BRONSON & BRONSON
[2012] FamCA 244
•23 April 2012
FAMILY COURT OF AUSTRALIA
| BRONSON & BRONSON | [2012] FamCA 244 |
| FAMILY LAW - PROPERTY – Where the Wife seeks a 55% final division in her favour – Where the Husband seeks a range of 55% to 70% final division in his favour FAMILY LAW - SPOUSAL MAINTENANCE – Where the Wife has substantial health problems and is commercially unemployable – Where the Husband is 71 years of age and plans to retire in 2012 |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Bevan & Bevan (1995) FLC 92-600 Cerini & Cerini [1998] FamCA 143 Hickey & Hickey (2003) FLC 93-143 In the Marriage of Aroney (1979) 5 Fam LR 535 Norbis v Norbis (1986) FLC 91-712 Nutting & Nutting (1978) FLC 90-410 Omacini & Omacini (2005) FLC 93-218 Rosati & Rosati (1998) FLC 92-804 Saxena & Saxena (2006) FLC 93-268 |
| APPLICANT: | Mr Bronson |
| RESPONDENT: | Ms Bronson |
| FILE NUMBER: | SYC | 7875 | of | 2009 |
| DATE DELIVERED: | 23 April 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 22-23 November 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Cairns |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan Kelly |
| COUNSEL FOR THE RESPONDENT: | Mr Dura |
| SOLICITOR FOR THE RESPONDENT: | Dimocks Family Lawyers |
Orders
The parties forthwith do all acts and things reasonably required to cause the following amounts to be disbursed from any Controlled Monies Accounts held with the National Australia Bank or any other bank on account of the parties:
(a) the sum of $615,854.45 to the Wife;
(b) the balance to the Husband.
Within 28 days of these Orders the Husband transfer to the Wife all his right, title and interest in and to:
(a) 14 of the 30 woodlots identified as allotment … dated … December 1999 for Lot numbers … – … in Annexure 27 to the Husband’s affidavit filed 20 June 2011 (“Annexure 27”);
(b) 5 of the 12 woodlots identified as allotment number … dated … February 2002 for Lot numbers … – … in Annexure 27;
(c) 9 of the 19 woodlots identified as allotment … dated … February 2003 for Lot numbers … – … in Annexure 27.
As against the Husband, the Wife shall be entitled to retain as the sole and beneficial owner those items of furniture and chattels and artworks identified in Exhibit 3, a copy of which is attached to these Orders, against which the name “[Ms Bronson]” appears.
As against the Wife, the Husband shall be entitled to retain as the sole and beneficial owner those items of furniture and chattels and artworks identified in Exhibit 3, a copy of which is attached to these Orders, against which the name “[Mr Bronson]” appears.
Within 28 days of these Orders the Wife make available for collection by the Husband or his nominee all of those items so identified as the property of the Husband.
That other than as expressly provided otherwise in these Orders, as against the Wife, the Husband shall be entitled to retain the sole and beneficial ownership of:
(a) His share of the Controlled Monies Accounts as provided for in paragraph 1 of these Orders;
(b) His shareholdings in Mr Bronson Pty Ltd;
(c) His rental bond;
(d) His personal effects including the contents presently in his possession;
(e) The interim payment he received from the sale proceeds of … M Street, Suburb A, in the amount of $129,612.00;
(f) His interest in the Mr Bronson Family Trust;
(g) His paid legal fees;
(h) His Citibank Visa Credit Card debt;
(i) His ANZ Visa Platinum and Amex Platinum debt;
(j) His interest in the Mr Bronson Superannuation Fund; and
(k) The furniture, chattels and artworks referred to in paragraph 4 of these Orders.
Other than as expressly provided otherwise in these Orders, as against the Husband, the Wife shall be entitled to retain the sole and beneficial ownership of:
(a) Her share of the Controlled Monies Accounts as provided for in paragraph 1 of these Orders;
(b) Her personal effects including the contents presently in her possession;
(c) Her rental bond;
(d) Her jewellery;
(e) The interim payment she received from the sale proceeds of … M Street, Suburb A, in the amount of $100,000.00;
(f) Her paid legal fees;
(g) The balance of the two payments of $50,000.00 she received, being $77,796.00;
(h) Her Visa Platinum credit card debt; and
(i) The furniture, chattels and artworks referred to in paragraph 4 of these Orders.
The Husband indemnify the Wife in respect of all liability whatsoever which the Wife may have whether now or in the future and whether alone, jointly and/or severally with the Husband and/or any other person and/or the Mr Bronson Family Trust to any creditor of the Trust pursuant to any guarantee and/or indemnity howsoever arising and without limiting the generality of the foregoing, pursuant to any guarantee given by the Wife whether alone, jointly and/or severally to the National Australia Bank Limited in respect of any loan or other facility provided to O Pty Limited and C Pty Limited.
Other than expressly provided in these Orders, the Husband and the Wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control including, but not limited to, money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects.
Each party shall indemnify the other in relation to any claim arising from debts in each party’s name respectively, and each shall release the other from all debts arising from one to the other.
SPOUSAL MAINTENANCE
Commencing within seven days of the date of these Orders and until 28 December 2012, the Husband shall pay directly to the Wife for her maintenance the sum of $1,000.00 per week, such payment to be made monthly by direct deposit into the Wife’s nominated bank account.
All outstanding applications be otherwise dismissed.
LIST OF FURNITURE
CONTAINED
… M STREET, SUBURB A
ROOM FURNITURE APPROX. Husband/ TO BE
COST Wife SOLD
| LOUNGE ROOM | 2 Lounge Chairs | $ | 500.00 | WIFE |
| 2 Side Tables | $ | 200.00 | WIFE | |
| 1 Hall Table | $ | 2,000.00 | HUSBAND | |
| 1 TV Cabinet | $ | 1,000.00 | WIFE | |
| 1 Plasma TV | $ | 2,000.00 | WIFE | |
| 1 Coffee Table | $ | 500.00 | WIFE | |
| DINING ROOM | 1 Antique Table | $ | 2,000.00 | WIFE |
| 6 Antique Chairs | $ | 2,000.00 | WIFE | |
| 1 Antique Sideboard | $ | 2,000.00 | WIFE | |
| SITTING ROOM | 1 Antique Bookcase | $ | 2,000.00 | WIFE |
| 2 Coffee Tables | $ | 500.00 | WIFE | |
| 1 Antique Lounge | $ | 2,000.00 | WIFE | |
| 2 Chairs | $ | 500.00 | HUSBAND | |
| KITCHEN | 1 Refrigerator | $ | 1,000.00 | WIFE |
| 1 Microwave | $ | 200.00 | WIFE | |
| STUDY | 1 Antique Desk | $ | 2.000.00 | HUSBAND |
| 1 Bookcase | $ | 500.00 | HUSBAND | |
| 1 Side Table | $ | 1,000.00 | WIFE | |
| 1 Chesterfield Lounge Chair | $ | 500.00 | WIFE | |
| DOWNSTAIRS SUN ROOM | 1 Mirror | $ | 500.00 | HUSBAND |
| 1 Lounge | $ | 100.00 | WIFE | |
| 1 Hall Table | $ | 1,000.00 | WIFE | |
| 2 Side Tables | $ | 200.00 | HUSBAND | |
| MAIN BEDROOM | 1 King Size Bed | $ | 1,000.00 | WIFE |
| 2 Side Tables | $ | 200.00 | WIFE | |
| 1Antique Dressing Table | $ | 2,000.00 | WIFE | |
| 1 Antique Lounge | $ | 1,000.00 | WIFE | |
| 1 Mirror | $ | 500.00 | WIFE | |
| 1 Hall Table | $ | 1,000.00 | WIFE | |
| 1 Mirror | $ | 500.00 | WIFE |
ROOM FURNITURE APPROX. HUSBAND/ TO BE
COST WIFE SOLD
| OUTDOORS | 1 Table and 6 Chairs | $ | 1,000.00 | WIFE |
| 1 Table and 2 Chairs | $ | 300.00 | WIFE | |
| 1 Barbecue | $ | 500.00 | WIFE |
ROOM PAINTINGS APPROX. HUSBAND/ TO BE COST WIFE SOLD
| LOUNGE ROOM | 1 Artist 1 | $ | 7,000.00 | HUSBAND |
| 1 Artist 2 (?) Abstract | $ | 2,000.00 | WIFE | |
| 2 Small Prints | $ | 1,000.00 | HUSBAND | |
| SITTING ROOM | 1 Artist 3 Lithograph | $ | 1,500.00 | HUSBAND |
| 1 Artist 3 Lithograph | $ | 1,000.00 | HUSBAND | |
| DINING ROOM | 2 English Landscapes | $ | 1,000.00 | HUSBAND |
| 2 Prints (Flowers & Landscape) | $ | 1,000.00 | WIFE | |
| STAIRCASE WALL | 1 Large Flowers | $ | 500.00 | WIFE |
| 1 Artist 4 Landscape | $ | 1,500.00 | HUSBAND | |
| 2 Landscapes | $ | 1,000.00 | WIFE | |
| STUDY | 1 … Scene | $ | 500.00 | WIFE |
| 1 Watercolour of Flowers | $ | 500.00 | HUSBAND | |
| DOWNSTAIRS SUNROOM | 1 Original Landscape | $ | 5,000.00 | HUSBAND |
| 2 Prints | $ | 500.00 | WIFE | |
| MAIN BEDROOM | 4 Prints (Flowers) | $ | 2,000.00 | WIFE |
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bronson & Bronson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: SYC7875 of 2009
| Mr Bronson |
Applicant
And
| Ms Bronson |
Respondent
REASONS FOR JUDGMENT
Mr Bronson (“the Husband”), was born in 1940 and is thus now 71 years of age. Ms Bronson, (“the Wife”), was born in 1952, and is thus now 59 years of age.
The parties commenced cohabitation on 1 May 1991. The Husband was then 50 years of age and the Wife was 38.
About ten years after they commenced cohabitation, the parties married in April 2001, and they finally separated on 6 September 2009. They divorced in December 2010. There are no children of the marriage, although the Husband has three adult children from a previous marriage.
Thus, the period of cohabitation between the parties was just over 18 years.
