Cagnani and Stankic
[2017] FamCA 417
•15 June 2017
FAMILY COURT OF AUSTRALIA
| CAGNANI & STANKIC | [2017] FamCA 417 |
FAMILY LAW – PROPERTY – Application by husband for a property settlement – contributions – add-backs – Orders made for the division of property for both superannuation and non-superannuation on the basis of 60 per cent to the wife and 40 per cent to the husband
| Family Law Act 1975 (Cth) |
| Finlayson & Finlayson & Gillam [2002] FamCA 898 |
| APPLICANT: | Mr Cagnani |
| RESPONDENT: | Ms Stankic |
| FILE NUMBER: | SYC | 5204 | of | 2013 |
| DATE DELIVERED: | 15 June 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 8, 9, 10, 11 & 13 January, 23 February and 24 May 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richards |
| SOLICITOR FOR THE APPLICANT: | Ms Ruggero of Vizone Ruggero Twigg Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Dura |
| SOLICITOR FOR THE RESPONDENT: | Mr Williams and Ms Elliott of M&K Lawyers Group Pty Ltd |
Orders
The wife shall pay to the husband the sum of $228,146.00 contemporaneously with the transfer of the home referred to in Order 2.
Within sixty (60) days from the date of these Orders the husband shall do all things and sign all documents to transfer to the wife all of his interest in the property VV Street, Suburb J, New South Wales (‘the home’).
Contemporaneously with Order 2, the wife shall do all things and sign all documents necessary to refinance the Westpac Home loan secured by mortgage (‘the mortgage’) over the home and secure the release of the husband from his personal covenants in respect of the mortgage to that Bank over the home, and from that time the wife shall indemnity the husband in relation liabilities arising pursuant to the mortgage except as is otherwise provided in these orders.
The husband shall:-
a)vacate the home and deliver it up with vacant possession to the wife, or her nominee, within sixty (60) days from the date of these Orders;
b)be responsible for and pay council rates and water rates on the home up to the date sixty (60) days from the date of these Orders; if current rates are in arrears or paid in advance, they are to be adjusted on a pro-rata basis. Such adjustment to be by deduction from or addition to the sum payable by the wife to the husband pursuant Order 6 these Orders;
c)be responsible for the normal periodic payments of principle and interest on the mortgage up to the date sixty (60) days from the date of these Orders, and:-
i)if the balance due under the mortgage is less than $559,695 (the agreed ‘mortgage balance’) the wife shall pay to the husband the amount of that difference (at the same time as she pays the money pursuant to order 1 of these orders) being the sum by which actual balance is less than $559,695; or
ii)if the actual balance of the mortgage is greater than the mortgage balance, the wife may deduct that difference from the amount she would otherwise be required to pay the husband pursuant to Order 1 of these Orders.
The wife shall:-
a)be entitled to vacant possession of the home as and from sixty (60) days from the date of these Orders; and
b)be responsible for and pay council rates and water rates as and from sixty (60) days of the date of these Orders.
In the event that the wife is unable or unwilling to comply with the orders regarding the transfer of the property then each party is given leave to apply for orders for extension of time or for sale of the property, provided the application for such mechanical orders pursuant to this leave is filed within one hundred and twenty (120) days of the date of this order. If he is reasonably available this application to be listed before Benjamin J.
If the wife is unable to comply with this order to enable the transfer of the home pursuant to these orders; interest in accordance with the Family Law Rules 2004 (Cth) shall apply from the later of sixty (60) days from the date of these orders or completion of the sale of the home.
The wife shall keep the husband informed of all negotiations, correspondence and settlements between her (and/or her solicitors) and the Insurance Australia Limited trading as NRMA Insurance (‘NRMA’) as to the resolution of a claim arising out of the explosion at the home in 2013 (‘the claim’).
Upon resolution of the claim and within twenty eight (28) days of the payment to her or her solicitor of the proceeds of the claim, the wife shall cause the such proceeds to be paid in the following priority:-
a)payment of fair and reasonable practitioner legal costs and disbursements in respect of the legal practitioner/s acting for the wife on the claim (and in that respect the husband is a third party payer pursuant to s 171 of the Legal Profession Uniform Law (NSW));
b)payment of $57,883 to the YY School plus any additional interest, fees and charges that have lawfully arisen since 3 August 2016; including the fees and charges incurred by the parties’ children attending at that school in 2016;
c)in reimbursement to the husband of $4,950 paid by him to Mr UU, Quantity Surveyor, for the preparation of his report dated 15 September 2016; and
d)the nett balance it is to be paid as to 60 per cent to the wife and 40 per cent to the husband.
If in the context of resolution of the claim against the NRMA:-
a)that insurer requests that the wife indemnify it against any possible claims by the husband; and
b)the wife provides the insurer with such indemnity and complies with order 9 of these orders;
then the husband shall indemnify the wife against any such claims made by him or on his behalf.
In accordance with s 90MT(1)(b) of the Family Law Act 1975 (Cth) (‘the Act’), whenever a splittable payment within the meaning of s 90ME of the Act becomes payable to or on behalf of the wife from her interest in the Public Sector Superannuation Scheme then the husband is entitled to be paid by the Trustees the amount of $107,680 giving a corresponding reduction in the entitlement of the wife as she would have had but for these Orders.
The operative time the above order is twenty eight (28) business days after the service of the Final Orders on the Trustees of the Public Sector Superannuation Scheme.
Liberty is reserved to the said Trustees and the parties to apply to this Court about the Orders made or the form thereof within the period of twenty eight (28) days after service of a copy of these Orders on the Trustees.
Subject to these orders and as against the husband the wife be solely entitled to the exclusion of the husband to all other property both real and personal in her ownership, possession and control, including but not limited to:-
a)all monies in financial institutions in her name;
b)all motor vehicles in her name;
c)furniture, jewellery and personal effects; and
d)all remaining superannuation entitlements held by her.
Subject to these orders and as against the wife the husband be solely entitled to the exclusion of the wife to all other property both real and personal in his ownership, possession and control, including but not limited to:-
a)all monies in financial institutions in his name;
b)all motor vehicles in his name, including the scooter, Classic car;
c)furniture and personal effects; and
d)all other superannuation entitlements held by him.
That the wife shall indemnify and keep indemnified the husband in relation to all liabilities and debts in her name, including but not limited to any credit card liabilities, loans from family members, and income tax liabilities.
That the husband shall indemnify and keep indemnified the wife in relation to all liabilities and debts in his name, including but not limited to any credit card liabilities, motor vehicle liabilities and income tax liabilities.
Other than any applications for costs, all extant applications (including Child Support Applications) are dismissed.
Any application for costs will be made in accordance with the Family Law Rules 2004 (Cth).
All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel to attend.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cagnani & Stankic has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 5204 of 2013
| Mr Cagnani |
Applicant
And
| Ms Stankic |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Cagnani (‘the husband’) and Ms Stankic (‘the wife’) have been engaged in parenting and property proceedings under the Family Law Act1975 (Cth) (‘the Act’) since late 2013.
The proceedings were listed for hearing for five days commencing 9 January 2017. The husband’s mother joined as a party to the parenting proceedings and an Independent Children’s Lawyer was appointed to represent the interests of B (aged 14 almost 15) and C (aged 11 almost 12).
The Parenting Proceedings
To the credit of the parents and after extensive negotiations almost all of the issues regarding the parenting of the children were resolved. Each of the parents and the Independent Children's Lawyer were represented by counsel and it was submitted by all of the legal practitioners that the limited remaining parenting issues ought to be determined on submissions based upon the relevant affidavit evidence.
Given the powers of the Court under Division 12A of Part V11 of the Act, combined with the relatively mundane and minor parenting issues to be determined, I adopted that course. Submissions were made and on 10 January 2017, oral reasons were delivered and the parenting orders were subsequently made.
After the completion of the parenting aspects of this litigation, the Independent Children’s Lawyer was excused from further involvement in the proceedings. The second respondent, Ms O Cagnani (‘the husband’s mother’) was removed as a party as she had no interest in the property proceedings, except as a witness.
