Capshaw and Major
[2012] FMCAfam 350
•13 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAPSHAW & MAJOR | [2012] FMCAfam 350 |
| FAMILY LAW – Orders for property adjustment – maintenance for children over 18 years of age. |
| Family Law Act 1975, ss.78, 79, 106, 66L, 75(2) Family Law Rules 2004 Child Support (Assessment) Act 1989 |
| Weir & Weir [1993] FLC 92 – 338 Black & Kelner [1992] FLC 92 – 287 Ferraro & Ferraro (1993) FLC 92 – 335 Hickey& Hickey [2003] FamCA 395 Omacini & Omacini [2005] FamCA 707 Burgoyne & Burgoyne (1978) FLC 90 – 467 Townsend & Townsend (1995) FLC 92-569 Kowaliw & Kowaliw (1981) FLC 91-092 Clauson & Clauson (1995) FLC 92-595 Pierce & Pierce [1998] FamCA 74 Spiteri & Spiteri (2005) FLC 93 – 214 |
| Applicant: | MS CAPSHAW |
| Respondent: | MR MAJOR |
| File Number: | PAC 4553 of 2010 |
| Judgment of: | Harman FM |
| Hearing dates: | 6, 7, 8 and 9 March 2012 |
| Date of Last Submission: | 9 March 2012 |
| Delivered at: | Parramatta |
| Delivered on: | 13 March 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms Pender |
| Solicitors for the Applicant: | Winn Legal |
| Counsel for the Respondent: | Ms Conte Mills |
| Solicitors for the Respondent: | Dennis Wong & Co |
ORDERS
Pursuant to s.79 of the Family Law Act 1975 and by way of orders adjusting interests in property between the properties:
a)The husband shall, no later than close of business 27 April 2012, pay to the wife a sum of $187,139.
b)That upon payment by the husband to the wife on or before that date, of the sum of $187,139, that the wife shall then forthwith and simultaneous with the payment, do all things, sign all documents and give all consents and authorities necessary to transfer to the husband the whole of her right, title and interest in the property known as and situate at Property F (“the Property F property”), in the state of New South Wales being all that parcel containing the certificate of title, Folio Identifier (omitted).
c)That in the event that the husband should fail, neglect or refuse to pay the sum of $187,139 on or before close of business 27 April 2012, then forthwith and thereafter each of the parties should do all things, sign all documents and give all consents and authorities necessary to list for sale and sell the Property F property by private treaty at a price agreed between the parties and utilising a solicitor or conveyancer or agent or agents agreed by the parties and in default of agreement, with respect to same then the provisions of order 2 shall apply.
d)Upon completion of any sale of the Property F property and in accordance with these orders, the net proceeds of sale then resulting should be distributed as follows:
i)In payment out of sales, costs and commission;
ii)In payment out of any mortgage, although there doesn’t seem to be one; and
iii)As to the net balance then remaining to be divided 25 per cent to the wife, 75 per cent to the husband.
e)Each of the parties will forthwith do all things, sign all documents and give all consents and authorities necessary to transfer to the wife the whole of the husband’s right, title and interest in:
i)Property Property A;
ii)The Hong Kong property; and
iii)The (omitted) motor vehicle.
In the event that the parties are unable to agree as to a listing price solicitor or conveyancer, I have made provision for selection of an agent, solicitor or conveyancer fixing of a listing price.
The wife shall forthwith and within seven days, deliver up to the husband and make available for collection by him all items within her possession comprising the husband’s personal jewellery, clothing, personalty chattels and all records, whether financial or academic.
Pursuant to s.78 of the Act and subject only to order 3 hereof, each of the parties shall be declared as against the other to sign absolute owner of, all shares held by them, all motor vehicles in their possession, all moneys in their possession, custody or control, all contributions to or benefits for entitlements arising from any funded superannuation or pension fund and any chattels personalty and furniture and furnishings held by them.
Each party shall be solely liable for and attend to payment of and indemnify the other with respect to any liability in their sole name, including but not limited to liability by way of HECS debt and/or liability to the Australian Taxation Office.
In the event that either party shall fail, neglect or refuse to sign any deed, document or instrument required by or to give effect to these orders then the Registrar of the Federal Magistrates Court Parramatta shall be and is hereby authorised, directed and empowered to sign such deed, document or instrument in the name of the defaulting party (same to be proved by production of an affidavit by the party requesting signature) and to thereafter do all things and acts necessary to give validity and operation to same.
Upon the expiration of the Appeal period and in the event that no appeal is lodged that all exhibits then be returned to the party who tendered same and that all material produced on subpoena be returned to the person or organisation who produced same.
All outstanding Applications and Responses are withdrawn and dismissed and all issues are removed from the list of matters awaiting hearing.
IT IS NOTED that publication of this judgment under the pseudonym Capshaw & Major is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 4553 of 2010
| MS CAPSHAW |
Applicant
And
| MR MAJOR |
Respondent
REASONS FOR JUDGMENT
These are proceedings with respect to property adjustment and maintenance for children over the age of 18 years.
The proceedings were commenced by the applicant wife, Ms Capshaw, by application filed on 29 September 2010. That application has subsequently been replaced by an amended application filed 23 December 2011.
A response was filed by the respondent husband Mr Major on 11 November 2010, which response has also, in turn, been replaced by an amended response filed on 3 January 2012.
The parties’ proposals
The parties’ proposals are as outlined in their respective applications and responses identified above, case outlines which have been filed by them augmenting the relief sought by them, and as addressed in submissions at the close of the case by each party.
In summary, the wife proposes that there be a division of the pool of matrimonial assets in her favour as to 60 to 65 per cent. She also seeks orders for adult child maintenance with respect to two children of the relationship, there being three in total, one of whom remains under the age of 18 years. With respect of the eldest of the children, it is sought that there been an order, which, in effect, provides a retrospective lump sum of maintenance for a period now past, and with respect to the middle child of the relationship it is sought that there be an ongoing order for his benefit until he attains a certain age or completes his undergraduate degree.
The husband, for his part, seeks orders as set out in his case outline document, which, perhaps, speaks most clearly to that which is in fact proposed by him that his response and which would see him receiving 55 to 60 per cent of the total asset pool. That would appear to be based upon assertions by him as to greater financial contribution as a consequence of what is conceded, at least at various points in the relationship, as to the husband having earned an income from one or more sources of employment significantly greater than that of the wife.
