CAMARO & CAMARO

FAMILY COURT OF AUSTRALIA

CAMARO & CAMARO

[2012] FamCA 735

FAMILY LAW – PROPERTY – matrimonial pool of assets – disputed items of property and liabilities – notional add-backs

FAMILY LAW – PROPERTY – contributions and adjustments – where the parties’ relationship was characterised by various periods of separation and reunion – where the wife was entitled to fifty-five (55) per cent of the asset pool and the husband forty-five (45) per cent of the asset pool – where an uncontroversial further adjustment of fifteen (15) per cent was made in favour of the wife – where a significant factor in the adjustment in favour of the wife was her continuing provision of primary care of the children who are all under the age of three (3) years

FAMILY LAW – PROPERTY – just and equitable orders – where the wife’s overall entitlement is to seventy (70) per cent of the asset pool – where the wife presently holds assets exceeding the value of her share of the pool, including the former matrimonial home – where the wife was ordered to pay a lump sum to the husband to ensure the husband received his proper entitlement – where further orders were made for the sale of the former matrimonial home in the event the wife defaults in the payment of the lump sum

FAMILY LAW – SPOUSAL MAINTENANCE – where no order was made for spousal maintenance – where the wife currently earned sufficient income to meet her living expenses – where the wife has reasonable prospects of finding alternate work upon expiry of her current employment contract

Family Law Act 1975 (Cth) ss 75, 79 and 106A

Biltoft v Biltoft (1995) 19 Fam LR 82
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Marriage of Burke (1993) FLC 92-356
McPhee v S Bennett Ltd (1934) 52 WN (NSW)
Omacini & Omacini (2005) 33 Fam LR 134

APPLICANT:

Ms Camaro

RESPONDENT:

Mr Camaro

FILE NUMBER:

SYC

2011

DATE DELIVERED:

30 August 2012

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Sydney

JUDGMENT OF:

Austin J

HEARING DATE:

13 & 14 August 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

N/A

SOLICITOR FOR THE APPLICANT:

Morton Family Lawyers

COUNSEL FOR THE RESPONDENT:

Mr D. Dura

SOLICITOR FOR THE RESPONDENT:

Kazi Portolesi Lawyers

Orders

The Application-Contravention filed by the wife on 10 August 2011 is re-listed for mention before the Court at 9.30 am on Monday 8 October 2012.
The wife shall pay to the husband the sum of $21,478 within two months of the date of these orders.
Subject to compliance with Order 2 hereof, and in consideration of that payment, the wife is declared the sole legal and beneficial owner (as between the parties) of the real property and improvements comprising the property commonly known as …, NSW (“the property”), and the husband shall do all such things and sign all such documents as may be necessary to transfer all his right, title, and interest in the property to the wife contemporaneously with his receipt of payment pursuant to Order 2 hereof.
In default of payment pursuant to Order 2 hereof, the parties shall do all such acts and things and sign all such documents as may be necessary to list the property for sale by public auction on the following terms:
(a)The solicitors acting on the sale of the property shall be chosen by the wife;
(b)The property shall be listed by the parties for auction sale within 8 weeks of the due date for performance of Order 2 hereof;
(c)The auctioneer, in the event of disagreement between the parties, shall be the auctioneer chosen by ballot from the respective choices of the parties;
(d)The reserve price shall be as agreed between the parties, and in the event of disagreement between the parties, the reserve price nominated by the auctioneer;
(e)In the event the property is not sold by auction, or private negotiation within a further 7 days, then the property shall be submitted to successive auctions within further 6 weeks periods until sold, otherwise on the same terms and conditions as applied to the first auction;
(f)The wife is restrained from charging, mortgaging, or further encumbering the property, other than for the purpose of compliance with Order 2 hereof.
Upon completion of the sale of the property pursuant to Order 4 hereof the parties shall cause the solicitors acting on the sale to disburse the proceeds of sale as follows:
(a)Firstly, to pay all costs, commissions, and expenses of the sale and to pay any Council and water rates outstanding in respect of the property;
(b)Secondly, to discharge any encumbrance registered over or affecting the property;
(c)Thirdly, to pay to the husband the sum of $21,478 together with any interest accrued on that sum pursuant to the Family Law Act and/or Family Law Rules;
(d)Fourthly, to pay the balance then remaining to the wife.
Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder, investment accounts are deemed in the possession of the named investor, and superannuation entitlements are deemed in the possession of the superannuant.
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names.
In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s.106A of the Family Law Act.
Costs are reserved for 28 days.
Any and all outstanding applications for orders pursuant to Part VIII of the Family Law Act are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Camaro & Camaro has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 29 of 2011

