Carmichael and Carmichael
[2008] FMCAfam 30
•18 January 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CARMICHAEL & CARMICHAEL | [2008] FMCAfam 30 |
| FAMILY LAW – Property – two pool approach – just and equitable. |
| Family Law Act 1975, ss.79(4), 75(2) |
| C & C [2005] FamCA 429 Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Makita (Aust) v Sprowles [2001] NSWCA 305 |
| Applicant: | MR CARMICHAEL |
| Respondent: | MS CARMICHAEL |
| File Number: | BRC 2272 of 2007 |
| Judgment of: | Baumann FM |
| Hearing date: | 18 June 2007 |
| Date of Last Submission: | 23 July 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 18 January 2008 |
REPRESENTATION
| Solicitors for the Applicant: | Barry & Nilsson |
| Counsel for the Respondent: | Mr Read |
| Solicitors for the Respondent: | Murdoch Lawyers |
ORDERS
That the monies held in Murdoch Lawyers Trust account be divided as follows:-
a)the sum of $108,220.90 to the husband; and
b)the remainder to the wife.
That any payment to the husband be stayed pending the costs application of the wife.
That within 14 days from the date of the order the wife will arrange for the BMW motor vehicle to be made available for collection by the husband at H Police Station.
That the wife retain the Bronze Wale for her sole use and benefit absolutely.
That except as otherwise provided for in this order, the husband and wife are entitled to be the sole legal and beneficial owners of all property including money, motor vehicles, frequent flyer points, any interest they have in any company or business, insurances, equities, superannuation entitlements, shares and personal effects currently in the possession or control of each of them respectively.
That each party indemnify and keep indemnified the other in respect of any liabilities in their name or in respect of any item of property that they receive in accordance with these orders.
IT IS NOTED that publication of this judgment under the pseudonym Carmichael & Carmichael is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 2272 of 2007
| MR CARMICHAEL |
Applicant
And
| MS CARMICHAEL |
Respondent
REASONS FOR JUDGMENT
Introduction
When the parties commenced cohabitation in August 2002, the Applicant Husband had modest assets but a superior income to the respondent Wife, who possessed significant assets (in comparison) but had a modest income.
The couple, aged 39 and 46 respectively, married in December 2002 and separated in August 2005. They did not have children.
They did however embark on a substantial residential building project – in every sense a “dream home” – on property purchased at Property W. These reasons explore the evidence and submissions which touch the development of this property. Although there are a number of small issues, the parties’ entitlements to the net proceeds of the home represents essentially the issue I am required to decide.
Although the trial in this matter proceeded on 18 June 2007, the parties by joint letter dated 29 October 2007 informed me that a Contract had been signed for the sale of Property W for a gross price of $1.3 million. The contract was unconditional as to the purchaser’s finance, and was scheduled for settlement on or before 10 December 2007.
Principles
The preferred or usual approach to determining property proceedings under s.79 of the Act was the subject of a succinct summary by the Full Court in Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143) at [39] where the Court said:-
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions for the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1085) FLC 92-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDR (2001) FLC 92-075 and Phillips and Phillips (2002) FLC 9.-104.”
History of Litigation
Shortly after separation in August 2005, the Husband commenced proceedings for property settlement in the Family Court of Australia. Those proceedings necessitated, it is alleged, interim determination by Bell J on 9 December 2005. His Honour made an order on that day (“the said interim order”), after hearing submissions from the legal representatives of the parties.
The extempore reasons of Bell J are before me. His Honour characterised the Husband’s interim application as seeking “to have the control of the building of a house situation at Property W”.
The said interim order was in the following terms:-
“Sole use and occupation and Vacant Possession
1. That Ms Carmichael (“the wife”) have the sole and exclusive use of the former matrimonial home situation at Property W to the exclusion of Mr Carmichael (“the husband”).
