Cantoni & Cantoni
[2022] FedCFamC1F 1051
•22 December 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cantoni & Cantoni [2022] FedCFamC1F 1051
File number(s): PAC 1840 of 2018 Judgment of: JARRETT J Date of judgment: 22 December 2022 Catchwords: FAMILY LAW – Property – alteration of property interests – where the relationship spanned approximately 22 years – where neither party made significant initial contributions – where the parties adopted a traditional division of labour during the relationship – where the applicant’s family provided significant sums of money to the parties – where the evidence does not satisfy the court that either party has significant health problems – where the respondent’s earning capacity significantly exceeds the applicant’s – where the primary question for the court to answer is how to divide the proceeds of sale of the only significant asset Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2), 79(4) Cases cited: Kessey & Kessey (1994) 18 Fam LR 149
Mabb v Mabb (2020) 60 Fam LR 299
Shaeffer & Jacobs [2011] FamCAFC 119
Trevi v Trevi [2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 76 Date of hearing: 10 & 11 October, 2022 Place: Parramatta Counsel for the Applicant: Mr Butters Solicitor for the Applicant: Khalil Family Lawyers Pty Ltd Counsel for the Respondent: Mr McCormick Solicitor for the Respondent: Goldsmiths Lawyers Solicitor for the Intervener: Q Pty Ltd ORDERS
PAC 1840 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CANTONI
Applicant
AND: MR CANTONI
Respondent
Q Pty Ltd
Intervener
order made by:
JUSTICE JARRETT
DATE OF ORDER:
22 dECEMBER 2022
THE COURT ORDERS THAT:
1.Orders 8(f) and 8(g) of the orders made on 2 September, 2022 be discharged.
2.Upon the sale of the real property situated at D Street, Victoria in accordance with the orders made on 2 September, 2022 the nett proceeds of sale be disbursed as follows:
(a)to the applicant or at her direction, the sum calculated according to the following formula:
((B-C-D) + $39,144+$50,973*70%)-$59,000
Where:
(i)B is the sale price of the property less adjustments paid or made pursuant to order 8(b) of the orders made on 2 September, 2022;
(ii)C is the combined value of the amounts paid to:
A.the Bank V to discharge its security over the property;
B.Mr L or at his direction; and
C.R Pty Ltd in respect of caveat … lodged on … on the title to the property.
(iii)D is the total amount paid pursuant to order 8(a) of the orders made on 2 September, 2022
(b)the balance, if any to the respondent or at his direction.
3.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 worker.
(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, including any individual liability for capital gains tax arising out of the sale by the parties of real property pursuant to these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cantoni & Cantoni has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JARRETT J:
This is an application for property adjustment.
The parties commenced their relationship in 1996 and cohabitation soon thereafter. They married in 2002 and separated on a final basis on 23 March, 2018.
By far the most substantial asset of the parties is a parcel of real property located at D Street, Suburb E, Victoria. I have set out below the circumstances leading to an order for the sale of this property and the disposition of the proceeds of sale. The only real decision I must make is how the balance of the proceeds of sale not otherwise paid as already directed by the court are to be distributed between the parties.
The applicant, in her case outline, sought orders that she should receive the balance of the proceeds of sale. She contends that this amounts to an overall division of the parties’ nett property of 70% in her favour. Her counsel continued to press for those orders in closing submissions.
The respondent, in his amended response, sought orders that the balance proceeds of sale of the Suburb E property should be applied 55% to the applicant and 45% to him. The respondent’s counsel indicated in closing submissions that his client was seeking to receive 45% of the parties’ nett assets.
Having regard to the parties’ evidence and submissions, the issues for me to determine so as to derive a just and equitable outcome in the proceedings are:
(a)the weight to be attributed to the parties’ contributions paying particular attention to the initial and post-separation contributions contended for by the applicant;
(b)how I should treat various liabilities of the parties which were contended to be “addbacks”; and
(c)the quantum of adjustment I should make in the applicant’s favour having regard to the factors set out in s 75(2) of the Family Law Act 1975 (Cth).