By application filed on 23 December 2009, the Husband sought Orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) to alter the interests of himself and the Wife in their property.
By the conclusion of the trial of those proceedings, the Husband sought Orders having the effect of dividing the property pool contended for by him (including both non-superannuation and superannuation assets) which approximated $1,800,000.00 on a 70%/30% basis in favour of the Husband, on his best case, and on a worst case scenario, as explained by his Counsel, an outcome of 55%/45% in favour of the Husband.
The Husband contended that the Wife’s contribution-based entitlement was in the range of 20% to 30% with the range for a s 75(2) adjustment in favour of the Wife being 10% to 15%, to arrive at an overall range of an outcome to the Wife of 30% to 45% of the combined pool.
The Wife sought Orders having the effect of dividing the property pool for which she contended (like the Husband combining both non-superannuation assets with superannuation to arrive at a pool figure of approximately $2,000,000.00) on a 55% / 45% apportionment in favour of the Wife.
The Wife contended that her contribution-based entitlement was not less than 40% and, whilst noting 10% as a minimum adjustment, primarily contended for a 15% adjustment for s 75(2) factors for an overall outcome of a 55% apportionment of the combined pool in favour of the Wife.
In addition to that property adjustment, the Wife also sought Orders for ongoing spousal maintenance for either $1,500.00 per week or $6,500.00 per month. In respect of the Wife’s spousal maintenance claim, it was contended on behalf of the Husband that if the property outcome resulted in the Wife receiving as much as 45% of the pool, no Orders for spousal maintenance ought be made. If the outcome was 30% to the Wife, it was acknowledged on behalf of the Husband that some Order for spousal maintenance for a “short period” may be justified, but it was not accepted that the rate of maintenance ought be paid at the level contended for on behalf of the Wife.
Whilst there are issues between the parties about the “pool” of assets to be considered, and other issues to be resolved, the central issues as to the parties’ competing approaches to the overall outcome on property determination are identified by reference to essential contentions they, respectively, advanced.
With respect to the Husband, the essence of the case he advanced may be paraphrased and summarised as follows:
a)The Husband introduced significant capital at the outset of the relationship, while the Wife had no capital of significance;
b)The Husband contributed gifts from his parents or inherited capital, in one form or another, during the relationship to which the Wife made no contribution;
c)The Husband had secured his earning capacity as a professional and partner in a major firm well before the relationship commenced, and he exercised that earning capacity throughout the relationship, and in the post-separation period, whilst the Wife has not undertaken any external employment since the relationship commenced;
d)By reason of the foregoing, “all but 100%” of the property pool under consideration is the product of financial contributions by the Husband;
e)Whilst the Wife made non-financial contributions over an admittedly long period of cohabitation commencing on 1 May 1991 and ending with final separation on 6 September 2009 (a period of about eighteen years), the Husband made equivalent non-financial contributions; and the weight to be given to these contributions is to be considered in the context that there were no children of the marriage and external labour was employed and funded by the Husband from his capital and income (as further discussed below);
f)The s 75(2) factors favour some adjustment to the Wife, but an adjustment no greater than 10% to 15%.
With respect to the Wife, the essence of the case she advanced may be paraphrased and summarised as follows:
a)The Husband’s claim as to the amount of initial capital he contributed to the relationship is over-stated by him and is not made out on the evidence;
b)Whilst the Husband made greater financial contributions overall, including initial capital and capital contributed via his family, that factor is tempered by the weight to be given to the lengthy period of the parties’ cohabitation and the non-financial contributions of the Wife in that context;
c)The Wife made non-financial contributions in assisting with improvements made to the properties owned by the parties from time to time and the Husband’s professional business and was a source of support, emotional and otherwise, throughout the relationship;
d)Even accepting that the Husband contributed substantial capital, allowing a 70%/30% apportionment in his favour for contribution-based entitlement as contended for by the Husband produces a 40% disparity, equating to $800,000.00 on the combined pool, and that would essentially preserve the Husband’s claimed capital contributions in the context of this lengthy relationship and would thus not be just and equitable;
e)A substantial s 75(2) adjustment is warranted in circumstances where the Wife has been out of the workforce for more than 20 years and the unchallenged medical evidence establishes that the Wife is commercially unemployable and has health issues, as compared to the circumstances of the Husband;
f)Aside from his own income, the Husband has the benefit of his re-partnering with, and marriage to, Ms B, and there is lack of disclosure on the part of the Husband as to the income and financial resources of his current wife.
Commencement of Cohabitation
I accept the Husband’s evidence that his first marriage to Ms D ended on or about 1 January 1990 after 25 years, and that those parties subsequently divorced.[1] I note that there are three now adult children from that marriage, being Mr E, now aged about 42 years; Mr F, now aged about 39 years, and Ms Ms G, now aged about 35 years.
[1] Paragraph 6 of Husband’s affidavit filed 20 June 2011.
There is substantial dispute between the parties as to the date of the commencement of their cohabitation. The Husband contends that although the parties had a sexual relationship prior to his leaving his first wife in or around 1 January 1990, and although the Wife spent, “…many days…”[2] at the Husband’s rented accommodation at P Street in Suburb A from 1 January 1990 until 1 May 1991, the parties did not commence cohabitation until the Husband commenced to occupy a property at H Street, Suburb A, in New South Wales on 1 May 1991. The Husband insists that during the period of their relationship preceding 1 May 1991, the Wife retained her own accommodation in Suburb J, New South Wales.
[2] See Husband’s affidavit filed 20 June 2011.
The Wife, on the other hand, asserts that the parties commenced living together in late 1989 in the Husband’s rented accommodation in P Street, Suburb A, and that this continued for eight months. The Wife further contends that she then returned to live in an apartment in Suburb J for four months before the parties commenced living together again then in the H Street property, “…in late 1990.”[3]
[3] Paragraph 16 of Wife’s affidavit filed 20 June 2011.
I prefer the Husband’s version of events in this respect. For reasons which become evident further below, I found the Wife to be unreliable as a witness, particularly as regarded specific details and dates. The Husband, by contrast, presented as a generally reliable witness, despite acknowledging during the course of his cross-examination some errors in his Financial Statements. Therefore, having regard also to the Wife’s acknowledgement that she did not cohabit with the Husband for four months preceding their moving in together at H Street; and the Husband’s specific affidavit evidence as to when the H Street property was purchased.[4] I find the Husband’s version of the parties spending significant time together, but not living together, prior to 1 May 1991 is more likely.
[4] Paragraphs 33 and 35 of the Husband’s affidavit filed 20 June 2011 and annexures 5, 12 and 13.
Both parties acknowledge that the Wife had ceased external paid employment prior to May 1991, and that she has not worked in such employment at any time thereafter. It is agreed that the Wife’s health issues played at least a part in her permanent ceasing of paid employment. It is also accepted by both parties that the Husband thus provided the vast majority of the parties’ income throughout the relationship, while the Wife’s contributions were essentially non-financial.
Approach to Property Settlement and Spousal Maintenance
It is now well-settled that the preferred approach to the determination of an Application brought pursuant to s 79 involves four inter-related steps.[5] First, I should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c), and determine the contribution-based entitlements of the parties which can be expressed as a percentage of the net value of the properties of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g) (“the other factors”), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant, and determine the adjustment, if any, that should be made to the contribution-based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determinations and resolve what Order is just and equitable in all the circumstances of the case.
[5] Hickey & Hickey (2003) FLC 93-143.
In many cases it is legitimate for the Court to adopt a global approach to the assessment of the overall entitlement of parties to property which involves the division of the parties’ assets on a global view of the total assets. Alternatively, it may, in the circumstances of the case under consideration, be legitimate to adopt an asset-by-asset approach involving a determination of the parties’ interests in individual items of property.[6] There may also be circumstances dictating a “two pools” approach where non-superannuation assets and superannuation assets receive separate treatment.
[6] Norbis v Norbis (1986) FLC 91-712.
In my view, a just and equitable outcome is achieved in this case by taking a global approach to a combined pool of assets including both non-superannuation assets and superannuation having regard to the length of the relationship and the ages of both parties and I note that this is the approach contended for by both of them.
In circumstances where I am to consider both Orders for property settlement and the Wife’s additional application for spousal maintenance, I ought determine the property Orders before considering maintenance as the relevant financial positions of the parties need to be reassessed in light of the effect of property Orders before maintenance is considered.[7]
[7] Albany & Albany (1980) FLC 90-905; Pastrikos & Pastrikos (1980) FLC 90-897; Anast & Anastropoulos (1982) FLC 91-201; Clauson & Clauson (1995) FLC 92-595; Bevan & Bevan (1995) FLC 92-600.
Step 1 – Identification and Valuation of Assets, Liabilities and Financial Resources
Whilst the Balance Sheet dated 22 November 2011 handed up at the outset of the trial reflected the respective positions of the parties then, it was confirmed in the course of the respective submissions of Counsel (Mr Dura for the Wife and Mr Cairns for the Husband) at the conclusion of evidence that each party was, in light of the evidence at trial, prepared to make concessions which resolved some areas of dispute which initially appeared in the Balance Sheet.
On behalf of the Husband, Mr Cairns acknowledged in his final submissions:
a)That the Husband’s shareholding in Mr Bronson Pty Ltd (in respect of the Husband’s professional business) ought be treated as having a nil value (Item 2) and that the claim by the Husband for liabilities asserted to be referable to that interest (Item 20) was abandoned, consistent with the evidence of the single expert accountant, Mr I (affidavit filed 16 November 2011), and the position of the Wife;
b)That the interim payment from the sale proceeds of the former matrimonial home received by the Husband as partial property settlement was in the amount contended for by the Wife (Item 11);
c)(Ultimately) in respect of the Husband’s interest in the Mr Bronson Family Trust (against the background of what is contained in the single expert report) that absent evidence as to winding up or liquidation of the relevant entities, the value of that interest should be taken at $392,829.00 as contended for by the Wife based upon the evidence of the single expert;
d)That the claimed liability in Item 19 had in fact been paid and was no longer asserted.
On behalf of the Wife, Mr Dura acknowledged in his final submissions that the Husband’s claimed liabilities on his Citibank Visa Credit Card and his ANZ Visa Platinum and AMEX Platinum Credit Cards (Items 16 and 17) were properly to be taken into account as liabilities.