Ms Camaro

Applicant

And

Mr Camaro

Respondent

REASONS FOR JUDGMENT

Introduction

The parties married and commenced cohabitation in May 2004.
Three children were born during the parties’ marriage – the eldest in August 2009 and the twins in September 2010.
The parties finally separated on 19 November 2010, when the twins were barely two months of age, and the children have lived with the mother since separation.
The parties remain in dispute about how much time the children will spend with the husband, but it is common ground the children will live predominantly with the wife. The property adjustment applications were consensually severed from the parenting applications and listed for hearing first. The parenting dispute is yet to be listed for trial.
These reasons deal with the parties’ property adjustment applications, over which the parties were engaged in a very broad-ranging factual and legal dispute about a very modest pool of property.
Unfortunately, the dispute over property adjustment orders was wholly disproportionate to the value of the property at stake, so neither party is likely to be satisfied with the outcome because their legal costs will constitute a sizable proportion of their respective shares of the pool.
Eventually it transpired that the parties were arguing over a 10 per cent differential, in circumstances where that percentage was worth little more than $21,000, and the entitlement of the wife to a spousal maintenance order.

Proposal and primary evidence of the wife

The wife pressed for the orders set out within her Amended Initiating Application filed on 24 February 2012, which orders it was finally contended were intended to reflect a distribution of the matrimonial pool of property in proportions that left her with 75 per cent and the husband 25 per cent. The wife desired retention of the home in which she lives with the children.
In addition, the wife also pressed for an order that the husband pay her periodic spousal maintenance, which in final submissions she converted to an application for lump sum spousal maintenance by capitalisation of the periodic sum.
The wife relied upon her affidavit and financial statement, both of which were filed on 18 July 2012.

Proposal and primary evidence of the husband

The husband pressed for orders in the nature of those set out within his Amended Response filed on 17 January 2012 and his Case Outline document.
The orders were intended to reflect a distribution of the matrimonial pool of property that left him with 35 per cent and the wife 65 per cent. The orders provided for the wife to pay to him a lump sum of $48,280, and in the event of default, sale of the former matrimonial home.
The husband relied upon his affidavit and financial statement, both of which were filed on 18 July 2012.

Process of property adjustment

In determining the property adjustment orders that should be made between spouses the Court follows a recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]).
Firstly, the Court should identify and value the matrimonial pool of property, comprised of the parties’ assets, liabilities and financial resources at the date of the hearing.
Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”), and determine the contribution-based entitlements of each party as a percentage of the matrimonial pool of assets.
Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), and s 75(2), and determine the adjustment, if any, that should be made to the contribution based entitlements of the parties.
Finally, the Court should consider the effect of those findings and resolve what order is just and equitable in all the circumstances of the case.

Matrimonial pool of property

I find that the pool of matrimonial assets, liabilities and resources comprises the following:

No	Assets	Party	Value	Total
1	The former matrimonial home	W	290,000
2	Suzuki car	H	8,500
3	Subaru car	W	24,450
4	Household contents	W	5,000
5	Household contents	H	2,000
6	Tools of trade	H	3,000
7	Toyota car	H	4,150
Sub-total	337,100	337,100
Liabilities
8	Mortgage (the former matrimonial home)	W	172,768
9	Personal loan	H	6,870
10	Mastercard	H	3,421
11	Loans from siblings	W	34,318
Sub-total	217,377	119,723
Superannuation
12	ING	W	37,133
13	REST	W	6,578
14	OSF	H	6,515
15	MLC	H	4,300
16	AMP	H	7,617
17	SuperTrace	H	335
18	R Superannuation Fund	H	2,794
Sub-total	65,272	184,995
Add-backs
19	Monies taken by husband in 2006/2007	H	nil
20	Monies taken by husband in 2007	H	nil
21	Monies taken by husband on 3/9/10	H	13,286
22	Interim distribution of property	W	14,000
23	Monies not paid by husband	H	nil
Sub-total	27,286	212,281
Net total	212,281

The balance sheet is based on the parties’ agreement, manifest from the joint balance sheet tendered at the close of evidence.[1]
[1] Exhibit D
The parties implicitly treated their superannuation interests as property rather than financial resources in their conduct of the litigation. I am satisfied that was an appropriate course to adopt (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429). Their superannuation interests are very modest in value.
There were some areas of residual disagreement which require explanation.