The Property Proceedings
The proceedings continued and evidence was taken with regard to the property issues. Unfortunately, counsel for the husband became ill in the middle of the day on Wednesday 11 January 2017 and part of the hearing time was lost as a consequence.
In terms of the property proceedings there was no issue between the parties that there ought to be a property order made, it was the nature of the order that each of the parties sought that was different.
In his case outline,[1] counsel for the husband asserted that given the circumstances of the case that the husband’s overall contributions should reflect on the division of 60 per cent to him and 40 per cent to the wife. Further, taking into account the other factors including those under s 75(2) of the Act there ought to be an overall adjustment not exceeding 50 per cent to each party, and a just and equitable outcome would be that the parties net assets be divided equally. In final submissions the husband’s position changed and he asserted that there ought not be an adjustment in respect of the other factors, and as a result the property ought be divided as to 60 per cent to him and 40 per cent to the wife. I have considered property on the basis of that later position of the husband.
[1] Exhibit F1.
In addition, in the context of that division of property the husband sought orders to enable him acquire the whole of the wife’s interest the parties’ property at VV Street, Suburb J (‘the matrimonial home’) at its agreed value.[2]
[2] $1,200,000 – see Exhibit E20.
In her case outline and outline of minute of orders sought[3] the wife sought that the matrimonial home be transferred to her and that each of the parties otherwise retained property in their possession, which would mean that the wife would retain the matrimonial home (subject to the mortgage) and her substantially greater superannuation entitlements. In final submissions counsel for the wife contended that having regard to the respective contributions of the parties there should be a division of 60 per cent to the wife plus another 15 per cent for the other factors. The wife wished to retain the matrimonial home as part of that division of property.
[3] Exhibits M1 and M2.
The wife sought a splitting order in terms the agreed value of their respective superannuation accumulation funds. The wife sought a split in her superannuation favour of the husband of $100,000. The effect of this would be that the husband retain his existing entitlements of $19,663. This being a division of the superannuation property as to about 38 per cent to the husband and the balance to the wife.
In terms of the husband he sought that each party retain their respective superannuation funds. This would mean that a significant percentage of the wife’s assets would have been in superannuation funds.
One of the issues to be determined was the treatment of the money payable to the wife pursuant to damage to the former matrimonial home, which damage was subject of a claim pursuant to by a building insurance policy taken out with NRMA Insurance (‘NRMA’) by the wife on the matrimonial home. There was question as to how any money due under that policy ought to be distributed.
An interlocutory order had been made by McClelland J that such monies would be used to pay arrears of school fees of some $57,883. It was not in issue that the parties ought to pay that debt, the question was in relation to the proportions, although it was likely to be paid out of the insurance claim.
There was an application by the wife for lump sum periodic child support, however, that issue was not argued and it was consequently dismissed.
BACKGROUND
At the date of hearing the husband was aged 45 years and was a driver by occupation. He had been in his current job for a number of years but said that the wages were unsatisfactory and that he would be looking for different employment once these proceedings had concluded.
On 23 February 2017 I raised with counsel a number of issues I wanted them to deal with in their submissions, namely:-
(a)the question of a splitting order given the quantity of the superannuation and it being the second major property of the parties;
(b)that the wife was not seeking lump sum child support or maintenance;
(c)I was troubled by the amount of tax that the husband asserted he was paying, bearing in mind his salary; and asked for submissions in relation to how I should deal with that;
(d)In their case outline the parties had at times treated the NRMA insurance claim as a financial resource, whereas I have treated it as property as it is or was a chose in action;
(e)I raised with counsel for the husband as to the amount of liability the husband would be taking on given the existing mortgage, his outstanding legal costs and the various debts he claimed, which totalled just under $1,000,000;
(f)I noted that the husband’s income in 2015 of some $67,000 and raised a question as to whether there was an issue as to that circumstance; and
(g)the husband’s financial statement, at paragraph 31, included an amount in arrears for child support for that month; was I correct or incorrect in that assessment?
The husband had said that he had made no efforts to seek other employment in recent times and deposed that he earns a total average income of $692 per week, plus his employer paid other expenses totalling $200 per week making a total of about $900 per week. From this was deducted about $327 in tax leaving a net income of about $574 per week.[4]. The tax seems somewhat high, given his income.
[4] Husband’s amended financial statement filed 22 December 2016.
Until recent years the husband was also engaged in motor sports preparation and competition. He had become, and his evidence was that he remains, well known in that competition community.
He made money over the years from:-[5]
299.Whenever [equipment] sold, I always told [the wife], for example, when the [Classic car] sold for the sum of $75,000, I said to [the wife], “A guy at the track just bought the [Classic car] for $75,000”. [The wife] often replied “Oh that’s great!”. I did not tell [the wife] about every single … part that I purchased or sold as they were ongoing frequently occurring transactions, over 20 years. Although this was an expensive hobby, it was always profitable for me. I made money by doing the following:
(a)I purchased … parts and on sold the parts at a profit;
(b)I kept my eye on the American Dollar, when the Dollar was at a good point, I purchased high performance parts, including …, from America and transported them to Australia. I then on sold the parts at a profit;
(c)I also developed a name for myself in the … industry and helped people build [vehicles], which I was paid for.
(d)I assisted in driving … for other people at [competitions]. I was paid for racing the [vehicles] including travelling interstate (Queensland, Melbourne, Perth);
(e)I spent time building [vehicles] that I then sold at a profit.
[5] Husband’s trial affidavit filed 15 December 2016, paragraph 299(a) to (e).
The husband asserted that whilst this was ‘an expensive hobby, it was always profitable’[6] for him and he made money undertaking the above work.
[6] Ibid.
The husband made the assertion that he had reached ‘the peak of my career’ and that he had not undertaken any tertiary qualification.[7]
[7] Ibid, paragraph 370.
Having regard to his evidence and my concerns about it I am not convinced that this evidence is accurate. I am satisfied that he has expertise but I reject his conclusion that he has reached the peak of his career. He clearly has skills and has significant knowledge and expertise. I am not convinced that he made great profit from that endeavour, but he did engage in it in a significant way.
The husband says that he is in relatively good health.
The wife was aged 42 at the date of the hearing and works as a public servant. She works three or four days per week, a total of about twenty four hours per week. That work is part time. She currently earns $923 per week from that employment. In addition she receives family tax benefits and rental assistance totalling about $307 per week and child support from the husband of $57 per week.
The wife gave evidence that she is able to take full time employment if that would enable her to purchase the home. If she is not able to purchase the home she would not want to change the arrangements bearing in mind what she sees as her responsibilities for the children. I accept that approach as a balanced parenting course.
The wife deposed in her trial affidavit[8] that she earnt considerably more than the husband each and every year from 1997 until 2014, the husband earnt more than the wife in 2015 and, whilst not specified, I am satisfied that the wife, given her current income, earnt more than the husband in 2016.
[8] Paragraph 59.
If the wife takes on full time employment she will have a gross income of about $75,000 per year.
The wife has worked with the public service throughout the marriage, initially full time but in later years part time. There was a period of about six months when she deposed that still as a part time employee she worked five days per week when the husband lost his driver’s licence for a period of about six months. I have accepted the wife’s evidence about her working history and comparative income levels. She set out:-[9]
59. The following table is a summary of mine and [the husband’s] taxable income between 30 June 1997 and 30 June 2016. I have had access to [the husband’s] and mine [sic] taxation return for the relevant years to complete the table below. These returns are also available for inspection at my Solicitor’s office.
[9] Wife’s trial affidavit filed 1 December 2016, paragraph 59.