BACKGROUND
The parties met in 1996 in Melbourne and commenced their relationship.
At the commencement of the relationship, the applicant was employed in the beauty industry and the respondent as a salesman. Neither party had any assets of note.
The respondent quickly moved in with the applicant at the apartment she rented. This apartment was furnished by the applicant’s parents and they assisted her with rent. The respondent did not contribute to those costs.
In 1998, the parties purchased their own business with assistance from the applicant’s father.
The parties married in 2002. They had two children, a daughter born in 2003 and a son born in 2007. Initially these proceedings also dealt with parenting issues but those issues have now been finalised by consent orders. By those orders, the parties’ youngest child lives with the applicant and spends time with the respondent as he requests. There are no orders with respect to the parties’ daughter who is now an adult.
Following the birth of their first child, the applicant was the primary carer for her and the respondent the primary income earner for the family. The parties applied themselves for the betterment of their family’s position.
The applicant’s parents, through the company P Pty Ltd, purchased the Suburb E property in mid-2006. The parties moved into the property in a short time later, in 2006 and were paying rent to P Pty Ltd. The amount of that rent is unclear.
The parties had intended for the Suburb E property to be redeveloped. In early 2014 they moved into a rental unit to allow the necessary building works to commence.
In late 2015 the Suburb E property was transferred from P Pty Ltd to the parties jointly. The mortgage had been paid down significantly by P Pty Ltd. The applicant’s evidence is that they did not pay any stamp duty on the transfer.
The construction works on the property were plagued with problems. The first builder did not finish the works. The second builder engaged to complete the works went into liquidation prior to finishing the project. The property was vandalised as a result of being left vacant while construction was incomplete. The works were not completed by the time the parties separated on 23 March, 2018.
The issue of what to do with the property was litigated thoroughly in this court. On 2 July, 2021 another judge of this court made orders that the property be sold as it then was, with the works incomplete. The applicant successfully appealed that decision and those orders were set aside.
On 2 September, 2022 following an defended interlocutory hearing, another judge of this court made orders that the Suburb E property be sold at auction and the proceeds of sale be applied in payment of any associated costs of sale, to discharge the outstanding mortgage, to discharge the various interests notified by caveats over the property, to pay $711,040 to K Company, to pay $408,000 to the applicant by way of interim property settlement and to hold the balance on trust pending determination of the proceedings. However, by the time these orders were made, the applicant had unilaterally decided to contract a builder for completion of the construction works.
At the time the matter came before me for trial, construction on the Suburb E property was still not complete, the property had not been sold, but it was scheduled for auction in late 2022.
On 7 December, 2022 and while this judgment was reserved, I invited the parties to send to my associate joint correspondence setting out the outcome of the auction in late 2022. No joint correspondence has been received. Instead, I received correspondence from the solicitor for the respondent in the following terms:
We refer to your email to the parties on 7 December 2022.
We have contacted the real estate agent managing the sale of the property. He has advised as follows:
1. The property did not go to auction [in late] 2022.
2.The construction works are now expected to finish [in late] 2022.
3. A new auction date will be set once construction is completed.
The correspondence is not expressed to be sent on behalf of both parties and there is no express consent from the applicant or her solicitors. Nonetheless, I infer that the applicant does not cavil with the terms of that correspondence because it is apparent from the face of it that the applicant’s solicitors have been copied into it and they have not signified an objection to it.
CONSIDERATION
The parties agree that it is just and equitable to make a property adjustment order in the circumstances of this case pursuant to s 79(2) of the Act. I too, agree. By reason of the breakdown in the parties’ relationship, the implicit assumption that the existing arrangement of property interests that was seen as sufficient or appropriate during the continuance of their marital relationship, has now been brought to an end. I so find.
