Cabello & Cabello (No 2)
[2024] FedCFamC2F 1727
•6 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cabello & Cabello (No 2) [2024] FedCFamC2F 1727
File number(s): SYC 5838 of 2020 Judgment of: JUDGE STEWART Date of judgment: 6 December 2024 Catchwords: FAMILY LAW – PROPERTY – Contributions – Disparity in financial contributions – Assessment of section 75(2) factors – Largely agreed asset pool – Resulting trust – Presumption of advancement – Parental loan to wife Legislation: Evidence Act 1995 (Cth)s 140
Family Law Act 1975 (Cth) ss 75(2), 75(2)(o), 117
Cases cited: Anderson v McPherson (No 2) (2012) 8 ASTLR 321
Bosanac v Commissioner of Taxation [2022] HCA 34
C v C [1998] FamCA 143
Calverley v Green (1984) 155 CLR 242
Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397
Dickons & Dickons [2012] FamCAFC 154
Dullow v Dullow (1985) 3 NSWLR 531
Dyer v Dyer (1788) 2 Cox 92; 2 Cox Eq Cas 92; 30 ER 42
Grier & Malphas [2016] FamCAFC 84
In the Marriage of Aleksovski (1996) FLC 92-705
In the Marriage of Kowaliw (1981) FLC 91-092
Jabour & Jabour [2019] FamCAFC 78
Kouper & Kouper (No 3) [2009] FamCA 1080
Martin v Martin (1959) 110 CLR 297
Muschinski v Dodds (1985) 160 CLR 583
Nelson v Nelson (1995) 184 CLR 538
Omacini & Omacini (2005) FLC 93-218; [2005] FamCA 195
Pettitt v Pettitt [1970] AC 777
Stewart Dawson & Co (Vict) Pty Ltd v Federal Commissioner of Taxation (1933) 48 CLR 683
Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278
Wirth v Wirth (1956) 98 CLR 228
Division: Division 2 Family Law Number of paragraphs: 105 Date of hearing: 4-6 March 2024 Place: Melbourne Counsel for the Applicant: Mr Othen Solicitor for the Applicant: Long Saad Woodbridge Lawyers Counsel for the Respondent: Mr Dura SC Solicitor for the Respondent: Pigdon Norgate Family Lawyers ORDERS
SYC 5838 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CABELLO
Applicant
AND: MR CABELLO
Respondent
ORDER MADE BY:
JUDGE STEWART
DATE OF ORDER:
6 DECEMBER 2024
THE COURT ORDERS THAT:
1.Order 1 of the minute of consent orders dated 31 August 2020 and made by His Honour Judge B Smith, be and is hereby discharged.
2.Orders 7 and 8 of the orders made 2 October 2020 by His Honour Judge B Smith be and are hereby discharged.
3.Within 90 days from the date of these orders (“the date”) the Husband pay to the Wife the sum of $227,543 (“the payment”), after which interest shall accrue and be payable at the rate set by the Federal Circuit Court and Family Court of Australia (Family Law) Rules 2021 (Cth).
4.Contemporaneously with the payment:-
(a)the Husband do all such acts and things and sign all documents necessary to transfer to the Wife the whole of his right, title and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales (and being the whole of the land in Folio Identifier … and registered at the date of these orders in the name of the parties joint tenants) (“the Suburb C Property”);
(b)the Wife refinance or discharge the mortgages to the Commonwealth Bank of Australian loan with the loan number ending #...30 (secured by mortgage against the Suburb C Property, being mortgage registered number ...) and with loan number ending #...67 (secured by mortgage against the Suburb C Property, being mortgage registered number …).
5.Pending the payment, the Husband pay interest and principle repayments associated with the Commonwealth Bank of Australia loan with the loan number ending #...67 (which loan being in the sum of approximately $242,908) and indemnify and keep indemnified the Wife with respect to same.
6.Save as is provided for in order 5 hereof, the Wife be responsible for and indemnify and keep indemnified the Husband against:-
(a)all payments due pursuant to the mortgage to the Commonwealth Bank of Australia loan with loan number ending #...30;
(b)after such time as the Husband makes the payment, all payments due pursuant to the mortgage to the Commonwealth Bank of Australia loan with loan number ending #...67; and
(c)all utilities, rates, taxes and like apportionable outgoings pertaining to or affecting the Suburb C Property.
7.In the event that the payment is not made within 120 days of the date of these orders, specific liberty be reserved to the parties to apply directly to the Chambers of Her Honour Judge Stewart by way of an Enforcement Application and supporting affidavit for enforcement of these orders.
8.Within 60 days of the date of these orders, the parties do all such acts and things and sign all such documents as may be necessary to close any accounts standing in credit with financial institutions held in the joint names of the parties (if any) and divide the remaining balance equally between them.
9.As between the Husband and the Wife, the Husband shall be solely entitled to receipt of the full amount of monies currently in the parties’ joint names, held in the D Conveyancing trust account.
10.As between the Husband and the Wife, and subject to any contrary statement in these orders, the Husband shall retain all interest in and entitlement to:-
(a)all really and personal property now in his respective possession or control, including but not limited to the real property situate and known as E Street, Suburb F, in the State of New South Wales, his Motor Vehicle 1, his Motor Vehicle 2, and household contents;
(b)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name respectively; and
(c)all interests in life insurance policies and superannuation funds standing in his sole name respectively, including but not limited to his Superannuation Fund 1 superannuation interest.
11.As between the Husband and the Wife, and subject to any contrary statement in these orders, the Wife shall retain all interest in and entitlement to:-
(a)all real and personal property now in her respective possession or control, including but not limited to the Suburb C Property, her interest in G Pty Ltd, her 1/3 legal interest in the property situate and known as H Street, Suburb J, and household contents;
(b)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name respectively; and
(c)all interests in life insurance policies and superannuation funds standing in her sole name respectively, including but not limited to her Superannuation Fund 2 superannuation interest.
12.The parties hereby release each other from all actions, proceedings, claims, demands, costs, liabilities and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing and also hereby indemnifies and shall keep indemnified the other party in respect of the same.
13.The parties each do all such acts and things and sign all documents, authorities and writings necessary to give effect to all or any of these orders.
14.Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:-
(a)each party be solely entitled to the exclusion of the other party to all property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(c)all insurance policies to become the sole property of the owner named therein;
(d)each party to be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)any joint tenancy of the parties in any real or personal estate be and is hereby expressly severed.
15.Each of the parties be at liberty to provide a copy of these orders to potential lenders/financiers in order to comply with these orders.
16.The parties have liberty to apply to the Chambers of Her Honour Judge Stewart within 7 days of the date of these orders with respect to the form, but not the substance, of these orders.
17.All extant applications be otherwise dismissed, and the matter removed from the list of pending cases maintained by the Court.
AND THE COURT NOTES THAT:
A.It is intended that these orders shall as far as practicable finally determine the financial relationship between the parties and avoid further proceedings between them.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE STEWART
These are property proceedings. The Husband is aged 59 and the Wife is aged 42. The parties commenced living together in either August 2011 or April 2012, married in 2013 and separated under one roof on 31 October 2019. A divorce order was made in early 2022 which took effect a month later.
Initially, the proceedings also involved a parenting dispute regarding the parties' two sons, nine year old X born 2015 (“X”) and seven year old Y born 2017 (“Y”) (collectively “the children”). Final parenting orders with respect to the children were made by consent on 7 June 2023, leaving only the property issues for resolution. Pursuant to the 7 June 2023 consent orders, the children live with the Wife and spend five nights per fortnight with the Husband during school term, half school holidays and special days.
THE PROPOSALS
The parties are in dispute as to how their property should be divided following separation after their nearly 8 or 9-year relationship and marriage. The proceedings were commenced in 2020, and the parties’ respective claims have evolved over that time.
As the parties’ proposals currently stand, the Applicant Wife seeks:-
(a)transfer of a property (known as the “Suburb C Property” or the “former matrimonial home”) to her sole ownership;
(b)discharge of the mortgages over the Suburb C Property by the Respondent Husband (with the Husband to pay those mortgages until they are discharged);
(c)a payment to the Wife from the Husband of $200,000; and
(d)otherwise each party retain their interests in all other property in their respective names (including superannuation).
The Respondent Husband seeks:-
(a)transfer of the Suburb C Property to the Wife’s sole ownership;
(b)discharge of the mortgages over the Suburb C Property by the Wife and the Wife to be responsible for those mortgages until they are discharged;
(c)a payment to the Husband by the Wife of $200,000 (the Husband having amended his position from the commencement of the hearing when he sought a payment from the Wife of $450,000); and
(d)otherwise each party retain their interests in all other property in their respective names (including superannuation).
Each party also seeks costs orders against the other. At this point there is no reason to think that the usual position pursuant to section 117 of the Family Law Act 1975 (Cth) (“the Act”) should not apply, although the parties may make a formal costs application following the result of these proceedings, if they consider there are grounds.
The parties’ respective positions are a significant distance apart in terms of their respective proposed property adjustment. The parties do not agree on what should be included amongst the assets and liabilities to be adjusted between them (which, for ease of reference, I shall refer to as the asset pool). At the conclusion of the proceedings, the parties’ respective constructions of their asset pools differed in that:-
(a)The Wife is registered on title of a property as to a one third interest at H Street, Suburb J in the state of New South Wales (and I shall refer to this interest of the Wife as the H Street property). This interest in the H Street property (if indeed she does have an interest) was acquired by the Wife well before she and the Husband commenced their relationship, cohabitation, and marriage. The Wife asserts that she holds her interest in that property on trust for her Mother and/or her Mother and Father. She says that she agreed to go on title to that property and become a joint mortgagor with her parents to assist them with the acquisition of that property in circumstances where they could not fund the acquisition and borrowings without her support. The Wife says that she has made no financial H Street to the property or the mortgage. Therefore, it is said by the Wife that the H Street property should not be included in the asset pool for division. The Husband asserts that it should. On the Husband’s case the Wife’s purported interest in the H Street property, less the current mortgage liability, is $333,333.