The parties’ evidence
In the case of each of the parties I have read the material identified by them.
In the case of the applicant wife that has comprised:
a)the amended application filed on 23 of December 2011;
b)an affidavit of evidence-in-chief by her filed 30 January 2012; and
c)a financial statement filed 18 January 2012.
Ms Capshaw has also been cross-examined with respect to documents filed earlier in the proceedings by her but she has not relied upon those documents and they have not been tendered.
In the husband’s case I have read and considered
a)his amended response
b)his affidavit of evidence-in-chief filed on 3 January 2012 and
c)his financial statement filed 20 December 2011.
I have also received a number of exhibits which have been tendered in each party’s case. In the case of the wife, there are a total of 14 exhibits and in the husband’s case 3 exhibits.
I have also received into evidence, as an aide-mémoire, balance sheets to which each of Counsel for the wife and husband respectively have spoken during their submissions, together with the case outline documents which have been of some considerable assistance and as previously identified.
In relation to the evidence, there is substantial agreement regarding the pool of assets, although there remain some minor issues between the parties which I will address in due course. They have related both to values ascribed to particular assets and, in the most significant instances, two issues, being:
a)the amount of add backs, if any, which should occur with respect to the withdrawal of funds by these parties from a (omitted) account operated by them in their joint names during their marriage; and
b)what value, if any, is to be ascribed to a pension fund maintained in Hong Kong in the wife’s name.
The chronology of events is not significantly in dispute between these parties and it is useful and instructive to set that out to the extent that there is agreement and as follows:
a)The husband was born on (omitted) 1960 and is accordingly 51 years of age at present, shortly to turn 52 years of age.
b)The wife was born on (omitted) 1961 and is accordingly 50 years of age and will this year turn 51.
c)On (omitted) 1987, the parties married.
d)On (omitted) 1990, the first and eldest of the children of the relationship, X, was born. She is now 21 years of age.
e)On (omitted) 1993, the second child of the relationship, Y, was born. He is presently 18 and will shortly turn 19.
f)In 1995, the parties purchased a property at Property A which has, throughout the relationship, been the matrimonial home of the parties. The property is now unencumbered and was purchased utilising a significant sum of cash savings which had been accumulated by the husband but during the relationship of the parties. The wife asserts in her evidence that she, indeed, had some savings at the commencement of the relationship which, in all probability, although the evidence does not specifically speak to that issue, would have contributed towards the relationship and the benefit of the parties.
g)In 1997, the parties relocated permanently, it would seem, to Australia, having previously resided both in Hong Kong and in New Zealand.
h)In 1991 and predating that migration, the parties had become entitled and eligible to purchase (omitted) housing in Hong Kong, which entitlement flowed as a consequence of the wife’s then employment in the (omitted).
i)On 4 May 1996, the youngest of the three children was born, being Z. He remains under the age of 18 years.
j)In 1997, the parties purchased a property at Property F which has been used as an investment property during the relationship and in which the husband now resides. There is some dispute between the parties as to the living arrangements which pertained to their relationship at that time and whether the husband was living principally in Hong Kong or otherwise. Nothing of great significance turns upon that issue, other than suggestions of a support provided by the husband to the wife during this period (as alleged in the wife’s case and which is disputed by the husband).
k)A number of renovations have been undertaken to the Property A property and they commenced in 1997. There is some real issue between the parties as to who undertook those renovations and whether there was any contribution of a non-financial nature by the parties or whether all renovations were undertaken by paid contractors.
l)In 1998, it would appear that the husband was or was still in Hong Kong and the wife and children visited him there at that time. In 1998, the purchase of the Hong Kong property, which the wife had become entitled to as a consequence of her (omitted) employment, was completed. The parties are very much at issue as to what has occurred with that property since its purchase, although they would appear on common ground that the property, as (omitted) housing, cannot legally be tenanted. There has, since the separation of the parties, been some real issue as to who has been in possession or control of the apartment and it would appear, on the balance of the evidence, that the husband or the husband’s family has been involved in securing the property both as to its locking and the like and have some role to play, irrespective of what contribution has been made by the parties through the provision of cash funds, in meeting expenses for the property.
In the husband’s case, it is alleged that his family has contributed funds towards upkeep, maintenance and payment of expenses for the property and that he now owes them a debt of AUD$40,000 as a consequence. Put bluntly, there is no evidence whatsoever to support that assertion. The evidence that is available as to the amounts that have been paid or would have fallen due to be paid would suggest that a debt of $40,000 would be unlikely to have accrued and the wife’s evidence suggests that funds had been provided by her or by the parties jointly into what was referred to throughout the evidence as a “three-way account”, which was accessible by the paternal grandfather and which, in all probability, was utilised towards those expenses whether partially or completely. In any event, the quantum of debts which would have been incurred and/or paid, and the absence of evidence, makes it impossible for any finding to be made to include the debt to the husband’s father and so much was conceded by the husband’s counsel during closing submissions.
The employment of the parties throughout the relationship has been a matter of great contention between them. One of the exhibits tendered in the proceedings and tendered in the husband’s case was a schedule prepared by the wife with respect to employment. It would be fair to say that the schedule favoured and was detailed and accurate as regards the wife’s employment and income but less so as regards the husband’s. A document was also tendered in the husband’s case which sort to set out a substantial chronology or résumé of the husband’s employment as well as the income earned by him. The husband was cross-examined with respect to a number of aspects of that document. It is suggested and I accept, for reasons discussed in relation to the evidence of the parties that the absence of source documents in relation to that which is alleged within the document would cause some difficulty in accepting all of the statements made therein.
The parties have, through their hard work and enterprise, accumulated not only the real estate assets referred to, but during their relationship had both contributed to and accumulated a substantial account with the (omitted) Bank. . That account included cash funds, both in Hong Kong and New Zealand dollars, and also a share portfolio.
A significant issue between these parties relates to and arises at about the time of their separation on or about 26 July 2009. The circumstances of the separation are also substantially in dispute, there being allegation and counter-allegation regarding alleged assaults at that time. In any event, shortly after separation, and on 4 August 2009, the wife withdrew one third of the funds then held in Hong Kong, being a sum of a little over $76,000. Those funds were placed into a joint account between the wife and her mother.