Financial Year ending 30 June
Wife
Husband
1997
$33,819
Not known
1998
$35,818
$32,509
1999
$35,669
$17,571
2000
$34,720
$12,231
2001
$37,148
$25,224
2002
$42,392
$23,843
2003
$62,193
$27,474
2004
$28,281
$22,081
2005
$35,175
-$1,080
2006
$153
NIL
2007
$39,239
$20,958 (due to capital gain on real property)
2008
$39,612
$4,506
2009
Not known
Not known
2010
$35,523
$13,893
2011
$48,329
$27,737
2012
$49,811
$34,574
2013
$46,889
$28,926
2014
$47,345
$36,545[10]
2015
$48,377
$67,119
2016
Not yet filed
$32,304
[10] This appears to be the gross earnings, prior to deductions. The taxable income is $31,923 – Exhibit E30 page 57.
60. Available for inspection at my solicitors office are my payslips from 27 May 1999 to 17 June 2015 which identify my financial contributions referred to above of payments made by me to our mortgage directly from my salary to the mortgage account.
The 2015 income of the husband was $67,119 which was about double that which he generally earnt. This was curious as in all other recent years he earnt modest income of between $27,737 and $36,545. No explanation was provided as to the income in 2015. I prefer the evidence of the wife in this respect given the records to which she had access and my assessment of her evidence generally. I have had regard to that comparative contribution of incomes in terms of assessing contributions.
The husband asserted that from time to time he earnt cash from his hobby, although, no reliable detail of the amount of that cash or any other barter arrangement was provided to the Court. There was no cogent or reliable evidence as to the amount of such earnings and as such I make no finding that such earnings were other than minor. I have discussed this further later in these reasons, given the schedule to which the husband refers.[11]
[11] Exhibit F6.
The parties met in 1992, became engaged in 1993 and married in 1997.
They had a large wedding with one hundred or so guests and the majority of the cost was met by the husband and his family.
Shortly before the parties married they purchased a property at VV Street, Suburb J (‘the VV Street property’) for $210,000. They borrowed about $60,000 from a financier. The husband contributed $50,000 to $60,000. The wife contributed $10,000. As to the wife’s contribution, given my later comments, I prefer her evidence to that of the husband. That property was initially rented until about 1998. The parties lived at the home of the husband’s parents for the first year of their marriage. I have had regard to that provision of accommodation in terms of assessing contributions. The parties resided at the VV Street property until 2005, initially in the house on the land and later in a duplex they build on the land.
In mid-1999 the parties undertook some renovations to the VV Street property. In relation to the renovations, the husband paid for those out of his own savings, including re-tiling the property, new carpets, new kitchen, light fittings, kitchen and laundry cabinets and appliances for the property at a cost of about $30,000.[12] I have had regard to the cost of that renovation in terms of assessing contributions.
[12] An agreed fact page 3 – wife’s case outline Exhibit M1 and page 4 husband’s case outline Exhibit F1.
In February 1999 the parties purchased a property at WW Street, Suburb XX (‘the Suburb XX property’) for either $245,000 or $249,000. The whole of the acquisition cost was funded by a mortgagee and this property was tenanted from 1999 to 2003. The wife asserts, and I accept, that she paid from her wages $100 to $150 per fortnight to cover the shortfall between the cost of the mortgage and the rental.
The parties’ eldest daughter was born in 2002 and she is now aged 15.
The wife says and I accept that she took fifteen months maternity leave, some of which was fully paid, with the birth of their eldest child. The wife has been the primary parent and carer for this child. This is not to say the husband did not assist. He undertook some household duties and some parental care.
In 2002 the parties sub-divided the property at VV Street property. They borrowed $150,000 to enable that sub-division to occur.
The husband received a retrenchment payment in about 2002, which I find arose from employment undertaken by him during the marriage.
The parties’ son was born in 2003, but as a result of complications during his birth he passed away the following day.
In April 2003 the parties sold the Suburb XX property and used the proceeds of sale to discharge a loan over a motor vehicle owned by the parties and the balance was paid off the mortgage on VV Street property.
The parties purchased the matrimonial home for $700,000 in February 2005.
In 2005 the parties’ second daughter was born and she is now aged 12. The wife took 24 months maternity leave on the birth of this child. Three months of this was fully paid leave. The wife was and remains the primary parent and homemaker for that child. As with the elder child, the husband undertook some household duties and some parental care.
The husband says that his parents lent them $38,000 towards the stamp duty on that purchase, the wife says it was $35,000. Either way, the loan was repaid shortly after it was borrowed.[13] I have had regard to this short term loan in terms of contributions.
[13]Wife’s trial affidavit filed 1 December 2016, paragraph 43.
Shortly after its acquisition the parties and their daughters moved into the matrimonial home. In 2006 they sold one of the VV Street properties for $460,000 and the other property for the same amount the following year.
The wife asserts that the husband was unemployed for two years from 2005. She says:-[14]
61.[the husband] was unemployed during a number of periods during our relationship, including between 2005 and 2009. [The husband] helped care for [the elder child] during the times that he was unemployed, but [the husband’s] care of the children was ad hoc. During [the husband’s] period(s) of unemployment, [the husband] would be absent from our home during the day. I am unaware of what [the husband] was doing during the day and this caused many arguments between us to the effect of:
Me: “Where were you? What do you do all day? You don’t help with the kids. We still have the kids in childcare which is costing money.”
[The husband]: “I’m looking for work. Don’t take the kids out of childcare as I’ll get a job soon.”
[14] Ibid paragraph 61.
The husband’s evidence is that he was in employment throughout the marriage and there was no period when he was not working in paid employment. He says he worked for his brother in around 2005 for two to three years until around 2008.[15]
[15] Husband’s trial affidavit, paragraphs 304 to 308.
Given my assessment of the wife’s evidence and the objective evidence of his minimal income set out in the schedule to the wife’s affidavit referred to earlier, I prefer her evidence in regard to their respective contributions from paid employment over those years.
In late 2006 the wife undertook cosmetic surgery which was approved by both parties and the cost was somewhere between $7,500 and $10,000.
In 2007/2008 the parties undertook extensive renovations to the matrimonial home including the construction of a new garage, a swimming pool and entertainment areas.
Over this period the wife asserts that the husband applied about $275,000 of the parties’ money to his own benefit. I will deal with that contention later in these reasons.
At this time the relationship between the parties was breaking down and the wife became distrustful of the husband and requested their bank to use joint signatories.
In 2008 the husband obtained employment.
Each of the parties’ daughters attended YY School.
In 2011 the parties agreed to the renovation of the upstairs of the home and spent about $30,000.
Between 2012 and 2013 the husband was employed as a sub-contractor for the public service. He also embarked on a business venture.
The wife asserts that in July 2012 the parties separated under the one roof. I accept that the wife believed the marriage was at an end at that time, but I do not accept that she informed the husband of that circumstance.
The parties separated on 15 March 2013.
The husband owned a sports car motor vehicle shell which he sold for $22,000 and he used this money for living expenses and outgoings. That sale was in March 2013.
There were some allegations of violence and some family violence orders made, however, no Kennon[16] type evidence or argument were made in this matter. Whilst those may have been relevant to the parenting matters, they are not relevant to the property proceedings.
[16] Kennon & Kennon (1997) FLC 92-757.
In September 2013 these proceedings were commenced. The parties have expended huge amounts of their wealth in the legal costs associated with these proceedings.
There was an explosion at the matrimonial home 2013, which caused damage to the garage of the matrimonial home. The joint insurance policy had lapsed and the wife had taken out a sole insurance policy. The wife said that there had been an offers made to settle the claim, and that by 23 May 2017 that an offer had been made to settle the claim for $214,800. That offer had been conditionally accepted on 23 May 2017.[17]
[17] Exhibit E27 – letter from ZZ Solicitors to AB Lawyers dated 23 May 2017.
In September 2015 the wife’s mother passed away.
In about October 2015 the husband let the matrimonial home out at a rental of $550 per week for one year. There was no objective evidence as to the value of rental. However, I am satisfied that for all other relevant periods of time post-separation, the husband has had the benefit of occupation of the matrimonial home.
The wife in her trial affidavit says:-
94.At the time [the husband] and I physically separated in March 2013, the main matrimonial asset was the [matrimonial home] which had a mortgage at that time of about $538,000. The property has since been damaged by the explosion and the principal sum owing on the mortgage has increased to $557,491.