(b)In the event that the H Street property is an item in the asset pool, there is a further controversy with respect to whether the mortgage should be calculated at $107,000 or $50,000 and thus whether the net equity in the property should be $277,000 or $333,333.
(c)There is a modest dispute as to whether the Husband’s rental bond on his current rental premises should be inserted at $3,920 (the total amount) or $1,920 (half the bond as his current partner paid him one half of the bond amount either in April 2022 or soon thereafter).
(d)There is a dispute as to whether funds withdrawn by the Wife from bank in the sum of $6,500 should be added back in to the asset pool.
(e)There is a dispute as to whether the Wife’s assessed and paid Capital Gains Tax liability of $25,888 should be included as a liability to be taken into account, as the Wife said she borrowed that amount from her Mother to pay the tax.
(f)Finally, there is a minor dispute as to whether or not the Husband’s credit card liability should be included as a liability to be taken into account.
Whilst noting the disputes between the parties it is to their credit that there is much in the asset pool about which they agree. They agree on the property valuations of two real properties and the Wife’s business. They agree on motor vehicle valuations, cash accounts and the value of chattels, jewellery and the Husband’s guitar collection. They agree that their interim property allocation of $50,000 should be included in the asset pool as should the proceeds of sale of other guitars retained by the Wife as should the proceeds of sale of a share portfolio retained by the Husband. They also agree that the Husband’s unpaid land tax and Australian Tax Office assessments should be included as liabilities. Finally, they agree that their respective superannuation entitlements ($248,000 for the Wife and $481,411 for the Husband) should be included in a single pool available for division of property between the parties, rather than being treated separately and perhaps differently when considering how property should be divided between them. Neither of the parties seek a superannuation split.
Save for the issue of the H Street property, I do not regard the controversies regarding the asset pool as being overly significant. The overall property to be divided between the parties is in the vicinity of 7 million dollars.
A key factor in the disparity in the parties’ positions is the consideration of contributions, particularly the introduction by the Husband of an unencumbered property in Suburb F which now sits in the asset pool at $3,750,000. That initial financial contribution is overwhelmingly superior to the initial financial contributions of the Wife (especially if her interest in the H Street property is excluded), but necessarily must be weighed in the balance of all of the other contributions made by the parties during the marriage and relationship, and the post separation contributions of each of the parties four-and-a-half years after separation. A lesser, but still important, disparity between the parties is how the section 75(2) factors should be assessed, and whether those factors do result in a further adjustment in favour of the Wife.
At the commencement of the proceedings, there were numerous other issues where the parties were in disagreement. As the hearing progressed, the parties sensibly resolved some of those less significant issues and largely distilled the case to its essence.
THE HEARING
There have been many matters referred to by the parties in these proceedings. I have not been able to include every piece of evidence I have heard or matters on which there was evidence in these reasons. Just because I have not referred to something in these reasons does not mean that I did not have regard to it. I have taken all the evidence into account.
In these reasons, unless it is clear from the context that this is not so, a statement of fact is a finding of fact.
Pursuant to section 140 of the Evidence Act 1995 (Cth), the standard of proof is to a balance of probabilities.
HISTORY
The Husband was born in 1965 and the Wife was born in 1982. They are aged 59 years and 42 years respectively. The Husband is employed as a manager for K Company, earning around $140,000 per annum (before tax) with the possibility of bonuses. For instance, in Calendar Year 2022 his bonus was said to be $524.87 per week or $27,293.36 per annum (after tax), and in his financial statement, the Husband estimated his current average weekly before tax income from bonuses at $838. The Husband also receives a car allowance he values at $231 weekly before tax. As best I can tell, the Husband’s current estimated before tax weekly income, excluding superannuation and rental income, is $3,748, being an annual income of $194,896.
The Wife runs a business via a company with her friend Ms L. The Wife holds one half of the shares and Ms L’s company holds the other half of the shares. The Wife earns approximately $150,000 per annum from that endeavour, but also receives a series of other benefits, including a vehicle, a mobile phone, and an internet subscription. I do not have evidence that would enable me to quantify the precise financial quantum of those additional benefits, but I take them into account.
The parties began living together in either August 2011 (according to the Wife) or April 2012 (according to the Husband). I do not think anything turns on the parties’ different accounts as to the date of cohabitation. They married in 2013. The children were born in 2015 (X) and 2017 (Y). The parties separated under the one roof in either late October or November 2019 and ultimately the Husband moved out of the former matrimonial home on either 18 or 19 September 2020 leaving the Wife and the children in occupation of the former matrimonial home from that time. Accordingly, their marriage and relationship spanned a period of approximately eight or nine years of financial interdependence, if one counts the continuing financial interdependence when they were separated under the one roof.
Well prior to the relationship and marriage, in early 1991, the Husband acquired property at E Street, Suburb F, New South Wales for $385,000 (and I shall refer to this property as the Suburb F property). The Suburb F property has proved to be a good investment for the parties. Prior to the parties’ relationship and marriage, and from 2007, the Suburb F property has been leased and remained so during the relationship and marriage. As the Suburb F property is unencumbered, the property was income positive. Since 2018, it has been rented for $1504 per week. At around the time the parties commenced living together, the single expert Mr M valued the property at $1,775,000, and it now sits in the asset pool at $3,750,000.
In early 2003, the Wife’s parents, together with the Wife on title and as joint mortgagor, acquired the H Street property for $445,000. The Husband asserts that at around the time the parties started living together, the H Street property was worth around $560,000, and thus the Wife had an initial financial contribution with respect to this property of around $185,000. The Wife notes that the property was subject to a mortgage of $340,000. I note that the Husband does not appear to have included that mortgage in his calculations, and the mortgage would intuitively reduce any interest the Wife might have to approximately $73,000. Beyond a subpoena issued to the Commonwealth Bank of Australia indicating that the Wife’s interest in the H Street property was $600,000 in 2014, there seems to be no other evidence as to the value of that property and the Wife’s legal one third interest in it at about that time. Due to the seemingly radical increase from either $73,000 or $186,000 to $600,000 in just three years, I am not sure whether that $600,000 figure is in fact intended to represent the total value of the H Street property at that time, instead of just the Wife’s interest. It goes without saying that if my determination is that the H Street property should be inserted as an item in the asset pool, that this property forms part of the initial financial contributions made by the Wife.
Also constituting part of the Wife’s initial financial contributions, in early 2010 the Wife acquired property at N Street, Suburb O, New South Wales (which I shall refer to as the Suburb O property), subject to mortgage. There is no concrete evidence as to the value of that property when the parties started living together in either August 2011 or April 2012, but a number of months later in October 2012, the property was tenanted and approximately a year later it was sold, reaping net proceeds of sale of either $70,000 (according to the Husband) or $80,000 (according to the Wife).
As I said, the parties resolved the parenting proceedings by consent on 7 June 2023, with orders (in summary) that the parties have equal shared parental responsibility for the children, and the children live with the Wife and spend gradually increasing time with the Husband, culminating in them spending five nights per fortnight and half of all school holidays with the Husband. The Wife therefore has a greater care obligation for the children, during school terms.
THE EVIDENCE
The Husband relied on his own evidence.
The Wife relied on her own evidence and the evidence of Ms P (the Wife’s Mother).
Both parties relied on the evidence of a series of single expert valuers, being:-
(a)Mr Q, a single expert valuer jointly instructed by solicitors for both parties to value the H Street property and a property at B Street, Suburb C, New South Wales;
(b)Mr M, a single expert valuer jointly instructed by solicitors for both parties to value the Suburb F property;
(c)Mr R, a single expert valuer jointly instructed by solicitors for both parties to value the Wife’s business “G Pty Ltd”; and
(d)Mr S, a single expert valuer jointly instructed by solicitors for both parties to value the Wife’s one-third interest in the H Street property (regardless of whether that interest is held on trust).
The Husband and the Wife were each cross-examined. The other witnesses were not required for cross-examination, and their affidavits were therefore accepted into evidence unchallenged.
The Wife
I had the valuable opportunity to observe the Wife give her evidence. The evidence traversed the following key topics:-
(a)the contributions the Wife made to the relationship;
(b)the exact nature of the G Pty Ltd business, including the income the Wife receives from it, and whether its activities (especially regarding the management of the Suburb F property) constituted a contribution during the relationship;
(c)the history of the parties’ property transactions;
(d)apparent errors in the Wife’s filed financial statement (which the Wife appeared to accept);
(e)how the Wife had spent money taken from the parties’ joint bank account, post-separation;
(f)the history of the H Street property, including whether the Wife holds her interest on trust for her mother, and how subsequent financial documents referencing the H Street property should be understood; and
(g)whether the Wife’s legal fees were funded by the loan on the H Street property, or by an inheritance her mother had received.
I do not consider that the Wife gave deliberately false evidence at any point. That said, some of her evidence was not wholly plausible. I was not persuaded by the Wife’s assertion that her spending of moneys from the joint account was in fact reasonable. I also gained the impression that the Wife can be obstinate, and may have had an inflated sense of the degree of contributions she made, and the degree of hardship she experienced. For example, the Wife asserted that the Husband failed to support her new business when she set up G Pty Ltd. While it appeared the Wife genuinely holds that view, it was not a sustainable position in light of: (1) the Husband providing a portion of the initial capital for the business; (2) the Husband transferring management of the Suburb F property to G Pty Ltd; and (3) the Wife not being able to point to any request for assistance she had made that the Husband had failed to provide. Rather, the Wife’s grievance was that she felt she had carried an unreasonable share of the domestic labour at that time, as she considers she was still the primary carer for the children, while working full-time. It is certainly true that domestic labour has a real impact on an individual’s capacity to undertake intensive paid employment, and its impacts on whole-of-career earnings are well known. However, an alleged inequality of domestic labour is not equivalent to the Husband failing to support the Wife establishing G Pty Ltd.