On 13 August 2009, and it would appear, as a consequence of an agreement that had been reached between the parties as to the division of that account, the husband purported to transfer $70,000 from the Hong Kong account to an Australian account. The money was, in the words used in the husband’s evidence “intercepted” by the wife, and she ultimately through some liaison through the police (it would appear at that time an interim order was in force which precluded direct communication between the parties) split that sum so that each of the parties received $35,000. The evidence would also suggest, and is corroborated by documents tendered in the wife’s case and ultimately, conceded by the husband, that the husband then retained and withdrew the balance of the (omitted) account which included shares together with cash funds in New Zealand dollars. Those withdrawals have been converted to Australian dollars for the purpose of these proceedings. The total of this third withdrawal was slightly in excess of $215,000 and being an amount of $215,683.
As a consequence of the above transactions, the parties received from what had previously been the joint (omitted) account, in the case of the husband, $215,683 plus $35,000 and in the case of the wife $76,000 plus $35,000. The evidence also suggests, and when cross-examined with respect to same it was conceded by the wife and corroborated ultimately by a document tendered and marked as an exhibit in the proceedings, that the wife had disposed of a number of shares during February 2011 and resulting in payments to her of $3,810.39 and $8,579.55 respectively. The wife indicated that she had attended to the sale of those shares to be able to meet legal expense and other fees.
The evidence also addressed events that transpired between the parties and their various assets following separation and particularly in the context of child support and general financial provision. Mr Major’s cross-examination, he had indicated and agreed that he had not, from separation and until a little over a year after separation, attended to the payment of child support, whether through the Child Support Agency pursuant to an assessment, or otherwise. The wife asserts that this is a factor that should weight substantially in her favour.
There is some force and credit to that, subject to the concessions made during evidence and largely corroborated by material introduced into evidence by exhibit or otherwise that:
a)Following separation, the wife continued to receive all of the rental income with respect to the then tenanted Property F property. That would appear to have totalled something slightly in excess of $18,000. The wife asserted in her cross-examination that she was entitled to one half of that amount being a tenant in common. The husband’s share the wife asserted she had retained as a contribution towards child support.
b)It would also appear common ground that a number of payments were made from Mr Major’s credit card following separation. The majority of those, but not all, would appear to have related to periodic payment authorities set up against that card. The wife’s evidence was that those payments had continued until the husband had cancelled them and/or that she had utilised a companion card on that account until it also was cancelled. They are amounts, that to the extent that there was a benefit received by the wife and these children, (and it is not a criticism to phrase it in those terms), certainly went towards and made some provision with respect to child support, even though not pursuant to an assessment.
It was, of course, open to the wife at all times to have made application for an assessment immediately upon separation. However, I am not satisfied that no financial provision was made by the husband during that period of time prior to the assessment of child support.
The other issue that flows in that regard is the differentiation between the parties and their evidence as to the support of the adult children of the relationship. The wife is critical of Mr Major on the basis that he has not made any specific financial provision towards either X or Z with respect to their university study and attendance. However, clearly he has made some contribution directly or indirectly as certain portions of the university fees were paid from his credit card post-separation.
In any event, that is the difference of attitude, perhaps, between the parties connected with the application for maintenance of adult children. The husband asserts that his relationship with the children is poor. Indeed, the two adult children of the relationship were, for the majority of the hearing, present in court. That is not any criticism of them or their mother but would certainly seem, in a very tangible and physical way, to corroborate the fact that they are, as it were, in the wife’s camp. That has some relevance to the determination of maintenance of children over the age of 18 years.
More importantly, however, the evidence that is available to the court with respect to that issue is minimal. Indeed, the only evidence that is before the court other than that which arose from answers given by the wife during cross-examination, is contained in paragraphs 5 and 6 of the wife’s affidavit and in a paragraph of the wife’s financial statement, being Part E therefore and question 17 more specifically. That portion of the financial statement suggests that X is living in the same accommodation as the wife and earning $769 per week. The other two children are not denoted within the financial statement as either members of the household or as earning income. That may well be on the basis that the question is headed “Other Income Earners within Your Household” and it being suggested that they earn no income. However, I do not make that assumption.
Paragraphs 5 and 6 of the affidavit provide:
“X completed full-time studies at (omitted) University for an (omitted) degree in December 2011. She has now commenced employment. Y is studying at the University of (omitted). The course is completed in the year 2015. Z is attending (omitted) High School Year 11 and plans to study at university. X, Y and Z live with me at Property A and have done so since separation. I support the children from my savings and earnings.”
That, as I have indicated, is the entire extent of evidence with respect to that issue and it was identified at the outset of the hearing that some deficiency with respect thereto may create some prejudice towards the successful determination of that application.
The issue with respect to the three children and their circumstances and financial support was raised not only with respect to a s.66L application, but also in the context of a s.75(2) adjustment which I will deal with in due course. I propose, once I have completed the discussion of the evidence which will be shortly, to deal firstly with the s.66L application.
The evidence of the parties was also plagued in the case of both parties, but more so with respect to Mr Major, by answers being substantially tangential to the questions put. Both parties were anxious. No doubt as a consequence of nervousness and their desire to present their case in its best light, noting that this is the one and only opportunity either of them will have to address financial issues between them, each was eager to make statements which were supportive of their case or perceived to be so. Regrettably, the difficulty with that approach is that the court was often left either confused or needing to ask further questions to be able to ascertain an answer to what were, at times, relatively simple, basic and straightforward questions.
I do not infer anything of substance as to any genuine desire by either party to avoid the answering of direct questions, but do observe - as was observed directly to Mr Major during his cross-examination - that these are parties who, whilst English may be their second language, both speak and communicate well in English, (although the wife was assisted during her cross-examination by an interpreter to ensure that there was clarity and certainty with respect to the questions put and that, perhaps, was some greater benefit to her than Mr Major, who did not have that opportunity), but these are also parties who are incredibly intelligent and well-educated.
Both of the parties have (omitted) degrees from university. In the case of Mr Major, he has two (omitted) degrees. The wife is a (occupation omitted), although not presently in employment. Accordingly, it is difficult to understand, firstly, how their responses to questions could be so tangential and secondly, and more so in the case of Mr Major, how there could remain, after litigation has been on foot between these parties for over 12 months, so many unresolved issues with respect to the production of the material and discovery. That was particularly an issue raised with Mr Major during his cross-examination.
