Calkins and Calkins
[2010] FMCAfam 284
•29 March 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CALKINS & CALKINS | [2010] FMCAfam 284 |
| FAMILY LAW – Parenting and property – shared care arrangement – valuation of business – contribution – future needs. |
| Family Law Act 1975, ss.60B, 60CC, 61DA, 65DAA, 75(2), 79 |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Bruce Smyth, “Time to rethink time? The experience of time with children after divorce” Family Matters No. 76, Winter 2005 page 4. |
| Applicant: | MS CALKINS |
| Respondent: | MR CALKINS |
| File Number: | WOC 214 of 2009 |
| Judgment of: | Altobelli FM |
| Hearing date: | 11 November 2009 |
| Date of Last Submission: | 11 November 2009 |
| Delivered at: | Wollongong |
| Delivered on: | 29 March 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Wong |
| Solicitors for the Applicant: | Dribbus Kovacevic Lawyers |
| Counsel for the Respondent: | Mr Maurice |
| Solicitors for the Respondent: | DGB Lawyers |
ORDERS
The parents shall have equal shared parental responsibility for the children, [X] born [in] 1999 and [Y] born [in] 2002.
The parents shall each have responsibility for the day-to-day decisions in relation to the care of the children during the periods that the children are in his-her care respectively.
The children shall live with the father in accordance with a two week rotating cycle as follows:
(i)In week 1 from the conclusion of school on Thursday to the commencement of school on the Monday immediately following;
(ii)In week 2 from the conclusion of school on Wednesday to the commencement of school on the Friday immediately following; and
(iii)At other times as agreed between the parties from time to time.
The children shall live with the mother at all other times.
Unless otherwise agreed by the parties the children shall live with each parent during the following times and any other order providing for time contrary to this order is suspended to provide for this order:
(a)
With the father for Christmas in even numbered years from
3.30 pm Christmas Eve to 2.30 pm Christmas Day and with the mother from 2.30 pm Christmas Day until 3.30 pm on
27 December.
(b)With the mother for Christmas in odd numbered years from
3.30 pm Christmas Eve to 2.30 pm Christmas Day and with the father from 2.30 pm Christmas Day until 3.30 pm on
27 December.(c)With the father for the first half of the New South Wales gazetted school holidays at the end of terms 1, 2 and 3 with changeover to occur at 3.30 pm on the second Sunday of the school holiday period unless otherwise agreed between the parties.
(d)With the mother for the second half of the New South Wales gazetted school holidays at the end of terms 1, 2 and 3 with changeover to occur at 3.30 pm on the second Sunday of the school holiday period unless otherwise agreed between the parties.
(e)With the father for the second half of the New South Wales gazetted school holidays at the end of term 4 in odd numbered years with such time suspended to facilitate the operation of Order 5(a) and Order 5(b).
(f)With the father for the first half of the New South Wales gazetted school holidays at the end of term 4 in even numbered years with such time suspended to facilitate the operation of Order 5(a) and Order 5(b).
(g)With the mother for the first half of the New South Wales gazetted school holidays at the end of term 4 in odd numbered years with such time suspended to facilitate the operation of Order 5(a) and Order 5(b)
(h)With the father for the second half of the New South Wales gazetted school holidays at the end of term 4 in even numbered years with such time suspended to facilitate the operation of Order 5(a) and Order 5(b)
(i)On each of the children's birthdays, the party who does not have the child in his/her care is to spend time with the children for a minimum of two (2) hours commencing at a time agreed between the parties but failing agreement between the parties between the hours of 5.00 pm and 7.00 pm if a school day and between the hours of 9.00 am and 1.00 pm if a non-school day.
(j)With the mother on Mother's Day each year for a minimum of six (6) hours commencing at a time agreed between the parties but failing agreement between the parties between the hours of
10.00 am and 4.00 pm.(k)With the father on Father's Day each year for a minimum of
six (6) hours commencing at a time agreed between the parties but failing agreement between the parties between the hours of 10.00 am and 4.00 pm.For the purpose of these Orders the New South Wales gazetted school holidays at the end of term 4 are deemed to commence at 9.00am on the day following the conclusion of the school term and conclude at 9.00am on the day the children are to return to school.
Each party shall facilitate the children communicating with the other party by telephone, e-mail or other means of communication at any reasonable time and the Mother shall ensure that the mobile phone provided to the children by the Father is charged, switched on and available to the children.
Each party is to provide such consents and such authorities to the children’s schools as may be necessary from time to time to ensure that each parent receives from the school copies of all newsletters, notices and details of all functions, parent and teacher nights and other activities to which parents are invited.
Each party is to provide such consents and such authorities as may be necessary from time to time to:
(a)allow the provision to the other party or to a medical practitioner of any medical report concerning any of the children;
(b)enable the other party to communicate with any of the children's places of education and obtain all information and copies of documentation from such place of education as the party may request in relation to any of the children;
(c)permit the other party to attend any of the children's places of education for any special event or at other reasonable times;
(d)permit the other party to discuss with the any of the children's teachers or other relevant persons involved in the education of the children the relevant child's performance.
The parties shall be at liberty to attend at any of the children's places of education for the purpose of attending any activity or occasion routinely attended by parents and for the purpose of discussing the child's progress with the relevant person.
The parties shall be at liberty to attend at any of the children's extra-curricular activities routinely attended by parents.
Each party is to encourage and foster the children's relationship with the other party.
If a parent’s time with the children commences at the conclusion of school the parent is to collect the children from the school and if a parent’s time with the children concludes at the commencement of school the parent is to deliver the children to the school.
Unless otherwise agreed by the parties or otherwise stated in these orders the father is to collect the children from the mother's usual place of residence, at the commencement of the children spending time with the father and the mother is to collect the children from the father, at his usual place of residence, at the conclusion of their time with the father.