Both parties, via their respective Counsel, also acknowledged in their respective final submissions that Item 7 in the Balance Sheet (household contents in Husband’s possession) could be removed as a Balance Sheet item, with that item being dealt with otherwise, as discussed further below.
That left the remaining issues about the “pool” to be determined, as follows:
a)The value to be taken for the Husband’s investments in S woodlots;
b)Whether the Wife’s credit card liabilities ought be included;
c)The treatment of each of two payments of $50,000.00 made to the Wife on 24 September 2009 and 26 October 2009 respectively; the Husband contending that these were acknowledged at the time by the Wife as partial property settlement and should be added back on that basis and the Wife contending that these payments ought be characterised as spousal maintenance;
d)The value of the Husband’s benefits in the Mr Bronson Superannuation Fund.
Husband’s shareholding in Mr Bronson Pty Ltd
This is the entity the Husband uses to conduct his professional business. In my view, the Husband’s ultimate concession to adopt the approach taken by the Wife was properly made.
In his Financial Statement filed on 22 November 2011, the Husband provided his estimate of value of his professional business (his 100% share in Mr Bronson Pty Ltd) of $35,000.00, but then attributed the estimate of $59,271.00 as liabilities with respect to the business. Both of these amounts were included in the Husband’s column in the Balance Sheet dated 22 November 2011.
However, pursuant to Division 15 of the Family Law Rules 2004 (Cth), the parties appointed Mr I, chartered accountant, as the single expert to prepare a number of valuations including a valuation of the Husband’s shareholding in Mr Bronson Pty Ltd. Mr I’s affidavit attaching his report was filed on 16 November 2011.
In his report dated 11 August 2011, the single expert concluded that the Husband’s shareholding in Mr Bronson Pty Ltd was valued at nil. Whilst at page 6 of his report, the single expert raises prospects about the goodwill of the business being saleable, that page of the single expert’s report sets out the detail as to the valuation approach taken by the single expert. There, the single expert records that in the year ended 30 June 2010, the balance sheet of the company shows trade debtors of $30,974.00, and that work in progress is not recorded as an asset.
Against that background, the single expert recorded the advice from the Husband’s solicitors that, “[The Husband] hopes to repay the overdraft to the ANZ Bank after he retires from Debtors and work-in-progress outstanding at the date of retirement,” and, “…any deficiency of assets as compared to liabilities of the company at the date of retirement will have to be personally met by [the Husband].”
The affidavit and report of the single expert were admitted into evidence without either party requiring the single expert to be available for cross-examination and he was not cross-examined before me.
The Wife adopted the approach consistent with the single expert evidence of ascribing a nil value to the Husband’s shareholding in Mr Bronson Pty Ltd without including any liabilities.
In the circumstances, I find the Wife’s approach to be correct, consistent as it is with the unchallenged evidence of the single expert retained to, inter alia, value the shareholding which is, as noted, the position the Husband ultimately reached.
Husband’s interest in S Woodlots
In circumstances where this Court must make Orders which are just and equitable, the evidence as to the Husband’s interest in “[S Woodlots]” and the value to be accounted for in respect of that interest is troubling.
Annexure “27” to the Husband’s affidavit filed 20 June 2011 reflects the Husband’s investment, from 29 June 1999 until 28 February 2003, in a total of 64 woodlots for a total cost (excluding GST) of $192,000.00. At paragraph 80 of his affidavit filed 20 June 2011, the Husband deposes to transferring his initial parcel of woodlots purchased for $9,000.00 to his superannuation fund. I note in passing that the single expert accountant adopted, “…the 30 June 2010 value of $5,313.00…” for the woodlots held in the superannuation fund in reaching a value for the Husband’s member benefit.
Commencing at paragraph 93 of his affidavit filed 20 June 2011, up to and including paragraph 96 of that affidavit, the Husband refers to his purchase of further woodlots from S Limited. He attaches as part of the Annexure marked “27” to that affidavit a copy of a letter dated 5 May 2005 from S Limited. However, Annexure “27” also includes a scheme proposal whereby it was proposed that investors in projects between 1998 and 2003 (in relation to “plantations”) were offered the opportunity to exchange woodlots for shares in the company.
Whilst there is no evidence before me that the Husband took up that offer (and I infer he did not) as was raised in the trial and in particular during submissions, the S group of companies went into administration pursuant to the Corporations Act 2001 (Cth).
The single expert accountant, Mr I, earlier referred to, confirms in his report that he was asked to analyse the tax payable by the Husband, “…in respect of the three woodlots in [S] purchased between 1999 and 2003.” He was advised that the cost was $183,000.00 and that they, “…are currently valued at $183,000.00.”
However, more importantly, at page 2 of his report, the single expert points out that he would need significantly more information to determine any tax payable with respect to the woodlot investments. It would appear that the single expert has addressed this topic in general terms rather than any focus being upon the feature that the relevant management company went into administration and liquidation, and the consequences of that for the investment, and for any taxation ramifications.
The single expert notes, under a heading, “Preliminary comment on tax payable by [the Husband] on the woodlots” (emphasis added), as follows:
I have been unable to find details of a liquid market for [S] “woodlots” (there appears to be a market amongst the clients of financial advisors, but that market is not liquid, i.e. there can be a long wait for willing buyers for value).
The single expert goes on to provide his “preliminary comment” on tax on the assumption that the Husband will not be able to readily sell his woodlots, but more importantly, on page 2 of his report, discussing the issue generally, the single expert refers to the funds expended on the woodlots having two or three components, a capital component (non-deductible for tax purposes which is the cost base on sale), an asset purchase component (tax deductible over time as depreciation) and a tax deductible component in the year incurred.
However, in contrast to this, Exhibit 2, being correspondence from the Husband’s accountant, confirms that by reference to the relevant contractual arrangements for the particular investment made by the Husband, “…all of the up-front payment represents a tax deductible outlay, then the ultimate receipt of the proceeds of final harvest will be fully assessable.”
In other words, the Husband secured a 100% deduction for each investment in the financial year in which it was made. Any income to the Husband from the woodlots, either by yield or sale of the woodlots themselves, would appear to be treated as assessable income in the year it is received.
On the Balance Sheet, the Wife adopts the figure of $183,000.00 as the “value” for this interest, whilst the Husband adopts a figure of $128,100.00 for this item, said to be a figure arrived at, by reference to Exhibit 2 in the proceedings, being the letter from the Husband’s accountants which refers to a 30% rate of tax (the Husband’s figure reflects that).
It is clear enough on the evidence that the Husband purchased the subject woodlots in order to achieve taxation benefits at the time of acquisition (the 100% deduction) and of which both parties have had the benefit. However, what is far from clear on the evidence before me is whether there remains any capital interest or value in the subject investments, net of any taxation burden, given what occurred with the management company.
In assessing this particular item of property, it seems to me that the Court must have regard to the nature, form and characteristics of the property under consideration. Plainly enough, the relevant woodlots were part of a managed investment scheme which provided a mechanism by which investors such as the Husband achieved taxation benefits at the time the investments were made and that benefit appears to be essentially a method of tax deferral.
In these circumstances, it seems to me that consistent with the principles espoused in Rosati & Rosati (1998) FLC 92-804, it would be legitimate to take account of the taxation effects of any future yield on the investment if and when such a yield is forthcoming as both parties have enjoyed, during the relationship, the tax effect or tax benefit of the Husband having made the subject investments, specifically for the purpose of the tax effect.
However, in circumstances where there would appear to be significant uncertainties about the net (after tax) worth of the subject investments and their viability, it seems to me that it would be unjust and inequitable to simply leave the investment with the Husband at any nominated value referable to the cost of acquisition of the woodlots in the first place or to apply some rate of taxation to the amounts invested which carries the assumption that the investments will yield as much as was invested either by sale or otherwise.
I reiterate that the Court’s overriding obligation in making an Order under s 79 is to ensure that any such Order is just and equitable in all the circumstances of the case.[8] This investment is, essentially, a tax deferral method. The Husband received a tax benefit when he purchased the woodlots and will have to pay a tax liability upon their sale or upon any income produced. As the Husband made this investment in his name alone, the tax liability will fall upon him personally, no matter who is to receive the benefit of the sale price. However, allocating this as an asset of the Husband alone ignores the fact that the tax benefit received by the Husband was during the parties’ marriage and thus, given that the Husband was the sole income-earner in the relationship, benefitted both of the parties. It seems to me that the only just and equitable Order that can be made in those circumstances is to ensure that the parties also both bear any tax liability that results from the sale of these woodlots. Consequently, I do not propose to ascribe a value to the woodlots, and propose instead to simply divide them by transfer between the parties in accordance with the ultimate percentage arrived at (or as close thereto as possible).
[8] Family Law Act 1975 (Cth) s 79(2).
Furniture and Contents
The Balance Sheet, dated 22 November 2011, concerning the figure adopted by the Husband, reflected some confusion. It would seem that this figure represents what the Husband says is his share of furniture and contents in the former matrimonial home of the parties at M Street, Suburb A, which was sold. The Wife, in her evidence, indicated that she continues to hold the furniture and contents either in her own possession or in storage.
On 11 October 2010, Orders were made by consent in this Court and by paragraph 7 of those Orders, there was a mechanism by which, by way of partial property settlement, the contents of the former matrimonial home were to be divided between the parties in approximately equal value.
I understand it to be the position that whilst that mechanism obliged the Wife to prepare relevant lists to bring that into effect, that has not occurred.
Both parties submitted to the effect that either the Orders previously made, as referred to, should be brought into effect, or that this Court now re-make similar Orders, by way of final Orders, to give effect to what was proposed.
I propose to make Orders reflecting that the furniture and contents be apportioned in the manner proposed by the Husband in Exhibit 3 before me.