The criticism that is made of Mr Major in that regard must be tempered by the reality, as submitted by his counsel, that a number of documents that he was criticised for not having produced were clearly within the wife’s possession. That significantly related to a number of tax returns with respect to which the husband was cross-examined. Further, the criticism of Mr Major must be tempered by the breadth of the call for provision of documents. The breadth of the call was, perhaps, a response to the manner in which the husband’s case was pleaded, he asserting that he had, throughout the relationship, earned significantly greater than from the wife and had particularised that as being, at one point, 5.15 times greater than the wife’s income.
The call for the production of documents included, for instance, a call for the provision of tax returns from 1983 to the present. The provision of such documents would be unlikely to be met by any litigant. However, when issues were put to Mr Major regarding discovery and the provision of material he had tended to indicate that requests had been made of his lawyers but he had either not seen the request, did not specifically recall having seen it or had produced that which was available and in his direct possession at that time.
That, of course, flies in the face of what is required and understood as to the production of documents in the “possession, custody or control” of the party and, particularly, with respect to the obligations for disclosure or discovery created by pre-litigation procedures in the Family Law Rules2004, which apply mutatis mutandis in this Court and, secondly and perhaps more importantly, the obligations discussed at some length by the Full Court in decisions such as Black & Kellner [1992] FLC 92-287and Weir & Weir [1993] FLC 92-338.
The husband indicated that he, whilst having a (omitted) degree in (omitted); had practiced in (omitted) and not (omitted) and, accordingly, and whilst represented throughout, did not understand what was required of him as regards disclosure or its importance.
It is trite to say that the obligation of disclosure and discovery is as complete, if not more complete and more onerous in (omitted) than within this Court. In any event, as the evidence has ultimately fallen before the Court, the absence of such disclosure or discovery is not significant in most respects, but to the extent that it is, I will touch upon it briefly in due course.
Issues in dispute
By the conclusion of the matter, there were a relatively limited number of issues in dispute, both as to the composition of the asset pool and issues with respect to contribution and adjustment for factors pursuant to s.75(2).
The most substantial issues in dispute appeared to be the following:
a)The valuation of a number of minor items of property, particularly comprising a (omitted) motor vehicle (that issue was ultimately resolved by concession) and the valuation of items of furniture and jewellery. No evidence with respect to value was produced, other than that of the parties and, accordingly, I am inclined to deal with those issues on the basis of admissions against interest by the party who has possession of those items, as there is no better evidence available.
b)How the wife’s (omitted) fund in Hong Kong is to be treated and, specifically, whether it is to be treated as an asset or a financial resource or both and, if it is to be treated as an asset, how it is to be valued.
c)Whether there are to be add backs made as a consequence of the (omitted) transactions and, if so, how those add backs are to be calculated mathematically and how they are to be apportioned as between the parties and whether they are to be added back as assets in stage one of the process or taken into account as adjustments, pursuant to s.75(2).
d)How contribution is to be assessed, particularly in light of the alleged disparity, which is conceded at least in part and at particular times, of income between these parties and how that might be offset by what is alleged by the wife as regards her homemaker and parent contribution and the matters that are conceded in the evidence as to financial management between these parties.
e)What adjustment should be made, if any, with respect to s.75(2) considerations; and,
f)What is to occur with respect to the plea for maintenance of adult children and, in particular, whether an order is to be made pursuant to s.66L or whether any adjustment is to be made pursuant to s.75(2).
Legislative framework
The Full Court has made clear in a number of decisions over a lengthy period, commencing with Ferraro & Ferraro (1993) FLC 92 – 335 and reaffirmed through cases such as Hickey [2003] FamCA 395 and Omacini [2005] FamCA 707 that there are four steps to the process that I must follow in dealing with applications for property adjustment, they being:
a)To identify and value the pool of property and usually at the date of trial;
b)To assess contributions;
c)To assess and make adjustments, if relevant and appropriate, for factors pursuant to s.75(2); and
d)To consider the outcome that would then be arrived at by having regard to the above findings and to be satisfied that the distribution that will then follow is just and equitable.
As regards all of those considerations, the Full Court has been clear in decisions such as Burgoyne & Burgoyne (1978) FLC 90-467 that:
“It is impossible for the Court to determine whether any particular order is just and equitable without first determining the nature and extent of the property of the parties at the time that the Court is making orders”.
What is the asset pool?
The majority of the asset pool to be divided between these parties is agreed. As I have indicated there are some minor issues with respect to tangible as opposed to intangible assets such as superannuation. Those issues are readily resolved and one was, in fact, resolved by concession.
The asset pool of the parties would appear to comprise:
a)The property at Property F in which the husband resides and which is unencumbered, it has an agreed value of $775,000;
b)The former matrimonial home at Property A in which the wife and the three children reside. It has an agreed value of $755,000 and is unencumbered;
c)The property in Hong Kong which is unencumbered and has an agreed value of $65,714;
d)The (omitted) motor vehicle retained by the wife and which has a value, agreed by the conclusion of evidence and submissions, of $20,000;
e)The wife’s Commonwealth bank account with an agreed balance of $4,297;
f)The husband’s Commonwealth bank account with an agreed balance of $17,270;
g)The funds retained by the husband in a (omitted) account, $130,000;
h)Funds retained by the wife, $70,000;
i)The husband’s shares, $45,957;
j)The wife’s shares, $18,000;
k)Furniture and contents in the wife’s possession. Whilst these have been enumerated at length in the husband’s material, there is no valuation evidence nor agreement as to value and, accordingly, I propose to treat the contents as having a value of $10,000, being an admission against interests made by the wife. The husband has asserted a value of $20,000; and
l)Items of jewellery in the wife’s possession. Again there is no valuation notwithstanding particularisation by the husband of what he alleges is held. The wife has conceded that she has jewellery with a value of at least $1,200 and I propose to include that value.
That accordingly provides a pool of non-superannuation assets with a total value of $1,912,438.
In relation to liabilities, four were alleged at the outset of trial. By closing submissions only two would appear to be of relevance.
Each of these parties has a Higher Education Loan Program debt, or a HECS debt. The wife has a debt of $38,956 and the husband $54,889, being a total of $93,845.
The husband had asserted, as has been indicated above, a debt to his father of $40,000 Australian dollars. No evidence has been produced to corroborate that allegation and it is not conceded. Accordingly, I do not take it into account and, indeed, its inclusion was abandoned during submissions.
