18 years at about the time of the hearing. The child C was then still under 18, so the wife had cared for those two children for 18 years and nine years respectively. The wife has done all the things usually done to care for children. The father’s son and daughter did not spend a lot of time with their natural mother although they usually spent four weeks with her each Christmas. She has lived in Northern NSW since about 1985. The wife’s work hours were typically tailored to suit the children’s needs, including the father’s son and daughter.
The husband alleges that, until separation, he and the wife put in about equal time and effort in caring for the children and that even after separation, until March 2005, he would spend from Friday afternoon until Saturday evening at the former matrimonial home so he could care for the child C and meet both of the younger girls’ needs to have access to their father at home. I do not accept the husband’s claim about the period before separation, but I do not think it matters much. The overall evidence indicates, and I accept, that the parties each diligently spent their time working, homemaking or parenting until separation. As might be expected, they usually spent the holidays they had with the children. There is not much point in detailing their specific efforts in the circumstances, except to say that before he went to work, after he arrived home and on weekends when he was not improving or maintaining the home or making contributions by improving his in-laws property, the husband often took the care of the children over from the wife, but this was to allow the wife to do other household tasks or to go to work. Both parties had little leisure time. After separation until November 2007, when only the child C needed significant effort for her care, the wife provided most of it but had help from her mother. That help must be considered to have been provided on the wife’s behalf, so does not need to be specified because, when the child C was not with the husband either the wife or her mother cared for her.
In June 2005 the husband commenced having overnight contact on one weekend in three with the child C in his home. Before this he was having less contact with C. He had become a little distanced from the child J by this time. She mistakenly blamed him for the parties’ separation and was, in any event, studying for the HSC. He would travel from Sydney where he lived to W to see the children and care for them from 9.30am to 6.00pm on one day of each other weekend. In May 2005 the husband commenced having contact with C at his home from after school on Friday to 6.00pm on Sunday on one weekend in three and from 9.30am to 6.00pm on Saturday on one other weekend in three. He would also have her from after school each Tuesday to about 7.00pm. In each instance he had to drive from Sydney to T to collect her and had to return her to T too. Sometimes when he was working on the South Coast he would spend additional evenings with the child C. In the first school holidays of 2006 the husband commenced spending half of the school holidays and having time on special days caring for C. On 27 November 2007 final orders were made for C to spend equal time with each parent during school term and for the parties to share parental responsibility equally. On 11 February 2008 the parties agreed on consent orders for the child C’s future care during school holidays and on special days. Her time is now spent equally with each party.