Assets, liabilities and financial resources
I find that as at the date of the trial before me, the parties have the following assets, liabilities and financial resources:
Assets: Suburb E property (J) $4,500,000.00 Bank V Account …67 (W) $2,000.00 CBA Account …86 (H) $144.00 Household contents (W) $12,000.00 Jewellery (W) $15,000.00 Household contents (H) $10,000.00 $4,539,144.00 Liabilities: Bank V loan secured by mortgage (J) $1,850,000.00 Monies advanced by Mr L (J) $711,040.00 Monies owing by respondent to R Pty Ltd (H) $233,000.00 Monies owing by applicant to R Pty Ltd (W) $206,173.00 $3,421,369.00 Superannuation: Superannuation Fund 1 (W) $20,000.00 Superannuation Fund 2 (W) $10,000.00 Superannuation Fund 3 (H) $20,973.00 $50,973.00 Nett non-super assets (including addback) $1,147,775.00 Nett assets (incl. superannuation) $1,198,748.00
On the second day of the trial, the parties handed up to me a joint balance sheet. The above table is based upon that agreed balance sheet, though with several differences based on the evidence that was before me. Ascertaining the asset pool in this matter is a process slightly complicated by the existing orders for the sale of the property and distribution of proceeds which, as at the date of the trial, had not been performed.
I have not included in the above table the respondent’s liabilities for legal fees – a total of $421,196.00. Those fees remain unpaid but the creditors have apparently lodged caveats over the title to the Suburb E property.
I make findings about the matters in the table above as follows.
The value of the Suburb E property
The value of this property was noted in the balance sheet to be agreed at the sum set out above. However, there is no valuation evidence before me. In submissions I was told that there was no dispute that the property had a value of between $4.5m and $4.75m. The value of the property will be determined by a sale. Given the lack of dispute as to the likely value of the property, an order that divides the proceeds of sale in percentage terms will effect a just and equitable outcome of the proceedings. Such an order is a legitimate exercise of the court’s power: see e.g. Shaeffer & Jacobs [2011] FamCAFC 119.
Liabilities and addbacks
Mortgage
There is no dispute that the mortgage granted in favour of Bank V should be paid from the nett proceeds of sale of the Suburb E property.
Debt to Mr L
Mr L is a sole trader operating under the trading name K Company. In mid-2021 the applicant entered into a fixed price contract with Mr L for construction to be completed on the Suburb E property at a cost of $711,040 inclusive of GST. Mr L agreed that he should receive payment of the balance due at settlement of the property.
In her affidavit filed on 6 July, 2022 the applicant refers to an affidavit filed by the respondent on 28 January, 2021. In that affidavit the respondent gives evidence of his dealing with, amongst others, Mr L.
By an order made on 2 September, 2022 another judge of this court ordered that the applicant was at liberty to complete the building works at the Suburb E property within thirty days of the order provided that the cost does not exceed that which was agreed in the contract between she and K Company. That cost was later particularised in the order at $711,040 as a payment to be made from the proceeds of sale of the property.
The property has not yet been sold and this amount has not been paid.
The respondent argues that this cost should be borne entirely by the applicant because:
(a)he rejected a proposal provided by the applicant’s solicitors from the builder because he thought it to be substandard because:
(i)it was vague in its detail;
(ii)excessive in terms of the costs proposed; and
(iii)not in line with the expectations from the original build design;
although he gives no particulars of any of these complaints;
(b)she engaged the builder without providing any notice or obtaining his consent; and
(c)he is unaware as to how the builder’s costs have been quantified and is of the view that the builder’s costs are exorbitant.
The respondent submits that K Company did not have any of the requisite licenses to undertake the build nor did it have a history of projects undertaken in Victoria. But there is no evidence that is so. Further, the respondent argues that he could not perform “any form of due diligence … to ascertain the quality of workmanship from [K Company].”. There is no evidence that is so either. The evidence is that K Company operated in South Australia. He says that K Company was unqualified to complete the development and he would not have chosen them to perform the works. Nor does he consider Mr L to be an “independent builder” whatever that means. He submits that there is a connection between Mr L and the applicant’s father and Mr L “did some work for [Mr M] and it appears [Mr M] has continued to maintain a working relationship with them”.