The husband has also asserted a Visa debt of $2,914. That also would not appear to be pressed in submissions closing the husband’s case and, accordingly, I disregard it.
If one is to then deduct the above debts from the gross pool of non-superannuation assets, there is an amount of $1,818,593 available for division.
That then leaves the issue as to what one is to do in calculating superannuation and what one is to do with respect to add backs.
Both parties have asserted that some adjustment with respect to add backs may be appropriate, although there has been difference in terms of mathematical calculation, as regards to the manner in which those would be calculated and included.
In the husband’s case, it has been asserted that from the amount ultimately retained by the husband, the amount retained by the wife would be deducted and that this amount would then be included as a notional asset for division in accordance with whatever percentage adjustment arises, following a consideration of contribution and s.75(2) adjustments.
In the wife’s case, it has been proposed that the amounts that each has retained would be separately included and that the percentage then determined by reference to that and a deduction made on the wife’s side of the ledger, so as to adjust for that which she has already retained.
As a matter of mathematical precision, the latter approach is preferred, as to do otherwise would include a factor of the husband’s retention and/or expenditure of funds as an asset distribution between the husband and the wife and which would see the wife, in fact, incurring some portion of the husband’s expenditure and the husband incurring a portion which, unless there was an equal division of assets, would be lesser, of the wife’s expenditure. That, I am not satisfied, would be a just and equitable manner of dealing with those add backs. Accordingly, I propose to add in the amount that each has retained and then deduct that from the amount that each is ultimately is to receive.
On the husband’s side, as indicated, there is ultimately no dispute that he has received sums of $215,683 and $35,000, which total $250,683. The husband retains, in his (omitted) account, $130,000 and, accordingly, I propose to include an add back of $120,683 (being the $250,683 less than which remains in the husband’s hands).
On the wife’s side of the ledger, she has received $76,000 plus $35,000, totalling $111,000. In addition, shares which were retained by the wife at separation in her name have been sold, being the two transactions of $8,579 and $3,811 respectively, totalling $12,390. If I am to deduct from that amount the $70,000 retained by the wife, then I would include an add back on the wife’s side of $53,390.
I propose to take that course, rather than an adjustment pursuant to s.75(2) in relation to those matters as I am satisfied, by reference to cases such as Townsend& Townsend (1995) FLC 92-569 and Kowaliw & Kowaliw (1981) FLC 91-092, that the funds that each has received, irrespective of the purpose of expenditure from those funds, are a premature distribution of property, rather than something that could be described in the general catch-all phrase of “wastage”.
I am in a position whereby I can accurately identify the amounts that each has received and, but for the premature distribution that has occurred, that amount (and as counsel for the husband has rightly submitted such funds would have been subject to the vigarities of the market, particularly in relation to the value of the shareholding), would have remained available for distribution between the parties. Even with variants, as a consequence of interest rates, rises or falls in share values or the like, the parties would have shared equally in such adjustments as the amount would have been included as part of the pool.
Superannuation
The superannuation assets of the parties within this jurisdiction would appear agreed between the parties.
The husband has a (omitted) accumulation fund, with a value of $33,658. The wife has two small funds, both of which are un-splittable within the terms of the legislation, with (omitted) Super and AMP and with values respectively of $1,685 and $4,669.
The more significant issue is the wife’s Hong Kong pension fund. It is a fund maintained in Hong Kong and which will, upon the wife turning 55, entitle her, in accordance with her present election, to receive a pension of something in the order of $10,000 Australian dollars per year.
A statement with respect to the fund has been tendered and which discloses that, at present, the election is as I have indicated, for the wife to receive a 100 per cent pension. The wife has been clear and frank in her evidence and during cross-examination, that this is a common practice and largely undertaken as if she were to die before turning 55 then her estate and her beneficiaries would receive 50 per cent of the pension election, but nothing else. She has also indicated that it is common practice that six months prior to the vesting date of 55, that parties will, by and large, then reconsider their election and determine whether they wish to receive a 50 per cent lump sum, being the maximum lump sum that can be provided and a reduced pension, or some other proportion between 50 and 100 per cent of pension, balanced against lump sum.
Again, one of the difficulties that arise with respect to the fund is that it is clear and conceded that on a basis of a 100 per cent pension the value of the fund to the wife is an annual pension entitlement. The pension could well be accurately calculated and an actuarial value ascribed to it. Similarly, if a lump sum election were to occur, that calculation can readily be made as well. Whether there is a difference between the end results of both, having regard to the wife’s anticipated life expectancy is unclear.
The only evidence before the Court that purports to provide any valuation of what is, in essence, a defined benefit fund, is evidence by the husband. On one view, he is clearly qualified to provide such valuation, being a (occupation omitted) with a (omitted) degree, as well as a (omitted) degree in (omitted). However, to admit such valuation evidence or to rely upon it, it already being before the Court as an annexure to his affidavit and not objected to, would be entirely contrary to the code of conduct of experts and entirely un-objective. It would be akin to if not, in fact, the clear and stark reality, a litigant in proceedings providing expert evidence with respect to the assets of the other party. I do not accept that this course is appropriate and thus there is no evidence of value.
In relation to the fund generally, it is submitted in the wife’s case that it should be treated as a financial resource as at present it represents purely an entitlement to a pension in the future, which may or may not vest, depending upon the wife reaching the appropriate age. In any event, it is a fund that is outside of the jurisdiction and cannot be split. I am not satisfied that the fact that this fund exists in Hong Kong would preclude the Court from dealing with or considering it.
It would certainly have the effect that there would be some real practical difficulty in any order being made which sought to attach or attack the fund, by way of splitting order or the like and it is entirely likely that any such attempt would be unworkable and impractical and would, in all probability, exceed the Court’s jurisdiction. However, there is a long line of case authority established by the Full Court that does not exclude overseas assets from consideration as part of the asset pool and the overall division of property, but simply places constraints upon how those assets might be interfered with, if at all.
The more important issue in my mind, with respect to the Hong Kong fund, arises from its nature. It is at best and in all probability going to provide to the wife a small stipend, even if the 50 per cent lump sum election were made, (and in that circumstance together with a small lump sum). It is impossible to calculate, on the evidence presently available, what funds will be available to the husband by way of superannuation payment, by way of lump sum or otherwise, upon his attaining whatever age is required to allow such release and, accordingly, I do not seek to offset the two on that basis alone, although there is some attraction in that approach.