2. That the husband do all acts and things necessary to:-
2.1 Vacate the residence at Property W within 14 days; and
2.2 Deliver to Ms Carmichael (“the wife”) all the keys and other means of access relating to the home and its fixtures;
2.3 Return to the wife any of her personal belongings in his possession.
3. That the wife and her agents have complete and unfettered access to and control of the real property including the home and its surrounds to the exclusion of the husband to enable the following to occur:-
3.1 Inspection of the home from time to time by a certifier, building inspector, valuer; and
3.2 Compilation of the construction of the structure and surrounds and all other work and things necessary or directed to be done by a building inspector or certifier to bring the property to a standard so as the wife can procure all relevant building, occupancy and permission certificates reasonably required for its occupancy and any other land, housing or building approvals required by any relevant government or building authority;
3.3 The marketing and sale of the home in a timely way for its market price.
Independent contractor to be appointed
4. That the wife be authorised to appoint Mr K to:-
4.1 Prepare a written report listing what work is necessary to complete the dwelling on the property to a standard that accords with the plans approved by the Brisbane City Council on April 2003 so that the wife can procure all relevant building, occupancy and permission certificates reasonably required for its occupancy and sale and any other land, housing or building approvals required by any relevant government building authority;
4.2 Prepare a written report listing what rectification work needs to be carried out on the subject property to bring it to a standard that accords with the plans approved by the Brisbane City Council on April 2003 and so that the wife can procure all relevant building, occupancy and permission certificates reasonably required for its occupancy and sale and any other land, housing or building approvals required by any relevant government or building;
4.3 Prepare a written report listing the estimated cost to complete the subject property including the dwelling and the surrounds and an estimated time frame in respect of same;
4.4 Prepare a written report setting out the works carried out by the husband on the subject property and estimated value of those works.
5. That the husband pay the costs of the report.
Completion of works
6. That the wife be authorised to appoint Mr K to complete the work on the property identified in his report prepared under paragraph 4 so that the wife can procure all relevant building, occupancy and permission certificates reasonably required for its occupancy and sale and any other land, housing or building approvals required by any relevant government or building authority, with the wife to be responsible for the supervision of and the completion of that work and to make all decisions in relation thereto without consultation with the husband.
7. That the husband be restrained from:-
7.1 Having any further involvement in the organisation of or building of or sale of the former matrimonial home;
7.2 Carrying out any further work and from contracting or arranging for any other person to carry out any further work on the property;
7.3 Interfering with the work or any tradesmen on the property;
7.4 Instructing Mr K or his agents or any other tradesmen in any manner whatsoever in relation to the property;
7.5 Applying for a builder’s licence or permit in relation to the former matrimonial home.
Retention of property until final order
8. That until further order the wife be entitled to retain in her possession:-
8.1 The BMW motor vehicle;
8.2 All of her personal belongings;
8.3 The Bronze Whale.
9. That the parties be entitled to remove from the former matrimonial home their clothing but that otherwise the parties be restrained from removing any chattels or furniture from the home until further Order or the consent of the other party.
Sale of home
10. That the wife be at liberty to place the home on the market for sale either before or upon the completion of the home, such sale to be by private treaty or by auction at a price agreed between the husband and the wife or failing such agreement at a price determined by a valuation by a single expert witness.
Restraint on Further Mortgage Pending Sale
11. Pending the sale of the home pursuant to paragraph 10 both parties are restrained from doing any act or thing to increase the existing mortgage over the home or to cause or procure the further charging or mortgaging or encumbering in any manner whatsoever of the home.
Spouse maintenance
12. That until the property is sold, the husband must:-
12.1 Pay all rates, taxes and assessments in relation to the home including all electricity excess water and similar charges assessed or charged by any competent local authority or statutory body and all other charges and expenses associated with the party’s use and occupation;
12.2 Pay all payments due and owing from time to time under the line of credit to the Bank of Queensland on the home;
12.3 Pay the lease payments on BMW motor vehicle.
Interim Distribution of Sale Proceeds
13. Upon the sale of the matrimonial home the proceeds be disbursed as follows:-
13.1 By payment to the Bank of Queensland all funds owing under and pursuant to the line of credit;
13.2 By payment of the costs of sale;
13.3 By payment of the balance to the trust account of the wife’s lawyers until further order or agreement.
Removal of Caveat
14. That within 7 days the husband at his expense hand to the wife an executed withdrawal of the caveat registered against the former matrimonial home.