However, these matters did not seem to concern the respondent when he met with, amongst others, Mr L in mid-2019 to organise a quotation from Mr L for completion of the work on the Suburb E property. He swears to his involvement with Mr L and K Company in his affidavit filed on 29 January, 2021. The opposition expressed in that affidavit to the engagement of K Company was that:
(a)the parties’ bank would not lend enough to cover Mr L’s costs and charges; and
(b)border restrictions meant that Mr L might not be able to travel from Adelaide to Melbourne to undertake the work.
The respondent further argues that when the order of 2 September, 2022 was made, the judge then said in his oral reasons that appointing the applicant as trustee for the sale of the property meant that she would assume any risks arising from the work at the Suburb E property being non-compliant in terms of Victorian building requirements. The respondent argues that in the absence of evidence that the building work has been done in compliance with Victorian building requirements, if the full $711,040 is paid from the nett proceeds of sale, it will have the effect that the applicant will be indemnified against the risk that she is meant to assume in respect of any non-compliance, unless the Court orders an “add back or adjustment in respect of that sum in favour of the Husband”. However, I reject that argument. The reasons of the judge who made the order on 2 September, 2022 are not before me and there is no sworn testimony about them. In any event, there is no qualification in the formal record of the orders made on 2 September, 2022 reserving to the trial judge any issue about the incidence of the completion costs.
In my view, there is no basis to visit the whole of the remaining construction costs (Mr L’s contract price of $711,040) solely upon the applicant. I reach that view because:
(a)Mr L was indeed known to the respondent;
(b)the respondent was prepared to engage Mr L in 2019 or 2020 but did not do so because of an inability to fund his costs and charges and border restrictions prevented access for Mr L, not for the reasons he now advances; and
(c)both parties will benefit from having the work completed to the property before its sale.
The debt to Mr L was reasonably incurred for the maintenance and improvement of the Suburb E property. That proposition is recognised in the orders of 2 September, 2022 authorising the applicant to complete the building works and authorising the payment to Mr L without qualification. It is a liability incurred for the purposes of the parties’ joint endeavour as co‑owners of the property and each should share in meeting those costs by taking the liability into account in the usual way.
Legal fees owing by the respondent
Both parties agreed that the respondent had some $61,665 in legal fees owing to Q Pty Ltd, some $209,531 in legal fees owing to Goldsmith Lawyers and some $150,000 in legal fees owing to T Pty Ltd. Each of the creditors has lodged a caveat over the title. These debts will be paid out upon the sale of the property and the payments will thereby reduce the capital otherwise available for distribution between the parties. Because these were legal expenses paid out of existing capital of the parties, I intend to notionally add them back to the asset pool in accordance with the principles most recently set out by the Full Court in Trevi v Trevi [2018] FamCAFC 173.
Amounts owing to R Pty Ltd
Each party has a loan agreement with R Pty Ltd (R Pty Ltd). It was suggested to me that the amount of these loans should be treated as addbacks.
The parties are agreed that the applicant took out a loan from R Pty Ltd, which is a current liability of $206,173. The applicant’s evidence is that this money was applied to mortgage repayments. This evidence was not challenged in cross-examination, and I find accordingly. Because this amount was applied to the conservation of the property of the parties, I do not intend to exercise my discretion to notionally add it back to the pool.
The respondent accepted in cross-examination that he unilaterally took out a loan of $350,000 with R Pty Ltd. There is no satisfactory evidence to account for how he expended those funds. The expenditure of those funds has been an issue in these proceedings for a long time and yet no probative evidence was given by the respondent as to the use to which those funds were put. The respondent originally deposed that $350,000 was paid directly on account of costs of the property. But cross-examination demonstrated that the amount borrowed was first paid to his personal bank account, from which there were subsequent withdrawals. He was unable to identify where nearly $200,000 (across two transactions) went other than to say that he “would think” it was builder’s costs although he did not know which builder. He accepted that he had provided no evidence to assist the court to know where he had transferred or spent the $350,000 raised by loan from R Pty Ltd.