In relation to the fund more generally, however, I note as part of an exercise of discretion with respect to s.75(2), that the husband has had, for some significant period of time, significant funds available to him being an amount in the order of $250,000. With respect to those funds received by the husband there is no evidence before the Court, nor explanation, as to how those funds have been utilised (save the remaining fund held in cash) and, accordingly, I am satisfied that it is appropriate and would not constitute any exercise of double counting for me to simply offset whatever value the wife’s Hong Kong pension fund may have against the husband’s superannuation assets and so that all superannuation assets ultimately, and by reference to authorities such as Clauson (1995) FLC 92-595, will remain in the possession and benefit of the party in whose name they are presently held.
Contribution
The asset pool, thus being determined, I can move to a consideration of contribution.
It is not urged that there should be other than a global approach adopted. Ultimately, the husband’s case, as I have indicated, is that he asserts that he should be found to have made the greater contribution as a consequence of his overwhelmingly greater financial input, through wages and earnings. There are some gaps in the husband’s evidence in that regard but, to some extent, they are at least in part explicable, as clearly the wife has had possession of a number of documents that may have been of benefit to the husband.
However, I am also satisfied, by reference to s.79, that the assessment of contributions, as the Full Court has made clear, is not a precise mathematical exercise but a balancing of the various competing contributions, set out in s.79(4).
With respect to financial contribution, it is clear and I am satisfied that the husband has made a greater financial contribution through income and earnings, but that must be balanced, again by reference to decisions such as Pierce& Pierce [1998] FamCA 74 and Spiteri & Spiteri (2005) FLC 93 – 214 against the contributions made overall during this long marriage and continuing post-separation.
Contributions are not only financial, nor are they all directly financial. It is possible for these parties to have made, and I am satisfied that they did, direct and indirect financial contributions, homemaker and parent contributions and, importantly in the context of this case, contributions by the wife, through her support and through the inclusion of debts in relation to each parties’ HECS liability, towards the husband’s ongoing income and earning capacity, as a consequence of his improved educational position achieved during the relationship. The same applies as regard to the wife’s educational position, however, all of those contributions must be balanced.
The wife’s evidence, in contradistinction to the husband’s, is that while she makes some concession that the husband earned a greater income than her for periods during the relationship, she does not concede this was 5.15 times greater than hers. She asserts that she has made, for most of the relationship, 100 per cent of the homemaker and parent Contribution. The Court is always reluctant to accept any assertion of such absolute and extreme terms. The husband was not cross-examined at great length in relation to his contributions and to the extent that he was, he asserted and continued to assert that he had made far greater contribution than the wife had alleged.
However, it is abundantly clear in my mind, that the periods of time that the husband was absent the jurisdiction, for periods of time the husband was engaged in full time employment, earning a good income as well as substantial study towards (omitted) degrees, that there must have been some substantial tipping of the balance in the wife’s favour as regards homemaker and parent contributions. I am also supported in that view by the husband’s evidence that the three children of the marriage will all continue to reside with the wife, by and large, obedient children who are resourceful, diligent and hard working in their own right and that they must also have made some contribution towards homemaker duties, particularly as they reach or reached their majority.
Balancing as best I can and without dissecting each portion of the parties’ evidence with respect to their respective contributions, I am satisfied that:
a)The wife had introduced savings into the relationship as alleged by her. She was not cross-examined nor any proposition put to the contrary and I am entitled to accept her evidence and do.
b)The parties had both worked hard during the relationship.
c)That the husband’s financial contribution, overall, was greater than the wife’s.
d)That the wife’s homemaker and parent Contribution, overall, was greater than the husband’s.
With respect of financial contribution, unusually, Mr Major had also conceded that during the relationship, the wife was, by and large, the financial manager and that, whilst his income was greater, she was the person who managed it. It was asserted in the husband’s case that the scale of his income was such that it enabled the parties to acquire property which was and was always unencumbered. However, the husband did make the concession, and frankly and appropriately so, that whilst the wife was the primary manager of finances during the marriage, she was indeed very good at that job. When it was put to the husband, that the wife was an astute financial manager, the husband’s response was “that is why I could always trust her”.
It was conceded that the wife engaged in the same manner of management of funds as that which has passed, since separation, in moving money between various accounts to earn better interest rates and the like. Accordingly, I am satisfied that the wife’s financial contribution is perhaps greater than that initially conceded by the husband, but that direct financial contribution by the husband exceeds that of the wife.
Balancing all of those matters, I am satisfied that the contribution of the parties during the relationship should be seen as relatively equal.
Post separation Contribution
That leaves an issue as to contribution post-separation.
Whilst clearly neither of the parties have a legal obligation to support any other person, including the husband’s new wife and the adult children of the relationship, they are responsibilities which the wife has taken on. The wife has, since separation, being now a period of some five years, been responsible for assisting and meeting the costs of these children. I am conscious in making that statement, that there are the observations already made that the husband, I am satisfied, has at least indirectly contributed to the support of these children, including the adult children, for the period prior to the issue of a Child Support Assessment and through the wife’s retention of rental income, payment of expenses from his credit card and the like.
Since the issue of a Child Support Assessment, clearly the wife has been responsible for meeting all other expenses of the three children, including the adult children. The difficulty I have in accepting the wife’s submissions as to the extent of adjustment that might be made in her favour, either as to contribution or s.75(2) factor in that regard, is the absence of evidence in relation to these children’s present circumstances. Other than X’s income being disclosed in the financial statement, I have no idea as to whether any employment is undertaken by either of the boys, although cross-examination of the husband would suggest that it is so, or, if it is, what income is earned by them, what contribution is made by them to the household or the like.
However, I am satisfied that the wife has, since each of the two eldest children have turned 18, continued to support them and the husband has declined to do so. That is not a criticism of him. He has no legal obligation to do so and in light of the apparent estrangement between he and the children that is perhaps explicable. However, that does not obviate from the fact that the financial burden has fallen on the wife’s shoulders nor the fact that the benison of their birth has become the malison of their ongoing support. In relation to the youngest of the three children, I am satisfied that, whilst child support is now paid in accordance with an assessment and no criticism is raised that payments are other than up to date, that child support is, as the legislation notes, a contribution towards the costs of these children.