Items 3 and 11

It was common ground the wife was in possession of a Subaru car that she bought shortly following final separation from the husband.[2] It was also common ground that the current value of the car is $24,450.[3]
[2] Wife’s affidavit, para 167
[3] Exhibit B, item 3
The wife was able to buy the car by borrowing money from her siblings in the total sum of $34,318.[4] Some of the debt was repaid by use of money received by the wife in the interim property settlement.[5] Since the money distributed to the wife under the interim property settlement is consensually added back to the balance sheet (item 22) consistency suggests the debt it repaid should also be added back.
[4] Wife’s affidavit, para 167
[5] Wife’s affidavit, para 175
The wife maintained that she must repay the balance of the debt to her siblings when she has the money available to do so. I accept that evidence.
The husband did not take issue with the quantification of the wife’s financial accommodation in the sum of $34,318. Rather, he contended the advances to the wife by her siblings were either not genuine loans, or alternatively, should not be treated as such (see Biltoft v Biltoft (1995) 19 Fam LR 82 at 94). In either case, the husband contended the car and the money advanced to acquire it should be expunged from the balance sheet, but I reject that submission.
The car exists, its value is not in doubt, and it should properly form part of the matrimonial pool of property.
I am also satisfied the money advanced to acquire the car should appear in the balance sheet as a liability. The advances could only have been by way of gift or loan. The characterisation of the advances as loans inferentially arises from the unchallenged evidence of the wife’s partial repayment of the money to her siblings and her credibly asserted intention to repay the balance.

Item 16

The final joint balance sheet tendered by the parties disclosed disagreement about the value of the husband’s superannuation interest with AMP. The wife contended for a valuation of $7,800, but her solicitor was impelled to concede that there was no evidence of such value. The only evidence pertaining to the value of that superannuation interest was the figure disclosed by the husband in his financial statement,[6] which evidence is adopted as an admission.
[6] Husband’s financial statement, para 45

Item 20

Although the wife alleged her ignorance of past term deposits held by the husband until after separation,[7] the husband alleged the wife was always aware of the term deposits. I prefer the wife’s evidence to that of the husband in relation to that issue because of the husband’s later admissions about how he hid at least one of the term deposits from her.
[7] Wife’s affidavit, paras 59-60, 62
The husband opened a term deposit with $20,000 in October 2006,[8] contemporaneously with an intermediate separation of the parties.[9] The husband admitted he closed the term deposit in November 2006 before it matured, most likely to fund the parties’ move into a new household. That is probably correct because the parties reconciled in November 2006.[10]
[8] Wife’s affidavit, Annexure G
[9] Wife’s affidavit, para 9.3; Husband’s affidavit, para 9(c)
[10] Husband’s affidavit, para 9(c)
The husband opened another term deposit in March 2007.[11] The husband admitted the sources of that deposit were a net commission payment received by him in January 2007[12] and the residue funds from the first term deposit which remained in his personal bank account.
[11] Wife’s affidavit, Annexure H
[12] Husband’s affidavit, para 25
The second term deposit was closed in September 2007. The husband combined the $20,000 from the term deposit with another $13,000 withdrawn from his personal account and created a third term deposit of $33,000.[13] This time the term deposit was opened in the name of the husband’s brother. The husband candidly admitted he placed the invested funds in his brother’s name to “try and keep the money out of the wife’s reach”.
[13] Wife’s affidavit, para 61-62, Annexure J
The husband moved that money into an asset under the legal control of his brother at a time when the parties were in financial distress – the mortgage over the parties’ investment property was already in arrears and mortgage payments were not being made. Up until May 2007 the husband received the rental income from that property and made the mortgage repayments in relation to it.[14] That arrangement ceased when the parties again separated in about May 2007.[15] Although the husband continued to receive the rent for several more months, he admitted he stopped the mortgage repayments.
[14] Wife’s affidavit, para 53
[15] Wife’s affidavit, para 9.4
The husband later closed the term deposit of $33,000 in his brother’s name and transferred $30,000 into another term deposit in his own name, which accounted for the curious change of account numbers on the term deposit documents.[16] That transfer occurred in either December 2007 or January 2008, contemporaneously with the parties’ reconciliation.[17] The husband admitted the money was transferred back into his name because their reconciliation made it unnecessary to keep the funds hidden in his brother’s name.
[16] Wife’s affidavit, para 75
[17] Husband’s affidavit, para 9(d); Wife’s affidavit, para 71
The term deposit was finally closed in March 2008, when the husband gave the wife $30,000 to put towards the purchase of another parcel of real property.[18]
[18] Wife’s affidavit, paras 72, 74; Husband’s affidavit, para 59
The husband admitted he retained $3,000 when the term deposit was transferred from his brother’s name into his own name, but he alleged that money was subsequently contributed to matrimonial expenditure.[19]
[19] Husband’s affidavit, para 66(e)
The wife alleged that sum of $3,000 should be added back to the balance sheet as a notional asset of the husband, but there is no evidentiary basis for its add-back. The wife could point to no oral or documentary evidence to contradict the husband about his use of the funds for the benefit of the family and I do not accept her submission that the husband’s evidence on the point should be rejected for lack of veracity. Impeachment of the husband’s credit on some facts does not automatically impeach his credit on every fact and issue. The court is always at liberty to accept all, some, or none of the evidence given by a witness (see McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8 at 9). Perhaps paradoxically, the husband’s admissions of his past deceit concerning the third term deposit tend to suggest his current reliability.