The two payments of $50,000.00 to the Wife
Both parties agree that two payments of $50,000.00 were paid by the Husband to the Wife in September and October of 2009, soon after separation. The Husband’s evidence is that he withdrew this capital from the superannuation fund to facilitate those payments.[9] It is the Wife’s case that these payments should be characterised as spousal maintenance, and thus should not be added back into the pool of assets. The Wife contends that this should be the case on the basis of two letters attached to her affidavit filed 21 June 2011. The first letter, Exhibit “B” to that affidavit, is a letter dated 11 September 2009 from the Husband to the Wife, and relevantly states:
2) Your holiday – I think it is a good idea for you to get away. I would suggest that you go either to Perth to see your sister, or to Surfer’s Paradise where you could see [Mr K], I am prepared to spend a total of $2500 for you on this. [Ms G] is prepared to pick up [L] to take her to the vet, provided it occurs outside of [Ms G’s] work hours.
3) The finances – I have arranged to put $1500 into your bank account. This amount will be paid on the 14th of each month until completion of our financial arrangements. I will also pay all the other usual monthly bills such as telephone, electricity, foxtel etc., wine and cigarettes within reason, until completion of our financial settlement. The property issues will have to be resolved at a later date and you should get independent legal advice as to your entitlements.
[9] See paragraph 117 of the Husband’s affidavit filed 20 June 2011.
The second letter, dated 17 September 2009 and annexed as Annexure “C” to the Wife’s 21 June 2011 affidavit, states:
I confirm that I will pay into your account the sum of $50,000 now and a further sum of $50,000 in one month (sic) time providing that you confirm that you accept these amounts as advance payments on account of your entitlement to our joint assets.
Would you please confirm your acceptance by signing and returning the attached copy letter.
It is the Wife’s case that, as the Husband stated in the 11 September letter that he would, “…pay all the other usual monthly bills…” the $50,000.00 paid a week later and the second $50,000.00 paid in October are the fulfilment of the Husband’s promise in that regard.
At the time the two payments were made, the Husband was paying the Wife periodic payments of $1,500.00 per month (later reduced to $1,200.00 per month) in addition to continuing to pay the mortgage repayments, outgoings and maintenance expenses of the former matrimonial home in which the Wife was living.
It is well-settled that there are only limited circumstances in which capital which has in fact been expended should be notionally added back to the pool of assets to be considered and that add-backs are the exception, rather than the rule.[10]
[10] See Omacini & Omacini (2005) FLC 93-218 and Cerini & Cerini [1998] FamCA 143.
However, the Husband deposes in paragraph 117 of his affidavit filed 20 June 2011 both as to the source of the payments made and the fact that the Wife signed an acknowledgement at the time, which is attached as Annexure “29” to that affidavit, in which the Wife acknowledged, as per the Husband’s request, that she accepted these payments as advance payments, “…on account of your entitlement to our joint assets.”
I find that by reason of the fact that these payments were characterised in that manner at the time they were made, and were treated by both parties as being an advance to the Wife of part of her overall property entitlement, in combination with the feature that the payments were sourced from capital which, if not made in that manner, would be available as capital to the parties now, they ought be added back to the pool.
However, the evidence establishes that the Wife met legal fees of $22,204.00 from these payments and the Wife’s legal fees (as are the Husband’s legal fees) are separately added back into the pool, and thus the amount added back ought be reduced to $77,796.00.
Mr Bronson Superannuation Fund
It was contended on behalf of the Wife that the value to be taken for this interest is at $223,098.00, based upon the estimate provided by the single expert, Mr I. That estimate appears at page 7 of Mr I’s report. On behalf of the Husband, it was contended that because the Husband has sold all of the public company shares owned by the superannuation fund, the value to be taken into account is $175,915.00, as referred to on page 8 of the Mr I report.
As appears from the estimate provided by Mr I at page 7 of his report by reference to his Annexure “E”, the expert made adjustments for the matters identified on page 7 of his report. Those adjustments included adjustments for the sale of public company shares for which the expert was given broker’s statements, but specifically the expert notes:
The sale of public company shares for which I was given broker’s statement (sic) has been noted and other public company shares are valued at the ASX market value at 13 July 2011 (I have continued to use this value as it illustrates how I arrive at my estimate, but that valuation is probably redundant as I am now advised by [N] [a reference to the Husband’s solicitors] that all shares have been sold, see hereunder).
At page 8 of his report, Mr I confirms receiving advice on behalf of the Husband by his solicitors as to the sale of all public company shares owned by the superannuation fund, and noting that the only assets of the superannuation fund were as set out on page 8, totalling $175,915.00. In the course of submissions, I raised with Mr Cairns, Counsel for the Husband, the feature that the e-mail referred to was not in evidence before me. More relevantly, the question is whether there was evidence before me of the factual bases for the assertions in the e-mail.
In reviewing this matter I note that, commencing at paragraph 116 of his affidavit filed 20 June 2011, the Husband deposes to relevant matters occurring since the parties’ separation. At paragraph 120, he deposes:
Since our separation, I have been selling the share portfolio owned by the Super Fund and paying the proceeds to me as a pension from which I have meet (sic) my living expenses, payments to [the Wife], mortgage payments and legal fees of these proceedings.
He annexes attachment “30”, being copies of statements showing the shares sold.
It ought be noted that the parties agree that an amount of $56,167.00 ought be notionally added back to the pool in respect of the Husband’s expenditure on legal fees.
Whilst paragraph 120 of the Husband’s affidavit does not make it clear whether all of the shares had by then been sold, that becomes clear from the Husband’s oral evidence during the course of his cross-examination. In the course of giving evidence about his use of funds withdrawn from the superannuation fund post-separation, the Husband made reference to there being only one asset left in the superannuation fund. That was obviously a reference to the Q Street real property, and overlooks any bank account and the woodlot investment. However, it is implicit on that evidence, which I accept, that the fund no longer retains any shareholding in public companies.
Whilst Mr Dura of Counsel for the Wife contended that to take the lower value would mean that the Wife has effectively contributed, “…one-half of her own maintenance…” since consent Orders were made in October 2010 and March 2011 which oblige the Husband to make certain financial provisions (and the Orders will be discussed further below), suffice to note here that the classification of the payments made under those Orders was a matter reserved to the trial. They were not expressed as maintenance Orders, and whilst the monthly $1,200.00 payment could readily be characterised that way, that is not so for the provision in total.
On the Husband’s evidence, which I accept, he was unable to meet solely from his income from his professional business all of the expenses for which provision was made in those Orders, there being a monthly shortfall of significance for the Husband to make all of the provisions referred to, as well as meet his own living expenses, and I accept his evidence that he had to resort to capital via his superannuation fund to meet those provisions in total.
I therefore find that the Husband’s interest in the superannuation fund ought be included at the figure of $175,915.00 on the basis that the fund no longer holds shares in public companies. I note in passing that in a sense this may be a somewhat inflated figure given the observations I have already made about the woodlot investment, but as that is included at the reduced value of $5,313.00 (on an initial investment of $9,000.00) and neither party contended otherwise, I will accept that value for the purpose of identifying a value of the Husband’s interest in superannuation.
Wife’s credit card debts
The Wife provided, in an updating affidavit filed 17 November 2011, a statement for her Visa card dated 14 October 2011, supporting the asserted liability of $17,515.00.
Whilst general propositions were put to the Wife in cross-examination to the effect that the Husband had provided, in one form or another, ample support for the Wife in the period post-separation, and there was challenge as to her expenditure on an overseas trip to Europe, and in particular, challenge as to the reasonableness of the Wife funding in some respects two friends who accompanied her on another holiday to Fiji, there was no specific challenge to the expenditure making up the credit card liability as being unreasonable.
On that basis, I will include that liability in the pool.
However, in passing, I note that included in the Balance Sheet is an item for the Husband of “rental bond” of $5,000.00. The Wife’s updating affidavit referred to, filed shortly before the trial, includes her deposition that she has paid a rental bond of $3,600.00. It would therefore seem that on the reasonable inference that the Wife will eventually receive the return of this bond, it is an asset she holds and ought be included in the pool, and I will so do.
I therefore find that the identification and value of the parties’ assets, liabilities and financial resources (excluding furniture and the woodlot investments dealt with separately) is as follows:
| Ownership | Item | Value |
| ASSETS | ||
| 1. Joint | Funds from sale of M Street, Suburb A invested in Controlled Monies Account | $889,889 |
| 2. H | Shareholding in Mr Bronson Pty Ltd | Nil |
| 3. H | Rental bond | $5,000 |
| 4. W | Rental bond | $3,600 |
| 5. H | Personal effects including present home’s contents | $2,000 |
| 6. W | Jewellery | $15,000 |
| 7. H | Interim payment from sale proceeds of M Street, Suburb A | $129,612 |
| 8. W | Interim payment from sale proceeds of M Street, Suburb A | $100,000 |
| 9. H | Interest in the Mr Bronson Family Trust | $392,829 |
| ASSETS TOTAL | $1,537,930 | |
| ADD-BACKS | ||
| 10. W | Expenditure on legal fees | $22,204 |
| 11. H | Expenditure on legal fees | $56,167 |
| 12. W | Two payments of $50,000 less legal fees added back | $77,796.00 |
| ADD-BACKS TOTAL | $156,167.00 | |
| LIABILITIES | ||
| 13. H | Citibank Visa Credit Card | $26,700 |
| 14. H | ANZ Visa Platinum & AMEX Platinum | $10,376 |
| 15. W | Visa Platinum Credit Card | $17,515 |
| LIABILITIES TOTAL | $54,591.00 | |
| SUPERANNUATION | ||
| 16. H | Mr Bronson Super Fund (self-managed) | $175,915.00 |
| TOTAL SUPER | $175,915.00 | |
| TOTAL NET POOL OF ASSETS | $1,815,421.00 | |
Step 2 – Contribution-based entitlements of the parties (ss 79(4)(a),(b) and (c))
Initial capital
The Wife deposes, commencing at paragraph 49 of her affidavit filed 20 June 2011, that when she first, “…moved into [P Street] in 1989…”, being the earlier period referable to the onset of the parties’ relationship but prior to cohabitation as I have found it to occur on 1 May 1991, that she contributed assets to the value of $60,000.00.
Simply put, the Wife’s evidence in this respect disassembled in cross-examination. Indeed, the Wife’s answers in cross-examination on this topic, which at best were vague, tentative and uncertain, led me to have significant doubts as to the reliability of the Wife’s evidence overall.