As a result of separation the husband became liable to pay child support. He has always discharged this obligation appropriately. It cannot be said that because some of the payments were low they were less than appropriate because they were based on the statutory formula and his income. In any event, sufficient or insufficient payment would not alter the sum available for division although it may affect which party holds part of the assets.
When the parties’ efforts from employment after cohabitation, from parenting to date and from homemaking during the relationship are compared, I think it is quite clear that they contributed in these ways equally. The difference in contribution, if any, arises from the contributions made by others on behalf of one or either of the parties, by the husband’s pre-cohabitation employment and the other contributions he made when the relationship started.
The wife’s parents have made two significant gifts, the $25,000.00 in 1996 and $30,000.00 in 2001. The $89,000.00 had been interest free for more than 10 years until the hearing, the W holiday home was rent and utility expense free for 14 months and holidays were often subsidised and at least one overseas holiday was fully paid for. The wife’s parents paid the child J’s school fees, gave her $3000.00 in Christmas 2006 and lent her $9000.00. The interest bearing fund to provide for the purchase of T property, so far I have held it is fair to regard it as a contribution, is in my opinion only of modest significance because although it had not been repaid for before the hearing, the orders will give the wife the capacity to repay it. It ultimately should cost the wife’s parents nothing because the Court’s orders will enable the wife to meet all costs associated with that loan so far as I can regard those costs as reasonable as against the husband. The $5117.00 provided interest free at the same time is a modest contribution. The wife’s mother’s help, especially after separation in caring for the children, particularly C, has already been credited to the wife.
The husband brought his trade qualifications and experience as well as his chose-in-action into the relationship. I do not regard him as bringing the termination pay into it because that arose entirely from his employment with AGL and that commenced after the commencement of the relationship. I have already given him credit for this. All his current superannuation entitlement came from $60,000.00 of his termination pay. I have credited his termination pay to his efforts in employment. However, the husband brought some very substantial assets into the relationship. They were worth, if the land is attributed a value at its purchase price and the chose-in-action is attributed a value at the sum eventually received, about $94,000.00 at 1983 values. The wife had $2000.00 in savings and a car worth about $5000.00 and had done some training as a beautician. The husband’s parents made relatively minor contributions with their interest free loans of $15,000.00 in 2004 and $10,000.00 in 2007.
After taking the date the contributions were made and the relative values at each relevant time and weighing the periods of interest free loans, I am satisfied that the husband contributed to a significantly greater degree from what he brought into the relationship or was contributed on his behalf than the wife contributed from what she brought into the relationship or was contributed for her. My conclusion is that the husband’s total contributions of all types have exceeded the wife’s total contributions of all types by 6% making the husband’s contribution 53% and that of the wife 47% to the $703,413.00 in net value of property which is available for division.
The wife is in good health and is still employed as a shop assistant and beautician. She has held her job for many years, so it is probably secure. As she was aged nearly 48 years at the time of the hearing, she is likely to have more than ten income earning years in front of her. She was earning a low income, $497.00 gross, when she made her Statement of Financial Circumstances. However, she was working only from 9am to 3pm, five days a week because she had the whole of C’s weekday care. In November 2007 that care became equally shared with the husband week about so she would not have been as inhibited in her earning capacity after this. C will soon have reached an age when she may safely be allowed to return home from school before the wife gets home from work. She was aged nearly 12 years when the hearing ended. I regard the wife as likely to have had a higher earning capacity than $479.00 by soon after the end of the hearing.
The husband’s health is quite poor. I regard him as having very little, if any, ability to do paid work. At best, he might be able to do a little casual work from time to time for no more than a few hours at a time. He could not work as a tradesman because it is too taxing and he has not done such work for many years. However, in his state of health and state of mind and in view of his grant of invalid status for social security payment purposes, I regard it as quite reasonable for him to choose not to take any employment. He said, and I accept, that he believes on valid grounds that he might die at any time. In those circumstances, his time is precious to him; too precious to waste it doing things he does not wish to do. I shall regard him as having, for practical purposes, no earning capacity from employment. Professor R’s stance that he can do a little work is more theoretical than realistic.
Currently the husband receives a pension of $178.00 per week gross. He will, once these proceedings are completed, need to buy a home suitable for himself, his wife and the child C. He is quite unlikely to have any funds left after such a purchase, so will not earn any interest and will probably have to borrow at interest to obtain an appropriate home. His wife was aged about 48 years at the time of the hearing. She had been employed until late 2006 at AGL but ceased working because her employer relocated and she was about to be fired. She received no termination compensation. It was not until April 2007 that she moved to the South Coast with the husband. At the time of hearing she was receiving unemployment and other benefits of $310.00 per week gross. She had been earning $685.00 gross per week. She intended to return to the paid workforce at the time of hearing, had been looking for work without success and believed she would have difficulty finding an appropriate job on the South Coast. She is an impressive person who seems to be straightforward and honest, I think she will have soon found work, although I doubt that she would have continued or shall continue to earn as much as she had been paid by AGL. The South Coast is not known for its pool of well paid work. There is no suggestion that she has any significant assets other than the car she obtained from the husband. I accept her evidence that when she was living with her first husband it was always his intention to return to the Philippines, their country of origin, so they had always rented a home and furniture and she had no significant assets. The husband will nevertheless have his wife to share the burden of significant elements in their cost of living. She is likely to be able to work for ten years or more. She appears to be in good health.
Both parties will have to provide about equally for the child C and will have her care to an equal degree. Neither will have to pay child support for her. The home the wife has will be more than adequate for C’s needs. The husband will not be able to afford such an expensive home but will need to expend all or most of the liquid assets he receives from these proceedings on a home and is likely to have to borrow to find a suitable one. Neither party can afford to maintain the lifestyle they could previously afford.