By contrast, I did not consider that the Wife’s evidence regarding the H Street property was shaken in any meaningful way. Her account was consistent, and was consistent with the affidavit provided by the Wife’s mother. That affidavit was accepted into evidence unchallenged, and I therefore take the facts of the purchase of the H Street property as stated by the Wife and her mother. As such, the dispute about whether a trust applies is a question about the legal and equitable consequences of those facts, rather than the facts themselves, with one exception – whether various payments by the Wife were in fact contributions to the mortgage, or merely a series of gifts to her parents.
Senior Counsel for the Husband spent a considerable amount of time on the issue of whether the Wife had subsequently benefited from deliberately representing to the Commonwealth Bank that her legal interest in the H Street property was also a beneficial interest, and thus an asset that could justify further mortgages being granted to the parties on other investment properties. The Wife denied she had knowingly made that representation. When Senior Counsel pointed to subsequent mortgage forms including the H Street property interest, the Wife stated that she believed that information was automatically populated by the bank from their own records. I accept that the Wife was being truthful in her evidence in this regard.
Senior Counsel attempted to assert that the Wife’s explanation was implausible by pointing to other information in or related to those forms that the Wife agreed would likely have been supplied by her in the loan application, asserting that therefore the Wife could not suggest that information about value of her interest in the H Street property had not come from her. Senior Counsel’s argument seemed to be based on a premise that either everything in a specific form was supplied by the bank’s own data, or everything in the form was supplied by the Wife. I do not accept that the bank’s practices are so black and white, and it is at least possible that the bank sourced its information from multiple sources. I accept the Wife’s evidence that she could not recall supplying that information to the bank, although that is not the end of the consideration. The Wife at the very least would have read the loan application and probably signed it. If the Wife’s position that she holds her one third interest in the H Street property on trust is accepted, then it is clear that she has made a false representation to the Bank. This does her no credit, but on balance it is my view that the trust issue rests on the facts of the acquisition of and contributions to the H Street property, and in making a proper assessment of that issue it would not be reasonable (in assessing the Wife’s case) to hold her to that representation, rather than undertaking a proper examination as to whether the elements of a trust exist.
The Husband
I also observed the Husband giving evidence. His temperament appeared reasonably similar to the Wife’s. I again do not consider there were grounds to be concerned about deliberate falsehoods, albeit that, like the Wife, the Husband may have an inflated perception of his own contributions.
Factual disputes raised during the Husband’s evidence were limited. There was some dispute about exactly how the Suburb F property was managed, including whether the Wife had assisted in managing that property directly and whether the property management fees paid to G Pty Ltd actually reflected G Pty Ltd doing the day-to-day management of the property. The Husband stood by his evidence that he managed the Suburb F property, as evidenced by various documents he had provided showing direct contact between the Husband and tradespeople.
It was suggested to the Husband that he deliberately chose not to increase the rent at the Suburb F property since 2018 (notwithstanding considerable rental market movement) as a forensic tactic to maximise outcomes in this proceeding. The Husband rejected that, but could not otherwise explain the absence of rental increases. That said, it is not necessarily clear to me that roughly five years of foregone rent increases would be financially advantageous in the long-term, even if it assisted the Husband’s case in some way. I also note that the Husband’s case is that the Suburb F property and its income should entirely be counted as the Husband’s contribution, meaning reduced rent would reflect a reduced post-separation contribution, as a number of expenses (notably including mortgages) remain shared expenses. I am therefore not persuaded there is a sufficiently clear identification of the asserted forensic benefit to the Husband to justify making an inference that he has consciously chosen not to increase the rent as a ploy in these proceedings.
There was also a question raised about whether the Husband was entitled to the return of the full bond at his new residence (where he rents), or whether half of that bond would instead flow to his new partner. The bond in question was $3920, and therefore half the bond would be $1960. A dispute over less than $2000 in an asset pool of around $7 million highlights the extent to which these proceedings have become trapped in minutiae. In any case, Counsel for the Mother's submissions on this topic rose no higher than an assertion that it had not been proved that half the bond was owed to the Husband’s partner.
DISCUSSION
I must consider whether it is just and equitable to make an alteration of property interests between the parties. I have described the busy joint efforts of the parties, the birth of X and Y, and the parties' acquisition of wealth during their relationship and marriage. Each party made material financial decisions based on an aspiration that the relationship would continue as a joint endeavour. I am well satisfied that it is just and equitable to alter the parties’ property interests. Neither party suggested I should not.
Accordingly, I shall identify the value of property, assets, financial resources and liabilities of the parties.
Once the assets are identified, and having determined that it is just and equitable to make a property order, I will consider relevant financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the acquisition, conservation or improvement of any of the property of the parties or either of them. I will also consider the contribution made by the parties to the welfare of the family, including the children.
Having assessed the parties’ contributions to the identified asset pool as agreed by the parties, or alternatively determined by the Court, I will look at relevant matters pursuant to section 75(2) of the Act.
The value of property, assets, financial resources and liabilities of the parties
The parties provided a comparative table of the current assets and liabilities each asserted in their case, which was marked Aide Memoire J1. After the conclusion of evidence, the parties indicated a number of previously-disputed items where they had reached agreement as to value. The following table reflects the information in Aide Memoire J1, as modified by the parties’ subsequent agreements. Disputed items are highlighted for ease of identification.
Ownership Description Wife’s Value Husband’s Value ASSETS Real Estate Joint B Street, Suburb C (“Suburb C property”) $2,000,000 $2,000,000 Husband E Street, Suburb F ("Suburb F property") $3,750,000 $3,750,000 Wife H Street, Suburb J (1/3 share) Excluded $383,333 Companies/Trusts Wife G Pty Ltd (50% share) $625,000 $625,000 Wife Motor Vehicle 3 (owned by G Pty Ltd and driven by Ms L) Excluded Excluded Wife Motor Vehicle 4 (owned by G Pty Ltd and driven by Wife) $92,150 $92,150 Wife 50% of CBA Business Transactions Account #...60 $475 $475 Wife 50% of CBA Business Transaction Account #...75 $223 $223 Wife 50% of CBA Business Transaction Account #...42 $7,901 $7,901 Wife 50% of CBA Business Online Saver Account #...64 $5,003 $5,003 Bank Accounts Wife CBA Smart Access Account #...21 $3,713 $3,713 Wife/X CBA Account #...48 $0 $53 Wife/Y CBA Account #...56 $0 $53 Husband CBA Cash Investment Account #...04 $0 $0 Husband CBA Complete Access Account #...56 $20,591 $20,591 Joint D Conveyancing Trust Account $11,210 $11,210 Motor Vehicles Husband Motor Vehicle 1 $82,000 $82,000 Husband Motor Vehicle 2 $12,350 $12,350 Shares Husband 157 T Company Shares $1,228 $1,228 Husband CommSec Account …88 $0 $0 Miscellaneous Husband Balance owing of loan to Paternal Father [sic] $0 $0 Joint Contents at Suburb C Property $10,000 $10,000 Wife Handbag $0 $0 Wife Jewellery $8,000 $8,000 Husband Rental Bond for U Street, Suburb V $3,920 $1,960 Husband Loan to Father $0 $0 Husband Home Contents including guitars in Husband’s possession $12,000 $12,000 Total: $6,645,764 $7,027,243 ADDBACKS Court-ordered distributions and payments Wife Interim distribution ($50,000 – legal fees) $50,000 $50,000 Husband Interim distribution ($50,000 – legal fees) $50,000 $50,000 Wife Wife's 50% share of Payment to Revenue NSW with respect to land tax on sale of Suburb W property (paid by Husband in first instance) $706 $706 Husband Interim Order 4 of Minutes of Orders signed 01.06.2023 Excluded Excluded Items disposed of post-separation Wife Instruments and household items sold by the Wife post-separation $23,600 $23,600 Husband Gross shares sale proceeds (expended on legal fees and cost of living) $106,716 $106,716 Wife Funds withdrawn by Wife from CBA Account #...09 from 19.03.2020 to 01.07.2020 $0 $6,500 Legal fees Wife Legal fees as at 23.05.2023 Excluded Excluded Husband Legal fees as at 24.05.2023 Excluded Excluded Total: $231,022 $237,522 LIABILITIES Mortgage/home loans Joint CBA Home Loan account #...67 $242,908 $242,908 Joint CBA Home Loan account #...30 $205,991 $205,991 Wife 1/3 of CBA Home Loan account #...12 (secured on H Street Property) Excluded $50,000 Personal liabilities Husband Z Finance loan Excluded Excluded Husband Motor Vehicle 1 Loan $75,400 $75,400 Husband 2024 Land Tax Notice Assessment $15,574 $15,574 Husband Outstanding legal fees owing to Pigdon Norgate Excluded Excluded Husband ATO Tax liability as at 15.02.2024 $55,363 $55,363 Wife Loan from Mother to pay ATO Tax liability (including CGT Liability) $25,888 $0 Company liabilities Wife Lease secure to Motor Vehicle 4 $65,733 $65,733 Credit cards Husband CBA Mastercard Diamond Account #...19 Excluded $4,456 Total: $686,857 $715,425 SUPERANNUATION Wife Superannuation Fund 2 Accumulation $248,000 $248,000 Husband Superannuation Fund 1 Accumulation $481,411 $481,411 Total: $729,411 $729,411 SUMMARY Total Property $6,645,764 $7,027,243 Total Addbacks $231,022 $237,522 Total liabilities $686,857 $715,425 Total superannuation $729,411 $729,411 Final Total: $6,919,340 $7,278,751
As can be seen, disputes as to value are now limited. Disputes as to on-going ownership of the above items are also limited. The parties indicated that they generally consider each item of the above should remain in the ownership of the current listed owner, save that:-
(a)the D Conveyancing Trust Account should be assigned to the Husband;
(b)the contents of the Suburb C Property would remain at that property, and therefore be assigned to the Wife;
(c)the parties dispute who should be responsible for the mortgages over the Suburb C Property (being CBA Home Loan accounts #...67 and #...30); and
(d)each of the parties asserts that the other should be required to make a substantial transfer of additional monies (the Wife seeking $200,000 from the Husband, and the Husband initially seeking $450,000 from the Wife subsequently reduced to $200,000), and acknowledged that achieving those payments may require liquidating other assets.