The Wife could provide no explanation as to the foundation for an assertion that she held $10,000.00 in savings. Indeed, the Wife had to acknowledge, eventually, that she had no funds to pay a removalist fee of several hundred dollars at about the time she was asserting retention of a capital sum of $10,000.00. In the end, the Wife could not recall whether she had any savings. Likewise, whilst the Wife was able to nominate several items of furniture that she had as well as, “…silverware, including cutlery…” she was unable to provide particulars of the furniture items she was referring to in any detail; or what became of them; and was certainly unable to establish any foundation for the value she asserted in her affidavit. Whilst in her evidence, the Wife referred to this being, “…a long time ago…” the point is that she swore her affidavit in June 2011, and there were no qualifications to the assertions as contained in her sworn affidavit.
The Wife’s evidence as to the life insurance policy was equally vague. She ultimately was unsure as to whether or not there was one or more life insurance policies and whether or not any policy was, “…taken out…” by her parents. Most importantly, she was unable to provide any basis for the assertion that the policy had a surrender value of $10,000.00.
In passing, as to the reliability of the Wife as a witness and her evidence, I note that the Wife asserted in her affidavit for trial (paragraphs 39 and 40) that the Husband told her (and reiterated) in discussions at the time of separation (6 September 2009) that the Wife would not need a lawyer, yet she attaches to that affidavit a letter from the Husband dated 11 September 2009 containing in the conclusion, “You should get independent legal advice as to your entitlements.” I do not accept that the Husband sought to persuade the Wife not to obtain legal advice, and I find that, to the contrary, he suggested that she so do. I find this to be an example of the Wife’s unreliability.
I prefer the evidence of the Husband that the only assets that the Wife brought into the relationship were one painting and two sideboards which he asserts had a value of approximately $5,000.00. I also accept his evidence that in 1993, the Wife was made bankrupt.
It is asserted by the Husband, in his affidavit filed 20 June 2011, that the Wife was made bankrupt by the removalists who moved her furniture from her Suburb J apartment to the H Street property in 1993. This is also in the context of the Husband’s evidence in his 20 June 2011 affidavit that the Wife commenced cohabitation with the Husband in 1991 because she informed him that her, “…landlord had given [her] a notice to quit and [she had] nowhere to go.”
The Wife gave oral evidence that she did not recall if she was declared bankrupt for three years from 1993 to 1996. After giving oral evidence that she, “…didn’t believe…” that she had been declared bankrupt, the Wife gave further evidence that she recalled that there was, “…an issue…” but that she could not remember what it was. Eventually, the Wife gave oral evidence that she deferred to the Husband’s recollection of the matter, which is that the Wife was a bankrupt for three years from 1993 to 1996. The fact that the Wife cannot recall such a significant event as personal bankruptcy causes me significant concern about her recall concerning other details and events surrounding the parties’ finances. It is for that reason, in addition to the medical evidence, discussed further below, that I do not place great reliance upon the Wife’s recall of specific amounts or dates where there is a conflict between the parties.
In passing, I note that if there is an equal division of furniture from the former matrimonial home, whilst there is no expert evidence as to the value of those items, Exhibit 3 before me contains a list of the items and it is clear that there is a substantial amount of furniture that can be taken to have value of significance. Under a formula where the Wife receives half of the furniture, it is readily apparent that she will be receiving, on my findings, far more than what she initially contributed.
With respect to the Husband, much of his affidavit filed 20 June 2011 (paragraphs 14 to 58) plus annexures 1 to 14 of that affidavit, were devoted to the Husband attempting to establish the conclusion expressed in paragraph 59 to the effect that as at the commencement of the parties’ cohabitation on 1 May 1991 (as I have found it to be), the Husband stood possessed of net assets (including superannuation) of $1,296,776.00.
That conclusion did not appear to rest comfortably with Exhibit 1, being the consent Orders dated 29 June 1993 between the Husband and his former Wife. However, as Mr Dura of Counsel for the Wife acknowledged in final submissions, Exhibit 1 cannot be treated as containing an exhaustive listing of the Husband’s assets at that time given the evidence in this case otherwise.
In any event, it is not so much a matter in this case of the Husband demonstrating only the nature, amount and use made of any “initial” capital contributed by him. Rather, in circumstances where the Wife does not suggest making any contribution to capital received by the Husband via his family, whether by gift or bequest, either before or during the parties’ cohabitation, it is essentially identifying that capital, whenever it was received, and the use made of it, which is relevant.
The Husband clearly brought significant capital to the relationship, including substantial inheritances from his father’s estate, consisting of both company shares and cash payments.
The history of the corporate structure of the Husband’s father’s estate is relevant to understanding the nature of the Husband’s initial contributions. The Husband’s father held all the shares in and was a director of (in addition to the Husband’s mother) a company known as T Investments. On 31 March 1960, the company U Investments Pty Ltd (ACN …) was incorporated, with the Husband’s father and mother both being appointed directors of that company. From that date onwards, U Investments owned all of the shares in T Investments. The Husband’s father owned 393,023 shares in U Investments, while the Husband’s mother owned one share in that company.
U Investments was also initially the corporate trustee of the family trust (the Bronson Family Trust) set up by the Husband to distribute income between himself, his first wife, Ms D, and the three children of his first marriage. Each of the Husband, Ms D and the Husband’s three children from his first marriage were beneficiaries of that trust. Upon the incorporation of V Pty Ltd (ACN … ) on 9 April 1987, of which the Husband is the sole director and shareholder and secretary, that company then became the corporate trustee of the Bronson Family Trust.
On 12 April 1988, the Husband was appointed director of T Investments.
On 13 April 1988, the Husband’s father passed away, and the Husband inherited one-half of his father’s estate, including half of his father’s shareholding in U Investments (and thus in T Investments) and a cash payment of $10,000.00. I infer that the other half of the Husband’s father’s shareholding in U Investments went to the Husband’s mother, given the Husband’s deposition that that second half of the shareholding passed to the Husband on the death of his mother in August 1991.
On 6 December 1988, the Husband was appointed a director of U Investments.
As at 30 June 1990, on the evidence from the Husband before me, which I accept, T Investments had investment assets worth $1,157,098.00 and cash reserves of $39,267.00.
These directorships held and companies owned by the Husband were brought to the relationship in 1991 or devolved to him soon after and were used by the Husband for the purpose of funding the parties’ assets.
The first home shared by the parties at H Street in Suburb A was purchased by the Husband for $500,000.00 plus transaction costs through the vehicles of V Pty Ltd (as trustee for the Bronson Family Trust) and T Investments, each of which held a 50% interest in the property as tenants in common. The Husband deposes in his 20 June 2011 affidavit that V Pty Ltd borrowed $80,000.00 from the ANZ bank for the purchase, but I infer that otherwise the two companies had sufficient cash reserves to fund the remainder of the purchase price of the property. The Husband also asserts to having largely funded the furnishing of this property in an amount of approximately $30,000.00.
I accept the Husband’s evidence that one-half of the estate of his father (excluding T Investments and U Investments) which the Husband received was worth, as at 30 June 1991, $98,148.00.
I accept the Husband’s evidence that following his mother’s death on 11 August 1991, he received approximately $236,000.00 (including forgiveness of a loan for $30,000.00) from her estate, plus one-half of U Investments, which wholly owned T Investments. I also accept the Husband’s evidence that as at 30 June 1991, only some two months after cohabitation commenced, U Investments held net assets of $846,199.00.
The significance of the Husband’s initial and inherited capital (in terms of the amount of it and the use made of it) as a springboard to the pool as it currently exists, can be seen in part by reference to the real property transactions which occurred; culminating in the M Street, Suburb A, proceeds ($889,889.00) now available, plus the combined $229,000.00 the parties have already received from those proceeds.
Aside from the feature that the H Street property was the parties’ home from 1 May 1991 for the next several years, that property later yielded net proceeds of sale of $788,000.00, which were applied to fund the property at W Street, Suburb A, for $945,000.00 plus acquisition costs. I accept the Husband’s evidence that the balance of that purchase, and the costs of acquisition, were funded by the sale by the Husband of shares inherited from his parents.
In due course, the W Street property’s sale enabled the parties to acquire the M Street, Suburb A, property for $1,305,000.00 (purchased on 9 September 2000), with mortgage debt of $300,000.00. Not long before this trial, on 16 November 2011, settlement of the sale of M Street for $1,600,00.00 occurred.
In addition, the M Street property was also utilised as security for borrowings to fund the present investment, and value held by, the Mr Burston Family Trust, which is included in the pool at $392,829.00.
Even allowing for the fact that, as referred to by the Husband in his affidavit and further particularised in his oral evidence, the Husband provided funds of $100,000.00 each to his two sons in 2000 and 2002 from sales of shares and investments and $100,000.00 from superannuation to his daughter some five years ago. On any view of the evidence, the pool as it currently exists is largely referable to the Husband’s receipt, in one form or another, of inheritances from his parents plus the superannuation he had at the commencement of the relationship.
Whilst the Husband had an established earning capacity at the commencement of the relationship, and I accept his evidence that he applied his earnings to the relationship throughout its course and post-separation; and the Husband’s earnings maintained the parties’ living expenses and the like, it is relevant to note that there is not much evidence to demonstrate that the Husband’s earnings during the relationship, as opposed to the capital he received as referred to, added to the assets now available for division.
On the Wife’s own evidence, she ceased external employment by 1989, and it follows, taking into account my earlier findings, that virtually 100% of the financial contributions to the relationship and marriage were made by the Husband, and, relevantly, very significant capital was provided by the Husband in relation to which the Wife did not make any contribution, financial or non-financial.
I also accept that the Husband brought to the relationship the capacity he had developed before the commencement of the relationship to earn income as a professional. The Husband deposes in his affidavit filed 20 June 2011 that he was admitted to partnership at professional business X in 1967, more than 20 years before the parties commenced cohabitation on 1 May 1991. In addition to that earning capacity, I accept that the Husband brought to the relationship a substantial amount of superannuation contained in the X Retirement Fund, worth approximately $161,261.00.