Item 21

On 3 September 2010, shortly prior to final separation, the husband withdrew the sum of $27,092 from the home loan account, causing the home loan to be enlarged by that amount.
The husband then banked the money into his own account.[20]
[20] Wife’s affidavit, para 120, Annexure W
Some of that money was thereafter spent by the husband for joint matrimonial purposes and some was not. The parties agree that the amount kept by the husband for his own use should be notionally added back to the balance sheet as an asset enjoyed by the husband, but the amount of the add-back remained contentious.
From the withdrawn money, the husband used $13,806 to pay out a loan on a family car,[21] leaving a balance of $13,286. I find the add-back is therefore properly quantified at $13,286, as submitted by the wife.
[21] Husband’s affidavit, para 66(b)
The husband also deposed to use of the remaining funds to make some mortgage payments in late 2010,[22] but the husband later admitted in cross-examination he was also then in receipt of the rental income from that property. The Court’s attention was not drawn to any evidence revealing the correlation between the rental income and the loan repayments due under the mortgage in 2010, but three years before in 2007 the rental income was $320 per week.[23] By 2010 the rental income may not have entirely off-set the mortgage payments, but there was likely general equivalence and any difference is de minimis for present purposes. Consequently, I ignore the rental income and mortgage payments in calculation of the add-back.
[22] Husband’s affidavit, para 66(c)
[23] Wife’s affidavit, Annexure K

Item 23

On 16 May 2011 interim orders were made requiring the husband to, among other things, pay certain amounts of money towards the expenses incurred in respect of a parcel of real property owned by the parties, pending the sale of that property. The husband did not comply with those orders.[24]
[24] Wife’s affidavit, paras 163-164
The wife computed the payments due under those orders, and consequently the husband’s default, at $4,016. The husband did not dispute the quantification.
The wife contended the father’s failure to pay that sum should be notionally added back to the balance sheet because the money was kept by him for his own purposes. I accept the husband’s contrary submission that there should be no add-back of that amount. His failure to make the payments, thereby breaching the Court’s orders, deserves condemnation. However, his failure to pay a liability with funds generated by him post-separation is not a proper basis for any add-back under established principles. It is neither a premature distribution of matrimonial property nor a waste of assets (see Omacini v Omacini (2005) 33 Fam LR 134 at 144-146), but rather a failure to contribute when required.