It would appear clear that the wife has the 100 per cent care of these children and, accordingly, I am satisfied that she has a particularly onerous burden in supporting them. On that basis, I am satisfied that by reference to the ongoing post-separation contribution, that the wife’s contributions overall should be assessed in a range of 50 to 55 per cent and I propose to set them at the mean point, being 52.5 per cent.
Lest I am wrong in that regard I will further address those issues regarding post-separation arrangements as regards s.75(2) adjustment.
In turning to adjustments for s.75(2), I note the matters which the Court is required to consider by reference to that section.
I am required to commence by considering the age and state of health of each of the parties. There is no significant disparity in the parties’ ages. The husband asserts that he has a number of health issues, however, they were not introduced in his evidence-in-chief by affidavit, but were adduced in oral evidence when he took the witness box. In that regard there is no evidence to otherwise support that there is any causal link between any health issue that the husband may suffer (and there is no admissible evidence that he does) and his income or earning capacity, whether now or in the future.
The wife is not presently in paid employment, although the evidence regarding the circumstances of that, other than a reference to a depressive condition, is not clear. Similarly, I do not have any evidence that draws a causal link between any suggested health difficulty and income.
I am required to consider the income, property and financial resources of each of the parties and their physical and mental capacity for appropriate gainful employment. As I have indicated, there is no evidence that suggests or, at least, which provides a causal link between any suggested physical or mental incapacity and capacity for employment.
I am satisfied that both of these parties are ably qualified for employment which is well remunerated. One would hope that each will continue in or will shortly return to such employment. In relation to income, property and financial resources of the parties, I note in particular, as I have already addressed, that the husband has since separation, and as a consequence of the premature distribution of funds from the (omitted) had the benefit of funds which the wife has not.
That is not to suggest that she has not had the benefit of any funds, but she has clearly had access to significantly lesser funds and, in a context wherein the husband has provided no particularisation or explanation as to what has occurred to the funds he has retained.
I am required to consider whether either party has the care and control of a child under the age of 18 years. Clearly the wife does and will continue to do so on a 100 per cent care basis.
As regards commitments of each party to enable them to support themselves or any other child or other person they have a duty to maintain and as has been observed by the Full Court since the commencement of both the Family Law Act1975 and the Child Support Assessment Act1989, these parties do not have a legal obligation, unless and until imposed by order of a Court, to support a present spouse or an adult child. However each, no doubt, feels and has expressed a moral obligation to do so.
The husband has been clear that he provides ongoing support to his new wife, however, there is no other evidence regarding her circumstances, whether she is qualified for employment, is in employment, is able to obtain employment at any time in the future or indeed, is even able to work in this country. That absence of evidence means that I cannot use that as a factor in the husband’s favour.
In the wife’s case, while she has no legal duty to maintain the adult children, I accept her evidence that she has provided substantial assistance to them and will continue to do so.
As regards the responsibilities of either parent to support any other person I note that the feeling of responsibility as a parent to support an adult child is entirely different to that addressed in the above consideration as a duty to support. A responsibility, in my mind, might include a moral obligation.
In this case, clearly the wife has taken on responsibility for supporting the elder children. Whilst in due course I will make it clear that I am not satisfied that I can or should make any order pursuant to section 66L, I am satisfied that I am entitled to take that circumstance into account.
As to whether either party is in receipt of a pension or other payment, either from a Commonwealth fund or superannuation scheme I note that neither party is presently receiving any superannuation fund payment or pension, although the wife clearly, on turning 55, will become entitled to the Hong Kong pension, subject to her election, of $5,000 to $10,000 per year. That ultimately is an amount of less than $100 to $200 per week. That will, if the wife is not then in paid employment, impact upon the pension that she is presently receiving in the form of a Newstart Allowance. The Court is entitled to take judicial notice of the amount paid by way of Newstart Allowance, which is far from substantial.
I must, where the parties have separated, consider a standard of living that, in all the circumstances, is reasonable. The Full Court has, again, commented at length as to what is meant by a reasonable standard of living and to make clear that it need neither be identical to that enjoyed prior to separation nor a subsistence level.
I am satisfied that both parties have the benefit of living in unencumbered accommodation and, in light of the change in the wife’s circumstances that is a felicitous circumstance. I am satisfied, overall, that the husband has the capacity to and has, through the retention of funds and through unencumbered accommodation available to him, (which occupation has, in turn, reduced the income available to both parties and particularly the wife, through the rental previously paid by tenants of that accommodation) and through his ongoing income and earnings, a greater standard of living than the wife at present which can be addressed through an adjustment.
The extent to which a party has contributed to the earning capacity of the other is relevant. Clearly the husband has obtained substantial educational benefit and qualification during the relationship, as has the wife. The husband continues to, and will, reap the benefits of his educational qualification. The wife in all probability will, in the future, but is not at present. The wife has clearly made a contribution to the husband’s present income.
The effect of a proposed order on creditors is not relevant.
The extent to which a party has contributed to income earning capacity, property or resources of the other party is, again, a relevant consideration and addressed above.
In considering the duration of the marriage and the extent to which it has affected earning capacity I note that these parties have been married for a long time. Their earning capacities have been positively enhanced, as a consequence of educational qualification, although the wife is not presently able to utilise that for a variety of reasons, including, I accept, that which she asserts in relation to her obligations to the children and depression.
The need to protect a party who wishes to continue in a role as parent has not been raised as a relevant consideration.
I must consider if either party is cohabiting the financial circumstances of that cohabitation. As I have indicated, the husband has re-partnered and re-married, the financial circumstances other than the husband’s assertion that he supports his wife, are not known. In the future, that relationship will provide some benefit to the husband I am sure.
The terms of orders proposed to be made and the impact upon the property of the parties and any bankrupt is not a relevant consideration. The orders that I propose to make and, indeed as are proposed by either party, will have no negative impact in that regard.
The terms of any order declaration and to the impact that it will then have upon third parties is not relevant.
Any child support that is paid is relevant. There is no dispute the husband pays child support as assessed and payments are up to date. It is however, as I have remarked, a contribution towards the costs of this child and, accordingly the wife, I am satisfied, wears the greater burden of that cost. It is, thankfully, tempered by the fact that neither party has a housing expense.