In closing addresses, the parties advised that they both considered the superannuation accounts should be included in the property pool on a one pool approach and neither party proposed a superannuation splitting order.
While most matters in dispute will require a more detailed consideration, two can be disposed of here. First, as noted above, I accept the Husband’s evidence regarding the rental bond plausible, and consider the Wife’s argument does no more than speculate that the Husband will not return to his new partner the half of the bond that she paid. I therefore treat the value of the rental bond as $1,960.
Second, in my consideration of the issues in this matter, I do not consider there is a principled basis on which to include what appear to be the children’s bank accounts within the asset pool. I therefore exclude from the pool the $106 in CBA accounts #...48 and #...56.
Issues in dispute in the asset pool
Accordingly, I now turn to the contentious issues which do need to be dealt with regarding the asset pool.
Whether to ‘add back’ money taken by the Wife from the Joint Account
The Husband has argued that the Wife acted unreasonably in taking various monies from the parties’ joint bank account. The Husband asserts that the Wife unreasonably took $6,500 from the joint account, and argues that this money should be treated as an ‘add back’ to the property pool, particularly as the money was largely spent on legal fees.
The Wife states, at paragraph [168] of her 29 November 2022 affidavit, that she took the money from the joint account, and says it was spent as follows:-
(a)$200 for groceries (18 February 2020);
(b)$150 for dog grooming (25 February 2020);
(c)$300 for clothes for the children (19 March 2020); and
(d)$5,600 for legal fees (1 July 2020).
The Wife’s breakdown of her expenditures of these monies was not challenged in cross-examination. I note that the Wife’s stated expenditures totals $6,250, rather than $6,500. In reviewing the dispute items of the balance sheet with Counsel, Senior Counsel for the Husband referred me to paragraph [168] of the Wife’s affidavit, and did not indicate any additions to the amounts listed in that paragraph. Given the reference to that paragraph, I therefore take the above listed amounts as the sole basis for the $6,500 add back the Husband seeks.
In Omacini & Omacini [2005] FamCA 195, the Full Court of the Family Court referred to three clear categories where it might be appropriate in the exercise of discretion to add back property which is no longer in existence when calculating assets available to be divided. Those circumstances are:-
(a)where there has been a previous distribution of matrimonial assets;
(b)where the parties have depleted the asset pool on legal fees; or
(c)where a party has embarked on a course of conduct that has negligently or recklessly diminished or wasted assets.
The question of addbacks was considered by His Honour Justice Murphy in Kouper & Kouper (No 3) [2009] FamCA 1080 at paragraphs [97]-[99]:-
The Full Court in Omacini & Omacini (2005) FLC 93-218 noted that circumstances in which it is appropriate to notionally add-back to the pool of assets, fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and in the circumstances outlined in Kowaliw referred to above.
That Full Court rejected the notion that “the mere fact that a party has expended money realised from the disposition of assets that existed as at the date of separation, will result in that expenditure being added back…” as being unduly simplistic (at para 39).
That add-backs are exceptional has also been emphasised in the Full Court in C v C ([1998] FamCA 143) where, (at para 46) the Full court held:
Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool, ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.
Further, at paragraph [108], Justice Murphy said:-
108.Whilst, clearly enough, the authorities make it plain that the manner in which any dissipation of funds should be dealt with is a matter for the trial judge’s discretion, and accepting that the discretion ought not, of course, be fettered, it nevertheless seems to me that (leaving aside the issue of paid legal fees) the authorities indicate that the issue can, conveniently, be approached by reference to five questions:
(a)Is it contended that property (including money), that would otherwise be available for distribution between the parties if a s 79 order is made, has been dissipated with a consequential loss to the property otherwise potentially divisible between the parties at the date of trial?;
(b)If so, is it alleged that the dissipation of property was in respect of things other than what, in the particular circumstances of this particular marriage, can be classified as “reasonable living expenses”?;
(c)If it is asserted that any loss to the divisible property results from dissipation of property other than in respect of such expenses, why is it asserted that the result should be a sharing of that loss by the parties other than equally?
(d)If it is contended that this be the result, why should there be an add back (which brings to account, dollar for dollar, such past expenditure in current dollars) as distinct, for example, from there being an adjustment being made pursuant to s 75(2)(o)?; and
(e)How should either any “add back”, or adjustment pursuant to s 75(2)(o), be quantified??
In Grier & Malphas [2016] FamCAFC 84, Their Honours Justices Murphy and Kent noted the importance of taking into consideration situations where there is significant disparity in the use of sums post-separation, the use of such funds in determining the exercise of discretion, stating:-
128.Each of the parties used funds available to them in the approximately four years between separation and trial. Included in purposes for which the sums were used were the reasonable living expenses of each. So-called “addbacks” are the “exception and not the rule”. Further, although always of course a matter of discretion it can be said that, in the usual course of events, amounts spent on reasonable living expenses would not often be added back.
129.As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. No error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and s 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.
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131.… the evidence discloses a very significant disparity in the sums expended by the parties and that her Honour did not address that disparity or examine the purposes for which the money was used. We repeat that this is a matter of discretion and could have been done either by “adding back” or, as has been suggested as often preferable by decisions of the Full Court, by reference to s 75(2)(o).
The $5,600 spent on legal fees falls squarely within a recognised category for add backs. Nothing in evidence persuades me that this legal expenditure should be treated differently. It will therefore be treated as an add back into the property pool.
As for the $650 spent in the other three expenditures identified, those appear to be general living expenses, and do not appear to have any of the features identified in Kouper & Kouper that would justify treating them as an add back. I therefore exclude that $650 from the property pool.
Whether to include the asserted loan to the Wife’s mother as a liability
This matter was not addressed during cross-examination. I therefore took it as agreed that the Wife made a capital gains tax payment in at least approximately this amount, and that the payment was funded through money received from the Wife’s mother. The only issue was therefore whether that money constituted a loan that needed to be repaid. In many ways, this issue was a mirror of the dispute regarding the rental bond for the Husband’s current residence, as the only real issue was whether there was sufficient evidence of an obligation to repay. I had no reason to reject the Wife’s statements on this point, and therefore on balance of probabilities, I accept that she has a loan obligation (albeit informal and unsecured) to her own mother. Accordingly, an amount of $25,888 will be included in the property pool as a liability that the Wife owes.
Whether to include the Husband’s Mastercard debt as a liability
I indicated on Day 2 of the Final Hearing that I proposed to include the Husband’s modest credit card debt as a liability. The Wife resisted that on the basis that it had not been paid and there has been a lengthy time after separation, and/or it should have been paid. That may be so, but it has not been paid, and it is an extant liability of one of the parties, in a situation in which their post-separation incomes and savings are yet to be disentangled. It is therefore appropriate to acknowledge post-separation expenses. Although I am surprised that this argument could not be resolved between the parties, the amount is de minimus and shall be included.
Whether to include the H Street property within the Property Pool
Appropriately, this issue received extensive attention during the trial. It is uncontroversial that the Wife is the legal owner of a one-third interest in the H Street property, and is listed as a co‑borrower on the mortgage over the H Street property, treated at trial as a one-third liability. However, the Wife asserts that she holds that one-third interest on trust (a resulting trust) for her mother, and is listed as a co-borrower solely because the bank was reluctant to issue the loan to her parents. The bank’s reluctance on that count proved to be justified, as the Wife’s father later entered bankruptcy, and his share of the H Street property was taken over by the Wife’s mother.
The law of resulting trusts is well settled. The High Court in Bosanac v Commissioner of Taxation [2022] HCA 34 (“Bosanac”) (per Kiefel CJ and Gleeson J) stated:-
12. A trust of a legal estate in property taken in the name of another is take not “result” to the person who advances the purchase money [citing Dyer v Dyer (1788) 2 Cox 92 at 93 [30 ER 42 at 43]]. The categories of resulting trust include trusts arising from A’s payment for the conveyance of rights to B; the voluntary transfer of rights inter vivos from A to B; and the transfer of rights on a failed declared trust. The term “resulting trust” states a legal response to proved facts [citing Swadling, “Explaining Resulting Trusts” (2008) 124 Law Quarterly Review 72 at 79]. The presumption of a resulting trust developed by analogy from the rule of the common law that where a feoffment, or conveyance, is made without consideration, the feoffment results to the feoffer [citing Dyer v Dyer (1788) 2 Cox 92 at 93 [30 ER 42 at 43]]. It arose from the common practice of the 15th to 17th centuries of those having fee simple estates in land to put them in use (the precursor to the trust) for themselves [citing Swadling, “Explaining Resulting Trusts” (2008) 124 Law Quarterly Review 72 at 79]. Because words of trust were not included on the face of the conveyance and because the transfers were gratuitous, the court supplied a presumption of a declaration to uses [citing Swadling, “Explaining Resulting Trusts” (2008) 124 Law Quarterly Review 72 at 80]. There were various advantages to the practice, including avoiding the hardship of feudal times, and avoiding escheat and forfeiture to the Crown in time of war, such as the Wars of the Roses [citing Anderson v McPherson (No 2) (2012) 8 ASTLR 321 at 338 [110]-[112]].