105.I have not contributed to the [matrimonial home] mortgage or any expenses for the property apart from the NRMA building insurance premiums since March 2015. The principal sum owing on the mortgage has increased by $22,000 since separation as many loan repayments have been made via funds in the redraw facility.
The wife was not challenged as to the increase in the mortgage from about $538,000 to the present agreed figure of $559,695; an increase of about $21,695.
The husband said:-[18]
335.Upon separation, [the wife] relocated from the home with the children. From such time, I have been responsible for all outgoings in respect of the home, except for the insurance which has been paid by [the wife], a unilateral step taken by her. I did not know that [the wife] was paying the insurance until after a fire took place at the home.
336.I have been solely responsible for the mortgage since March 2013 and continued to pay the mortgage except for the short period that the property was tenanted. I refer to Pages 226 to 229 of Exhibit JC[19] copies of my bank statements which show mortgage repayments from my account ending 6403.
337.In addition to the mortgage repayments, I have paid all outgoings in respect of the home including Council rates, water, electricity and maintenance. I repainted the house in around late 2013, and have maintained the property as best I can, since separation. In around 2014, plumbing work was required to the property, I paid approximately $1,500.
[18] Husband’s trial affidavit paragraphs 335 to 337.
[19]These statements show that the husband made various repayments on the loan from 26 September 2013 to September 2016. The statements do not provide balances, but show few monthly loan repayments from September 2013 until May 2014, namely one capital payment of $2,800 in September 2013 and another payment of $7,000 in May 2014. Over that period interest accumulated at the rate of about $2,400 to $2,500 per month, the repayments did not meet the interest charged. From June 2014 to September 2015 interest repayments were made regularly and equated to the interest charged. From September 2015 until July 2016 the payments were made from ‘Deposit One Agency [Suburb F] Rent’. These were generally greater than the interest repayments. From August 2016 the deposits seemed to come from a different source. I find that the rent payments were from the tenants and the balance by the husband.
In about October 2015 when the husband tenanted the matrimonial home there was no objective evidence as to whether the rent paid was at market value or otherwise. However, I am satisfied that for all other relevant periods of time post-separation the husband has had the benefit of occupation, or at least control, of the matrimonial home and has paid some expenses. He has not met the interest on the loan and it has increase to indebtedness of the parties. I have had regard to that in the assessment of contributions.
The wife has had the primary care of the children since separation and this will continue following consent orders and orders made by determination made by this Court on 10 January 2017.
At a time when I was dealing with objections to affidavit material by each of the parties on Wednesday 11 January 2017 there was an exchange between myself and counsel for the husband in relation to paragraph 371 of the husband’s trial affidavit.
This was a robust exchange and I was endeavouring to raise with counsel a possible ambiguity between different parts of the husband’s evidence on the affidavit material. No findings were made and no concluded view was asserted the Court. The husband’s counsel sought instructions from the husband and a short time later indicated two things: firstly, that counsel was feeling unwell and would not be able to continue, and secondly, the husband had instructed him to make a disqualification application when the matter returned on Friday 13 January 2017.
When the matter came back before me, I invited counsel for the husband to make the application. At that point, I was informed that such application would not be made.
There was also a robust exchange regarding the time of cross-examination. At the commencement of the hearing I sought from counsel for all parties a trial timetable. In that timetable there were time estimates of cross-examination of all of the parties.
I informed counsel for the parties that the cross-examination would not be at the lengths they sought, rather it would be somewhat shorter otherwise this matter would have run well beyond the five hearing days.
Later that day I was informed that most of the parenting matters had settled and the property proceedings could be limited to one day. At the commencement of the cross-examination counsel for the husband said he sought three and half hours of cross-examination of the wife, which would have taken most of the days hearing. Given the assurances provided by counsel earlier in the week I limited the cross-examination of the husband and wife each to two hours.
During the course of the cross-examination of the wife I reminded counsel for the husband that there was a time limit and I brought the cross-examination to an end two hours and twenty minutes after it commenced.
Counsel complained that he needed three and a half hours at that time. I allowed counsel for the wife a further twenty minutes or so and then the cross-examination was brought to an end.
This enabled the evidence of both the husband and wife to be concluded within the one day in accordance with the earlier indication given by counsel for both parties. The wife generally answered her questions concisely.
I was informed that the oral evidence had completed at the end of hearing on 13 January 2017. The matter was adjourned for submission and tendering of any outstanding documents on 23 February 2017.
At the commencement of that day the parties tendered updated evidence of valuation for the matrimonial home which was admitted into evidence by consent. The value of the home was agreed.
Counsel for the husband sought to rely upon an affidavit of Mr BC which was sworn but undated and had been attempted to have been filed on 20 February 2017, some two or three days before this date. Ms BC’s affidavit was sought to address some issues in relation to a company, CD Pty Ltd (‘CDPL’), and a debt claimed by the husband as outstanding to them.
Reasons were given and leave was refused.
Counsel for the husband then sought to adjourn the proceedings so that this material could be relied upon. In the context of that argument counsel for the wife asserted that the evidence in respect of the company and by their searches had the capacity to impact adversely on the credit of the husband.
In those circumstances I permitted the adjournment and I permitted the husband to rely on the affidavit, but restrained parties from filing any further material. It was a matter between the parties as to whether the witness would be needed for cross-examination.
It was of concern that the declaration attached to the affidavit was dated 19 January 2017 but was not made available to the wife’s legal advisors until about one month later.
The proceedings were adjourned and a practitioner/client costs order was made for the costs of the day.
In these reasons any statement of fact shall be regarded as a finding of fact unless the contrary is clear from the statement.
EVIDENCE
The husband relied upon the following:-
(a)His trial affidavit filed 15 December 2016 (‘the husband’s trial affidavit’) - I removed from that affidavit the annexures and they became exhibit F5;
(b)His amended financial statement filed 22 December 2016;
(c)The husband cross-examined the wife in relation to parts of her financial statements filed 6 September 2013 and 18 December 2015, and as such I had regard to those parts of the financial statement to which my attention was drawn in cross-examination;
(d)The affidavit of Mr UU filed 15 September 2016;
(e)The two affidavits of the husband’s brother, Mr DE Cagnani; the first filed 15 December 2016 in relation to paragraphs 12 to 14 and the second sworn 11 May 2017 and filed 24 May 2017;
(f)The two affidavits of the husband’s mother; the first being the one filed 12 December 2016 as to paragraph 45 and the other being the one sworn 9 January 2017 and filed in court on 10 January 2017;
(g)The affidavit of Mr EF filed 19 December 2016;
(h)Affidavit of Mr FG sworn 12 December 2016;
(i)Affidavit of Mr BC sworn 19 January 2017 and filed 20 February 2017; and
(j)In his case outline and final submissions the husband asserted that he relied upon the affidavit of Mr GH sworn 12 December 2016 and filed 14 December 2016. This affidavit was of a cheer squad variety and was not the subject of any meaningful submission. It appeared to relate to children’s issues and I gave its contents no weight.
The wife relied upon the following:-
(a)Her trial affidavit filed 1 December 2016 (‘wife’s trial affidavit’);
(b)Her financial statement filed 21 December 2016;
(c)Affidavit of Mr HI filed 7 November 2016 purporting to give expert evidence as to the value of two motor vehicles;
(d)The exhibits was at times problematic due to a number of factors, including the electronic exhibit numbering system, a hearing over a period of months and a judge based outside the Sydney Registry. Accordingly I will list the exhibits with their various numbers. They are:-
·Wife’s Exhibit E6 (M1) – case outline of wife, not as to the facts contained therein except where the facts asserted by the wife are the same as the facts asserted by the husband in his case outline.
·Wife’s Exhibit E7 (M2) – minute of orders sought by the wife at commencement of proceedings. This became superfluous by the conclusion of the hearing with draft orders sought in the written submissions of each of the parties.