The respondent’s debt to R Pty Ltd was crystallised by an order of the Supreme Court of Victoria made in early 2019. The debt the respondent was ordered to repay was $350,000 with 5% interest per annum from the date of advance to date of payment. In those proceedings, the respondent joined the applicant as a third party and he seeks contribution or indemnity against her in respect of that liability. The third party proceedings were transferred to this court by an order made in mid-2020 in the Supreme Court of Victoria.
By the terms of a subsequent Deed of Settlement, the respondent’s debt to R Pty Ltd was reduced by $130,000 in consideration of the buyback of his shares in R Pty Ltd. The respondent’s balance sheet suggested, and it was submitted by counsel for the respondent at the close of the trial, that the outstanding value of the debt was $233,000. It was somewhat unclear how the respondent arrived at this figure, as this seems to be only 5% total interest on the principal sum despite a five year period of the debt.
I am not persuaded by the respondent’s evidence that he has disbursed the funds he received from R Pty Ltd by way of loan as he asserts in his affidavit material, or at all. I am not persuaded, on the balance of probabilities, that those funds were contributed by him to the construction costs incurred with the Suburb E property. I am not satisfied that their disbursement is adequately explained at all. I accept the applicant’s submission that the respondent should remain solely responsible for that loan. The third party proceedings by the respondent against the applicant in respect of this liability should be dismissed.
Accordingly, I find that the parties’ gross assets available for distribution (noting that the real property value is to be fixed by sale) are:
D Street Suburb E $4,500,000.00 Bank V Account (W) $2,000.00 CBA Account (H) $144.00 Jewellery (W) $15,000.00 Household Contents (W) $12,000.00 Household Contents (H) $10,000.00 $4,539,144.00
The parties liabilities that should be brought to account are:
Mortgage to Bank V $1,850,000.00 Debt to Mr L $711,000.00 R Pty Ltd Loan (W) $206,173.00 $2,767,173.00
Their superannuation interests are:
Superannuation Fund 1 (W) $20,000.00 Superannuation Fund 2 (W) $10,000.00 Superannuation Fund 3 (H) $20,973.00 $50,973.00 CONTRIBUTIONS
Initially, neither party brought any assets of any significance to the relationship.
The applicant’s evidence was that during the relationship she was the primary carer of the children and the respondent was the primary income earner. That evidence was unchallenged in cross-examination, and I accept her account. The respondent did not offer any evidence to suggest that the division of labour in the relationship was different to that described by the applicant.
The applicant contended that payments made by her parents should be treated as contributions by her to the improvement of the property of the parties. These payments included:
(a)furnishing the parties’ apartment;
(b)assisting with rental payments at the apartment;
(c)meeting mortgage repayments for the Suburb E property in the order of $168,723.46;
(d)obtaining building insurance for the Suburb E property for $800 a month, though it was not clear for how many months this was paid;
(e)paying for architects and engineers for the Suburb E property, to the value of $28,699.52.
None of these matters were challenged in cross-examination, although when those propositions were put by counsel for the applicant to the respondent, he denied most of them. I thought his denials were disingenuous. I find that the applicant’s parents provided significant financial assistance throughout the relationship although I cannot make a precise finding about the amount. It is clear, even from the respondent’s evidence that were it not for the significant financial support given by the applicant’s parents, the parties would not have been able to purchase the Suburb E property.
Absent evidence from the applicant’s parents of their intention when providing the financial assistance, or any other evidence bearing upon their intention at the time of advancing the financial assistance, the presumption is that it was intended to benefit only the applicant: Kessey & Kessey (1994) 18 Fam LR 149; Mabb v Mabb (2020) 60 Fam LR 299, 303. There is no such evidence here and accordingly, I find that the financial assistance given by the applicant’s parents by themselves and through P Pty Ltd were significant contributions made on behalf of the applicant by her parents.