Assessment of contributions

At the commencement of their relationship the wife owned a car, some savings, a superannuation interest, and was liable for a HECS debt.[25] It is not possible to quantify the wife’s initial contributions because objection was validly taken to her inexpert opinion evidence about value, but the husband did admit the wife’s savings amounted to $11,000.[26]
[25] Wife’s affidavit, para 11
[26] Husband’s affidavit, para 52
By comparison, the husband introduced to the relationship savings of not less than $30,000.[27] He also owned a car, a utility, and some lawn mowing equipment.[28] Similarly, objection was validly taken to the husband’s inexpert opinion evidence about the value of those assets.
[27] Wife’s affidavit, para 12; Husband’s affidavit, para 50
[28] Husband’s affidavit, para 53
Prior to their marriage the parties jointly purchased their first parcel of real property, using their savings, a gift of $5,000 from the husband’s parents, and a bank loan.[29]
[29] Wife’s affidavit, para 16; Husband’s affidavit, para 50, 52
Other properties were purchased thereafter and served either as the matrimonial home or an investment. Such purchases were funded with savings, together with fresh or extended loans.[30]
[30] Wife’s affidavit, paras 21-23, 72, 74; Husband’s affidavit, paras 54, 59
Loan extensions were also used to fund renovations and improvements to the properties.[31] Despite the parties’ different perceptions about the extent of their individual non-financial contributions to the performance of renovation and maintenance work upon the properties, I accept that each contributed in that regard.
[31] Wife’s affidavit, para 26
The wife worked throughout the marriage as a professional until March 2009 when she ceased work during her first pregnancy.[32] The parties’ first child was born in August 2009.[33] It was only months later in February 2010 that the wife learned she was pregnant with twins[34] and they were born in September 2010.[35] The wife did not commence paid employment again until March 2012,[36] well after final separation.
[32] Wife’s affidavit, para 85
[33] Wife’s affidavit, para 103
[34] Wife’s affidavit, para 112
[35] Wife’s affidavit, para 125
[36] Wife’s affidavit, para 181
The husband also worked during the parties’ cohabitation, but the nature of his work changed from time to time. The husband worked variously in the property industry, as a financial officer, a tradesman, and a self-employed labourer.[37]
[37] Husband’s affidavit, paras 24-32
Throughout the marriage, until the wife ceased paid employment because of her pregnancy, the wife’s income was superior to that earned by the husband.[38]
[38] Exhibit C
During the course of the marriage the wife received two payments for either redundancy or termination of her employment, which payments she contributed to matrimonial finances.[39] One of those payments related to employment commenced by the wife in August 2003, before cohabitation,[40] so not all of the first redundancy payment related to a period of employment undertaken wholly within the margins of the marriage. The undefined portion of the payment referrable to pre-cohabitation employment is an extra financial contribution made by the wife and the remainder of the two payments are characterised as financial contributions incidental to the wife’s employment during the marriage (see Marriage of Burke (1993) FLC 92-356 at 79,764).
[39] Wife’s affidavit, paras 56, 86
[40] Wife’s affidavit, para 20
The husband conceded the wife was the primary carer for the eldest child once he was born in August 2009.[41] The same concession logically applies once the twins were born in September 2010, particularly since the husband admitted then working in two jobs.[42]
[41] Wife’s affidavit, paras 104-105, 186-187
[42] Husband’s affidavit, para 20
The parties finally separated in November 2010 and since then the extent of the wife’s responsibility for the care of the children has become even more pronounced.
Although the parties’ relationship subsisted for little more than six years, it was punctuated by numerous separations.[43] The wife implicitly tried to isolate the contributions made by the parties during periods of separation from those they each made during their cohabitation, but such an approach was artificial for a number of reasons. Firstly, there was factual inconsistency about the actual periods of intermediate separation. Secondly, all of the financial and non-financial contributions made by the parties were relevant to the property adjustment exercise, irrespective of when they were made. Thirdly, and perhaps most importantly, it was an impossibly difficult task to differentiate their financial contributions in that way because of the complexity and sheer volume of monetary transfers between numerous accounts.
[43] Wife’s affidavit, para 9; Husband’s affidavit, para 9
The parties each said as much in cross-examination. The wife poignantly said “Everything was just so confusing. It [the money] was back and forth”. The husband explained that different interest rates applied to their two mortgaged loans and monies were moved between the loan accounts, off-set accounts and personal accounts as and when money was needed. He said “Money went backwards and forwards”. The two mortgages were paid from the wife’s personal accounts with Bank T from May 2008 until about July 2009 and then the two mortgages were paid from the husband’s personal accounts with the Commonwealth Bank until final separation.[44]
[44] Wife’s affidavit, paras 90, 101, 149, 159
The wife’s affidavit was replete with evidence about the movement of funds between accounts, much of which proved to be futile.
For example, the wife pointed to the husband’s withdrawal of $15,000 from a mortgage account on 17 March 2006 when they separated, implying the funds were retained by the husband for his own purposes.[45] However, her cross-examination then revealed the husband in fact repaid those funds to the mortgage account in three tranches of $5,000 about two weeks later on 30 March, 31 March, and 1 April 2006.[46] That would have been plain from the contents of the bank statements issued for the loan account, but the wife did not annex to her affidavit the correct loan account statement.[47]
[45] Wife’s affidavit, para 32
[46] Wife’s affidavit, Annexure C; Husband’s affidavit, para 66(a)
[47] Wife’s affidavit, Annexure D
As another example, the wife explained how the husband sold her car to her father for $15,000 in August 2010 and banked the sale proceeds into his own account, implying that the sale proceeds were kept by the husband for himself.[48] However, in cross-examination the wife was impelled to admit the husband had annexed bank statements to his affidavit proving the transfer of the sale proceeds of $15,000, in two separate amounts of $1,500 and $13,500, from his account to the parties’ mortgage account only a couple of days later.[49] The payment of the $15,000 into the parties’ mortgage account was also confirmed by a loan account statement annexed to the wife’s own affidavit.[50] The sale proceeds from the car were therefore applied in reduction of the parties’ mortgage.
[48] Wife’s affidavit, para 114
[49] Husband’s affidavit, Annexure V (page 124)
[50] Wife’s affidavit, Annexure W (page 75)