13. The presumption can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land (or other property) held on trust for him or her [citing Stewart Dawson & Co (Vict) Pty Ltd v Federal Commissioner of Taxation (1933) 48 CLR 683 at 690; Calverley v Green (1984) 155 CLR 242 at 251; Nelson v Nelson (1995) 184 CLR 538 at 547]. The presumption cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence [citing Muschinski v Dodds (1985) 160 CLR 583 at 612], and where more than one person pays the purchase price, as here, regard is necessarily had to evidence of each of their intentions.
Senior Counsel for the Husband argued that the Court should not find a resulting trust over the H Street property because in this case, it was the Wife's own parents who provided the purchase price for the property, and therefore the presumption of advancement applies instead. Their Honours Kiefel CJ and Gleeson J addressed the interaction between the presumption of a resulting trust and the presumption of advancement in Bosanac immediately after the foregoing paragraphs:-
14. The presumption of advancement allows an inference as to intention to be drawn from the fact of certain relationships [citing Nelson v Nelson (1995) 184 CLR 538 at 547]. It applies to transfers of property from husband to wife and father to child, but in Nelson v Nelson [(1995) 184 CLR 538 at 548-549, 576, 585-586, 601] this Court accepted that there is no longer any basis for maintaining a distinction between a father and a mother so far as concerns transfers of property to a child. Originally the relationship were considered by themselves sufficient to afford “good consideration” for the conveyance, but a rationale for the presumption has come to be found in the prima facie likelihood that a beneficial interest is intended in situations to which the presumption has been applied [citing Wirth v Wirth (1956) 98 CLR 228 at 237].
15.On one view the presumption of advancement is not strictly a presumption at all. It may be better understood as providing “the absence of any reason for assuming that a trust arose” [citing Martin v Martin (1959) 110 CLR 297 at 303; see also Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 at 298 [55]]. At an evidentiary level, it is no more than a circumstance which may rebut the presumption of a resulting trust [citing Pettitt v Pettitt [1970] AC 777 at 814] or prevent it from arising [citing Wirth v Wirth (1956) 98 CLR 228 at 237]. It too may be rebutted by evidence of actual intention [citing Calverley v Green (1984) 155 CLR 242 at 251].
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16. This Court’s decision in Nelson reflects views about a more modern society. In that case, Dawson J [citing Nelson v Nelson (1995) 184 CLR 538 at 575] observed that there was no reason now to suppose that the probability of a parent intending to transfer a beneficial interest in property to a child is any the less the case with respect to a mother than a father…
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The weight of the presumptions
19. The maintenance of either presumption, especially that of advancement, has been the subject of commentary and criticism. In Calverley v Green [(1984) 155 CLR 242 at 248-249], Gibbs CJ pointed out that they do not always lead to a result which is what would be expected in ordinary human experience and gave as an example the circumstance of a woman making deposits of money for her niece and nephew. His Honour observed, with respect to the presumption of a resulting trust, that it would not usually be thought that the niece and nephew were to hold the monies on trust for her. In Dullow v Dullow [(1985) 3 NSWLR 531 at 535], Hope JA (Kirby P and McHugh JA agreeing) expressed the view that it “seems rather ridiculous that troubles in England at the end of the Middle Ages should be the basis, in the late twentieth century, for making findings of fact”.
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21. It is the concern of the courts to determine what was intended when property was purchased or transferred. It may once have been the case that evidence capable of rebutting the presumptions was not available. That is unlikely to be so today, especially in the context of dealings as between spouses where the relationship has been of sufficient length to permit a court to observe how the spouses have dealt with property as between themselves and managed their affairs. This evidence may take many forms, but it has always been understood that the strength of the presumptions will vary from case to case depending on the evidence.
22. The presumption of advancement, understandably, is especially weak today. In Pettitt, Lord Hodson [Pettitt v Pettitt [1970] AC 777 at 811] considered that when evidence is given it will not often happen that the presumption will have any decisive effect. In the same matter, Lord Upjohn considered that given both presumptions are but a mere circumstance of evidence, they may readily be rebutted by comparatively slight evidence [Pettitt v Pettitt [1970] AC 777 at 814].
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32. The question of intention is entirely one of fact, and concerns the intention manifested by the person or persons who contributed funds towards the purchase of the property. In Martin v Martin [(1959) 110 CLR 297 at 304], it was observed that for the most part it can be assumed that proof of intention will be made out by the circumstances. Reference was made [citing Martin v Martin (1959) 110 CLR 297 at 304] to what had been said by Cussen J in Davies v The National Trustees Executors and Agency Co of Australasia Ltd [[1912] VLR 397 at 403]:
“It is impossible to try to arrange into certain sets of categories certain facts, and say beforehand they will or will not become decisive or immaterial. The attention must be kept steadily fixed on the one fact in issue – What was at the time the intention or the purchaser or transferor? Anything which is relevant to that issue is admissible.”
In that same decision, Gageler J (as His Honour then was) explained the interaction succinctly, although with slightly different nuance:-
51. …The presumption [of a resulting trust] arises where property was purchased by one or more persons using funds contributed in whole or part by one or more others [citing Heydon and Leeming, Jacobs’ Law of Trusts in Australia, 8th ed (2016) at 212-215 [12-10]]. Unless there was consideration for the contribution, the presumption is that everyone concerned in the purchase transaction intended the property to be held at and from the time of purchase for the benefit of the contributors as tenants in common in proportion to their respective contributions…
52. …The counter-presumption arises where a contributor and a purchaser were in a recognised category of relationship… The counter-presumption is that the contributor and the purchaser intended the contribution to the purchase price to have been made and received as a gift, for the purchaser’s “advancement”.
53. Where other indications of intention are equal, or at least equivocal, the counter-presumption is a complete answer to the presumption. The zero-sum result is “the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title” [citing Martin v Martin (1959) 110 CLR 297 at 303. See also Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 at 298 [55]]: no resulting trust.
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62. …Stereotypes are best avoided. Old ones die hard. New ones should not be created judicially. Whatever might have been thought in the past, we must nowadays accept that families, even happy families, are not all alike.
63. Instead of inventing another equitable presumption, conformation of the beneficial ownership of property acquired in a familial context to contemporary expectations is better pursued by paying close attention to the content and manner of operation of the existing presumptions…. The principles that emerge… can, I think, be summarised in the following terms.
64. The presumption of a resulting trust is a presumption of fact, functionally akin to a civil onus of proof. The presumption will yield to an actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence. The weight to be given to the fact of a contribution having been made to the purchase price in drawing an inference as to actual intention will vary according to the totality of the circumstances of the case.
65. The counter-presumption [the presumption of advancement] is not really a presumption at all. The existence of a relationship within a category recognised as triggering the counter-presumption is no more than a “circumstance of evidence” [citing Dyer v Dyer (1788) 2 Cox Eq Cas 92 at 93-94 [30 ER 42 at 43]. Compare Glister, “Is There a Presumption of Advancement?” (2011) 33 Sydney Law Review 39. Considered alone, the circumstance of such a relationship is enough to negative the presumption [of a resulting trust] which arises from the bare fact of contribution to the purchase price. However, the circumstance of such a relationship will not be considered alone if other evidence going to intention is adduced will then simply be weighed in the overall evidentiary mix.
I have quoted from Bosanac at some length because, with respect to the learned Counsel and Senior Counsel for the parties, whose submissions were well-researched and of great assistance to the Court in managing a complex and lengthy factual scenario, I have concluded that both mischaracterised the operation of the presumption of advancement. The submissions from Senior Counsel for the Husband were largely directed towards an assertion that the Wife had failed to provide sufficiently clear and strong evidence to rebut the presumption of advancement. Likewise, Counsel for the Wife conceded – incorrectly, in my view – that the presumption of advancement was a threshold issue that the Wife needed to overcome in order to show that a resulting trust existed over the H Street property. In my view, Bosanac is authority that binds me to approach the presumption of advancement quite differently.
I understand Bosanac as follows:-
(a)where it is asserted that a resulting trust exists, finding any such trust will depend on determining the actual intention of the persons supplying the purchase monies at the time of the purchase;
(b)that intention is determined as a question of fact, not of law, and the weight given to different evidence or circumstances will vary from case to case;
(c)where there is evidence provided – even potentially slender evidence – presumptions of trust or advancement do not have automatic effect, and instead are merely considered as part of weighing the overall factual matrix to determine the actual, factual intent.
I turn therefore to the evidence regarding the intentions of the Wife and her parents at the time of purchasing the H Street property. The evidence is that at the time of acquisition:-
(a)the Wife was listed as a legal owner of the H Street property;
(b)the Wife did not supply any part of the purchase price for the H Street property;
(c)the Wife’s parents moved into the H Street property without any rent being paid, nor any agreement regarding such.
Both parties relied on subsequent actions and statements to give indications of the likely intention at the time of purchase. There are challenges in such an approach, in that subsequent actions and/or intentions evolving over time cannot supplant the original intention. These difficulties were conceded by both sides, although I accept that subsequent actions can still be illustrative of initial intentions and understandings.