Return of Property
15. That the wife return to the husband any original documents that she has in her possession belonging to the husband personally and to M Enterprises (Qld) Pty Ltd.
Costs
16. That the parties’ costs of and incidental to these proceedings be reserved to the trial judge.”
The order speaks for itself, save for one issue of interim spouse maintenance. The order, at paragraph 12, under the heading of “Spouse Maintenance” requires the Husband to pay certain liabilities. However the reasons of Bell J, in my view, cause a doubt about whether it was his Honour’s intention to make a spouse maintenance order or simply, by way of a form of mandatory injunction, compel the Husband to pay certain expenses – namely the home loan, the car lease payments and expenses running with the ownership (e.g. “rates, taxes and assessments”) and the occupation (e.g. “electricity, excess water and similar charges”) of the home. I say this because of the reasons of his Honour at paragraphs 14-15 where he says:-
“There are two other matters. One is the question of interim spousal maintenance. I have already indicated, Ms M I think, on the matters before me that there is little or no chance of her being able to convince me at this stage that she is without means and that she is unable to support herself in the style to which she has become accustomed in relation to her outgoings of $483 as against her income of some $622.
I note, of course, that there is no claim in her expenses for either rent, she is living with her parents, and nor is there any claim for a motor vehicle…”
I received no submission that the payments made should be characterised as a “spouse maintenance payment”, and I intend to consider such payments in the mix of post separation contributions.
For completeness I should note that the proceedings were transferred to this Court during the joint callover in February 2007.
The House at Property W
The intention to construct a home at this address was, in my view, clearly a joint endeavour of the parties. The detailed written submissions assert various different contributions and whilst I will deal later in these reasons with an assessment of contributions within the matrix of the relevant section 79(4) factors, I make the following findings relevant to these proceedings in respect of this property:-
a)The parties jointly selected and committed to the purchase of the vacant land for the location of their dream home.
b)The land was purchased in the name of the Wife for $325,000 in May 2003. Stamp duty and other incidental legal expenses would have been incurred and paid in the sum of approximately $7,500.
c)The overwhelming majority of the costs of acquisition of the land came from the Wife who had available at that time
- approximately $314,381, being the net proceeds of sale of her property at Property M;
- some form of superannuation entitlements from her former employment with Axxx of $38,776 received 15 May 2003.
d)As the property was registered in the sole name of the Wife, she was required to be recorded as the “owner-builder”, in circumstances where the parties decided not to have a fixed price head building contractor, but rather engage registered and licensed tradespeople to complete works. The parties both were involved in conversations with the design architects; choosing furniture etc.
e)Although the Wife completed the required and mandatory course as an “owner – builder”, the Husband’s knowledge and experience in the building industry was superior to that of the Wife.
f)Although a Mr W started as a project manager he was replaced by a Mr U. The reasons for the change are in dispute. The Wife did not call Mr W to give evidence. In any event I do not regard it as necessary to determine whether
- Mr W resigned because he clashed with the Husband and because the Husband asked him to do work which was not in accordance with the plans (Wife’s claim); or
- that the Wife did discuss variations with the Husband and the builder (Husband’s claim).
g)Construction of the house began on 22 March 2004. Originally the parties borrowed $300,000 from Suncorp-Metway which was subsequently increased to $400,000 and ultimately refinanced to the sum of $450,000 on 4 May 2005 through Bank of Queensland. Although the reasons for the continual increase in building costs beyond the original estimate of $300,000 is disputed, I am satisfied on the totality of the evidence, that neither party is “to blame” for the increase in a “waste” sense to separation.