Each party is restrained from denigrating the other party and is to use their best endeavours to ensure that no other person denigrates the other party in the presence or hearing of the children.
Each party is to keep the other party informed of their residential address and telephone numbers, including a landline telephone number if available, and notify each other of any change to same within forty-eight (48) hours of the change occurring.
Each party is to contact the other party as soon as practicable should any of the following events occur while the children are in their care:
(a)If any of the children become seriously ill.
(b)If any of the children are hospitalised.
(c)If any of the children are involved in an accident resulting in injury or injuries requiring medical attention.
That the parties shall forthwith do all things necessary to disburse the proceeds of the former matrimonial home in the following manner and priority:
(a)Payment of the balance held by Hozack Clisdell Lawyers to the wife.
Within 60 days, the husband shall also pay to the wife the difference between $280,702 and the amount received by the wife pursuant to the immediately preceding order. At the end of 60 days interest is to accrue on the amount at the rate calculated in accordance with the Family Law Act 1975, its Rules and Regulations. The wife has leave to relist before Federal Magistrate Altobelli on 7 days notice in relation to enforcement, if payment is not made in the period stipulated.
As from the date of these Orders the Respondent Husband is declared to have the sole right, title and interest in the businesses [T] and [A] and the property at Property P.
The parties forthwith do all things and sign all documents necessary to cause the Respondent Husband to be appointed a joint trustee and signatory with the Applicant Wife on the following accounts:
(i)Bendigo Bank [1] [X]
(ii)Bendigo Bank [2] [Y]
(iii)Bendigo Bank [3] [X]
(iv)Bendigo Bank [4] [Y]
As from the date of these Orders and as between the Applicant Wife and the Respondent Husband, and subject to the above Orders, the Applicant Wife and the Respondent Husband shall each respectively retain all interest in and entitlement to:
(i)All personal property now in her/his respective possession or control.
(ii)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her/his sole name respectively.
(iii)All interests in life insurance policies and superannuation funds standing in her/his sole name respectively.
Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these Orders.
The parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
IT IS NOTED that publication of this judgment under the pseudonym Calkins & Calkins is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT WOLLONGONG |
WOC 214 of 2009
| MS CALKINS |
Applicant
And
| MR CALKINS |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons relate to an application for parenting orders, as well as an application for property settlement. The applicant, whom I will refer to as the wife, is 42 years old. The respondent, who I will refer to as the husband, is 46 years old. They have two children, [X] who is 10 years old and [Y] who is 7 years old. The husband and the wife married [in] 1990, and finally separated in February 2005 when the wife commenced sleeping in the fourth bedroom of what was then the former matrimonial home. On 13 June 2009 the wife moved out of that home with the children, and currently resides in rented accommodation at [omitted]. The issues before the court include what parenting orders are in the best interests of the children, and what property settlement is just and equitable in all the circumstances of this case.
Background
Despite the seeming breadth of this case, the issues are quite discrete. The main issue in relation to the children is how much time they should spend with their father. He would like equal time. The current orders provide for five nights out of 14, and the mother proposes this continues, albeit in a slightly different way. On 16 April 2009 Brewster FM made an order that the children live with the mother and spend time with their father from after school on Friday to the commencement of school on Monday each alternate weekend, and from after school on Wednesday until the commencement of school on Thursday, each week. The current orders, in effect, provide for six changeovers, or transitions, each fortnight from one parent’s household to the other, albeit through school. In relation to the parenting matter, one of the concerns that the mother has is that the children are unsettled by the current arrangement for them to spend time with the father. There is a Family Report in this case that was prepared by Family Consultant Mr John Lemaire dated 21 August 2009. He recommends that the children’s time with the father be extended to six nights out of 14. The issue in relation to the children is, therefore, quite discrete. Should it remain five out of 14, or be increased to either six out of 14, or seven out of 14 nights per fortnight?
In relation to property settlement, again the issues are quite discrete and this means that I will not have to set out a comprehensive history of relevant financial transactions. The parties agree that contribution should be assessed at the date of separation as being equal. Initially the wife sought a claim for post-separation contribution, but this was then withdrawn during closing submissions. The wife seeks an adjustment in her favour under s.75(2) assessed at 15 percent, principally based on the disparity in the parties’ income, and earning capacities. The husband says that if he has equal time then there should be no adjustment under s.75(2). In the alternative, the husband argues that the wife does have a capacity for employment and that in any event she has access to financial resources that he does not and thus there should be no adjustment under s.75(2).
In relation to the property settlement, however, a number of discrete issues arise in relation to the constitution of the pool of assets. The husband purchased a property at Property P after separation, and it is agreed that the current value of that property is less than the purchase price, including the out of pocket expenses. There is an issue, therefore, about how the negative equity should be treated in the balance sheet, and whether there should be add-backs for property of the husband and the wife (a boat, trailer, and savings) used as part of the purchase price. A substantial issue in this case is the valuation of the business known as [T]. There is a difference between the valuations given by each of the parties’ valuers, and this will involve considering, amongst other things, who has used the most appropriate capitalisation rate. There is also an issue between the parties as to how to characterise an inheritance to which the wife has become entitled, but not actually received.
During the course of their marriage, the parties purchased and sold a property, operated various business, received redundancy payments, inheritances and so forth. They both worked at various different times and they were both involved in homemaking and parenting though the wife asserts that she had a much greater role as a parent. Even though they separated in February 2005, it was a separation under the same roof until relatively recently, in June 2009, when the wife and the children moved out of the home. During this period there appears to have been a separation of finances. In November 2007 the husband purchased a property of Property P for $421,000. The 10 percent deposit was provided as to $14,100 from personal savings account, $15,000 from the sale of the boat and caravan, and $13,000 being a gift from the husband’s father. The balance of the purchase price was provided by way of a mortgage from the Commonwealth bank of Australia. The parties agree that the current market value of this property is $370,000, and that the negative equity in this property is $37,814, though they dispute how this should be treated.