The Wife relied on her own affidavit and the affidavit of her mother, both of which state plainly that the intention was for her parents to be the sole beneficial owners of the H Street property, and the Wife was only listed on the mortgage in order to assuage the bank’s concerns. While Senior Counsel for the Father cross-examined the Wife at length on this issue, the Wife’s mother was not required for cross-examination and her affidavit was therefore accepted into evidence unchallenged. It therefore was not put to the Wife’s mother that she had: made a false statement; was misremembering; had misunderstood the effect of the transaction; or any other reason for rejecting her account. The decision not to cross-examine the Wife’s mother therefore creates significant barriers to the Husband’s case.
In her affidavit, the Wife’s mother said as follows:-
[H Street] property
7. In or around [early] 2003, [Mr AA] [the Wife’s father] and I purchased the [H Street] property for around $445,000. My father […] gifted me $120,000 to purchase the property. The remainder of the purchase of the property was financed by way of mortgage with Commonwealth Bank. At the time [Mr AA] and I applied for the mortgage, [Mr BB] from Commonwealth Bank advised us that in circumstances where we were considered low-income earners, combined with our age, we were unable to obtain a mortgage without one of our children going on the mortgage with us. At the time we applied for the mortgage, I was working as a [healthcare professional] and [Mr AA] was working as a [tradesperson]. [Mr BB] suggested [Ms Cabello] go no the mortgage with us as a guarantor, given she had a full-time job and was around 20 years of age at the time.
8. [In] or around [early] 2003, [Mr AA] and I approach [Ms Cabello] and said words to the effect of “your father and I cannot obtain a mortgage given our ages and our income. The bank has suggested you come onto the mortgage to help us secure the mortgage. Will you help us?” to which [Ms Cabello] said, “of course, anything I can do to help you and dad I will.”
9. [In early] 2003, the purchase of [H Street] property settled. [Mr AA], [Ms Cabello] and I were listed on title as tenants in common in equal shares and a mortgage was obtained with Commonwealth Bank in the amount of $340,000. [Ms Cabello] did not contribute to the purchase price, to any stamp duty payable on settlement, or any associated costs with or in relation to the purchase and settlement of the [H Street] property. The property has always been, and continues to be, mine and [Mr AA’s] property.
10. From this time onwards, [Mr AA] and I have been solely responsible for all mortgage repayments, council rates, water rates, home and contents insurance and all associated costs of maintaining the [H Street] property. [Ms Cabello] has not made any financial contributions towards our property.
11. In or around April 2013, I became aware that [Mr AA] had incurred significant credit card debt and legal action was taken against him. In or around 22 April 2013, I discovered that a caveat had been lodged on the title of the [H Street] property by [Mr AA’s] trustee in bankruptcy.
12. In or around April 2014, I was able to refinance the mortgage over the [H Street] property with Commonwealth Bank so that only [Ms Cabello] and I were on the mortgage. I did this to assist in discharging [Mr AA’s] bankruptcy and to avoid a situation where the trustee of bankruptcy seized our home to pay for [Mr AA’s] debts. At the same time, [Mr AA] transferred his 1/3 share interest in the [H Street] property to me. [Mr AA] agreed to transfer his interest to me to mitigate any risks going forward of us losing our home in the future. I have been solely responsible for meeting all the mortgage repayments and associated expenses for the [H Street] property following [Mr AA] transferring his interest to me in April 2014.
13. In […] 2016, my father passed away. I received an inheritance of around $300,000. $211,000 of my inheritance was applied to the mortgage over the [H Street] property, reducing the mortgage from $368,000 to $157,000.
14. Although [Ms Cabello] remains on title, and as mortgagor of the [H Street] property, this is my home that [Mr AA] and I have lived in since 2003. [Ms Cabello] has not made any financial contributions towards our property. I am responsible for all mortgage repayments and associated expenses for the [H Street] property. I meet these expenses from my pension. The funds I receive from my pension are sufficient to meet these outgoings and my own general living expenses.
I have discussed above Senior Counsel challenging the Wife’s account by asserting that the Wife used her legal interest in the H Street property as part of securing further loans, and why I was not persuaded by Senior Counsel’s arguments on that front.
Senior Counsel also put to the Wife that a series of quite large transactions she made to her mother and grandfather during the parties’ marriage were in fact contributions to the mortgage over the H Street property. I found this line of questioning more persuasive in some respects, as I considered that the Wife’s explanation for the payments – that they were simply gifts – was at least curious. Those transfers would reflect very large gifts over a lengthy period of time. However, I am not prepared to accept Senior Counsel’s proposition that those payments were mortgage payments, nor that the payments evidence an earlier intention that the Wife should be a beneficial owner of the H Street property. The payments are irregular. The amounts fluctuate, and there are often significant gaps between payments, followed by a flurry of transactions. The Wife’s grandfather also was not a party to the mortgage, so treating payments to him as mortgage payments would require an assumption that money was funnelled through the grandfather to the mother, in some kind of unexplained round robin sham. Cogent evidence would be required to support such a finding, which is not available here. Therefore, while I agree with Senior Counsel that the payments are unusual, I am not prepared to find that they were mortgage payments by the Wife to the H Street property mortgage.
Even if I were prepared to find that the payments were mortgage payments, that still would not suffice to show that the Wife and her parents intended, at the time of purchase, that the Wife should have a one-third beneficial ownership of the H Street property. The H Street property was purchased in 2003. The transactions identified by the Husband commence in 2014. That is a significant gap and I would require a basis on which to be persuaded that the payments the Husband identified actually reflect an on-going pattern of payments dating back to 2003. Otherwise, the payments would not be evidence of intention as at the time of purchase. I do not have any such basis.
Considering the evidence as to intention in its totality, I find on balance of probabilities that the intention of the Wife and her parents at the time of purchasing the H Street property was that the Wife’s parents should be the only beneficial owners, and the Wife should merely hold her interest on trust for her parents. Accordingly, I find that the H Street property should not be considered an asset of the Wife for inclusion in the asset pool. I therefore exclude it from the asset pool.
The loan over the H Street property
Given my finding that the Wife’s share in the H Street Property does not form part of the asset pool, it is not strictly necessary to make findings about the value that should be assigned to that interest. However, for completeness and in case I am wrong in finding that the Wife holds her interest in the H Street Property on trust for her mother, I note the following:-
(a)the Wife asserts that the net value of her share in the H Street property (if included in the pool) should be $277,000, as that reflects the full value of both the property and the mortgage over it;
(b)the Husband asserts that the net value of the Wife’s share of the H Street Property should be treated as $333,333, based on a reduced value of the mortgage;
(c)the Husband asserts that the full value of the mortgage should not be included as a liability because a significant portion of the outstanding loan amount was due to the Wife’s mother drawing down on previously paid-off amounts to give the Wife funds for her legal fees, and therefore including that portion of the mortgage that was used for legal fees would effectively have the Husband paying the Wife’s legal fees;
(d)the Wife asserts that her legal fees were funded by an inheritance that the Wife’s mother received from the Wife’s grandfather, and that inheritance was merely temporarily ‘parked’ in the loan before being extracted for the payment of the Wife’s legal fees;
(e)the inheritance was received in 2016, and I understand it was used to reduce the amount owing, rather than merely placed in an offset account; and
(f)while I do not have an exact date for when the Wife’s mother drew down on the H Street Property mortgage as part of funding the Wife’s legal fees, logically it must have occurred several years later.
In such circumstances, I would not accept that it would be appropriate to treat the redrawn mortgage as merely being the inheritance in another form. The inheritance was used up into the mortgage, and not kept separate. The Wife’s increased liabilities associated with that redraw therefore would need to be either excluded from the property pool, or if included then also accompanied by an equivalent add back reflecting the monies being expended on legal fees. Therefore, if I am wrong and the H Street Property should be included in the property pool, then I would have used the $333,333 net value the Husband proposes. It might conceivably be possible to argue that the redraw should be quarantined and treated as only having affected the Wife’s mother’s share of the mortgage, and thus having been a gift to the Wife by her mother, but Counsel for the Wife did not suggest I should consider such an approach, even in the alternative. Counsel for the Wife appeared to accept that valuing the one-third share in the H Street property was a choice between the Wife’s figure and the Husband’s figure, and I would have made my decision accordingly.
Revised asset pool summary
Accordingly, with the contentious issues in the asset pool resolved, the assets and liabilities available to be distributed between the parties are as follows:-
Ownership Description Value ASSETS Real Estate Joint B Street, Suburb C (“Suburb C property”) $2,000,000 Husband E Street, Suburb F (“Suburb F property”) $3,750,000 Wife Motor Vehicle 4 (owned by G Pty Ltd and driven by Wife) $92,150 Companies Wife G Pty Ltd (50% share) $625,000 Wife 50% of CBA Business Transactions Account #...60 $475 Wife 50% of CBA Business Transaction Account #...75 $223 Wife 50% of CBA Business Transaction Account #...42 $7,901 Wife 50% of CBA Business Online Saver Account #...64 $5,003 Bank Accounts Wife CBA Smart Access Account #...21 $3,713 Husband CBA Complete Access Account #...56 $20,591 Joint D Conveyancing Trust Account $11,210 Motor Vehicles Husband Motor Vehicle 1 $82,000 Husband Motor Vehicle 2 $12,350 Shares Husband 157 T Company Shares $1,228 Miscellaneous Joint Contents at Suburb C property $10,000 Wife Jewellery $8,000 Husband Rental Bond for U Street, Suburb V $1,920 Husband Home Contents including guitars in Husband’s possession $12,000 Total $6,643,764 ADDBACKS Wife Interim distribution ($50,000 – legal fees) $50,000 Husband Interim distribution ($50,000 – legal fees) $50,000 Wife Wife’s 50% share of Payment to Revenue NSW with respect to land tax on sale of Suburb W property (paid by Husband in first instance) $706 Wife Instruments and household items sold by the Wife post-separation $23,600 Husband Gross shares sale proceeds (expended on legal fees and cost of living) $106,716 Wife Funds withdrawn by Wife from CBA Account #...09 from 19.03.2020 to 01.07.2020 (legal fees only) $5,600 Total: $236,622 LIABILITIES Joint CBA Home Loan account #...67 -$242,908 Joint CBA Home Loan account #...30 -$205,991 Husband Motor Vehicle 1 Loan -$75,400 Husband 2024 Land Tax Notice Assessment -$15,574 Husband ATO Tax liability as at 15.02.2024 -$55,363 Wife Loan from Mother to pay ATO Tax liability (including CGT Liability) -$25,888 Wife Lease secure to Motor Vehicle 4 -$65,733 Husband CBA Mastercard Diamond Account #...19 -$4,456 Total: -$691,313 SUPERANNUATION Wife Superannuation Fund 2 Accumulation $248,000 Husband Superannuation Fund 1 Accumulation $481,411 Total: $729,411 Total Assets $6,643,764 Total Addbacks $236,622 Total Liabilities -$691,313 Total Super $729,411 FINAL TOTAL: $6,918,484
As noted above, the various items excluded from the asset pool will be retained by their current holders, save as previously stated.