The wife is likely to continue with her current lifestyle. If the money she or the parties have borrowed is ordered to be repaid to her parents, I have little doubt that it will, to a substantial degree, be returned to the wife. I do not think that the loan on T property is likely to be continued as an interest only loan. The loan is likely to be converted into an ordinary housing loan with the home itself being security for the loan backed by a guarantee by the wife’s parents. Other moneys paid to the wife’s parents to discharge any loan are likely to be use to reduced the principal on the housing loan. If the loans to the wife’s parents are not repaid pursuant to orders of the Court, I find that the wife will not have to pay them. Her oral evidence made it reasonably clear that this is what she believes will occur. She has good grounds for that belief. She said she will repay the loans when she can afford to do so. She is never likely to be able to do so, or at least, is not in the foreseeable future likely to do so.
Once orders are made the parties will settle in the new way of life these will permit. The financial situation, as it existed at the time of hearing for each party in respect of their ability to afford their living costs are irrelevant because the orders will change the situation so much. In future, I expect the husband to be able, with his wife, to afford to meet the costs of the lifestyle he chooses or they choose. I expect the wife to continue to live beyond her means in that she is highly likely to retain the T home and maintain the subsidised lifestyle which she has been used to since separation and before. I do not regard it as just to make orders which require the husband to, in effect, subsidise it because the wife cannot afford it. The parties simply cannot afford to maintain their pre-separation lifestyle. In considering what orders I regard it as just to make, I shall act on the assumption that the division of property should, to do justice between the parties and be equitable in the circumstances, provide them with much the same quality of life as they currently expect to have, but by accounting for what is the reality of the situation, namely that the husband may have a curtailed lifespan but may not, that he has the opportunity to share living costs with his wife and that the wife will continue to receive the financial subsidies as she previously has had from her parents whereas the husband should not have to contribute to her lifestyle more than is reasonable in view of his situation.
The wife submitted that there should be no adjustment under s.75(2) but that she should receive 60% of the pool because of her contributions to that extent. The wife seeks a splitting order over the husband’s superannuation to permit this division. I have found the wife’s contribution to be 47 % not 60%. To achieve her claim I would have to make a s.75(2) adjustment of 13% in her favour. This is out of the range which warrants consideration.
The husband’s solicitor submitted that the wife should pay the husband $130,000.00 plus the proceeds of sale of the former matrimonial home, which amounted to $168,546.00 plus interest at the time i.e. $298,546.00 plus the interest and that otherwise the parties retain the property held in their name or under their control but that the wife indemnify the husband for debts claimed from him by the wife’s parents and be responsible for such debts as she owes them on her own. This is an unrealistic claim. If it or anything like it were to be granted, it would not be just to the wife. No proper s.75(2) adjustment would bring the husband’s share to the level sought.
A consideration in relation to the parties’ commitments is that of costs. Consideration of the costs liabilities of each party is quite difficult and risky because, although the major thrust of the Act is to avoid costs orders between parties, I cannot say whether or not one will be made. I also cannot, except pursuant to s.117 of the Act, make one party directly responsible for any part of the other’s costs. Accordingly, I should not give costs obligations much weight even though they should not be ignored because I have converted the husband’s paid costs into notional property available for division and must recognise that there are substantial debts in the form of unpaid costs. In the case of the wife, the costs have been paid to her lawyers by her parents who, in doing so, lent her the amount paid. The wife’s overall costs are likely to be about $112,000.00 or a little more and those of the husband are likely to be about $20,000.00 or a little less. One cannot say that the husband’s costs are other than perfectly reasonable. By comparison and having seen what has been relied on by the parties and knowing the issues, one must question the reasonability of the wife’s costs. They certainly should not, except under s.117, be visited on the husband pursuant to s.75(2) and s.79.
A weighing of all the above s. 75(2) considerations in light of the essential submissions of the parties in respect of the parties needs, which I regard as the only significant ones, I conclude that there should be a 2% departure in the husband’s favour from their respective contributions if a just and equitable division of the property of the parties is to be achieved. This is because the wife will probably not have to bear her debts to her parents and will probably benefit from the husband’s debts to them.
To divide $703,413.00 in the proportion of 55% to 45% between the husband and wife, the husband should receive $386,877.00 and the wife should receive $316,535.00. If, from the $144,546.00 plus interest which is held in trust pending the outcome of these proceedings, the two joint debts are paid, there is sufficient still available for division between the parties to give each their net entitlement. As the husband already holds property and notional property worth $380,309.00 if he receives $6,568.00 of the net joint assets this will give him $386,877.00. The balance of the $46,610.00, if paid to the wife will provide the $40,041.00 which the wife should have to increase her share from the net assets worth $276,494.00 which she holds to the $316,535.00 to which she is entitled. The interest on the moneys held in trust can be divided between the parties in the proportion to which they are entitled to all the net property i.e. 55% to the husband and 45% to the wife. There is no need to make a splitting order. I shall make orders in accordance with the above and declare that neither party has any interest in the property or notional property or liability for the debts attributed in paragraph 40 of this judgment to the other party.
It is ordered:
(1)That within on month the parties shall from the moneys including interest held on their behalf in the controlled moneys account in the name of the wife’s solicitor pending these orders pay:
(a)to GE Creditline and Network Finance the sum of $8500.00
(b)to the wife’s parents the sum of $89,426.00.
(c)to the husband the sum of $6,568.00
(d)to the wife the sum of $40,041.00
(e)to the husband 55% of the remainder.
(f)to the wife the remainder being 45% of the balance after payment in performance of (a), (b), (c) and (d).
(2) It is hereby declared that neither party has any interest in the property or notional property or liability for the debts of the other party specified in paragraph 40 of the judgment of the Court published on 28 November 2009 in these proceedings.
(3)Costs are reserved.

I certify that the preceding ninety one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate:

Date: 28 November 2008

[2008] FamCA 1030

28 November 2008

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Costs

Remedies

Constructive Trust