·Joint Exhibit E8 (M3a) – this was the then joint balance sheet, but became superfluous by the conclusion of the hearing with an agreed list in the written submissions of the parties.
·Husband’s Exhibit E9 (F1) – husband’s outline of case not as to the facts contained therein except where the facts asserted by the husband are the same as the facts asserted by the wife in her case outline.
·Husband’s Exhibit E10 (F2) – husband’s minute of order. This became superfluous by the conclusion of the hearing with draft orders sought in the written submissions of each of the parties.
·Independent Children’s Lawyer Exhibit E11 (ICL1) – minute of parenting order. This was superseded.
·Husband’s Exhibit E12 (F3) – amended minute of order sought by husband. This became superfluous by the conclusion of the hearing with draft orders sought in the written submissions of each of the parties.
·Independent Children’s Lawyer Exhibit E13 (ICL2a) – amended minute of parenting order. This was engrossed in the parenting order.
·Husband’s Exhibit E14 (F4) – email and letter from IJ Lawyers to M + K Lawyers dated 6 January 2017 regarding ING bank statements.
·Exhibit number F5 – this was the subject of some confusion during the trial, it is the annexure to the husbands trial affidavit. I have now remarked it as exhibit E36.
·Husbands Exhibit F6 (the husband’s tender bundle) was initially not recorded – it is now Husband’s exhibit E32.
·Husband’s Exhibit E15 (F7) – this is a letter from ASX settlement Corporation recoding the wife and her sister as having been registered in Company JK. There was no evidence that this was ever used and the evidence of the wife, which I accept, was that it was not used.
·Husband’s Exhibit E16 (F8) – letter from KL Lawyers dated 7 March 2014 saying that the wife ‘… does not hold any shares in any public company, either solely in her name or beneficially held by a third party including Company JK.
·Husband’s Exhibit E17 (F9) – ING documents produced on subpoena in about November 2013.
·Exhibit M4 was initially not recorded – it is the exhibits to the wife’s trial affidavit – and is now Exhibit E35.
·Wife’s Exhibit E18 (M5) – ASIC searches as to CDPL.
·Wife’s Exhibit E19 (M6) – Mr LM Sales Receipt number … dated 3 March 2011 (four pages).
·Wife’s Exhibit E20 – valuation of the matrimonial home at $1,200,000 on 20 February 2017 by Mr MN.
·Wife’s Exhibit E21 – handwritten trial plan.
·Husband’s Exhibit E22 – wife’s financial questionnaire dated 23 April 2014 together with a copy of the wife’s 2003 income tax return.
·Husband’s Exhibit E23 – affidavit of husband’s brother filed in Court on 24 May 2017. This was also a superfluous tender given that it was on the court file and read into evidence without controversy.
·Husband’s Exhibit E24 – husband’s outline of submissions by Mr Richards dated 24 May 2017. This contained the orders sought by the husband subject to amending draft order 1 to show $222,721. It also contained a ‘joint balance sheet’ which I was told and accept that was identical with that contained in the wife’s outline of submissions.
·Wife’s Exhibit E25 - wife’s outline of submissions by Mr Dura dated 24 May 2017. This contained the orders sought by the wife. It also contained a ‘joint balance sheet’ which I was told and accept was identical with that contained in the husband’s outline of submissions.
·Wife’s Exhibit E26 – wife’s costs memorandum.
·Wife’s Exhibit E27 – Letter from ZZ Solicitors to AB Lawyers attaching an amended Deed of Release to settle to NRMA garage claim by the wife for $214,800. This was a conditional acceptance of the NRMA offer.
·Wife’s Exhibit E28 – The husband’s Westpac bank account and credit card statements (credit card from September 2014 to January 2017) together with the CBA credit card statements July 2014 to December 2016.
·Wife’s Exhibit E29 – a tender bundle containing:-
-Business Activity Statement (BAS) schedule of CDPL for parts of 2014 and 2015.
-Husband Westpac credit card statements 2014 to 2015 (which was a repetition of the credit card statements contained in E28 except this part was only up to December 2015).
-Husband’s CBA credit card statements July 2014 to January 2016. (this was a repetition of the credit card statements contained in E28 except this part was only up to January 2016).
-CDPL Business Activity Statements for the September 2014, December 2014, March 2015 quarters, signed by the husband and the CDPL Business Activity Statements for the June 2015 and September 2015 quarters, unsigned. These were evidence that the husband was acting as a public officer of CDPL from at least September 2014 until the last signed document on 17 April 2015.
-ASIC search of PQ Pty Limited, which operated the business of ‘QR’ from June 2013 to February 2015. On the face of this record the husband had no interest in this corporation, nor was he one of its public officers.
-ASIC Search of RS Pty Ltd, in which a relative of the husband is its public officer and shareholder. I can infer nothing from that material, and I give it no weight.
-ASIC Search of [XXXX][20] Invest Pty Ltd, in which a person with a name similar to the husband’s name was its public officer and a shareholder. The husband was not cross examined about this company and his offer to give evidence on the final day of the hearing was opposed. As such, I can infer nothing from that material, and I give it no weight.
[20] Pseudonym allocated by me.
-A further ASIC search of CDPL, which showed it operated the business of ‘QR’ from January 2015 to July 2015. The ASIC recorded show that the husband was purportedly a public officer and sometime shareholder over part of that period, albeit that a later filed document retrospectively changed that circumstance.
-A timeline of the involvement of the husband with CDPL.
·Wife’s exhibit E30 – Company searches relating to:-
-ST Pty Ltd.
-TU Pty Ltd.
-A.C.N. … Pty Ltd.
-A copy of the husband’s last three income tax returns showing:-
-2014 taxable income of $31,923 (tax payable of $2,607.37),
-2015 taxable income of $67,119 (tax payable of $14,703.060, and
-2016 taxable income of $32,304 (tax payable of $2,679.76).
·Wife’s Exhibit E31 – Husband’s financial questionnaire filed 14 April 2014.
·Husband’s Exhibit E32(F6) – Husband’s tender bundle. This includes the schedule of husband’s deposits to various bank accounts (not paginated but containing 11 pages).
·Husband’s Exhibit E33 – Husband’s schedule of Effects of Orders.
·Wife’s Exhibit E34 – letter from wife’s solicitors to the trustee of the wife’s superannuation fund dated 22 December 2016 providing procedural fairness to the trustee.
·Wife’s Exhibit E35 (W4) – two folders being copies of documents attached to wife’s trial affidavit.
·Husband’s Exhibit E36 (F5) - is the annexure to the husbands trial affidavit.
The husband
The husband gave evidence in terms of his affidavit filed 15 December 2016 (‘the husband’s trial affidavit’). He made one amendment to a date in paragraph 294(c) of his trial affidavit. Whilst not specifically referred to at the commencement of his evidence it was clear that he also gave evidence in terms of his amended financial statement filed 22 December 2013. It was included in his case outline.
I removed from the husband’s trial affidavit the voluminous annexures, which were tendered and are Exhibit E36.
Counsel for the husband tendered on his behalf a bundle of documents which were admitted to evidence as exhibit E32.
At the commencement of that tender bundle is a schedule of the husband’s deposits to various bank accounts from July 2006 to May 2013. The total deposits are said to amount to $754,555. I did not do the exercise of auditing the figures. The husband said he checked these on a line by line basis.
The husband’s evidence was that this 11 page schedule was prepared by his solicitor, but with his involvement. It was created over a long period of time. It was served on the solicitor for the wife on the Tuesday 10 January 2017 which was after the trial commenced. That delay was not adequately explained.
The schedule is problematic. For the period 28 November 2006 to 18 December 2006 the husband claims receipts/deposits as follows:-
28 November 2006 $4,000
5 December 2006 $1,000
7 December 2006 $3,800
8 December 2006 $1,000
13 December 2006 $2,000
18 December 2006 $1,000
These match up to the receipts in the husband’s Visa account statements. [21] The schedule only lists the deposits and the husband has not provided any details of expenses. When cross-examined in relation to that part of the material[22] the husband accurately describes the payments in for that month totally some $12,800,[23] however, earlier pages show that the new charges that period were some $23,326 and the income/refunds was some $15,380. No endeavour was made to explain the outgoings, many of which the husband conceded, related to overseas purchase of car parts and the like.