The wife was critical of the husband’s secrecy about the movement of funds between accounts, but she was also secretive when it suited her. The wife received a redundancy payment in January 2007, which she banked into her personal account and deliberately decided not to divulge to the husband the quantum of the payment.[51] She also happily made unilateral withdrawals upon the mortgage when she perceived the need to do so.[52]
[51] Wife’s affidavit, para 56
[52] Wife’s affidavit, paras 108, 110, 111
The wife’s evidence about the quantum of her financial contributions was also liable to error.
For example, the wife alleged she contributed $50,000 towards the cost of acquisition and improvement of a parcel of real property in March 2008, compared with only $30,000 contributed by the husband.[53] Under cross-examination the wife was forced to concede that she had only contributed about $30,000 to the purchase, which sum comprised her savings of $27,000[54] and some extra money she had accumulated. The source of the wife’s savings was not merely her own income, but also rental income from the parties’ investment property.[55] The same may be said of the $30,000 contributed by the husband from the term deposit. Those funds were probably sourced from re-draws on the mortgage[56] in addition to income he earned. Consequently, not only did the wife eventually admit she and the husband had each equally contributed $30,000 to the acquisition and renovation of a property in early 2008, it is clear that their respective contributions were only an admixture of their wages, rental income and mortgage re-draws.
[53] Wife’s affidavit, para 78
[54] Wife’s affidavit, para 76
[55] Wife’s affidavit, para 67
[56] Wife’s affidavit, para 32
Upon final separation in November 2010 the wife and three children moved to live with the wife’s parents. The husband remained in sole occupation of the former matrimonial home until February 2011, but he failed to meet all of the financial outgoings payable in respect of the former matrimonial home.[57]
[57] Wife’s affidavit, paras 152-153
The wife and children resumed occupation of the former matrimonial home in February 2011 after the husband vacated it. She and the children remain living there[58] and the husband now lives with his parents.[59]
[58] Wife’s affidavit, paras 145, 156
[59] Husband’s affidavit, para 4
Upon her resumption of occupation of the former matrimonial home the wife was required to make payments to bring arrears of the mortgage, strata fees, and other utilities up to date.[60]
[60] Wife’s affidavit, paras 154
On 16 May 2011 interim orders were made requiring, among other things:
a)The payment by the husband of mortgage repayments, rates and insurances upon the parties’ rental property, pending its sale (Order 30);
b)Upon completion of the sale of that property, the payment by the husband to the wife of spousal maintenance in the sum of $200 per week (Order 31); and
c)The withdrawal, within 7 days, of a caveat lodged by the husband over another property registered in the sole name of the wife (Order 29).
The Court also noted the husband’s agreement to continue paying to the wife by way of child support the sum of $100 per week, irrespective of whether the Child Support Agency assessed a lesser child support liability for him.
The husband brazenly conceded that he breached each and every one of those orders and failed to adhere to his promise about payment of child support.
The husband failed to pay any money at all towards the mortgage, rates and insurance referrable to the rental property, even though he admitted he was then in employment as a tradesman.[61] He did not relinquish that employment and begin receiving an unemployment benefit until August 2011.[62]
[61] Husband’s affidavit, para 32
[62] Husband’s affidavit, para 34
The husband agreed the sale of the rental property was completed in about August 2011 and he admitted he thereafter failed to make any more than a single spousal maintenance payment to the wife.[63]
[63] Wife’s affidavit, para 170
The caveat over the wife’s property, that was to be removed in May 2011, was not removed by the husband until August 2012. The husband simply ignored the wife’s repeated requests to remove the caveat in accordance with the order.
As for child support payments, the husband paid a total of only $400 to the wife between March and April 2011.[64] The husband did not make good on his promise to continue paying to the wife an amount of $100 per week by way of child support.[65]
[64] Wife’s affidavit, paras 197, 199
[65] Wife’s affidavit, paras 171, 200
The husband’s contumelious disregard of the interim orders is not a factor that influences the Court’s exercise of discretion in the assessment of the parties’ contributions, but his failure to comply with the orders serves to illustrate how the burden of maintaining the children and her household fell so onerously upon the wife for a period of time.
Following final separation the husband’s child support liability was assessed at $146.15 per week, but review of that assessment caused its reduction to only $12.76 per week,[66] and the husband conceded in cross-examination that he convinced the Child Support Agency to credit his payment of $400 against past arrears, as the wife deposed.[67]
[66] Wife’s affidavit, para 198
[67] Wife’s affidavit, para 201
The Child Support Agency retained a tax refund due to the husband in satisfaction of child support,[68] but the husband conceded in cross-examination that he successfully applied to have most of that sum refunded to him.[69]
[68] Wife’s affidavit, para 202
[69] Wife’s affidavit, para 171
The husband’s child support assessment was previously $18 per fortnight,[70] but the husband said in evidence it is now $30 per month. Irrespective, it is a trifling contribution towards the maintenance of the children.
[70] Wife’s affidavit, para 203
The husband asserted his overall contributions were greater and warranted an assessment of his entitlement to the matrimonial pool at 55 per cent. I reject that submission. The wife’s financial and non-financial contributions were clearly superior.
The husband’s initial contribution of assets was probably more valuable than the wife’s, but that disparity was soon reversed by the greater income generated by the wife. The superiority of the wife’s financial contribution was emphasised by her maintenance of the household, including the children, after separation. She did that with only miniscule child support payments from the husband and also without any spousal maintenance, either pursuant to the interim orders or during the period the wife was without gainful employment. That situation has endured since November 2010. The wife has also carried the load involved in providing the primary care and supervision for three young children since separation, extending her primary responsibility in the role of homemaker from when the first child was born in August 2009.
The wife ultimately submitted that her contributions justified her entitlement to 60 per cent of the matrimonial pool. That slightly exaggerates the superiority of her contributions, which are more properly measured at an entitlement to 55 per cent of the matrimonial pool. A differential of 10 per cent is appropriate.