As regards any other fact or circumstance considered relevant I refer to the matters above, particularly the use of available funds since separation and the greater weighting in the husband’s favour as to the use of those funds.
To the extent that submissions are put in the nature of Black & Kellner and Weir & Weir submissions, I am satisfied that I should address those submissions through this consideration as the husband has failed to disclose what he has done with any funds which no longer remain in accounts and those funds are in the order of $120,000. They would not appear to presently exist and accordingly, have provided the husband with some material benefit in some fashion not disclosed.
The terms of a financial agreement are not relevant.
The terms of any part VIII AB financial agreement are not relevant.
Conclusion
Overall and by reference to the evidence relating to each of the above matters to which I have referred, I am satisfied that an adjustment of five to 10 per cent in the wife’s favour would be appropriate. I propose, in an alternate modelling to provide a finding of contribution as already made, of 52.5 per cent and a five per cent adjustment for s.75(2). Alternatively and lest I am wrong regarding a finding of greater contribution by the wife I would find equal contribution and make an adjustment in the wife’s favour at the median point of the adjustment referred to above, being 7.5 per cent. By either methodology the outcome is the same
On either version of it, I arrive at a distribution of the tangible non-superannuation assets between these parties as to 57.5 per cent in the wife’s favour and, accordingly, 42.5 per cent in the husband’s favour.
Structure of orders
The wife has, and will retain, the Property A property, valued at $755,000 and the Hong Kong property, valued at $65,714. There had been controversy between the parties as to which of these parties would retain the Hong Kong property, but in submissions the husband had indicated he would release the property and not oppose its transfer to and retention by the wife, if it were to reduce the amount that he might be required to pay if a lump sum payment were required.
The wife will also retain the (omitted) motor vehicle, with a value of $20,000, the Commonwealth bank account with a value of $4,297, the wife’s shares with a value of $18,000, the wife’s furniture and contents with a value of $10,000, the wife’s jewellery with a value of $1,200, the wife’s (omitted) account, which I note was excluded from the wife’s balance sheet tendered in submissions but was included initially and is purely an oversight due to the haste with which the matter is concluded, with a value of $70,000.
I have also included, on the wife’s side of the ledger, the add back that I previously identified, of $53,390. That produces a total, already in the wife’s hands or available or previously available to the wife of $997,601.
The wife has a HECS debt of $38,956, which I propose to then deduct so that the wife would have, in her hands, a sum of $958,644. A 57.5 per cent division of the net pool would require that the wife receive $1,145,783. If I were to deduct the $958,644 the wife already retains, then the wife will need to receive, from the husband, a further payment of $187,139 and I propose to make an order accordingly.
As regards to the justice and equity of the orders, I am satisfied that that will leave the husband in a position whereby he will be readily able to fund settlement in accordance with the orders. The husband has available to him, should he choose to utilise them, cash funds of $130,000 in immediately available funds. Accordingly, the husband would not be required to borrow in excess of $50,000, which he can readily secure against the unencumbered Property F property.
It is a matter for him entirely, and I intend that with no disrespect to him, as to whether he funds the entire amount by way of mortgage which would still, in all probability, produce a repayment level for him at current interest rates, of no more than $400 per week, or whether he wishes to utilise a combination of available funds, including, in all probability, that there being no evidence to suggest that it is either so or not so, funds from the $215,000 and $35,000 already received by him and as to which there has been no accounting or disclosure.
I am satisfied the husband is in a position to attend to that payment and/or to service any borrowing required to make it without this impacting upon his overall financial position or comfort.
The husband would retain an unencumbered property at Property F, or a property encumbered with a very modest mortgage, together with a significant holding of shares, cash funds and the like.
The husband had also raised in submissions that a number of items of personal jewellery and other personally chattels and papers had not been returned to him. There would not appear to be any significant agreement as to whether that is the case or not, but I propose to make an order that the wife make available to the husband such items as she may still have in her possession. That is not intended to generate another opportunity for litigation between the parties, as there is no evidence upon which I can make a finding and I do not, that the wife in fact has other items in her possession. However, to the extent that they may be there and the wife may spend some little time turning her mind to and searching for such items, if they are found they should and probably will, in accordance with the orders I propose to make, be made available.
Otherwise, with respect to the justice and equity of the matter, I am satisfied, by reference to the findings of contribution and future needs pursuant to s.75(2) that I have made, that the orders are just and equitable and will allow each of these parties to move on into the future supporting themselves and, directly or indirectly, their children, whether adults or otherwise and maintaining their lives with a standard of living that is as referable as possible to that which each had enjoyed prior to the separation.
I have indicated and, I would think, have made clear during these reasons that I am not satisfied that there is evidence to support an order pursuant to s.66L with respect to either of the children, X or Y.
However, in turning to that section I note that a precondition to the exercise of jurisdiction by the Court, pursuant to s.66L(2) is as follows:
“A Court must not make a child maintenance order in relation to a child that extends beyond the day on which the child will turn 18, unless the Court is satisfied that the provision of maintenance beyond that day is necessary:
a) To enable the child to complete his or her education or;
b) Because of a mental or physical disability of the child.”
Thankfully, it is not suggested these children suffer any physical or mental disability. In particular, any concern that might be suggested regarding a mental disability is contraindicated by the fact that the two adult children are both at or have attended university and, accordingly, to the extent that any disability exists, it could not possibly have been suggested to have impacted upon their intelligence or their ability to complete studies.
The difficulty that I face is that the precondition of making an order pursuant to s.66L, being that threshold and it is expressed by the legislators in mandatory and specific terms which compels me to not make an order unless so satisfied, is that I simply have no evidence that could touch upon or answer the question as to whether it is necessary for a maintenance order to be made to enable the child to complete their education. That is not to suggest that I am not satisfied that they would not benefit from some financial contribution by their father but, in all probability, whether their father was alive or deceased, these children would be supported by their mother through that arrangement.
I am satisfied that in the absence of that evidence, I could not make the threshold finding s.66L(2) requires and that the most appropriate course and, indeed, the best I can do and have attempted to do, to address the expenditure that will no doubt arise in the wife’s hand is to take it into account, as I have, in relation to both contribution and s.75(2), both directly and in the alternate. For those reasons, I propose to dismiss all outstanding applications including, to the extent that such maintenance is sought, that portion of the application.
I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of Harman FM
Date: 18 April 2012
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