The applicant also deposed to making post-separation contributions towards the Suburb E property by entering into a contract for building works to be completed despite the respondent’s protest. The applicant suggests that this building work increased the value of the property, but offered no evidence to suggest the quantum of that increase.
The respondent, in cross-examination, disagreed that the building work done had increased the value of the property, though the basis of his belief was not articulated in any persuasive way.
It was uncontroversial that the property had been listed for auction at a reserve price of $4,500,000. It was put to the respondent in cross-examination that he had, in a previous affidavit sworn before the building works but not before me at the trial, deposed to the Suburb E property having a value of $3,000,000. The respondent did not agree, and the prior inconsistent statement was not proven by counsel for the applicant. Whatever is the case, counsel for the respondent told me in submissions that it was not in dispute that the property had a value of somewhere between $4.5m and $4.75m.
The absence of evidence on this point makes it impossible for me to make any real finding about how much the applicant’s post-separation contributions to the Suburb E property increased its value. What is uncontroversial is that these contributions were made by the applicant and I take that into account in coming to my overall finding on contributions.
Additionally, the applicant claims that she has a debt to P Pty Ltd of $490,000. There is no loan agreement between the applicant and the company in respect of that loan. I have not included it as a liability above. I accept that the applicant’s parents, or perhaps her father, via P Pty Ltd have made advances to the applicant in the post separation period to assist her with meeting mortgage repayments and various other expenses associated with the Suburb E property. Although I have little confidence in being able to make a positive finding on the evidence about the amount advanced, it is a matter that I consider should be taken up in a broad way as a matter weighing in the applicant’s favour in relation to contributions. I have considered alternatively taking up this matter under s 75(2)(o) of the Act because it is likely that the applicant has incurred some liability with P Pty Ltd that she might either have to repay or feel morally obliged to repay in the event that she is able, but on reflection, I prefer to deal with it as a contribution matter.
The applicant also gave evidence that since separation, both children of the relationship have been living with her and that the respondent has not made any financial contributions towards their care, nor paid child support. This evidence was conceded by counsel for the respondent. I find that the applicant has made significant post-separation contributions to the welfare of the parties’ family through the care of the children of their relationship.
It was submitted by counsel for the respondent that I should come to an overall conclusion that the contributions of the parties were equal. I do not accept this submission. While the division of labour between the parties during the relationship was not an unusual one, the contributions on behalf of the applicant by her parents and her post-separation contributions need to be given proper weight. Counsel for the respondent submitted that these contributions were “offset” by the respondent paying the mortgage over the property, however it is not a matter of identifying contributions and “offsetting” contributions. The task is to weigh all of the contributions up to the time of trial and arrive at a holistic view of them.
Having regard to the matters I have referred to above, I find that an appropriate assessment of contributions in this case is 60% in favour of the applicant and 40% for the respondent. On the assets, liabilities and financial resources as I have found them to be (using the value of the real property as an indicative value and taking no account of costs of sale and the like), that would be a division of the assets of something like $1,093,766.40 to the applicant and $729,177.60 to the respondent.
Subsections 79(4)(d), 79(4)(e), 79(4)(f) and 79(4)(g)
The applicant’s unchallenged evidence is that she earns approximately $66,000 per annum. It was not suggested that she was not fully exercising her earning capacity.
The respondent’s evidence as to his income was the subject of cross-examination. The respondent recorded his income as nil despite also recording that his business was making $10,000 per week in revenue, approximately $520,000 per annum. There was also evidence before me that this business had been deregistered at the time the respondent swore his financial statement. The respondent provided Notices of Assessment recording his taxable income as nil. It is unclear how the respondent reconciles his business’ deregistration with swearing his income as nil.