[21] Ibid, page 409.
[22] Exhibit F6, pages 408 to 411.
[23] Ibid, page 410.
The husband did not provide invoices in relation to any deals in respect of the work he outlined in his trial affidavit.[24] He said he was paid in cash and exchanges or that the person he was dealing with would pay for material or goods from the United States. He was paid cash for driving.
[24] Husband’s trial affidavit, paragraph 299(a) to (e).
He was evasive in terms of how much he received in such cash payments. The husband was cross-examined in terms of his assertion that he was ‘at the peak of his career’ however given his history, if it is accepted, he has the capacity to earn money from his hobby and his expertise in that field.
Consequently the figures provided by the husband in the schedule are meaningless. It is clear that the husband has great expertise in this area of his life, but as to profits, there is no objective evidence to support the husband’s contentions. I do not accept that it was a profit making exercise.
It is troubling that the husband asserted that he has paid the mortgage instalments on the former matrimonial home since separation. He said:-[25]
336.I have been solely responsible for the mortgage since March 2013 and continued to pay the mortgage except for the short period that the property was tenanted. I refer to Pages 226 to 229 of Exhibit JC copies of my bank statements which show mortgage repayments from my account ending 6403
[25] Ibid, paragraph 336.
This was not accurate. The mortgage was paid when the property was tenanted but otherwise payments fell behind. The documents to which the husband refers in terms that paragraph about the loan repayments does not support his statement. He was unable to wholly meet the mortgage and the amount payable under the loan increased by about $21,000.
I accept that for a period of about a year the husband received rent on the matrimonial home which met and exceeded the mortgage repayments at that time.
The husband’s evidence in this area was unreliable.
I am similarly troubled by the husband’s evidence at to an alleged debt to CDPL. He says he borrowed $67,425 from CDPL in June 2015.[26] His evidence was that CDPL is part of the group for which he works, QR. He was asked whether he has any interest in that group, and answered that the company was registered in his name for a day. I have set out elsewhere the indication of the analysis of the Australian Securities and Investment Commission’s (‘ASIC’) database records in terms of the husband’s evidence. The husband was also the signatory on a number of the CDPL business activity statements lodged in 2014 and 2015.[27] They are unexplained and deeply troubling given the debt claimed.
[26] Husband’s trial affidavit, paragraph 364.
[27] Exhibit E29 – part D.
That history is troubling and the husband provided no details of the operation of the company despite his significant involvement in it. The husband’s answers to questions in relation to the company were evasive and provided no meaningful answers. He claimed that he was simply given documents to sign. I do not believe him. I have considered this finding notwithstanding the uncontentious evidence of Mr BC.
Given the general nature of the husband’s affidavit and his tendency to dissemble and obfuscate, I am troubled by the quality of his evidence and I have treated it with caution.
The wife
The wife gave evidence in terms of her trial affidavit and financial statement.
There were a number of issues which were addressed in her cross-examination.
For financial products traded on the Australian Securities Exchange a trader usually needs an electronic account to access the sale and purchase of listed shares. The wife had acquired such an account. The husband found the Company JK document[28] confirming its existence shortly after the parties had separated. The wife asserted that the account had never been used. The veracity of that assertion could have easily been tested by the husband through the issue of a subpoena to find out what shares, if any, the wife had traded. No evidence was adduced as to the existence of any share trading, which supported the wife’s evidence. I am satisfied that shares were not acquired through that process and I accept the wife’s evidence in that respect.
[28] Exhibit F7.
The wife deposed that in the fifteen or so years leading up to her mother’s death in 2015 she cared for her mother who lived in public housing near her home in Suburb J. The wife gave evidence that her sister was meeting some expenses. From about February 2004 the wife commenced paying to her mother $20 to $40 per fortnight, which amount increased to $100 per fortnight. There was some evidence that it may have been $150 per fortnight on at least a number of occasions. This money was paid into a joint account with the wife and her sister. This was also an account which was used by the wife to access financial assistance provided by her sister. There is evidence, and I find, that the husband and the wife purchased a modest motor car for the wife’s mother at some time during the marriage.
The wife gave evidence, and I accept, that the husband knew in general that the wife was providing assistance to her mother, but did not know the specifics of such support.
In addition the wife said her sister paid a premium on a modest insurance policy with a value of some $15,000 to $17,000. The wife gave evidence that this was used to pay for her mother’s funeral and internment. The wife was cross-examined as to what property the mother left to her. The amount paid was a relatively modest sum. The wife and her sister had assisted in supporting their mother. The wife’s mother lived a very modestly lifestyle. Cross-examination of the wife in this area seemed much ado about nothing.
I am not satisfied that there was any money or any significant money left by the wife’s mother and that the funds and support provided by the wife to her mother were done with the husband’s knowledge and consent.
The wife gave evidence that her mother was otherwise in receipt of a pension. The wife received a carer’s benefit for her mother some time from about 2012 to 2015. The wife’s evidence, which I accept, was that they spent more on their mother than they received from the Government and they used the extra funds to provide adequately for the wife’s mother.
I accept the wife’s evidence in respect of her mother and I have had regard to this spending in terms of contribution.
The wife was criticised for not producing documents requested of her at 6.00pm on the Friday evening before the hearing. I do not accept that is a valid criticism of her given that the trial was to start within two days and that these proceedings had been on foot for some time. This did not impeach her credit.
The wife was cross-examined about a statement she made on taking money out for furniture rent and the like when she did not spend all of that money on furniture. She spent a modest amount of probably less than $1,000 on furniture and about $2,500 to $3,000 on rent, bond and the like.
The wife said she used the balance of the money for living expenses. I accept her evidence in that regard.
The wife was criticised for not disclosing her family benefits in her financial statements and including the expense of the school fees when she was unable to pay. I am not satisfied those were reasonable criticisms of the wife and it did not, in my view, generally impeach her evidence.
In cross-examination the wife was challenged in relation to taking financial records from the husband. The wife said that she took most of the financial records and had taken so beforehand. She had rented a storage facility for that purpose.
In this respect the wife was challenged as to the reliability of her evidence given a contradiction in terms of her evidence given as against her statement to the police made 1 October 2013[29] where she said:-
By November 2012 I decided that I was not getting any answers from [the husband], and he was not co-operating with things he promised to do so I started planning what I was going to do with myself and the kids. I slowly started to move my personal things out of the house. Over a six month period I took most of my photos, financial bank statements, clothing for the children and I, but not too much so [the husband] would notice.
[29] Annexure G to wife’s affidavit filed 15 November 2013, paragraph 11.
The wife gave evidence that she did not take her jewellery and that jewellery remained behind owned by the husband.
Having considered all of the evidence, I am satisfied it was a mistake but it did not significantly impeach the evidence of the wife.
I accept the evidence of wife that she left the former matrimonial home with the children in a hurry on the date of separation and resided with her aunt and uncle for six months until she moved into private residential accommodation. I accept that she did not take any more of her or the children’s possessions. I prefer her evidence that she did not take her jewellery.
It was put to the wife that she had secret bank accounts. Given the evidence and the bank statements showing transfers in and out of the ING account and my preference to the wife’s evidence at times to that of the husband, I am not satisfied that such adverse contention was made out.
The wife gave evidence thoughtfully and carefully. She sought to be precise in her evidence and made admissions against interest and seemed to have a good knowledge of the funds and how the funds were spent. She was frank and was an impressive witness.
Her evidence was not undermined and I generally regard her as a being a reliable witness and good historian. However, I have considered her evidence in has to be seen in the context of her partisan views of the behaviour of the husband.
Mr HI
Mr HI provided evidence in accordance with his affidavit filed 7 November 2016. He asserted that he had qualifications to value two classic cars. He opined that one had a value in June 2010 ranging upwards from $100,000. He opined that the second had a value of between $100,000 to $125,000.