It is accepted by both parties that the Husband also made almost 100% of the direct financial contributions throughout the duration of the relationship. Early on in the parties’ relationship, in August 1991, the Husband’s mother passed away and the Husband received one-third of her estate, worth approximately $236,000.00, including the remaining shares in U Investments Pty Ltd (and thus the remaining shares in T Investments Pty Ltd). The value of those shareholdings was approximately $582,372.00. The Husband continued to manage the investments and assets of U Investments Pty Ltd and T Investments Pty Ltd with the assistance of financial advising firm, Y Pty Ltd, until “in or about 2000”, on the Husband’s evidence, T Investments Pty Ltd was put into voluntary liquidation.
The Husband also commenced, in 1992, to practise law in his own firm through the corporate vehicle Mr Bronson Pty Limited. The Husband also set up the Mr Bronson Superannuation Fund by deed in February 1993, to which his X Retirement Fund benefits were transferred. V Pty Ltd was and remains the trustee of that superannuation fund. In 1999, the Husband purchased two parcels of woodlots from S Limited for tax purposes which were subsequently transferred to the Mr Branson Superannuation Fund.
The property at W Street, Suburb A, was purchased in the names of the Husband and the Wife as tenants in common in equal shares in September 1998. The purchase was funded by the proceeds of sale of the H Street property (paid to the Husband through the Bronson Family Trust and his share in T Investments) and the sale of shares which had been personally owned by the Husband’s late parents.
In September 1998, the Bronson Family Trust was wound up. In November 1998, the Z Family Trust was then established, with V Pty Ltd as its corporate trustee. The Husband is both the Appointer and one of the beneficiaries of the Trust.
On 9 September 2000, the Husband and the Wife purchased the property at M Street, Suburb A, as tenants in common in equal shares. The purchase was funded by the proceeds of sale from the W Street property and a loan from the ANZ Bank in the order of $300,000.00.
The Mr Bronson Superannuation Fund also purchased offices at Q Street in Suburb TT in June 2000 and in AA Street, Suburb SS, in 2002.
V Pty Ltd, as trustee for the Z Family Trust, also purchased office space at BB Street, Suburb TT in December 2004 and carparking spaces in August 2005 through its holding of one-third of the units in the CC Unit Trust (the remaining two-thirds being held by third parties). These purchases were funded through loans secured by a mortgage over the office space and storage space at BB Street, a mortgage over the parties’ M Street home, a mortgage over a third parties’ real property at Suburb DD, debenture charges by C Pty Ltd (the manager of the BB Street Property) and O Pty Ltd, as well as personal guarantees by the Husband, the Wife and two third parties.
The parties accept that the Husband, through his personal income and that of the companies, trusts and superannuation funds from which he derived income, funded both the parties’ living costs as well as renovations to all three Suburb A properties.
Save for an inheritance of the Wife worth $25,000.00 (or $23,000.00 on the Husband’s affidavit filed 20 June 2011 – the difference being irrelevant given its insignificance in the context of the pool) and the “cashing in” of the Wife’s life insurance policy for a sum of $20,000.00, it is accepted by both parties that the Husband otherwise funded the parties’ lifestyle and the acquisition of the parties’ assets.
Non-financial contributions
The Wife’s non-financial contributions were the subject of much dispute. The Wife asserts in her affidavit filed 21 June 2011 that she “organised” renovations to and maintenance of the parties’ properties at H Street, W Street and M Street, including selecting fittings, paint colours and the like and liaising with tradesmen and gardeners. In the Wife’s oral evidence before me, after initially denying that the parties chose the properties’ fittings together, the Wife then accepted that the Husband did have input into that task, although she maintained that their respective inputs were not equal, hers being the greater. The Wife also deposes to having, amongst other associated matters, been “…solely responsible for organising the sale of the [H Street] property,” conducting research to aid in the purchase of the W Street property, liaising with real estate agents in the purchase and sale of the W Street property and attending Annual General Meetings for the M Street property. The Husband, in his oral evidence before me, accepted that the Wife, along with the Husband when he was home, did supervise the tradesmen who attended their successive homes and that she assisted, with the Husband, in preparing the H Street and W Street properties for sale. The Husband, however, denied that the Wife was solely responsible for organising the sale of the parties’ properties, and asserted that they both participated in the process, with the Husband arranging for the agent (who was a personal contact of the Husband at the time) and the Wife being involved in other aspects of the sale. I accept the Husband’s evidence that both parties were involved in the process of renovating, purchasing and selling each of the parties’ properties; however, I find that the Wife contributed more than the Husband to tasks such as the supervision of tradesmen and the preparation of the properties for sale given the greater amount of time the Wife spent in the home due to her unemployment in comparison with the Husband, who was working as a professional at the time.
The Wife further deposes in her 21 June 2011 affidavit that she was, “…responsible for undertaking all of the household and homemaker duties,” (emphasis added), including shopping, preparing meals, washing and ironing clothes and cleaning the M Street property. The Husband disputes some aspects of this in his 20 June affidavit. The Husband accepts, at paragraph 111, that the Wife attended to washing the parties’ clothes (although he deposes that he also contributed to this on occasion) and that she prepared approximately three dinners per week. However, he asserts that he also made substantial non-financial contributions to the household, including attending to grocery shopping, sorting clothing, gardening and sweeping, household repairs and maintenance, vacuuming, rubbish disposal, bed-making, preparation of his own breakfast, preparation of take-away meals and dishwashing.
I accept the Husband’s evidence in this respect, particularly given the Wife’s oral evidence on the issue. Under cross-examination, the Wife accepted that although the parties initially did the grocery shopping together, the Husband later took over that task, and that the parties split the washing and ironing between themselves after an initial period where she solely performed that task. The Wife also accepted in her oral evidence that the parties shared cleaning duties, with the Husband solely performing all the heavy yard work and with external/paid cleaners attending the property once a fortnight. The Wife also accepted that, especially in the later years of their relationship, the parties ate out frequently, reducing the need for her to prepare meals at home.
Regarding the Husband’s business as a professional, the Wife deposes in her 21 June affidavit that she contributed to the professional business by assisting with all of the decision-making regarding the business, entertaining business associates and clients, helping out at the Husband’s office and answering the phone, as well as assisting the Husband with all of the decision-making regarding his business and property investments. Further detail was provided in the Wife’s oral evidence, where she deposed that she answered approximately 15-16 calls per month for the Husband’s business which required her to pass on messages or “occasionally” make appointments. Under cross-examination, the Wife admitted that her support of the Husband’s decision-making regarding his professional business was limited to providing him (together with the Husband’s son, Mr E) with the emotional support he required to have the confidence to open his own professional business. The Wife also acceded under cross-examination that her “helping out” at the Husband’s business was limited to a single day when she filled in as a secretary.
The Husband, by contrast, asserts that the Wife answered only approximately one call per month for his business. The Husband gave oral evidence that he was certain of the number as the Wife would pass messages from each call on to him, and gave evidence that it was rare for clients to use his home, rather than his office, phone number, and that this occurred only when they discovered his name in the telephone book rather than by his design. The Husband also deposes in his 20 June 2011 affidavit that it was not his practice to entertain any of his clients at his home. Although this was not put to the Wife during cross-examination, I note that the Wife’s affidavit makes no mention of her entertaining the Husband’s business associates and clients at their home. Therefore, it is open on the evidence before me to find that such entertaining was done external to the parties’ premises at restaurants and the like, and I so find. I also note that the Wife raises her giving of a personal guarantee for a substantial loan from the National Australia Bank used to fund the Husband’s companies’ participation in the purchase of commercial office space at BB Street, Suburb TT. The Husband agrees that this was the case, but in circumstances where the Wife has no personal assets or income of her own, and indeed, as will be discussed further below, no earning capacity, the significance of the giving of such a guarantee (as a contribution) is somewhat limited.
It is unnecessary to make findings as to minutiae such as the exact number of telephone calls taken by the Wife each month, as the difference between the parties does not substantially affect the effect of the body of evidence as a whole. Even on the Wife’s own evidence, particularly her oral evidence, her contribution to the Husband’s professional business was minimal.
The Wife also asserts in her 21 June affidavit to having helped the Husband care for and support his son, Mr E for approximately two years. This included, the Wife asserts, cooking all of Mr E’s meals, doing his washing and cleaning and, “…supporting him in general.” The Wife does not provide any exact dates as to when this actually occurred; however, as she deposes this occurred at the H Street property, which was purchased in 1991, I infer that it must have occurred in the initial period. Mr E was then about 21 years of age. The Husband did not refute this in any of his material. I acknowledge that this is a relevant contribution; however, Mr E having been at least 21 years at the time, this was not in the nature of a care or parenting contribution.
The Wife acknowledged in cross-examination that throughout the relationship, external paid cleaners provided house cleaning and housekeeping assistance; that the Husband did the, “…outside work…”, that the parties often dined out, and the Husband attended to most grocery shopping and otherwise shared other domestic tasks.
In circumstances where there were no children of the marriage, it must be recognised that each party received the benefit of non-financial contributions in these forms provided by either of them.
Whilst I accept that the Wife provided the Husband with support in his decision to leave the partnership of Business X and undertake professional business on his own account, I find this to be part of the mutual support each party probably gave to the other during the course of this relationship. For the Husband, he no doubt rendered the Wife support of a similar kind, particularly by reference to her health conditions discussed below. Whilst the element of mutual support is no doubt important in a relationship that endured for the length of this relationship, it is also important to note that such support was mutual and in a relationship which provided no children in the setting of assessing the contributions of each party.
I find that each party made equivalent, albeit in different forms, non-financial contributions throughout the relationship. In short, that non-financial contribution is to be regarded as equally made by both parties.
In passing, I note that the Wife, whilst pointing to her support of the Husband’s move to professional business on his own account, did not advance any case to the effect that this was a financially provident move. That is, there was no evidence advanced to support the proposition that the Husband enjoyed significantly or any greater earnings or benefits by taking that step than he would have enjoyed had he continued in his partnership role.
Post-separation contributions
The correspondence earlier referred to, which is in evidence, reflects the reality that, upon separation, the Husband continued to provide for the Wife’s support. In particular, aside from payments to the Wife of, initially, $1,500.00 per month and then $1,200.00 per month, the Husband met substantially all of the expenses related to the Wife’s continued accommodation in the former matrimonial home. He continued to meet substantial mortgage payments and other outgoings, albeit partly from superannuation.