The evidence in this case consisted of affidavits and oral evidence from the parties, their respective valuers, and the Family Consultant.
I propose to deal with parenting issues first, and then the issues raised in the property settlement case.
Applicable Law
In determining parenting matters under Part VII of the Family Law Act the Court must regard the best interests of the child as the paramount consideration: s.60CA.
The objects and principles of Part VII are set out at s.60B:
60B Objects of Part and principles underlying it
(1) The objects of this Part are to ensure that the best interests of children are met by:
(a) ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child; and
(b) protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and
(c) ensuring that children receive adequate and proper parenting to help them achieve their full potential; and
(d) ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.
(2) The principles underlying these objects are that (except when it is or would be contrary to a child’s best interests):
(a) children have the right to know and be cared for by both their parents, regardless of whether their parents are married, separated, have never married or have never lived together; and
(b) children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives); and
(c) parents jointly share duties and responsibilities concerning the care, welfare and development of their children; and
(d) parents should agree about the future parenting of their children; and
(e) children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).
(3) For the purposes of subparagraph (2)(e), an Aboriginal child’s or Torres Strait Islander child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture includes the right:
(a) to maintain a connection with that culture; and
(b) to have the support, opportunity and encouragement necessary:
(i) to explore the full extent of that culture, consistent with the child’s age and developmental level and the child’s views; and
(ii) to develop a positive appreciation of that culture.
At the very core of the new Part VII of the Family Law Act 1975 is the creation of a presumption of equal shared parental responsibility in s.61DA. Section 61DA provides:
61DA Presumption of equal shared parental responsibility when making parenting orders
(1) When making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
(2) The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in:
(a) abuse of the child or another child who, at the time, was a member of the parent’s family (or that other person’s family); or
(b) family violence.
(3) When the court is making an interim order, the presumption applies unless the court considers that it would not be appropriate in the circumstances for the presumption to be applied when making that order.
(4) The presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
If the presumption applies, I am required to consider certain things:
65DAA Court to consider child spending equal time or substantial and significant time with each parent in certain circumstances
Equal time
(1) If a parenting order provides (or is to provide) that a child’s parents are to have equal shared parental responsibility for the child, the court must:
(a) consider whether the child spending equal time with each of the parents would be in the best interests of the child; and
(b) consider whether the child spending equal time with each of the parents is reasonably practicable; and
(c) if it is, consider making an order to provide (or including a provision in the order) for the child to spend equal time with each of the parents.
Substantial and significant time
(2) If:
(a) a parenting order provides (or is to provide) that a child’s parents are to have equal shared parental responsibility for the child; and
(b) the court does not make an order (or include a provision in the order) for the child to spend equal time with each of the parents; and
the court must:
(c) consider whether the child spending substantial and significant time with each of the parents would be in the best interests of the child; and
(d) consider whether the child spending substantial and significant time with each of the parents is reasonably practicable; and
(e) if it is, consider making an order to provide (or including a provision in the order) for the child to spend substantial and significant time with each of the parents.
(3) will be taken to spend substantial and significant time with a parent only if:
(a) the time the child spends with the parent includes both:
(i) days that fall on weekends and holidays; and
(ii) days that do not fall on weekends or holidays; and
(b) the time the child spends with the parent allows the parent to be involved in:
(i) the child’s daily routine; and
(ii) occasions and events that are of particular significance to the child; and
(c) the time the child spends with the parent allows the child to be involved in occasions and events that are of special significance to the parent.
(4) Subsection (3) does not limit the other matters to which a court can have regard in determining whether the time a child spends with a parent would be substantial and significant.
Reasonable practicality
(5) In determining for the purposes of subsections (1) and (2) whether it is reasonably practicable for a child to spend equal time, or substantial and significant time, with each of the child’s parents, the court must have regard to:
(a) how far apart the parents live from each other; and
(b) the parents’ current and future capacity to implement an arrangement for the child spending equal time, or substantial and significant time, with each of the parents; and
(c) the parents’ current and future capacity to communicate with each other and resolve difficulties that might arise in implementing an arrangement of that kind; and
(d) the impact that an arrangement of that kind would have on the child; and
(e) such other matters as the court considers relevant.
Because s.65DAA refers to the best interests of the child I must then go back to consider s.60CC which specifies how I must determine what is in a child’s best interests.
60CC How a court determines what is in a child’s best interests
Determining child’s best interests
(1) Subject to subsection (5), in determining what is in the child’s best interests, the court must consider the matters set out in subsections (2) and (3).
Primary considerations
(2) The primary considerations are:
(a) the benefit to the child of having a meaningful relationship with both of the child’s parents; and
(b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
Note: Making these considerations the primary ones is consistent with the objects of this Part set out in paragraphs 60B(1)(a) and (b).
Additional considerations
(3) Additional considerations are:
(a) any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views;
(b) the nature of the relationship of the child with:
(i) each of the child’s parents; and
(ii) other persons (including any grandparent or other relative of the child);
(c) the willingness and ability of each of the child’s parents to facilitate, and encourage, a close and continuing relationship between the child and the other parent;
(d) the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii) any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;
(e) the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis;
(f) the capacity of:
(i) each of the child’s parents; and
(ii) any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
(g) the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child’s parents, and any other characteristics of the child that the court thinks are relevant;
(h) if the child is an Aboriginal child or a Torres Strait Islander child:
(i) the child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
(ii) the likely impact any proposed parenting order under this Part will have on that right;
(i) the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents;
(j) any family violence involving the child or a member of the child’s family;
(k) any family violence order that applies to the child or a member of the child’s family, if:
(i) the order is a final order; or
(ii) the making of the order was contested by a person;
(l) whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;
(m) any other fact or circumstance that the court thinks is relevant.