h)Although the parties occupied the property from March 2005 the home was not fully completed. In essence at that stage the funds available for construction were low. I am satisfied the Husband made a non-financial contribution to the construction by liaising with a range of contractors and attending to minor works (including some plumbing) and gardening. The Wife also made a non-financial contribution – but to separation it was less than that of the Husband. To this extent the Husband at paragraph 104 gives an estimate of his labour. Although I do not accept the accuracy of his estimate, I do generally accept the nature of the works performed. These non-financial contributions by both parties need to be seen in the context of the major works on management and construction being performed by tradespeople.
i)At paragraph 58 of his trial Affidavit the Husband asserts that “total costs of construction for the period 2003 to 2005 came to $534,835.70”. Annexure “A” is said to be a detailed schedule of payments. The schedule is in an alphabetical order. The payments are not chronological in each group. The Husband concedes he does not have receipts for many of the asserted payments. Also it seems that a lot of payments were made by American Express and/or Visa card. I infer that this was to attract frequent flyer points – but that it is likely the credit cards were paid for from the loan funds. For example, the Husband only says $197,697 were “paid for from loaned monies”.
I cannot be satisfied that some “doubling up” of expenses may not have occurred. I think it likely that:-
i)The whole of the available loan funds were contributed to the construction. During this period (prior to separation) the income available was sufficient to meet living expenses without drawing on loan funds for living expenses.
ii)Nearly $50,000 of payments are said to be made by cash. I infer getting a receipt for those payments is probably problematic.
iii)That from the Husband’s income and/or through his alter ego M Enterprises, he is likely to have made a further financial contribution to the construction costs, but I am not able to conclude on the available evidence that it is as much as $98,864 as claimed by the Husband at paragraph 62, or even the sum of $70,000 earlier claimed (paragraph 58).
j)As a consequence of the said interim order made, the Wife did take over control of completion of the home and any necessary rectification. I do not accept that the Husband should bear responsibility (financially) for the rectifications or the difficulties, for example, with the balcony. It is my view that some of these issues arise from the decision of the parties to “owner-build” and the cost savings they hoped to have achieved by doing so.
k)
Although a Mr K was to be retained (pursuant to the authority in paragraph 6 of the interim order) to “complete the work on the property” as was to be identified by him, he was neither able to prepare a report or to complete any works. The Wife retained, without consultation with or the agreement of the Husband, a
Mr F to do the same task the said interim order anticipated Mr K undertaking.
l)
Objection at the trial was taken to the Wife relying on the Affidavit of Mr F on the basis that he was not appointed as a single expert and further some of his opinions offend the rule in Makita (Aust) v Sprowles [2001] NSWCA 305, concerning opinion based on admissible facts. In circumstances where Mr K was not available to do the tasks the interim order sought of him, I regard it as consistent with the Wife’s authority under paragraph 6 of the order to get someone to do the same. She chose Mr F. I accept he is a registered builder and that he was both qualified and able to give details of works required to complete the dwelling and defects (Item 4.1 and 4.2). I do not regard him as being able to give an accurate estimate of “works carried out” by the Husband (Item 4.4) as he had to, necessarily, rely upon information provided by the Wife. For example, Mr F was not asked to give an estimate based on the sworn testimony of
Mr Carmichael in his trial Affidavit.
m)It is accepted by me that the Wife’s Father, post-separation, assisted the Wife in completing the home and that he expended actual funds in doing so. Mr M swore a detailed Affidavit which was filed on 28 May 2007. He submitted himself to cross examination. Some of his opinions in the Affidavit are beyond his expertise (see for example, paragraph 8 where he claims that $34,493.96 “is attributable to the neglect or fault of
Mr Carmichael”. It was clear from his evidence that Mr M did expend funds and time and effort in assisting his daughter.n)The Affidavit of Mr M contains, as annexure “GM01”, details and invoices (totalling over 100 pages) photocopied to verify the claim by Mr M for the following total sum of $118,951.41 being:-
Mr F’s Fees
$8017.62
Marketing Costs
$10,087.60
Actual Costs Paid
$64,660.61
$82,765.83
Claim for “lease” of furniture
$13,668.14
Claim for labour
$17,267.00
Claim for interest
$5,250.58
$118,951.41
(Refer paragraph 50 of submissions of Wife). To the extent that the Husband is only prepared to conceded the sum for actual expenses of $59,887.67 rather than $64,660.61, I prefer the evidence of Mr M.