As reflected by the Orders made by consent on 11 October 2010 and 16 March 2011, whilst he continued to earn income in his professional business, the Husband had the responsibility for meeting substantial expenses for the Wife’s benefit, including maintenance of the M Street property until settlement of the sale of that property shortly before trial.
I have already referred to the fact that the Husband had to resort to capital to some extent to meet shortfalls between his earnings and the provisions he was required to facilitate by reference to those consent Orders, and to the extent that capital, in particular in the form of superannuation, was used, the Wife, too, can be said to have made post-separation contribution. There is a difference of about $48,000.00 between the figure for superannuation contended for by the Wife as compared to the figure contended for by the Husband, which I have accepted. In his oral evidence, the Husband acknowledged that something like $174,000.00 was applied from superannuation to meet expenses, including the parties’ respective expenses; the provisions already referred to; and the Husband’s legal fees. As against the withdrawal from superannuation, there is evidence of the Husband having made contributions to superannuation in the post-separation period. For example, the expert refers to contributions of $50,000.00 being made in the 2009/10 financial year.
Balanced against this is the inclusion in the pool of the Wife’s post-separation credit card debts and the inclusion in the pool of approximately $56,000.00 as an add-back of legal expenses on account of the Husband, notwithstanding that he has earned income throughout the period post-separation; as well as the feature that contributions were made to superannuation by or on behalf of the Husband post-separation.
Overall, I find that the Husband’s facilitation of the Wife’s accommodation in the former matrimonial home for her exclusive use post-separation, taken with the other provisions, which had the effect of maintaining the pool of assets, is a contribution by the Husband to be brought into account, albeit partly offset by the source of funds being, in part, superannuation.
Otherwise, in case there be any doubt, to the extent that each of the consent Orders made on 11 October 2010 and 16 March 2011 left the characterisation of the payments to be facilitated by the Husband as reflected in those Orders to be reserved for my determination, I do not characterise them as in any way being advances of partial property payments in favour of the Wife.
Conclusion as to contribution-based entitlement
I ought make it clear that, whilst at paragraphs 55 to 57 of his affidavit filed on 20 June 2011, the Husband raises implicit doubts about the veracity of the Wife’s claims of ill-health at the commencement of cohabitation, I do not accept any inference to the effect that the Wife could or should have undertaken employment and that the Husband somehow suffered her choice not to assist him financially.
On the other hand, I do not accept the Wife’s assertions to the effect that it was the Husband’s insistence that she not work and remain at home.
Whilst the Wife provides evidence of health issues affecting her capacity for employment, the earliest time she refers to having such difficulties as set out in her affidavit is by reference to the period commencing in or about October 2006.
In my view, the conclusion to be reached on the evidence as a whole, and I so find, is that for whatever reasons, the parties chose to live their lives during their marriage relationship in a way which did not involve the Wife working in external paid employment. At the least, the Husband acquiesced in that position, and there is no evidence before me upon which I could be satisfied that this is a case of a kind where one party suffers the financial consequences of the other’s insistence on not working despite the protests of the former.
Nevertheless, in assessing contribution-based entitlements in a relationship in which there were no children, and having regard to the circumstances as a whole, there must be recognition of the significance of the Husband’s financial contribution, both via his inheritances and also having regard to the feature that he worked throughout the relationship and contributed his earnings for the mutual benefit of the parties.
The approach to be taken to an imbalance of capital contribution, both initial and otherwise, is well-settled by authority.[11] To my mind, the contention on behalf of the Wife of an assessment of 60%/40% in favour of the Husband for contribution-based entitlement would not adequately reflect the enormous disparity of financial contribution in this case, where there are no children of the marriage and despite the duration of the period of cohabitation. I have found non-financial contribution to be equal, and even though those contributions were made over a lengthy period, their nature is likewise in the setting where there was no parenting role to be performed.
[11] See, for example, Pierce & Pierce (1998) FLC 92-844; Williams & Williams(1992) FLC 92-339; Cabbell & Cabbell [2009] FamCAFC 205; Alekovski & Alekovski (1996) FLC 92-705.
Whilst an 80%/20% assessment was contended for at one end of the range by the Husband, against an asserted starting point that 100% of the financial contribution or almost that was made by the Husband, I consider that in circumstances where the relationship subsisted for something over eighteen years in terms of cohabitation, that a 20% outcome to the Wife would undervalue the non-financial aspects of the marriage relationship including mutual care and support and affection, having regard also to the feature that such aspects of substantial value do not lend themselves to measurement in financial terms.
On all the evidence and balancing the competing considerations, I find that a reasonable assessment of contribution-based entitlement is 65%/35% in favour of the Husband. In reaching that conclusion, I am aware of the fact that a 30% disparity on the combined pool, as I have found it to be, approximates $545,000.00. I am satisfied that this properly reflects the disparity between the parties’ respective entitlements on a contribution-based assessment.
Step 3 – s 79(4)(d) and (e), including subsection s 75(2) factors
In considering this step, the most prominent factors to be considered are the age and state of health of each of the parties and their capacity for employment in the future.
As already stated, the Husband is now 71 years of age and thus, as he deposed in his oral evidence, is at the end of his working life. The Husband gave evidence, which I accept, that he does not have an expectation that his historical level of income will be maintained. He has observed that his work is, “…dropping off…”, finds that he cannot work as hard as he used to and acknowledges that he has to slow down. He acknowledges that he is at the end of his working life and he gave evidence, which I accept, that he plans to cease work as a professional at the age of 72, and from that point on would have only the income sourced from his savings and investments and from a “management contract” worth, “…a few thousand a month.” However, I note the Husband’s evidence that he has repartnered with one Ms B, who is approximately 59 years old. Ms B and the Husband married in April 2011. The Husband deposed in his 20 June 2011 affidavit evidence that Ms B has an income of approximately $30,000.00 per annum and that she contributes to their household’s food and utilities, although he gave oral evidence that she does not contribute to their rental costs. The Husband gave further oral evidence that he had ceased paying Ms B approximately $400 per week for working for his professional business approximately four to five weeks prior to this trial.
The Husband deposes to being in generally good health; however, there was unchallenged evidence of the Husband’s dental practitioner that the Husband will require significant dental work over the next decade which could cost up to $65,000.00 and of the Husband, again unchallenged, that he suffers from glaucoma and requires associated treatment and management of that condition.
The Wife is 59 years of age; however, despite the Husband’s assertions that she has a capacity for part-time employment, I find that such a prospect is highly unlikely. The Wife has not worked in commercial employment since about 1989, and thus would have great difficulty, even with retraining, in re-entering the workforce. In addition, there is substantial evidence, which the Husband did not challenge, that the Wife has significant health problems, including physical issues affecting her mobility.
The evidence of Dr EE, the single expert psychiatrist, in her affidavit filed 16 June 2011, was that the Wife is, “…physically incapable of obtaining gainful employment due to her poor physical state.” Dr EE diagnosed the Wife with:
Alcohol Abuse (sic) and probable dependence, alcoholic liver disease, long-term analgesic abuse and likely dependence, chronic pain condition of uncertain origin, pernicious anaemia and iron deficiency anaemia.
Dr EE also further diagnosed the Wife with a nicotine dependence, and stated that she considered it, “…extremely unlikely that she [the Wife] would improve sufficiently to be able to engage in employment of any kind, even on a limited number of hours per week,” even with appropriate treatment.
There is also doubt about whether the Wife would seek appropriate treatment for her conditions. In her oral evidence before me, the Wife gave evidence that despite being given advice over the years to cease smoking, she had never acted upon that advice. Also, despite the substantial medical evidence regarding the Wife’s problem with alcohol, including the report by Dr EE indicating that failing to limit or cease her alcohol consumption immediately is likely to cause, “…further deterioration in her health, including her cognitive functions,” the Wife gave oral evidence that she continues to drink one to two glasses of white wine or champagne each day, four days a week. However, I have doubts about the accuracy of the Wife’s reporting of her current alcohol consumption given the inaccuracies in her past reporting. For example, in her oral evidence before me, the Wife gave evidence that up until four to five months prior to this trial, namely sometime in June or July of 2011 (at a point which she “thought” preceded the report by Dr EE), the Wife was consuming one to two glasses of alcohol per day five days per week. The Wife seemed hesitant in giving this evidence, and then admitted that it was actually more like two to four glasses of alcohol per day, five days a week. This is despite her reporting to her general medical practitioner, as recorded in Dr EE’s report, that as at 12 June 2010, she was consuming only two standard drinks per day. This inconsistency raises questions in my mind about the Wife’s past and present alcohol consumption; but suffice to say that the Wife’s ongoing alcohol consumption, even at the lowest amount admitted by her, precludes the Wife from participating in gainful employment at present and into the future.
Even were the Wife to commence treatment with a drug and alcohol counsellor, as Dr EE recommends, it is Dr EE’s opinion that such treatment could only prevent “further deterioration” in the Wife’s health, rather than resulting in any substantial improvement. Given that it is Dr EE’s opinion, which I accept, that the Wife is presently incapable of engaging in gainful employment, I find that the combined result of these findings is that the Wife will never be able to return to paid employment.
The Husband attempted to assert that the Wife’s frequent attendance at poker tournaments at Suburb A Club evidenced an acuity of mind which could be used for part-time work. However, given the strength with which Dr EE states her conclusions (which were not challenged by the Wife), and the symptoms of the Wife’s conditions, which included an ataxic gait to the point where the Wife had difficulty finding her way through Dr EE’s office’s hallways, I find that the Wife has no capacity for employment now or into the future.
The Wife has not repartnered and has no assets of her own to support her into the future.
It is important at this point to also consider what would be a, “…standard of living that in all the circumstances is reasonable,” under s 75(2)(g). Cases such as In the Marriage of Aroney (1979) 5 Fam LR 535 have held that what is “reasonable” must be judged by reference to the standard of living the parties enjoyed during the relationship. Here, the parties enjoyed a very high standard of living for the duration of their relationship and the Husband funded a continuation of such a lifestyle for a period following separation. All three of the parties’ properties were in Suburb A, an exclusive suburb in Sydney, and the Wife had the benefit of never being required to work, the assistance of a cleaner once a fortnight, frequent meals out and financial support of a comfortable lifestyle.
The Wife deposes in her updating affidavit filed 17 November 2011 that her present home in Suburb A costs some $3,910.00 per month in rent.