Counsel for the husband submitted that Mr HI had not seen the vehicles and was not appointed as a single expert under the rules. His qualifications were such that he was unable to provide the expertise necessary to value the vehicles.
Further, he said that the husband’s valuer should be preferred, as he inspected the first motor vehicle.
I do not reject the expertise or the evidence of Mr HI, although it clearly has limitations, not the least of which was that the vehicles were not inspected by him.
Mr BC
Mr BC provided evidence as set out in his statutory declaration sworn on 19 January 2017 and attached to his affidavit filed 20 February 2017.
His evidence is that he was a director of CDPL as of 4 March 2015 to 10 February 2016. The records from ASIC show that on 13 August 2015, UV Lawyers lodged on behalf of Mr BC a retrospective change as to the shareholding and public officers of CDPL. The husband ceased to be a director as from 4 March 2015 (five months earlier) and Mr BC was appointed from that March 2015 date. In addition the husband’s shares were transferred to Mr BC on the same date.
Curiously, the records from ASIC show that on 1 March 2016 the husband lodged a change to company details dated 1 March 2016, which was lodged through UV Lawyers. In that document the husband recorded that Mr BC ceased being a director on 10 February 2016 and the husband again became a director CDPL from that date. Mr BC’s shares were then transferred back to the husband on the same February date.
By document lodged 17 November 2016 by the husband, on his own behalf notified ATSIC (retrospectively), that he ceased being a director of CDPL as and from 3 July 2014 (some two years four months earlier) and that Mr VW was the director of the company from 7 July 2014 and shareholder from the same day.
In his affidavit, Mr BC did not offer an explanation as to why these machinations occurred.
The affidavit of Mr BC was admitted without the need for cross examination.
Mr UU
Mr UU’ affidavit was read into evidence and he was not required for cross examination. He provided a report as to the value of the remedial works required to make good the fire damage at the former matrimonial home and opined that the remedial work to the garage totals $237,657.48.
The evidence of Mr UU was used by the wife to promote her insurance claim against NRMA. His evidence was not challenged and I accept that cost to be accurate.
The husband’s brother
Mr DE Cagnani is the husband’s brother and he provided evidence in terms of paragraphs 12 to 14 of his affidavit filed 15 December 2016. I accept that he is willing to make his home available to assist the husband in acquiring an interest in the former matrimonial home. He says:-[30]
I am prepared to lend money to my brother in order to facilitate him purchasing the former matrimonial home. I have discussed with my brother and he is aware that I will require a mortgage secured over his home in respect of the monies owed by him.
[30] Paragraph 14 of Mr DE Cagnani’s first affidavit.
On the final day of hearing the husband sought to rely upon an affidavit of Mr DE sworn 11 May 2017. There was no objection to such late filing by the wife and I gave leave for it to be filed in Court.
Neither of Mr DE’s affidavits addressed the issue of the alleged debt between that husband and this brother.
In his later affidavit, this witness confirmed that he was prepared to lend money to the husband and ‘assist in any repayments if need be’. I take it that to lend the money, given the context of the affidavits, was to mean that he would offer his properties as security and presumably given personal guarantees required by any mortgagee.
This witness was not cross examined and his evidence was admitted without controversy.
The husband’s mother
The husband’s mother provided evidence in terms of paragraph 45 of her affidavit filed 15 December 2016. In this paragraph this witness said she is:-
45. I am aware that [the husband] is willing to purchase [the wife’s] share in the former matrimonial home from [the wife]. As I own my own home (unencumbered), I am prepared to borrow funds for [the husband] in order to facilitate the purchase of the former matrimonial home.
In her further affidavit filed in court on 10 January 2017,[31] she said the husband and the wife lived with she and her husband for about one year after they were married. Further, that such accommodation was rent and expense free. She went on to say that she did the cooking, cleaning, washing clothes, ironing and other household chores for the parties.
[31] Exhibit F6 pages 201 and 202.
The husband’s mother said she lent $51,000 to the husband in about 2003 which was not repaid. In 2005 the husband’s parents lent the parties $35,000 for stamp duty, which loan was repaid. I accept the evidence of these contributions and I have included them in my consideration of the parties’ respective contributions.
This witness was not cross examined and her evidence was admitted without controversy.
Mr FG
Mr FG provided evidence in his affidavit sworn 12 December 2016. He said he ‘had been in the [motor vehicle] racing business for over 33 years’[32] in addition to his ‘over 15 years as a … consultant and expert.’[33] He gave evidence of the value of the classic motor vehicle. There was no evidence that he was apprised of the Family Law Rules 2004 (Cth) relating to experts. However, given the determination as to the value of this car, his evidence is moot.
[32] At paragraph 2.
[33] Ibid.
Mr EF
Mr EF asserted he was an expert, but provided no factual basis upon which that expertise could be based. There was no evidence that he was apprised of the Rules relating to experts. However, given the determination as to how I treated this vehicle and its historical context, his evidence is moot.
SOME FINDINGS
The parties jointly tendered, as an exhibit,[34] a valuation of the matrimonial home by Mr MN of WX Valuers. That valuation showed its market value as at 20 February 2017 as $1,200,000. I have accepted the evidence of that valuation.
[34] Exhibit E20.
To acquire the matrimonial home the husband has available security over the matrimonial home, his brother’s property and his mother’s property. He would need to discharge the existing mortgage and refinance the home.
The husband says he has the following debts:-
a)The joint mortgage debt on the matrimonial home[35] $559,695
b)Husband’s legal fees as at 23 September 2016[36] $163,910
c)Husband’s estimated legal fees for hearing[37] $100,000
d)Debt to CDPL $ 67,000
e)Debt to Mr XY $ 30,000
f)Commonwealth Bank of Australia (‘CBA’) credit card[38] $37,994
g)Westpac MasterCard[39] $14,907
[35] Agreed liability.
[36] Husband’s trial affidavit, paragraph 363.
[37] Ibid.
[38] Husband’s amended financial statement, paragraph 51.
[39] Ibid.
This totals $973,506 which during the early part of the hearing was greater than the then agreed value of the home, since that time evidence was adduced that the home had a value of $1,200,000. To acquire the matrimonial home the husband would need to payout the mortgage and his other obligations. This does not take into account any money that he would need to pay to the wife.
The husband’s mother has offered support by way of mortgage secured over her home and Mr DE has offered similar support and assistance with repayments. Notwithstanding this evidence, I am not satisfied that, on the income declared by the husband or the possible increase in his income, the husband has the capacity to meet the loan repayments on a loan of at least $1,000,000.
At separation the wife owned a 4WD which she sold to August 2014 to meet living expenses, including credit card debt, legal fees, school fees and a debt to her sister. She also bought a Motor vehicle 1 for about $21,000.
The wife was the primary carer of the children, principal homemaker for the couple, and that she performed most of the home duties. It is in issue as to the husband’s contributions. I find that he was involved, but not anywhere near the extent of that by the wife. I generally accept the evidence of the wife in terms of her non-financial contribution
At the commencement of contributions in 1992 and at the time of marriage in 1997 the husband made a far greater initial financial contribution in terms of the quantum of his property against that of the wife. The parties lived rent free in the husband’s parent’s home for about a year after marriage.
Since that time the wife has made the greater financial contributions, given her income and her management of the parties’ assets. The only year that the husband seems to have earnt a larger sum than the wife was 2015.
I have considered the wife’s additional contributions as homemaker and parent during the course of the relationship; I find that the wife has made the greater homemaker and parent contribution.
Having regard to all of these considerations and in the context of the property accumulated by the wife, I assess those contributions as 55 per cent on the part of the wife and 45 per cent on the part of the husband.
RELEVANT SECTION 75(2) FACTORS
The husband is presently aged 45 years and is apparently in good health.
The wife is presently aged 42 years and apart from some psychological issue at around the time of separation and stress associated with these proceedings she is apparently in good health.