Significance of Time
Like many disputes relating to children, this is a dispute about dividing the child’s time between the parents. A leading Australian researcher has reflected on this phenomena in an article entitled “Time to rethink time? The experience of time with children after divorce”[1]. Smyth refers to the notion of time as part and parcel of the ‘custody wars’ between parents. He says about time at page 4: “…Parents fight about it, courts divvy it up, and children long for it.” Smyth goes on to say some important things about time at page 9 of the article:
A solid body of data also suggest that it is the quality of relationships between parents, and between parents and children, that exerts a critical influence on children’s wellbeing, not the amount of time per se (Amato and Gilbreth 1999; Pryor and Rodgers 2001). Of course, an emotionally close and warm relationship between parents and children requires time to sustain it. “Quality time” needs time.
According to Kelly and Lamb (2000), the greater the range of contexts for interaction between parents and their children, the better. They suggest that different contexts facilitate children’s social, emotional and cognitive development, as well as afford greater opportunities for parents to build emotional bonds with their children.
It is the intermingling of different activities and the different experiences of time that diverse contexts bring that form the hub of family life, and which are critical for family wellbeing. For instance, overnight stays allow for the experience of mundane everyday routines, as well as special moments – such as putting children to bed, reading to them, saying good night, and starting the day together over breakfast. Focused one-on-one together time (such as playing a game, talking in the car, reading a book together, or helping with homework) sends a clear signal to children that they matter. Outdoor time (such as fishing, netball, or hiking) provides opportunities for children’s emotional, physical, social and cognitive development, and give parents the chance to mentor, and to remain engaged with, their children. Fun time (such as long-weekends and school holidays) or special time (such as birthdays, Mothers’ or Fathers’ Day, and Christmas) foster the pursuit of mutually rewarding experiences for children and parents, help create bonds between each and symbolise those bonds, and can create positive life-long memories.
But while these, and other, types of time are important for children’s and parent’s wellbeing, one type of time warrants special attention: being-in-the-moment time. This type of time involves unstructured, spontaneous, intimate time where a parent and child are free to “hang out”, talk about things, or engage in activities that are important to them (such as a teenage daughter talking about boyfriend problems while her father peels potatoes). Post-separation parenting arrangements that involve thin slices of parent–child time, such as daytime-only contact each Saturday afternoon, work against the experience of “being” time as this sort of time needs to feel natural and unimpeded to create the conditions for free-flowing interpersonal engagement.
[1] Bruce Smyth, “Time to rethink time? The experience of time with children after divorce” Family Matters No. 76, Winter 2005 page 4
This is a social science perspective on time, and its significance in the context of children’s relationships with their parents. Section 65DAA(3) is the Family Law Act’s attempt to incorporate this social science perspective into law. The definition of substantial and significant time sets a high benchmark (“…only if…”) for the very diverse forms of cumulative interaction between a parent and child described in paragraphs (a), (b) and (c) of that section.
Property Settlement
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
In relation to add-backs, the applicable law can be found in decisions such as the Full Court's decision in AJO & GRO (2005) FLC 93-218 and again I will incorporate into these my ex tempore reasons, relevant passages from that Full Court decision that describes the situations in which add-backs are appropriate.
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31. As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
“44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
Parenting Application
By way of further background in relation to the parenting application, when the case first commenced the mother was seeking permission to relocate the children from the [omitted] area to the Wollongong area. By the time of the hearing, she had discontinued this claim and in evidence she explained that this was principally in response to the Family Report prepared by Mr Lemaire which recorded the views of the children against such a proposal.
Mr Lemaire’s report follows the usual form. He was very complimentary of the parents, in many ways. For example at paragraph 6 of his report, he notes:-
6. It was apparent that no destructive animosity exists between the parties and that they are able to communicate regarding parenting issues and the children’s needs. When seen for this assessment Mr Calkins and Ms Calkins related amicably and appeared to easily tolerate each others company.
Mr Lemaire did note, however, that each reported communication difficulties with the other, though the parents seemed to be able to manage their conflict so that it did not occur in front of the children. Mr Lemaire noted that the husband’s argument about equal care was that it would provide the children with more stability, as well as enable them to do more things with him, and learn from him. The wife was concerned about how the children’s father would cope with equal time in a situation where he is busy running his business, and she emphasised the need for the children’s routine. She described the children as being unsettled for “three or four days” when they returned from weekends with their father, and thus she thought that a week about arrangement would simply add to their distress.
When the Family Consultant observed the children with both parents individually and separately he concluded as follows:-
During the observation session, it was not possible to discriminate between the parents in terms of the level of attachment the children have for each other. It was apparent that both parents are important figures for both children.
When Mr Lemaire spoke with both children, he noted that both of them said they wanted to spend more time with their father.
In terms of his evaluation, the Family Consultant notes that whilst the parents have been essentially separated for several years, the children have only experienced this as a separation from when their mother moved out of the home. Thus, their opportunity to adjust to the parents’ separation has been limited, and this has affected their perception of the situation. One of the reasons for making a recommendation against a relocation to Wollongong was the fact that the children were adjusting to the fears and insecurities of having separated parents, and this meant that their environment should remain as predictable and familiar as possible.
The Family Consultant concludes at paragraph 36 in the following terms:-
36. Equal care works best when it is initiated by both parties. They have the same aspirations for their children and they are not diverted by thoughts of deprivation or inequity. Because
Mr Calkins and Ms Calkins are relatively free from conflict there is some potential for them to be able to productively negotiate an equal care arrangement. Ms Calkins, however, took the firm view that the children’s needs would be better served in the one household. Given the recency of the separation, and the children’s adjustment task, it may be better for Ms Calkins’s view to prevail and for the children to be able to identify the one household as theirs. The present arrangement provides the children with five days out of 14 with their father. By adding one Thursday night per fortnight, they would spend six nights out of 14 with Mr Calkins.