It is also apposite to consider the Wife’s contribution to the Husband’s earning capacity. As indicated above, I do not find that the Wife has contributed significantly to the Husband’s business as a professional; although she took some telephone calls and provided emotional support as well as performing some homemaking duties, this did not “free up” the Husband’s ability to earn income in the way that a parenting role or more substantial homemaker role may have.
Balancing those factors and having regard to the quantum of the combined pool of assets, liabilities and financial resources as I have found it to be, I find that a 10% adjustment in favour of the Wife should be made so that, overall, the pool (excluding furniture) is divided 55%/45% in the Husband’s favour.
This takes into account the fact that the Husband will probably cease work within the next twelve months and must continue to fund his retirement, albeit with the assistance of his new wife, Ms B, and his “management contract”, whilst also acknowledging the significant costs of supporting the Wife to a reasonable standard, particularly in light of her health difficulties.
45% of the combined pool (excluding the woodlot investments and furniture), is $816,939.45.
The Wife already has, or has had the benefit of:
a)Rental bond, $3,600.00;
b)Jewellery, $15,000.00;
c)Interim payment from sale proceeds, $100,000.00;
d)Add-back of legal fees, $22,204.00;
e)Add-back of part-payments of $77,796.00.
That comes to a subtotal of $218,600.00. When the Wife’s credit card liability is taken into account ($17,515.00), the net amount made available to the Wife since separation is $201,085.00.
If the Wife retains what she currently has, then, aside from her proportion of furniture and the woodlot investment, the Wife must receive $615,854.45 which can be paid from the monies invested in the Controlled Monies Account to receive her overall entitlement.
Step 4 – Just and equitable Orders
The Orders I propose to make would see the Wife receiving all of her entitlement in cash, rather than any share of superannuation.
Whilst I have assessed the entitlements to the combined pool referred to at 55%/45% in favour of the Husband, and that apportionment will be applied to the woodlot investments (to the extent it can be), I consider it just and equitable that the Wife receive an equal share of furniture and contents of the former matrimonial home.
The Orders will enable the Husband to retain his professional business and the legal structures he has employed for some time.
I therefore consider Orders which provide for the Wife to be paid out of the Controlled Monies Account, and to otherwise retain the property she holds or has had the benefit of, are Orders which are just and equitable in the circumstances of this case.
Spousal maintenance
Counsel for the Wife submitted that the Wife should be awarded $1,500.00 per week or $6,500.00 per month in spousal maintenance (this was in addition to 55% of the property pool). There is, at present, an interim consent Order for the Wife to receive the amount of $6,000.00 per month from funds on deposit from the sale of the former matrimonial home, made on 11 October 2010 not characterised by that Order.
Section 72 of the Act provides that:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so if, and only if, that other party is unable to support herself or himself adequately…
Section 72(1) sets out the three circumstances which may cause the need for maintenance to arise and, relevantly here, provides in sub-paragraph (b):
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; …
having regard to any relevant matter referred to in subsection 75(2).
In Nutting & Nutting (1978) FLC 90-410, Lindenmayer J interpreted “adequately” within the meaning of s 72 of the Act as importing:
A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.
In Saxena & Saxena (2006) FLC 93-268, Coleman J set out the four steps that the Court should follow as:
1. To what extent was the Wife unable to support herself?
2. What were the Wife’s reasonable needs?
3. What capacity did the Husband have to meet an order, if one were made?
4. If steps 1 to 3 favoured the Wife, what order would be reasonable having regard to s 75(2) of the Act?
The Full Court of this Court set out, in Bevan & Bevan (1995) FLC 92-600, the principles which guide an Order of spousal maintenance as follows:
Taken together then, we would state the law as being that an award of spousal maintenance requires:
1. A threshold finding under s 72 [now s 72(1)];
2. Consideration of s 74 and s 75(2);
3. No fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit;
4. Discretion exercised in accordance with the provisions of s 74, with ‘reasonableness in the circumstances’ as the guiding principle.
Step one requires that s 72(1) of the Act be satisfied. That section states that:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonable able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Evidently, subsection (a) of s 72(1) of the Act does not apply to the case at hand. However, given my findings above, I find that subsection (b) is applicable; as already mentioned, I accept the findings of the single expert psychiatrist, Dr EE, that the Wife does not, and never will have, any capacity for gainful employment.
Provision to the Wife of 45% of the combined pool of assets, plus an equal share of furniture and contents from the former matrimonial home, plus 45% of the woodlot investments and the investment of that capital either in a home or on an income-earning basis whilst the Wife resides in rental accommodation, will provide the Wife with some capacity to support herself. The question is, though, the extent to which the Wife will be unable to support herself and her reasonable needs in that respect.
Assessment of Wife’s reasonable needs and extent she is unable to meet them
It is trite to note that the Wife bears the onus of establishing her reasonable needs.
The Wife filed a Financial Statement on 20 June 2011, but that was at a time when she was residing in the former matrimonial home, since sold, and her accommodation expenses were largely met by the Husband via the consent Orders already referred to.
The Wife’s “updating” affidavit filed on 17 November 2011, shortly before the trial, updates her financial position only to the extent that it discloses the rental she is paying in her current residence, and identifies the credit card debt already referred to.
Whilst the Wife was cross-examined about the prudence of obtaining rental accommodation in Suburb A at $3,910.00 per month; and acknowledged in the course of cross-examination that she could find cheaper accommodation in the Suburb A area even if she remained in that area, there was no substantial challenge to the expenses she otherwise set out in her Financial Statement.
Nevertheless, it is necessary for the Court to be satisfied that the needs claimed are reasonable within the meaning of the statute and, as discussed in the authorities referred to, the extent to which the Wife is unable to meet them.
At Part N of her Financial Statement filed 20 June 2011, the Wife set out her claimed average weekly expenses. I note at this point that if the Wife chooses to continue to reside in rental accommodation, some of those expenses would not be relevant. For example, house repairs of $120.00 per week and the items for gardening/lawnmowing and house and pool cleaning. Of course, if the Wife rents, then those expenditure items will be replaced by more expensive weekly rental payments.
However, there are other items in Part N which are questionable. For example, a claim of $10,400.00 net on an annualised basis for “holidays” for a single woman who is not in any employment seems to me to be outside the category of “reasonable” within the meaning of the section. There is also a claim under the bland heading of “necessary commitments” of $200.00 per week, or $10,400.00 per annum. No particulars are provided as to that claim.
Assuming the Wife resides in rental accommodation or her own home, I do not see that it is reasonable that she spends as much as $90.00 per week on external paid cleaners. Other claims have the appearance of being excessive, such as veterinary bills of $40.00 per week; $60.00 per week on hairdressing and toiletries, and $150.00 per week for food for a single person plus $50.00 per week for “household supplies”.
However, taking into account the property she is to receive, the fact that the Wife will need to take on additional expenses following these Orders taking effect, such as private health insurance, perhaps home insurance, utilities bills, medical bills and the like, I find that the Wife’s reasonable expenses which she cannot meet from her own resources amount to about $1,000.00 per week.
Husband’s capacity
On the Husband’s evidence, which I accept on this aspect, he is planning to retire by the end of this calendar year when he reaches the age of 72. According to the Husband’s Financial Statement filed on 22 November 2011, his present income is $3,677.00 per week, including $2,300.00 in salary. His present expenses, excluding any obligation to pay the Wife $1,200.00 per month, are $2,244.00 per week. Assuming that it is only the salary component which will cease upon the Husband’s retirement, I infer that the Husband’s income post-December 2012 will be approximately $1,377.00 per week. Excluding the Husband’s liability to pay $1,200.00 per month and assuming the Husband will cease making contributions to his superannuation fund and that there will be a commensurate decrease in the Husband’s income tax liability, the Husband’s weekly expenses will decrease to approximately $1,300.00 per week. The Husband will also be in possession of assets (assuming the position immediately following these Orders does not change) worth approximately $998,481.60, plus 55% of the net value of the Husband’s woodlots and half the furniture from the M Street property. The Husband will therefore have a capacity to contribute to the Wife’s expenses, pending his retirement.
Section 74(1) of the Act expresses the power to make Orders for spousal maintenance as follows:
In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
Section 75 then sets out a series of factors which must be considered when exercising the power granted under s 74(1). I have already considered, in the context of s 79, the relevance of the various s 75(2) factors, and I do not propose to repeat that consideration here. However, given the Order I propose to make under s 79, I must also, at this point, take into account that the Wife will, following this trial, have had or received the benefit of significant capital, plus 45% of the proceeds of the sale of the Husband’s woodlot investment. If the Wife invests that capital, that will provide her with an income.
I note at this stage the “no fettering” principle that this Court does not automatically award a former spouse an amount required to maintain their former lifestyle simply because funds are available. What is important in exercising the discretion of this Court under s 74, is whether the Order for spousal maintenance is reasonable in all the circumstances. Lindenmayer J, in Nutting & Nutting (1978) FLC 90-410, commented in this regard:
By sec. 72 of the Act, the husband is liable to maintain the wife only to the extent that she is incapable of supporting herself adequately, and again ‘adequately’ imports a standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.
Taking into account what the Wife is to receive by way of property settlement, I find that what is reasonable in all the circumstances is that the Wife have available to her a sum of $1,000.00 per week pending the Husband’s retirement. This takes into account the standard of living the parties enjoyed prior to separation, including the ability to live in the expensive suburb of Suburb A and to enjoy such privileges as private health insurance, holidays and the support of cleaners and gardeners, whilst also taking into account, as noted by Lindenmayer J, the circumstance that the parties are now separated and their assets have been divided, meaning that the parties can no longer enjoy exactly the same lifestyle as persisted during their relationship. This is certainly far above a “subsistence” level and will enable the Wife to live comfortably.
I thus make an Order that the Husband pay to the Wife maintenance in the sum of $1,000.00 per week until the Husband turns 72 years of age on 20 December 2012.
Obviously, if there be a change in the circumstances of either party, it will be possible to seek to vary that Order.
I therefore make the Orders as set out at the commencement of these reasons.
I certify that the preceding 194 (one hundred and ninety-four) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 23 April 2012.
Associate:
Date: 23 April 2012
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