For the reasons given, I propose to reimburse Mr M from the proceeds of sale, the sum of $82,765.83 because I regard the claim for actual expenses; the claim of retaining Mr F (the Wife’s substitute under the order) and the marketing expenses as reasonable and a joint expense. The balance of Mr M’s claim of $36,485.58 shall be treated as a contribution post-separation by the Wife – but not in the mathematical manner contended for by Mr M.
As the pool of assets below identifies, I anticipate some expenses associated with the successful sale and marketing of the property have been included. I would think the Wife could produce invoices as to reasonable expenses actually incurred and they should be met by the available pool. As I indicate at the conclusion of these reasons, it may be necessary to hear some further submissions about division taking into account these reasons and the actual expenditures post-trial.
Pool of Assets
I made the following findings in respect of disputed items in the pool, adopting, consistent with the Full Court decision in C & C [2005] FamCA 429, a two pool approach to superannuation.
Proceeds of Sale of Home
For the matrimonial pool, I adopt the sale price of $1,300,000 for the house but will await further submissions of any further reasonable sale expenses incurred. Similarly I will adopt the evidence at trial as to the loan balance, but will adjust in my final order for the actual debt discharged.
Furniture
I was provided with little evidence of a probative nature as to the value of furniture. There is no evidence of significant purchases during the short relationship. Each of the parties had chattels in their possession at cohabitation. I am aware the Wife asserts the Husband removed substantial chattels prior to him vacating the property. The Husband agrees he did so – but that they were items he “owned prior to our relationship” (paragraph 93). It is clear little was left by way of furniture necessitating the Wife to ask her parents to allow her to use some of their furniture to assist the home being marketed. The evidence is confusing as to furniture and its origin and value. In the circumstances, each party will retain what they now have in their possession and I do not intend to include any allowance in the pool for furniture.
I intend to order the Wife retain the bronze whale. It was a gift to her; has merely sentimental value; and it is unclear in the absence of a current balance sheet for the company whether it even was recorded as the actual property of the company.
Telstra Shares
Although the usual approach is to include all assets available at the time of hearing, and the Wife certainly owns some shares, it is clear that they were bought for her as a gift by her parents. They have minimal value compared to the pool as a whole and I intend to exclude them from the pool.
BMW Motor Vehicle
The BMW motor vehicle was a vehicle organised by the husband for the Wife without her knowledge. I am not required to make any finding about the signature of the Wife on the documents although I note the Wife says it is not her signature. Nonetheless, the Wife has had the use and benefit of the vehicle. The parties agree the value of the car is exceeded by its lease debt. The net debt of $10,000 will be included as a liability.
Proceeds of Trade in of Rodeo Motor Vehicle
The Rodeo motor vehicle was purchased during the relationship and a Holden Statesman had preceded it. It is not clear how the Toyota motor vehicle that the Husband claims he had at cohabitation was dealt with (save for the Wife’s statement at paragraph 13). Paragraph 17 of the Wife’s Affidavit refers to the purchase of a Statesman vehicle with a contribution from the Wife (of $9,600) and a termination payment received by the Husband from E Company in 2003 of $20,000. It seems, according to the Wife, that the Statesman was subsequently traded in on an RX8, before the Husband leased the Holden Rodeo.
The best evidence of the purchase of the Husband’s Mercedes motor vehicle, post separation, is exhibit 11 and on the evidence I am prepared to accept that invoice as establishing that the Husband obtained a benefit from the Holden Rodeo, as a trade in to the net effect of $20,275. If the Husband claimed otherwise it was within his power to provide an explanation of the disposal of the Holden Rodeo.
Frequent Flyer Points
Although it is likely that some “frequent flyer” points or other reward points have accumulated through the course of the marriage from the credit cards operated by the Husband, the evidence does not enable me to be certain of their total or what can be acquired with those points.