Adjustment of entitlements

The parties were largely in agreement about the extent of the third stage adjustment deserved by the wife.
The wife contended for an adjustment of 15 per cent and the husband did not demur. In fact, he initially advocated for an adjustment in her favour of 20 per cent, but that was in circumstances where he had argued the wife only had a primary entitlement to 45 per cent of the pool.
I agree with the parties that an adjustment to the wife of 15 per cent is required by the evidence, so it is unnecessary to elaborate at length why that is so. Some particularly salient points should be specifically mentioned though.
The parties are of similar age, both are in good health, and each has the capacity for gainful employment, although the wife’s ability to exercise her employment capacity is restricted to some degree by her primary responsibility for care of the parties’ three children. The eldest child has only just attained three years of age.
The husband’s egregious contravention of the interim orders made in May 2011 and his failure to pay meaningful amounts of child support, which occasioned financial hardship to the wife, are relevant factors in the exercise of discretion (s 75(2)(o)) and were properly recognised as such by the husband’s counsel. That is not because of the financial burden consequently carried by the wife in the past, which is a factor already considered in the assessment of the parties’ contributions at the second stage of the property adjustment process. Rather, the relevance of those considerations at the third stage of the adjustment process is their formation of a reliable basis for prediction that the husband will likely afford little financial support for the children in the future so that the burden of maintaining the children will continue to be foisted primarily upon the wife.

Just and equitable orders

The result of those conclusions is that the wife’s overall entitlement to the matrimonial pool is measured at 70 per cent and the husband’s entitlement is conversely 30 per cent.
A 70 per cent share of the matrimonial pool computes to $148,597 (to the nearest dollar).
The wife is presently in possession of assets (items 1, 3, 4), liabilities (items 8, 11), superannuation interests (items 12, 13) and add-backs (item 22) with a net value of $170,075. Consequently, the wife already controls assets with a net value that exceeds her entitlement by $21,478 (= 170,075 – 148,597).
It is the wife’s proposal that she retain all assets “currently standing in [her] sole name or possession”,[71] which by definition includes the real property, namely the former matriominal home which is registered in her sole name.
[71] Amended Application, Order 1
She can only do so if she pays $21,478 to the husband. Although there is no asset or resource to which the wife may turn to fund such a payment to the husband, it is possible the wife could raise funds of that amount from her family, which she has done in the past, or by extension of the mortgaged loan.
If the wife can raise such funds for payment to the husband it would enable her to retain the encumbered home she occupies with the children, her car, her chattels, and her superannuation interests. That would be a just and equitable outcome, just as the husband envisaged.[72]
[72] Amended Response, Orders 1-4
Of course, if the wife is unable to raise funds for payment of the husband then the only asset from which the parties’ entitlements can be appropriately adjusted is the former matrimonial home. Default orders are therefore made for the sale of that property if the wife does not make the designated payment to the husband. The invocation of the default orders is delayed for a period of two months to enable the wife sufficient time within which to organise her financial affairs.
Numerous past costs orders have been made against the husband in favour of the wife. One of those orders has been paid, but the others have not because the costs have not yet been quantified. Those orders remain enforceable.