The respondent’s testimony was that almost the whole of the business income is spent on associated costs. He did not provide any supporting evidence for this claim, and I do not accept it. At very least the respondent’s evidence was that the company profit was able to cover his living expenses, which from his financial statement were in the order of $230,000 per annum. Although I might not be able to make a precise finding as to the respondent’s earning capacity, I am satisfied that it is at least three times greater than that of the applicant, probably more.
The applicant also has care of the parties’ 15 year old son and will continue to do so until he turns 18. It was clear from the respondent’s cross-examination that not only has he not paid any child support, he will continue to resist paying child support to the best of his ability. He has an existing debt of $60,000 with the Child Support Agency that he disputes. I find that the applicant will be the sole financial provider for the parties’ 15 year old son.
It was conceded by the respondent that there should be an adjustment to the parties’ contribution based assessment in the applicant’s favour to take into account the abovementioned matters (save for the potential liability to P Pty Ltd). Counsel for the respondent submitted that the adjustment should be in the order of 5%. Counsel for the applicant submitted that the adjustment should be in the order of 10%.
Having regard to the relative earning capacity of the parties and the care of their son, I consider that an appropriate adjustment in favour of the applicant is 10%. I therefore find that the overall property of the parties should be divided to give effect to a split of 70% to the applicant and 30% to the respondent.
Again, on the assets, liabilities and financial resources I have set out above, that would be a distribution of $1,276,060.80 to the applicant and $546,883.20 to the respondent.
Orders
When the Suburb E property is sold, the interests secured or notified over the property will have to be paid out. There will also be realisation costs that have not been quantified in the evidence before me. However, what is clear is that the following amounts will be disbursed:
(a)Bank V mortgage for the benefit of both parties;
(b)Debt to Mr L for the benefit of both parties;
(c)Applicant's R Pty Ltd loan which I have found was applied by her to the parties benefit.
Each of these amounts should be borne proportionately by the parties by deducting them from the proceeds of sale of the real property.
Assuming a sale price of $4,500,000 and adopting sale costs speculated upon by Counsel for the respondent in submissions, (commission of $80,240 and conveyancing costs of $5,000) that would leave an approximate balance of $1,647,547.
The balance of the amounts to be disbursed are:
(a)Legal Fees - Q Pty Ltd;
(b)Legal Fees - Goldsmith Lawyers;
(c)Debt to T Pty Ltd;
(d)R Pty Ltd Loan.
Each of these liabilities should be borne solely by the respondent but they would be paid from the proceeds of sale reducing it to approximately $993,351.
The orders I have drawn take account of these matters and divide the parties’ property in the proportion I have determined, namely 70% to the applicant and 30% to the respondent.
By those orders, the amounts for which the respondent should be solely responsible are added to the nett proceeds of sale of the real property so as to identify the nett proceeds for division between the parties. The value of the parties’ other property ($39,144.00) and their superannuation ($50,973) is added to reveal the total nett value of the parties’ property available for distribution. The applicant’s 70% share should take up the property she presently holds (which, including superannuation, has a value of $59,000). After taking into account property retained by her, the balance (70% of the parties’ nett property as found by me less $59,000) is the amount to which the applicant is entitled. The respondent is entitled to the residuary.
The orders made on 2 September, 2022 provide for the applicant to receive $408, 000 by way of interim property settlement. I have ignored that in these reasons in judgment given that the property has not sold and the amount has not been paid to her. Consistently with that, I will discharge orders 8(f) and 8(g) of the orders made on 2 September, 2022 so as to better give effect to the orders made consequent upon these reasons.
On the basis of my reasoning, the applicant is likely to receive the whole of the nett proceeds of sale. Assuming the costs speculated upon by counsel for the respondent in submissions are reasonably accurate, it will only be in the event that the property sells for approximately $5.05m or more that an amount will become payable to the respondent. The orders I have set out at the commencement of these reasons will see a return to the respondent in the event that the sale price of the property is sufficiently high.
I make the orders set out at the commencement of these reasons.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 22 December 2022
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