Liabilities
The actual debt secured over the property will be known to the parties now because of the sale of the home. For the reasons identified earlier, I intend to include a debt to Mr M for $82,765.83
The credit card liabilities of the Husband at separation were as follows:
Suncorp-Metway
$5037
AMEX
$7846
Visa
$1590
$14,473
If the Husband seriously contended that the increase in these liabilities, post separation, should be a joint liability he bore an onus to establish how and for what purpose the debts increased to $20,000 (Suncorp-Metway), $30,000 (AMEX) and $4643 (Visa) respectively. His failure to do so makes it unfair, in my view, to impose upon the wife an obligation to contribute to those increases which may well be entirely personal discretionary expenditures of the Husband. I accept the Husband made a contribution by meeting and continuing to be responsible for any interest on those balances since separation. Even at 20% p.a. that could only amount to approximately $6,000.
Eunos Debt
The Husband says that he repaid a debt on the Wife’s Eunos to the Wife’s parents entirely. Mr M swears to $5000 remaining outstanding, but when in cross examination, he was asked to respond to the Husband’s evidence that it had all been repaid, his response was that he couldn’t say how much he got for the Eunos as his wife “handled all that”. In the absence of any evidence from his wife, I am not satisfied that I should prefer his evidence (clearly based on hearsay) over that of the Husband. I do not propose to include a debt for the Eunos as a result.
Other Assets
The Wife says she does not trust the Husband and claims he has other business interests. She refers to his consulting company M Enterprises; the alleged property in B and M; the interest in C Company and R Pty Ltd.
The Husband says taxation returns for the company, the source of his income personally, had not been prepared. The Wife however had access to the bank statements for the company and asserts the Husband had received funds for the year 2005-2006 of $181,561.29.
On the basis of the difference between that figure and the Husband’s estimate of $200,000 – together with the allegations of failure to disclose - I am asked to draw the inference (less cautiously) that the Husband is hiding assets. The eloquent submissions of the Wife's Counsel at paragraphs 16 to 32 do not persuade me that the Husband has additional assets of value not disclosed.
I am not required to reach a finite conclusion as to the Husband’s income for the periods for which he has not produced taxation records. In circumstances where it is not disputed that his income was the source of repayments on the home loan and BMW little is achieved by a further exploration. The Husband’s income for the relationship (that is the period ended 30 June 2005) is established as:-
30 June 2003
$89,447
30 June 2004
$96,796
30 June 2005
$214,845
I deal with his contributions later, from this income, which on any assessment over the period of the relationship greatly exceeded that of the Wife.
Subject to the matters raised above, I estimate the notional pool as:-
Assets
From Home Proceeds
$1,300,000
Husband’s Bank Accounts
$19,872
Wife’s Bank Accounts
$602
Proceeds of Rodeo
$20,275
$1,340,749
Liabilities
Final Agent’s Commission and costs of sale
Not Known
Secured Loan
$450,563
Husband’s Credit Cards
$14,473
Debt to Mr M
$82,765
$547,801
Nett Approximately
$792,947
If I allowed “standard” REIQ commission (5% on first $18,000 and 2.5% on the balance) this would amount to $32,950 and a net non-superannuation pool of approximately $760,000. I intend to use this figure when considering contributions and the impact of the s.75(2) factors.
Superannuation
At commencement of cohabitation the Wife had preserved superannuation entitlements of $42,000 which arose from her pre cohabitation employment with Axxx. The Wife’s employment during the relationship, as a salesperson for two building companies and now for a local boutique, has generated a modest income and minimal occupational superannuation benefits. I find that the agreed value of the Wife’s superannuation at $70,840 therefore is mostly attributable to the pre-cohabitation interest and accruals on that interest during the relationship and of course for the two years post separation.
The Husband, in final written submissions, concedes his superannuation should be regarded as having a value of approximately $98,822 being:-
S Fund
$38,822
M Enterprises
$60,000
$98,822
The Wife also submits that the Husband has other entitlements that he has not revealed. In cross examination the Husband was confronted with documents showing an entitlement to a “Mr A” of $6,470. I think it more likely than not that the small entitlement belongs to the Husband.