Spousal maintenance

Although the wife did not disclose any proposal for a spousal maintenance order in her Amended Application, the husband was under no misapprehension at the trial that such an order was sought.

The precise terms of the proposed spousal maintenance order were never revealed, but the wife’s Case Outline document indicated she sought a periodic order until the youngest children started school.
The wife’s Case Outline document also suggested that she desired a lump sum spousal maintenance order in addition to a periodic order, but her solicitor later confirmed that the lump sum order was sought in lieu of the periodic order.
The wife’s entitlement to payment of spousal maintenance hinged essentially upon two countervailing issues – her capacity for gainful employment and her desire to continue her role as a parent to three very young children.
There is really no doubt about the existence of the wife’s capacity to earn income. She earned significant wages as a professional during the parties’ cohabitation and only ceased work as a consequence of pregnancy. Following separation the wife renewed her professional qualifications, formed a corporation, and used that corporation as the vehicle through which she sub-contracted her professional services to a large public corporation.[73]
[73] Wife’s affidavit, para 181
The sub-contract with the public corporation was for a term of six months and was due to finish in early September 2012. However, the wife gave evidence that she has been given the option to extend the term of the sub-contract until 31 October 2012.
There is no evidence to found any inference that the wife will be able to renew the sub-contract beyond October 2012. However, even if the contract expires at that time, the ability historically displayed by the wife to secure remunerative employment permits an inference that she will not be out of work for long if she genuinely seeks it.
The wife currently derives daily gross fees of $650 plus GST, working only several days each week.[74] Her present gross weekly income averages $2,200[75] and is more than sufficient to cover her reasonable living expenses.[76]
[74] Wife’s affidavit, para 182, Annexure LL
[75] Wife’s financial statement, para 9
[76] Wife’s financial statement, paras 19-32
The wife has been able to work part-time for the last six months, notwithstanding her commitments to the children. The care of the children has been managed in that time with assistance from the wife’s mother and the children’s enrolment in day care.
The aggregate cost of day care for all three children is currently $305 per day, but that cost is defrayed by a daily rebate of $165 received by the wife. The net daily cost to the wife is therefore $140.
Understandably, the wife wishes to balance work commitments with her desire to fulfil her role as a parent to the children, which is an important consideration (ss 75(2)(c) and 75(2)(l)).
The husband refused to accept that the wife would encounter difficulty trying to hold down a full-time job and care for the children simultaneously. His solution to that problem was for him to care for the children more regularly, but that idea was impracticable. The parties remain locked in controversy about the amount of time the children should spend with the husband, with the trial of those parenting issues yet to be heard. Very little evidence was adduced in these proceedings about the husband’s independent care of the children and, under the existing parenting orders made in May 2011, the amount of time spent by the children with the husband is quite restricted.
Having deliberated over the competing considerations, it is not unreasonable to expect the wife to exercise her proven income earning capacity by working on at least a part-time basis, as she has successfully done for the past six months. Because of the wife’s skills, even part-time work is likely to generate sufficient income to cover her reasonable living expenses. The wife can probably still satisfactorily fulfil her role as a caring parent to the three children whilst working part-time, which inference arises from an assumption that the wife would not concede her parenting capacity has been diminished over the last six months whilst she has worked part-time.
I am not therefore satisfied that the wife has demonstrated a need for spousal maintenance. Such a finding obviates the need to evaluate the alleged arbitrariness of the amount of spousal maintenance sought by the wife, the husband’s alleged incapacity to pay such maintenance, and the issue of whether any maintenance should be paid periodically or by way of lump sum.

I certify that the preceding one hundred and nine (109) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 30 August 2012.

Associate:

Date: 30 August 2012

[2012] FamCA 735

Key Legal Topics

Areas of Law

Family Law