The Family Consultant thus recommended that the children live with their mother and spend time with their father on alternate weekends from Friday after school to Monday morning, each Wednesday night, and each alternate Wednesday and Thursday nights, plus school holiday periods as arranged.
The Family Consultant was not required for cross-examination.
I accept the evidence contained in the Family Report, and place significant weight on the recommendations.
Both the mother and father were cross-examined about the evidence they give in their affidavits about parenting matters. My impression of them was consistent with the impression of the Family Consultant. Both [X] and [Y] are actually quite lucky to have two parents who love them as much as they do, and who have so much to offer in terms of their well-being and best interests. Clearly the parents cannot agree about arrangements in relation to the children, and communication is strained. On balance, however, and particularly compared to so many cases before the Family Law Courts, these children will continue to thrive in the care of both parents.
I can understand the tenor of the father’s case, insofar it was put in cross-examination of the mother, and articulated in submissions. If the current level of shared care is five out of 14, and the Family Consultant recommends six out of 14, then there is no great quantitative or qualitative gap in reaching equal time. Notwithstanding this the mother remained firmly of the view that the children would be unsettled by frequent changeovers, and extended periods of time away from her.
As for the argument that there is little difference between six out of 14 and seven out of 14, it is an alternative that was considered by the Family Consultant and rejected by him as not being in the best interests of the children. On the basis of the evidence before me, it is not possible to cavil with what the Family Consultant has recommended.
I therefore propose to make parenting orders to the effect of the children spending time with their father for six out of 14 nights each fortnight. I do have some concerns about how, precisely, the six nights ought to be structured. I am of the view that the disruption and stress that the children appear to experience, at least based on the mother’s evidence, will be reduced by a reduction in the number of changeovers. As indicated in an earlier part of these reasons there are currently six changeovers, and even on Mr Lemaire’s proposal it would remain six. The father’s proposal is for two periods of block time. I agree under the circumstances that this is appropriate as it reduces changeovers to a total of four each fortnight. One block should be for 4 nights, and the other 2 nights. There appears to be no significant dispute between the parents about school holidays and special days
Property Application
As was indicated in the introduction, there are a number of discrete issues that apply in the context of the property settlement. The first issue, or group of issues, relates to the constitution of the pool of assets. At the commencement of the hearing I was presented with an agreed joint balance sheet identifying points of difference. This is reproduced below:
Asset
Ownership
Husband’s Value
Wife’s Value
Property W
Joint
$590,000.00
$590,000.00
Property P
Husband
$370,000.00
$370,000.00
[T] & [A]
Husband
$94,446.00
$155,000.00
Bendigo Bank [5]
Husband
$145.40
$145.40
CBA [6]
Husband
$1,791.00
$1,791.00
[F] Shares
Husband
$5,438.75
$5,438.75
[F] Group Ltd
Husband
$4,040.00
$4,040.00
Bendigo Bank [7]
Wife
$8,846.10
$8,846.10
Westpac [8]
Wife
$5,938.35
$5,938.35
1999 Holden Astra
Wife
$5,000.00
$5,000.00
CBA shares sold 1/7/09
Husband
Nil
$4,143.00
Add backs re Property P purchase
Husband
Nil
-
Negative equity in Property P as against mortgage
Husband
$37,814.00
$37,814.00
Proceeds of boat, trailer and caravan applied to Property P
Husband
Nil
$15,000.00
Bank account funds of Husband applied to Property P
Husband
Nil
$14,100.00
TOTAL ASSETS
$1,123,459.60
$1,212,256.60
Liability
Mortgage to Bendigo Bank
Joint
$361,141.00
$361,141.00
Mortgage to CBA [9] – Property P
Husband
$152,861.00
$152,861.00
Mortgage to CBA [10] – Property P
Husband
$254,953.00
$254,953.00
TOTAL LIABILITIES
$768,955.00
$768,955.00
Superannuation and Other
[M] Superannuation Fund ([11])
Husband
$88,197.00
$88,197.00
Colonial State [12]
Wife
$21,257.35
$21,257.35
Balance of inheritance
Wife
$90,000.00
$90,000.00
TOTAL SUPER AND OTHER
$199,454.35
$199,454.35
NET ASSETS
$553,958.95
$642,755.95
There is an issue about the value of the [T] business, with the husband through his experts asserting it is valued at $94,446, and the wife through her expert asserting it is valued at $155,000. I will deal with this in detail below.
There are a number of issues relating to the post-separation purchase by the husband of the property at Property P. The parties agree that the property in question has a value of $370,000, which is less than the purchase price. What the parties have agreed should be described as the “negative equity” in the Property P property is $37,814. In short, the amount secured against this property is in excess to its current market value. The reduction in the value of this property appears to be the result of market forces. There was no submission, or even any hint, that the reduction in value was a result of anything that the husband did, or failed to do.
The evidence indicates that the husband sold a boat, trailer and caravan and applied the net sale proceeds, approximately $15,000, towards the purchase price of Property P. In addition, he used funds in his bank accounts totally $14,100 towards the acquisition of this property.
On behalf of the wife it is submitted that the sums of $15,000 and $14,100 should be added back into the property pool. She submits that the negative equity in the property should be excluded from the pool. The husband submits that the negative equity should be included in the pool but as an asset which is offset by the corresponding liability. It is clear that all of these issues are interrelated.