On this basis, each party brought into the relationship about the same amount in superannuation. The Husband’s interests have grown more than the Wife’s, through his higher income, although because of the shortness of the relationship, it is fair to record that in the vicinity of $40,000 would have accumulated to the Husband’s current entitlements, post separation ($200,000 income x 9% for two years).
I find the parties superannuation entitlements at trial to be as follows:-
Husband
$105,292
Wife
$70,840
Neither party seeks a splitting order. In view of the nature and history of contributions to these entitlements I would not make a splitting order. Each party shall be ordered to retain their own entitlements and I shall factor these entitlements into the range of factors under section 75(2).
Contributions
It follows from the findings I have already made that the contributions of the parties to the acquisition, maintenance and improvement of the property during the relationship of both a financial and non-financial character (and both direct and indirect) could be summarised as follows:-
Husband
a)Minimal assets at cohabitation save for a car, small savings and some furnishings.
b)A higher more significant income during the relationship which substantially met
i)The living expenses of the parties
ii)The loan repayments on the home
iii)The lease payments on the BMW used by the Wife and cars used from time to time by the Husband
iv)Additional costs of construction beyond the funds borrowed, although the exact amount is unclear
c)And also
i)Non-financial contributions to the management and construction of the home
ii)Non-financial contributions as homemaker, although less than those of the Wife because of his more substantial work commitments
Wife
a)Significant pre-cohabitation assets which I find to be as deposed to by the Wife at paragraphs 4 and 5 of her trial Affidavit. In this regard I mention that the Wife had jewellery and furniture (including antiques) at the commencement of the relationship and they have not been the subject of valuation, but are retained by the Wife.
b)The direct financial contributions included savings of $12,508 and a further payout from Axxx of $13,000 received in December 2003.
c)The Wife’s other contributions during the relationship and since separation were at least:-
i)The benefit through the use of the flat at the home of the Wife’s parents for the first 12 months. The Husband said they paid $100 per week however I am not satisfied that cash funds on a weekly basis were paid for rental.
ii)The Wife’s income during the relationship, although it was modest and significantly less than the Husband’s income
iii)The non financial contributions by the Wife to the design, management and construction of the house prior to separation. I would assess the Wife’s contribution as less than the Husband’s prior to separation.
iv)The non-financial contribution as home maker, which I would assess as superior to that of the Husband
v)The significant post separation contributions, mostly of a non-financial character (and largely supported by her Father Mr M) in:-
- organising for the home to be completed
- liaising with contractors
- use of the funds of Mr M for expenses incurred
- Mr M’s time and effort in assisting
- use of the furniture to enhance the appearance of the home for marketing purposes
- liaising with Real Estate agents on the marketing.
Because I have taken the view that certain expenses should be paid from the available pool (Mr F’s expenses; original marketing;
Mr M’s expenses actually incurred) of $82,765.83, the non-financial contributions of the Wife post separation are less than if those expenses incurred had not been allowed in Stage 1 of the analysis.
The Wife contends that as it was “her land”, the majority of the capital improvement was associated with the land and she ought therefore be entitled to a greater share of the increase.
I do not regard such an approach as consistent with authority – unless I was to adopt an “asset by asset” approach and the land had not been the subject of improvements. To adopt the wife’s approach is, in my view, artificial. The parties both acknowledge the buyout property market conditions which have prevailed. If the “actual costs” of the construction to point of sale were approximately $915,000, calculated as follows:-
Land
$325,000
House (borrowed funds)
$450,000
Husband’s additional direct and indirect contributions
$70,000
Mr M’s direct and indirect contributions
$70,000
$915,000
(and in so estimating I make no finding of the quantification of the contributions of the Husband and Mr M), then a safe price of $1,300,000 represents about a 40% increase over the two years since separation. Clearly the Wife’s initial contributions were significant, however if the Husband did not have the income to pay the loan repayments, the parties may have lost the opportunity to have this gain.