FURTHER CONTENTIOUS ISSUES
Contributions
I have referred to contributions elsewhere in these reasons and these comments should be read in conjunction with those previous statements.
The Husband’s initial financial contributions to the parties’ wealth were significant. Not all assets had values provided in the parties’ documentation, but by far and away the largest financial contribution appears to have been the Suburb F Property. On the figures provided by the Husband, it appears that the assets held by the Husband at the start of the relationship amounted to approximately 90% of the shared assets of the parties, although Counsel for the Wife correctly noted that a notionally-mathematical approach will tend to be misleading. Therefore, while Husband’s initial financial contributions were significant, those must be weighed together with the parties’ contributions during and after the relationship, rather than being either weighed against the other contributions or in some way isolated from the contributions.
As I have set out in the history, each of the parties applied the proceeds of their employment to the acquisition and conservation of wealth in an energetic, enthusiastic and aspirational way.
Each of the parties have made significant post-separation contributions. While the Wife has had the majority of the care of the children, the Husband has also spent considerable time caring for the children, and there are now final orders in place (by consent) for the Husband to spend substantial and significant time caring for the children (in the language used in the Act prior to the commencement of the 2023 amendments). Specifically, the Father’s affidavit details that he has had care of the children as follows:-
(a)from 27 November 2019 (the date of separation) until approximately late February 2020, between two and three evenings per week after collecting the children from daycare;
(b)from approximately late February 2020 until 10 August 2020, a continuation of the two‑to-three evening regime, as well as care on “most Sundays”;
(c)from 10 August 2020 to 21 September 2020, no care times (save for Father’s Day), which the Husband attributes to the Wife refusing to permit contact;
(d)from 2 October 2020 until 29 November 2020, time pursuant to consent orders, which provided for a fortnightly regime of 9am to 5pm on Sundays in week 1, and 5pm Friday to 5pm Sunday in week 2;
(e)from 29 November 2020 until 3 June 2021, no time, initially due to a disagreement regarding change over location, and then (according to the Husband) due to alleged contraventions of orders by the Wife;
(f)from 3 June 2021 until 7 June 2023, time pursuant to consent orders, which provided for a graduated time regime culminating in a fortnightly regime of 9am to 5pm on Saturday in week 1, and 5pm Friday to 5pm Sunday in week 2; and
(g)from 7 June 2023 onwards, time pursuant to consent orders, which provided for a graduated time regime culminating in a fortnightly regime of in week 1 from the conclusion of school on Thursday until the commencement of school on Monday and in week 2 from the conclusion of school on Thursday until the commencement of school on Friday (as well as half of all holiday periods).
It has not been necessary for me to interrogate questions of alleged contraventions or periods in which either party has alleged the other has denied contact with the children, and accordingly I make no findings on those issues.
Both parties have continued to earn a reasonable income, enabling preservation of key assets, with the Husband in particular to date having assumed liability for maintaining payments on the mortgage over the former matrimonial home, despite that property being still occupied by the Wife.
Counsel for the Wife (not surprisingly) argued that I should temper the weight given the Suburb F Property, noting that much of that property’s current value comes from the extraordinary growth in land prices Sydney has seen in recent decades. Counsel noted that the Wife also brought a property to the relationship, but did not have an equivalent opportunity to benefit from that land price inflation because the parties made a collective decision to sell the Wife’s property and put the proceeds of that sale towards the purchase of the former matrimonial home. The decision to purchase the former matrimonial home meant that the parties did not need to rent a property, and were free to lease out the Suburb F Property. Counsel argued that the income stream from the Suburb F Property, and the ability to enjoy the benefits of land price inflation, were at least partially available because the parties made a decision to sell the Wife’s property. Absent that shared decision, it is possible that the Suburb F Property may not have been quite so profitable for the parties, and the Wife’s financial contributions may well have appeared materially larger.
I found the argument by Counsel for the Wife persuasive on this point. It does not seem just or equitable to ignore that the Wife has effectively foregone the ability to claim a significant financial contribution by liquidating her major pre-relationship asset and merging it into the parties’ shared resources. That said, it is necessarily impossible for me to know what growth in price the Wife’s property would have seen, or what other decisions the parties would have made, and it would be inappropriate to speculate. I also consider that the need to recognise that the Wife’s contributions may not all be fully visible does not reduce the value of the Suburb F Property, but rather suggests another avenue of contributions by the Wife. I therefore take into consideration in a general way, and weigh together with all other contributions of the parties that the Wife sacrificed the opportunity for asset price growth for the collective good, and therefore her financial contributions may not be adequately reflected in simply taking the value of the proceeds at the time her previous property was sold.
The issue of contributions has been considered by the Full Court of the Family Court of Australia in Jabour & Jabour [2019] FamCAFC 78 (“Jabour”). Although that case involved an analysis of contribution arising from introduction of land which was rezoned during the marriage, resulting in a significant rise in value, their Honours discussed the assessment of contribution generally at paragraph [55] as follows:-
Again, consistent with the authorities set out above and those which we discuss below, the import of Pierce is that the weight to be attached to an initial contribution must be assessed against the rubric of all of the contributions, both financial and non-financial, made by the parties over the course of their relationship.
Quoting paragraphs [20] and [21] of the decision Dickons & Dickons [2012] FamCAFC 154, their Honours in Jabour noted as follows:-
Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79). That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
In my view the real issue in this case is how to weigh the Husband’s superior initial financial contribution against the myriad important contributions made by each of the parties during this busy and productive union. That is difficult as the leap from arithmetic analysis to an overall assessment that does justice to each of the parties is not a science. Nevertheless, I propose to give more than cursory weight to the introduction of the Suburb F Property by the Husband.
I am not of the opinion that the post-separation contributions favour either party. It is true that the Wife has undertaken the majority of parenting and continues to work outside the home. The Husband has been paying for the mortgages over the former matrimonial home, has paid child support and child-related expenses, and has cared for the children for the period they have been in his care.
Weighing all of the contribution issues in the balance, I assess the contribution-based entitlement of the parties pursuant to section 79 of the Act as 37.5% to the Wife and 62.5% to the Husband. I assess this division as warranted by the Husband’s injection of the Suburb F Property.
A consideration of the factors pursuant to section 75(2) of the Act
While the parties are both in reasonable health, there is a material difference in their ages. The Wife is 42 and the Husband is 59. Each is on a reasonable income. The Husband’s income exceeds the Wife’s, but the quantum of that difference fluctuates, as bonuses make up a considerable portion of the Husband’s annual income. The Wife’s company appears to be healthy and growing at a reasonable rate, and therefore I consider it likely that the Wife’s income will continue to increase over time, whereas the Husband’s income may remain more constant and possibly even decline as he ages (although there was little reference to that during the hearing). Ultimately, I have formed the view that the Wife is on the upward climb of her earning capacity and seems to be a skilled and competent business person. At the very least this is evidenced by the growth in the value of G Pty Ltd, a 50% share of which now sits in the asset pool at $625,000 having been established in 2018.
The consent orders regarding the children's parenting arrangements provide that the Wife will remain the children’s primary carer, albeit that the Husband will also provide carer for the children approximately 40% of the time. The consent orders also provide for the Husband to pay 50% of the cost of the children’s school fees, miscellaneous schooling and sporting equipment, and medical fees. The orders also provide that any assessed child support liability shall continue. Therefore, while it is likely that the Wife will bear a greater portion of on-going costs relating to providing for the children, that is not likely to be significant discrepancy.
The parties’ future needs for self-support are contested, and will depend on how I determine two of the remaining issues in this matter: who should assume responsibility for the Suburb C property mortgage, and what (if any) additional monetary transfer should occur between the parties. On the Husband’s case, the Wife would both be responsible for the mortgage and need to pay him a further $200,000. The Wife stated this would force her to sell the Suburb C property, and return to renting, as she would not be able to afford a replacement house in a comparable area. That would significantly increase her on-going costs for self-support. On the Wife’s case, the Husband would assume responsibility for the Suburb C property mortgage, and pay her $200,000 on top of that. The Wife would then occupy the property free of debt, and with cash reserves, markedly reducing her future expenses, as well as empowering her to meet even quite considerable unanticipated expenses. Regardless of the orders I make, the Husband is likely to continue renting his current residence for the foreseeable future, and using the Suburb F Property as a source of income (notwithstanding that he could, theoretically, move into the Suburb F Property and be liable for neither mortgage payments nor rent, provided he were willing to forego the rental income he currently receives). Both parties will also need to meet large legal bills arising from this matter, which are likely to restrict their free cash flow for some time following the conclusion of the case. Overall, I consider that the parties have comparable future needs for self-support, although I am mindful that any orders I make will impact those future needs.