The recent income details I have of the wife are as set out earlier. The wife is likely to work full time, given that she proposes a mortgage of up to $800,000 on the matrimonial home. The husband has a much smaller income than has the wife, but has a capacity to earn greater income as he did in 2015. I am satisfied that their respective earning capacities are equivalent. I have also set out earlier in these reasons the husband’s income details.
The wife will have the primary care of the children although, they will spend significant time with the husband.
Neither party has re-partnered nor do they have a responsibility to support any other person.
The wife receives family tax benefits and rental assistance from the Government of about $307 per week.
In addition she receives child support of about $57 per week.[67] The husband claims he pays about $100 per week child support.[68]
[67] Wife’s financial statement filed 21 December 2016, paragraphs 12 and 13.
[68] Husband’s amended financial statement filed 22 December 2016, paragraph 31.
The husband refers to his current child support assessment in his trial affidavit and said he attached a copy of the current assessment.[69] The document attached was not a child support assessment, rather it was a statement of account from Child Support for the period 21 October 2016 to 18 November 2016. It shows a payment due of $554.30 which was the total of the $246.67 periodic child support and ‘debit adjustments’ of $307.63. That particular sum arises out of a change to Child Support Assessments for the period from 1 September 2014 to 31 August 2015. Initially the husband was assessed as having $126.50 for about 3 months, nil for about seven months, and $139.83 for about two months. Those assessments were changed and the parties were notified of an additional $307.63 the husband was to pay for over that twelve month period. The husband’s assertion that he was paying $400 per month was disingenuous. He is paying the amount asserted by the wife. The previous month the statement shows the husband paid the $246.67. This is about $57 per week being $28.50 per week for each child.
[69] Husband’s trial affidavit paragraph, 334 and Exhibit F5 page 225.
The standard of living of both parties is likely to have been reduced.
There are no other relevant s 75(2) factors except that to which I refer later, if I am incorrect as categorising the NRMA claim as property.
Given those circumstances I assess the other factors in favour of the wife, primarily the care of the children at 5 per cent (making a 10 per cent difference).
ASSESSMENT
In terms of the non-superannuation property and the non-NRMA property I have determined that the remaining non-superannuation property ought to be divided as to 60 per cent to the wife and 40 per cent to the husband.
I have not included the NRMA claim or the school liability in these calculations. Those figures are yet to be fixed but will be relatively close. I have considered that this pool will be about $214,800 less costs and less the school fees of $57,753 plus any additional fees from the end of 2016.
The wife’s non superannuation property, including the house and less the agreed mortgage payout, adds up to $656,259. To divide the non-superannuation property (excluding NRMA and school fees) would be calculated as follows:-
Matrimonial home – agreed value $1,200,000.00 Motor Vehicle 1 – agreed value $15,750.00 ING Account #...44 – agreed value $152.00 Westpac Account #...48 – agreed value $50.00 Westpac Account #...66 – agreed value $2.00 Wife's Furniture – determined value $0.00 Wife’s paid Legal Fees – amount of $63,412 is agreed. However it is treated as nil $0.00 Home loan ($559,695.00) Amount payable to husband ($228,146.00) Total $428,113.00
For the husband the non-superannuation property and liabilities plus the payment from the wife would be;
Classic Car (USD$42,000 conversion as at 06.01.17 - 0.732933) - determined value $57,304.00 Scooter – agreed value $500.00 CBA Account #...49 – agreed value $0.00 Husband's Furniture – determined value $0.00 Jewellery – determined value $0.00 Tools and equipment, car parts, 4WD, utility motor vehicle – determined value
$0.00Husband’s paid legal fees – amount of $147,425 is agreed. However treated as nil $0.00 Amount payable by wife $228,146.00 Westpac Account#...03 –agreed ($542.00) Total $285,408.00
I discussed the NRMA claim elsewhere in these reasons. I will treat this chose in action a property. I am relatively sanguine about this approach given the Full Court decision of Finlayson & Finlayson & Gillam [2002] FamCA 898 where they discussed a chose in action at 423:- saying:-
…That finding, in part, at least, supports her Honour’s subsequent finding (at p.39 of her judgment) that the extra contribution, by the wife’s family on her behalf, increased the wife’s overall contribution to the chose-in-action, which her Honour found to be “the only asset remaining”, from 50% to 60%. That approach by the trial Judge was in accordance with many decisions of this Court including Kessey and Kessey (1994) FLC 92-495; 18 Fam LR 149, and involved no error of law.
However, if I am incorrect in that approach, I would have treated the facts in the same way as a s 75(2)(o) of the Act factor.
There was no indication of the legal costs of the wife in respect of the NRMA claim, but if reasonable legal costs are incurred to pursue that claim such costs ought to likewise be paid out of the claim. I will note in the orders that the husband is a third party payer pursuant to s 171 of the Legal Profession Uniform Law (NSW). It is my understanding that such a notation would likely mean that the husband is entitled to have the wife’s practitioner client legal account for the work on the NRMA claim assessed, if he believes that the account is not in all the circumstances fair and reasonable.
The parties agree that the school fees outstanding to YY School ought first to be paid out, and I will adopt that course. As the balance of the claim, if any, it should be treated the same way as the remainder of the property, that is divided as to 60 per cent to the wife and 40 per cent to the husband. It was agreed that the husband be reimbursed the fees he paid for the expert report of Mr UU of $4,950, given that it was used and relied upon in the NRMA claim. The effect of such an order would be that the husband effectively pays 40 per cent of that fee and the wife effectively pays 60 per cent of Mr UU’s fee.
The amount of the superannuation accumulated by the wife as against the modest amount accumulated by the husband in the context of this asset pool would leave the wife superannuation rich and accessible property poor. I am not satisfied that that would be just and equitable or otherwise proper in these particular circumstances.
As such, I have treated superannuation as a separate pool. The wife commenced contributing shortly before the parties met and no precise figure was made available to the Court as to the amount at the time the parties commenced cohabitation. Most of the contributions were likely made during the period of time the parties were together and after separation, and given the evidence of income, the wife made greater direct financial contributions to the superannuation than did the husband. I have considered the superannuation in the light of the same factors as was the case with the non-superannuation property.
Given the parties’ respective ages, they will likely not access those superannuation funds for many years hence.
Given the circumstance of the parties I intend to split the superannuation as to 60 per cent to the wife and 40 per cent to the husband.
The total pool of superannuation is $318,358 made up of the wife’s accumulation fund of $298,695 and the husband’s accumulation fund of $19,663. Forty per cent of the total is $127,343 of which the husband has $19,663.
Consequently, if I split $107,680 from the wife’s accumulation fund this would provide the husband with 40 per cent of the pool of superannuation funds.
I am satisfied that such an adjustment is just and equitable as between these parties and I will make such order.
CONCLUSION
For these reasons there will be orders for division of the property, both superannuation and non-superannuation on the basis of 60 per cent to the wife and 40 per cent to the husband.
The wife will take the matrimonial home as part of the property orders in the context of the division I have determined. Once she takes occupation of the matrimonial home; then the mortgage over it, council rates, water rates and home insurance will be her responsibility. The husband is in sole occupation of the home and has had occupation of it since separation, but for a period of about a year when he let it out. He ought to be responsible for the rates and mortgage repayments up to the date the wife takes possession of the home.
If the rates and/or mortgage are overpaid he ought to receive a refund. If the rates are unpaid and/or the mortgage increased, he should pay the excess.
The mortgage fell into arrears under his stewardship of the home, I had regard to that circumstance as a minor factor in terms of contribution. However, increases in those arrears during his occupation of the home for the period from hearing to judgment ought not be visited on the wife.
With all of the division of property and determinations I have made, I reflected as to whether in all of the circumstances that such orders are in all of the circumstances appropriate. I am satisfied that they are.
Further, I then considered whether in all of the circumstances the orders are just and equitable. I am satisfied that they are.
Accordingly, I will so order.
I certify that the preceding two hundred and ninety three (293) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 15 June 2017.
Associate:
Date: 15 June 2017
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