The wife submits that the husband purchased the property on his own. The acquisition took place during the period of separation under the same roof, but before the physical separation of the parties. Accordingly, the negative equity should not be sheeted home to her. However, she also argues that there should be an add-back of the boat, trailer and caravan sale proceeds ($15,000) as this was clearly joint funds and a further add-back of $14,100 being the husband’s savings. Interestingly, her counsel’s submission in relation to the savings in question was that it should be added back, because it was monies saved at a time when they were in a shared household, albeit separated. His argument is that, in effect, the wife contributed to the accumulation of these savings, even though they were separated but cohabitating under the same roof and not physically separated.
The husband argues that there should be no add-backs because the $15,000, and $14,100 are already represented in the pool of assets in the value of the property at Property P. Accordingly, the husband submits it would be double counting to include these items in the balance sheet. The husband resists the inclusion of the negative equity on the basis that there is no evidence of recklessness on the husband’s part and that changes in the market should be borne by the parties equally, whether losses or profits.
Resolving these issues might have been less complex had there been more evidence about the precise nature of the allocation of finances of the husband and wife during the post-separation period, when they were living in the same physical residence. What evidence I have leads me to believe that it is simply not as clear cut as the husband paying to the wife a certain amount each week, with him meeting other outgoings. The very nature of the contribution that either the husband or the wife would have been making both financially and non-financially during this period is surely more complicated than that which first meets the eye by reading the affidavits.
In order to be just and equitable to both the husband and the wife, I propose to do as follows. The value of the Property P property in the balance sheet should total the purchase price. In the draft joint balance sheet provided by both counsel, this was described as the property at Property P having a value of $370,000, and then a separate item of $37,814 represent the negative equity, but as an asset. This is a convenient way of describing what I consider to be the just and equitable result. If an amount equivalent to the full purchase price of the Property P property appears as an asset in the balance sheet, it would not be just and equitable to make further add-backs on the sums of $15,000 and $14,100, that were contributed towards its purchase.
Once the purchase price of Property P appears on the balance sheet, howsoever described, any other issues of add-back appear redundant, including a passing mention in the wife’s case for the inclusion of shares sold by the husband.
In view of the matters set out above, however, in order to be just and equitable to both parties the full liability secured against the Property P property also needs to come onto the balance sheet, as a liability.
There was also an issue about the treatment of the balance of an inheritance to which the wife is entitled but not yet received. She agrees that she is entitled to receive it, but believes that that is unlikely that it will be paid to her. Accordingly, her counsel submits it should be a financial resource, as it is not property available to her. Counsel for the husband submits that it is, in effect, within the wife’s power to pursue the entitlement that is hers and to convert what might be an inheritance entitlement not received, into cash in her hands, through appropriate enforcement measures. It is unfortunate that this issue received mere passing reference in the evidence and cross-examination. On the basis of the information available before me, however, I think it is just and equitable to characterise the $90,000 as a financial resource available to the wife, rather than as a property to be divided between them. It is thus more relevantly considered under section 75(2), than under section 79(4).
Having regard to the above matters the balance sheet will be as follows:-
Asset
Ownership
Husband’s Value
Wife’s Value
Property W
Joint
$590,000.00
$590,000.00
Property P
Husband
$370,000.00
$370,000.00
[T] & [A]
Husband
$94,446.00
$155,000.00
Bendigo Bank [5]
Husband
$145.40
$145.40
CBA [6]
Husband
$1,791.00
$1,791.00
[F] Shares
Husband
$5,438.75
$5,438.75
[F] Group Ltd
Husband
$4,040.00
$4,040.00
Bendigo Bank [7]
Wife
$8,846.10
$8,846.10
Westpac [8]
Wife
$5,938.35
$5,938.35
1999 Holden Astra
Wife
$5,000.00
$5,000.00
Negative equity in Property P as against mortgage
Husband
$37,814.00
$37,814.00
TOTAL ASSETS
$1,123,459.60
$1,184,013.60
Liability
Mortgage to Bendigo Bank
Joint
$361,141.00
$361,141.00
Mortgage to CBA [9] – Property P
Husband
$152,861.00
$152,861.00
Mortgage to CBA [10] – Property P
Husband
$254,953.00
$254,953.00
TOTAL LIABILITIES
$768,955.00
$768,955.00
Superannuation and Other
[M] Superannuation Fund ([11])
Husband
$88,197.00
$88,197.00
Colonial State [12]
Wife
$21,257.35
$21,257.35
TOTAL SUPER AND OTHER
$109,454.35
$109,454.35
NET ASSETS
$463.958.95
$524,512.95
The next issue is the valuation of the business. The business known as [T] was initially conducted as a partnership between the husband and the wife, which was then dissolved in 2006. Since then it has been conducted by the husband as a sole trader. The predominant trade of the business is in [omitted]. In recent years, however, the business has increased its activity in [omitted]. The business was purchased in 2004 for $166,000.
Expert reports were prepared by Mr B for the husband, and Mr F for the wife. Both reports were tendered in evidence, as were previous iterations of the reports. Both Mr B and Mr F gave evidence and were cross-examined.
Mr B’s first reported is dated 27 July 2009. He valued the business at $35,760 based on capitalisation of maintainable earnings. In his later report dated 25 August 2009 he valued it at $82,000. In both reports he used a capitalisation rate of 35 percent. By the time Mr B gave oral evidence during the hearing he valued the business at $94,446 but on the basis of net tangible assets. It was put to him by the husband’s counsel that on the sale of the former matrimonial home the amount of $361,141 would be repaid to the Bendigo Bank, the mortgagee, thus increasing the net tangible assets available to the business. Mr B agreed that that was the case and that the net tangible assets would thus become $94,446. His evidence was that as the net tangible assets figure was greater than the figure arrived at through capitalisation of maintainable earnings, the higher figure ought to be adopted.