I adopt a global approach. The Wife’s initial contributions were significant and overwhelming. However, without the Husband’s knowledge of the building industry and his substantial income the parties, I find, would not have been able to borrow the funds needed to construct the home and pay the additional expenses over those construction costs.
Weighting up the multitude of different contributions, I have assessed the contribution based entitlements as being 75% to the Wife and 25% to the Husband.
Section 75(2) Factors
The Husband is in a much stronger income position than the Wife – and that is likely to continue. The shortness of the relationship means that I would not find that the Wife enhanced the Husband’s work choices and career opportunities significantly. The relationship has not impeded the Wife’s career to any significant extent. She is slightly older than the Husband and has few, if any, formal qualifications.
The Husband’s superannuation entitlements are greater than those of the Wife. I take that into account
The Wife will receive a more substantial share of the available cash pool – however that is more a result of her initial contributions. It does place her however in a better cash position than the Husband to, for example, reaccommodate herself, buy a car (to replace the BMW which she could not afford to keep) and to pay her legal expenses.
I do not ignore that the Wife has suffered cervical cancer and there is always a chance of future reoccurrence.
I have not accepted the “waste” argument advanced by the Wife which would have been a consideration under s.75(2)(o). For completeness the costs of rectification seem to me to be attributable mostly to the parties’ trying to build a “superior home” on the cheap – as an owner builder and doing what they could themselves – rather than any wanton, reckless or negligent acts in a Kowaliw sense.
Considering all these factors, I regard an adjustment of 5% to the Wife as appropriate. This is the same as saying the Wife should have the first 10% of the non-superannuation pool – or approximately $76,000. Considering the Husband’s income (gross) per annum exceed $200,000 and on the modest pool which exists, I regard this adjustment as appropriate.
Just and Equitable
I regard a division of 80/20 in the Wife’s favour as appropriate and must now consider whether an order of that nature does justice and equity to the parties in a real sense.
Before doing so, I intend to order that the Husband pay from his share to the Wife the sum of $8,271.73, calculated as follows:-
50% of change of lock costs
$639.25
Payments due under Bell J Order
$8,271.73
I am unable to definitively decide what happened at the time when the Husband vacated the home (he says on 8 December, 2005 which the Wife disputes) with the security cards and keys. The Husband says he gave them to the Wife’s bank. I think it was appropriate for security reasons and considering the period between separation in August 2005 and vacation of the house, for the locks to be changed and the Husband should contribute equally.
The Wife at paragraph 82 of her Affidavit sets out various expenses which she says she has paid (or have been paid) and are payable under the said interim order of Bell J. Excluding the marketing costs of
P Real Estate and Mr F’s expenses, which have been allowed for in the reimbursement to Mr M, the balance amounts to $7,632.48.
I do not propose in these reasons to make a decision as to the costs of the proceedings or, in isolation, the costs of the interim hearing before Justice Bell. I will allow the parties an opportunity to consider these reasons, and the final order that I will make, and consider any further costs submissions to be advanced. Of course, the parties could rely on any submissions previously delivered.
The effect of the order would be as follows:-
Husband
- 20% of the next pool of approximately $760,000 would be received by the Husband – amounting to $152,000
- He would retain his superannuation entitlements, his bank accounts, the proceeds of the Rodeo motor vehicle and items in his possession
- He would be responsible for the BMW debt (the car being returned to him) and his credit card liabilities
Wife
- 80% of the net pool amounting to approximately $592,000
- She will return the BMW to the Husband but otherwise retain her superannuation entitlements, her bank accounts, jewellery, Telstra shares, furniture and other items (including the Bronze Whale) currently in her possession
- The Husband will reimburse her from his share of expenses the sum of $7,633.48.
I regard an order which achieves such a result as just and equitable. I will ask the solicitors for the parties to discuss the form of order and provide me within 7 days with a draft. I am happy to hear any submissions on the draft at 9:30 on Friday 25 January 2008.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
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