I am satisfied that the parties enjoyed a good standard of living during the marriage, living in a reasonably affluent area of metropolitan Sydney. Nothing in the expense statements provided by each party appeared to me to be unreasonable, and it was not argued that I should treat either party as being unacceptably profligate. I accept that both parties are on reasonable incomes. However, I note that the current cost of housing in Sydney is high, and therefore there is a risk that the Wife may not be able to live comfortably with the two children if her housing situation is destabilised.
Aside from providing for the children, neither party has a binding responsibility to support any other person. That said, the Husband’s evidence was that he contributes to the support of his new partner and her children. Counsel for the Wife expressed scepticism about this passage of the Husband’s evidence, as the Husband indicated an almost total lack of knowledge of his new partner’s financial situation, and a commensurate lack of curiosity. Given that, as noted above, I did not consider I had grounds to doubt the Husband’s credibility in general, I am prepared to accept that the Husband may simply have been uncommonly incurious about his new partner’s finances. In any event, it did not appear from the Husband’s evidence that his contributions to his new partner and her children were especially onerous or unmanageable.
Doing the best I can, I am of the view that the section 75(2) factors weigh marginally in the Wife’s favour at 2.5% due to the Wife’s additional care of the children, the likelihood that she will be responsible for a number of nuanced and additional costs of being primarily responsible for their care, and the differential in at least the short term of the parties’ respective earnings. That is, I consider that it will be just and equitable to divide the asset pool 60% to the Husband and 40% to the Wife.
This result will mean that each of the parties will maintain their current asset holdings and in particular the Wife should be able to retain the children’s and her current stable accommodation in the former matrimonial home, and the Husband shall retain the Suburb F property. Although the division of property is not an exercise in social engineering, this strikes as an appropriate and happily practical and pragmatic result.
On the basis of the asset pool as I have determined it, I have prepared a simplified comparative table of the parties’ asset/liability/superannuation holdings below.
Item Value Wife Take Husband Take Notes ASSETS AND ADDBACKS Suburb C Property $1,551,101 $1,551,101 $0 Former matrimonial home with an agreed value of $2,000,000 less mortgage #...67 of $242,908 and mortgage #...30 of $205,991. Net Equity $1,551,101. Suburb F Property $3,750,000 $0 $3,750,000 Agreed value. Wife’s Share of G Pty Ltd $625,000 $625,000 $0 Agreed value. Wife’s Motor Vehicle 4 $26,417 $26,417 $0 Agreed net value. $92,150 less lease outstanding of $65,733. Wife’s cash in G Pty Ltd $13,602 $13,602 $0 Agreed amounts combining accounts #...60, #...75, #...42, and #...64. Wife’s cash at bank $3,713 $3,713 $0 Agreed figure for account #...21 Husband cash at bank $20,591 $0 $20,591 Agreed figure of account #...56. Monies in conveyancing trust account $11,210 $0 $11,210 Agreed figure. Currently in joint names, but it is agreed that the full sum will go to the Husband. Husband’s Motor Vehicle 1 $6,600 $0 $6,600 Agreed net value. $82,000 less loan outstanding of $75,400. Husband’s Motor Vehicle 2 $12,350 $0 $12,350 Agreed value. Husband’s shares $1,228 $0 $1,228 Agreed value. Suburb C Property contents $10,000 $10,000 $0 Agreed value. Joint property agreed to be retained by the Wife. Wife’s jewellery $8,000 $8,000 $0 Agreed value. Bond on Husband’s rental property $1,920 $0 $1,920 Value as determined by the Court. Husband’s home contents, including guitars $12,000 $0 $12,000 Agreed value. Wife’s interim distribution $50,000 $50,000 $0 Agreed addback for legal expenses. Husband’s interim distribution $50,000 $0 $50,000 Agreed addback for legal expenses. Wife’s land tax $706 $706 $0 Agreed addback. Payment to Revenue NSW with respect to land tax on sale of Suburb W Property (paid by husband at first instance). Sale of instruments and chattels by Wife $23,600 $23,600 $0 Addback for instruments and household items sold by the Wife post-separation. Husband share sale proceeds $106,716 $0 $106,716 Agreed addback, expended on cost of living and legal fees. Wife’s withdrawal of funds $5,600 $5,600 $0 Addback by Court determination. Quantum of addback by Court determination. Total: $6,290,354 $2,317,739 $3,972,615 LIABILITIES NOT ALREADY INCLUDED ABOVE Husband land tax assessment -$15,574 $0 -$15,574 Agreed amount Husband Australian Tax Office liability -$55,363 $0 -$55,363 Agreed amount Wife’s loan from Mother to pay Wife’s Australian Tax Office liability -$25,888 -$25,888 $0 Included by Court determination. Husband’s mastercard -$4,456 $0 -$4,456 Included by Court determination. Total: -$101,281 -$25,888 -$75,393
Item Value Wife Take Husband Take Notes SUPERANNUATION Wife’s Super $248,000 $248,000 $0 Agreed amount Husband’s Super $481,411 $0 $481,411
Agreed amount Total: $729,411 $248,000 $481,411 Assets and Liabilities excluding Super $6,189,073 $2,291,851 $3,897,222 Including Super $6,918,484 $2,539,851 $4,378,633 In % Terms 100% 36.7% 63.3%
In assessing the Wife’s application, in effect she seeks an additional $648,899 above what is shown in the table above, constituted by the Husband discharging the mortgages on the Suburb C Property ($242,908 and $205,991 respectively, for a total of $448,899) plus a transfer from the Husband of $200,000. That would see her retain $3,188,750, or 46.1% of the asset pool, with the Husband retaining $3,729,734 or 53.9% of the asset pool.
In assessing the Husband’s application, in effect he seeks an additional $200,000 above what is shown in the immediately prior table, constituted by a transfer from the Wife of $200,000. That would see him retain $4,578,633 or 66.2% of the asset pool, with the Wife retaining $2,339,851 or 33.8% of the asset pool.
I am not persuaded that either party’s proposal is the appropriate outcome. As previously set out, I am satisfied that an overall 60/40 adjustment in the Husband’s favour is appropriate in this case.
In assessing that result, I shall also stand back from arithmetical calculation and consider what such a result actually means for the parties.
For the Wife, in arithmetical terms, it means she should receive a total share of $2,767,393, uplifting the amount in the previous table by $227,543. I consider that should be achieved by having her retain the former matrimonial home but subject to a reduced total mortgage of $221,356, which is serviceable on her income, and likely less than the weekly rental cost of a commercial rental arrangement for equivalent property, and provides appropriate accommodation for her and the children, commensurate to their standard of living during the marriage. She will retain her interest in G Pty Ltd, which provides her income and other benefits as discussed. The other assets notionally retained by the Wife have been dispersed, largely on legal fees and taxation liabilities. She will continue to owe her Mother some $25,888, but I would hope that debt can be repaid on flexible terms.
I also take into account the Wife’s superannuation entitlements, but note it will be over a decade until she can access those funds. She has her obligations for legal expenses, which are considerable (according to her costs notice, her total costs will be some $433,593, of which she has paid $49,998, with $41,250 held by her solicitors in trust).
Overall, I consider that the Wife, at her age and with her earning capacity, will be able to build on this relatively simple representation of personal wealth which should see her through to retirement in relatively good circumstances.
For the Husband, his share of the parties’ wealth will be reduced from the amount shown in the previous table by the commensurate amount, being $227,543. He will retain the Suburb F Property, his superior (although modest) cash holdings, and his various motor vehicles and chattels. Like the Wife, the other assets notionally retained by the Husband have been dispersed. He too will have legal costs (according to his costs notice, his total costs will be some $574,126, again some of which he will have already paid), and will have the additional burden of the payment due to the Wife and his taxation liabilities. His current superior income will be required to service those liabilities, pay rent or any mortgage, and make payments for the care of the children. Those matters are not insignificant, and I am satisfied that the financial demands on him will be similar to those of the Wife. He does have the advantage of being able immediately to access his superannuation, subject to statutory requirements.
Standing back and considering the parties’ respective positions overall, I am satisfied that the division of property described above between the parties is just and equitable. I shall make an order for payment within 90 days, with the Wife to refinance the mortgages on the former matrimonial home at that time. In the interim, the Husband should be responsible for interest payments on the larger mortgage (#...67) until the Wife is put into funds.
Finally, and for the sake of completeness (although there was little direct submission, evidence or argument on these matters):-
(a)In her minute of orders sought, the Wife sought orders that the Husband continue to be responsible for payments on both mortgages over the Suburb C Property, pending the payment to be made by him. The Husband in his Amended Response sought that the Wife be immediately responsible for both mortgages. Given the determine with respect to outcome that I have made, it is appropriate that the Husband continues to make payments on the mortgage with loan number ending #...67, as the loan amount for that mortgage is approximately the same amount as the payment he is to make to the Wife.
(b)Both the Wife and the Husband sought an order pursuant to section 106A of the Act. That order is unnecessary and cumbersome at this stage, and in any event I will reserve liberty to apply directly to my Chambers with respect to enforcement issues, particularly because I have not put a default clause for the payment in the orders. It seems unnecessarily expensive for the parties to be required to go through a single point of entry on enforcement issues following Judgment.
I shall also reserve liberty for the parties to apply to my Chambers with regards to the form but not the substance of my orders, in the event that the parties have a scheme of payments in mind that would suit their family better.
I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Stewart. Associate:
Dated: 6 December 2024
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