Mr F, in his first report dated 30 July 2009, valued the business at $225,000 on a capitalisation of maintainable earnings basis. In his report of 24 August 2009 he revised that figure to $155,000, a figure which he maintained during his oral evidence. He adopted a capitalisation rate of 20 percent.
For present purposes it is not relevant to discuss precisely why the valuers changed their valuations from the first to the last iteration of their written reports.
On 21 August 2009, prior to the hearing, the two valuers conferred as they had been directed. A copy of their joint statement was presented to the court and is reproduced below:-
JOINT STATEMENT OF VALUERS
MR B AND MR FDATE OF CONFERENCE 21 AUGUST 2009
Calkins v Calkins
[T] and [A]A. POINTS OF AGREEMENT
1.The business operates a [omitted] service.
2.There are no formal contracts to provide services.
3.The business appears to be a going concern.
4.The appropriate basis of valuation is the capitalisation of maintainable earnings.
5.On a notional liquidation basis the business has a deficiency in net assets.
6. A reasonable proprietor’s salary is $55,000 per annum plus superannuation.
7.Depreciation has been reduced from an accelerated tax rate to a more appropriate useful life basis.
B. POINTS OF DISAGREEMENT
Mr B believes that the appropriate capitalization rate is thirty-five percent (35%).
Reasons:
1. Current volatile economic conditions making it difficult to borrow funds.
2. Reliance on owner/operator to maintain and grow business. Owner has local knowledge and contacts.
3. Low liquidity of business.
4. Low margins.
5. Two nationally recognized and well established franchised competitors in the area.
6. No ongoing contracts.
7. Ease to establish without paying a premium
8. There is a deficiency in net assets.
Mr F believes that the appropriate capitalization rate is twenty percent (20%)
Reasons:
There is a point of difference in the capitalisation rate used in the two valuations, predominantly due to the potential for the type of business buyer.
The capitalisation rate I have used is 20%. This has both historic and current reasoning linked to the type of potential purchaser and the overall cost of the business. This rate represents the lower end of the return on investment scale however the nature of the purchaser would accept such a return as part of an overall employment option. The following has been taken into consideration in assessing the capitalisation rate:
1.The total value of the business is low therefore potentially being funded without significant bank borrowings or borrowing that would be well covered by external security such as equity in a home.
2.The low value of the business makes it suitable for a potential purchaser who has received a redundancy payout.
3.There is a market for ‘male’ businesses that are not franchises and not shopping centre traders sought by individuals receiving redundancy who have [omitted] aptitude and experience.
4.The business is favourably priced when compared to franchises on offer.
5.The business has a long trading history with a repeat client base, main highway exposure, strong tenancy with ample access and parking, proven quality suppliers, [M] membership and clean all weather facilities.
6.The business is mainly cash and credit card with minimal debtors balanced by trade creditors.
7.The purchase price includes tangible assets of stock and fixtures and fittings to the book value of $180,980.
8. The business demonstrates continued sales growth over inflation indicating it can compete favorably.
9. There is room for a purchaser to improve margins and expand the [omitted] part of the business.
10. From experience in the [omitted] industry along with outplacement of [omitted] redundancy recipients I am aware of purchasers prepared to accept a 5 year (20%) return on their investment.
11. The business last traded in 2004 for $166,000 with an intangible component of $52,000. Since then it has improved its premises and shown sales growth of 43%. The current business price is fully covered by the book value of tangible assets at approximately 1:1.12.
12. The business is located in a sea change district.
Dated: 21 August 2009
As can be seen from the points of agreement both experts agreed that the appropriate basis of valuation is the capitalisation of maintainable earnings, and both agreed that a reasonable proprietor’s salary is $55,000 plus superannuation. It is a close analysis of the points of disagreement that will assist the court in determining which of the valuers’ evidence to accept, or whether it is possible to make an intelligent assessment of another capitalisation rate that would be just and equitable in the circumstances of this case.
Mr B, the husband’s expert, gave oral evidence. In chief he explained how his figure of $94,446 was calculated by reference to net tangible assets. It is interesting to note that when he was asked by the husband’s own counsel to comment on the 12 points raised by Mr F in the joint report, Mr B expressly agreed with seven of the points made by Mr F, and conceded that several other points might be true. Indeed, when
Mr B was cross-examined he was forced to make further concessions about the acceptability of some of the points made by Mr F. Mr B was then, of course, cross-examined about his eight points of disagreement and, once again, his evidence was marked by his frequent concessions with the matters put to him in relation to his own points of disagreement. At the close of Mr B’s evidence the distinctions that he had drawn between the methodology adopted by Mr F, and himself, seemed quite illusory.
Mr F also gave oral evidence and was cross-examined. Apart from being criticised for adopting the previous purchase price of the business as a relevant factor, very little damage was done to his evidence. It is clear that Mr F merely took into account the previous purchase price as a rule of thumb, and not as an independent determinate of the value of the business at $155,000. The court accepts his explanation that the purchase price is a factor that a prospective purchaser might take into account in determining what is an appropriate value of the business.
On balance, I found the evidence of Mr F to be far more persuasive and I accept his evidence and find the business to be valued at $155,000.
I note that this is not a case where the evidence allows me to substitute my own calculation or estimate of what is an appropriate capitalisation rate.
The Property W property was sold and settlement took place on
15 December 2009. From the sale proceeds $350,000 was paid to the Bendigo Bank. I can only assume that this discharged the parties joint liability to that bank, otherwise the settlement could not have taken place. The parties received net sale proceeds of $240,597.44 held by Hozack Clisdell Lawyers in an interest bearing controlled monies account. It is in the interests of the parties, and will certainly add clarity to these reasons, if I incorporate this information into my reasons for judgment.
Having regard to the above matters, the final pool of assets and liabilities will be as follows:-
Asset
Value
Net sale proceeds of Property W
$240.587
Property P
$370,000
[T] & [A]
$155,000
Bendigo Bank [5]
$145
CBA [6]
$1,791
[F] Shares
$5,438
[F] Group Ltd
$4,040
Bendigo Bank [7]
$8,846
Westpac [8]
$5,938
1999 Holden Astra
$5,000
Negative equity in Property P as against mortgage
$37,814
TOTAL ASSETS
$834,599
Liability
Mortgage to Bendigo Bank
NIL
Mortgage to CBA [9] – Property P
$152,861
Mortgage to CBA [10] – Property P
$254,953
TOTAL LIABILITIES
$407,814
Superannuation and Other
[M] Superannuation Fund ([11])
$88,197
Colonial State [12]
$21,257
TOTAL SUPER
$109,454
TOTAL ASSETS
$ 944,053
NET ASSETS
$536,239
Contribution
As I indicated earlier in these reasons, the parties conceded that contribution until the date of separation should be assessed as being equal. I agree that that is entirely appropriate on the facts of this case. Also, as indicated before, whilst the wife had originally claimed for post-separation contribution, by the time of the final submissions her counsel had withdrawn this claim. Accordingly, contribution is assessed at 50:50.
An adjustment under section 75(2)?
The wife’s claim for an adjustment assessed at 15 percent in her favour is based primarily on what she argues to be the significant differences between her income and earning capacity, and that of the husband’s. She is currently in receipt of Centrelink benefits including family tax benefit and is in receipt of child support paid by the husband. According to the husband’s financial statements, in February 2009 his income from the business was over $2,000 per week, but by August 2009 it had reduced to $630 per week. The difference in income was not a matter that was explored in cross-examination. In addition the husband is currently receiving rental from the property at Property P, in the sum of $220 per week. According to the June 2009 balance sheet provided by the husband’s own accountant, the drawings alone from the business were $90,921, up almost $40,000 from the previous year. Given the quite extensive amount of evidence before me in relation to the business, being the husband’s main source of income, I am left with the impression that the husband’s income of $630 from the business, as disclosed in his last financial statement, represents the very minimum that he would earn from the business. In all likelihood it provides benefits to him well in excess of the declared income. Moreover, as was pointed out to his own accountant in evidence-in-chief, the sale of the former matrimonial home, with the consequent discharge of the Bendigo Bank mortgage which represents most of the business debts, will mean a considerable improvement in cash flow, even if it doesn’t necessarily impact on the value of the business.
The husband intends to retain the business and all the evidence indicates that it is a viable ongoing concern. The wife’s evidence is that she will, in the fullness of time, return to the workforce. Indeed, her evidence created in me the impression that she is a resourceful woman who, subject to her understandable desire to parent her children, will return to the workforce in time. None of this detracts from a finding that there is a significant disparity in the income, and earning capacity of the husband and the wife, that needs to be reflected by way of an adjustment in her favour. But is 15 percent appropriate in the circumstances of this case? The answer is no, particularly because the wife has available to her a resource of $90,000 associated with un-received benefits from an inheritance. Moreover, the parenting orders that I have made will provide for the children to live with their father six nights out of every 14. This will no doubt reduce the child support that is payable, but will also help to reduce some of the costs associated with meeting the needs of the children, though not in a significant way.
All of the above leads me to conclude that a 10 percent adjustment in the wife’s favour is appropriate on the circumstances of this case.
A Just and Equitable Order
A property settlement in favour of the wife at 60 percent provides her with an entitlement of $321,743 dollars. It was common ground between the parties the former matrimonial home had been sold and that after the mortgage to Bendigo Bank was discharged, there would be cash available for distribution between them. No orders were sought by the parties in relation to super splitting and thus I proceed on the basis that each will retain the superannuation presently in their name. I believe that is appropriate in the circumstances of this case.
Having regard to all of the evidence I am satisfied that a 60:40 split is as just and equitable as the size of the property pool enables it to be. It should provide the wife with a cash adjustment which will help her to re-establish herself. The husband is left with a cash producing business, and a very heavily encumbered property at Property P but the financial evidence indicates he should be able to service the same.
At 60% of the pool of assets, the wife’s entitlement should be $321,743 and would be constituted by:
Bendigo Bank [7]
$8,846
Westpac [8]
$5,938
1999 Holden Astra
$5,000
Colonial State [12]
$21,257
Payment to the wife
$280,702
At 40% of the pool of assets, the husband’s entitlement should be $214,495 and would be constituted by:
Sale proceeds of Property W
$240,587
Property P
$370,000
[T] & [A]
$155,000
Bendigo Bank [5]
$145
Negative equity in Property P
37,814
CBA [6]
$1,791
[F] Shares
$5,438
[F] Group Ltd
$4,040
[M] Superannuation Fund ([11])
$88,197
Mortgage to CBA [9] – Property P
($152,861)
Mortgage to CBA [10] – Property P
($254,953)
$495,198
Less payment to the wife
($280,702)
Net entitlement
$214,496
I note that the wife notionally sought spouse maintenance but it was conceded that the claim could not be proved and was withdrawn.
I note in the husband’s case summary he seeks orders that he be appointed as a joint trustee and signatory with the wife as regards a number of accounts for the Bendigo Bank in trust for the children. The wife was cross-examined about this. I am satisfied, having regard to the evidence, that it is appropriate for both the husband and the wife to control what amounts to trust accounts for the children. Accordingly I propose to make orders to that effect.
The effect of these orders is that the husband must pay to the wife $280,702. The net sale proceeds of the Property W property will account for $240,587 of this, and the balance of $40,115 will need to be paid within 60 days, or as the parties otherwise agree. The orders will contain some enforcement provisions.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Kate Lambert
Date: 29 March 2010
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