Carter and Carter

Case •

[2014] FCCA 1958

•

29 August 2014

FEDERAL CIRCUIT COURT OF AUSTRALIA

CARTER & CARTER [2014] FCCA 1958
Catchwords:
FAMILY LAW – Property – application for property settlement – assessment of the asset pool – contributions of the parties – consideration of factors under Family Law Act 1975 (Cth), s.75(2) – whether any adjustment should be made – credit – findings as to credit – full and frank disclosure – where husband made full and frank disclosure of bank balances – waste – whether party engaged in wasteful conduct.

Legislation:

Evidence Act 1995 (Cth), s.136

Family Law Act 1975 (Cth), ss.75, 79, 80

Federal Circuit Court Rules 2001, r.22.01
Cases cited:
Black & Kellner (1992) 15 Fam LR 343; FLC 92-287
C & C [2005] FamCA 429; (2005) 33 Fam LR 414; FLC 93-220
Carter & Carter [2011] FMCAfam 750
Carter & Carter (No.2) [2011] FMCAfam 935
Farnell & Farnell (1996) 20 Fam LR 513; FLC 92-681
Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
Kowaliw & Kowaliw (1981) FLC 91-092
Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518
Townsend & Townsend (1995) 18 Fam LR 505; FLC 92-569
Applicant: MS CARTER
Respondent: MR CARTER
File Number: SYC 443 of 2011
Judgment of: Judge Scarlett
Hearing dates: 4-6 December 2012
Date of Last Submission: 11 February 2013
Delivered at: Sydney
Delivered on: 29 August 2014

REPRESENTATION

Counsel for the Applicant: Mr Johnston
Solicitors for the Applicant: Swaab Attorneys
Counsel for the Respondent: Mr Duane
Solicitors for the Respondent: Hamish Cumming Family Lawyers

ORDERS

  1. Within three (3) months of the date of these Orders and simultaneously:

    (a)The Applicant Wife is to do all things and sign all necessary documents in order to transfer to the Respondent Husband all of her right title and interest in the real property situate at and known as Property R in the State of New South Wales;

    (b)The Applicant and the Respondent are to do all acts and things and sign all necessary documents at the expense of the Respondent Husband in order to discharge the mortgage secured against the property at Property R aforesaid and substitute a fresh mortgage in the Husband’s name and provide to the Wife a copy of the discharge of mortgage in registrable form;

    (c)The Husband is to do all acts and things and sign all necessary documents in order to cause the Wife to be released from any personal guarantees she has given to any financial institutions up to 20 December 2010 except in relation to the property situate and known as Property C in the State of New South Wales;

    (d)The Wife is to do all acts and things and sign all necessary documents provided to her by the husband in order to relinquish her interest as a beneficiary of the Carter Family Trust; and

    (e)The Husband is to pay to the Wife the sum of $140,278.00.

  2. If the Husband fails to comply with Order 1 within the time specified by the Order then:

    (a)The Husband is to pay interest on the said sum of $140,278.00 or so much of that sum as remains unpaid until payment in full to the Wife at the rate prescribed by Rule 22.01;

    (b)The parties must immediately do all acts and things and sign all necessary documents in order effect a sale of the properties at Property B in the State of New South Wales and Property R in the State of New South Wales by way of public auction which is to take place within six (6) weeks of the date specified by Order 1 at the best price possible as nominated by the agent acting on the sale;

    (c)The Wife is to nominate the agent to act on the sale of the properties at Property B and Property R aforesaid;

    (d)The parties are to distribute the proceeds of sale of the properties at Property B and Property R aforesaid as follows and in the following priority:

    (i)Agents’ costs;

    (ii)Legal costs pertaining to the sale;

    (iii)Discharge of any mortgage;

    (iv)Adjustment of water rates and council rates;

    (v)The sum of $140,278.00 due under Order (1) above and any interest due and payable on that sum to the wife; and

    (vi)The balance to the husband

  3. If there is a shortfall between the net proceeds of sale of the properties at Property B and Property R aforesaid on the one hand and the sum of $140,278.00 referred to in Order (1) above  and interest on the said sum as prescribed by Order (2) above then:

    (a)Within one (1) week of the date of exchange of contracts in relation to the sale of Property B and Property R aforesaid whichever is the later then the Applicant and the Respondent are to do all acts and things in order to effect a sale of the property at Property G in the State of New South Wales by way of public auction which is to take place within five (5) weeks of the date of exchange of contracts in relation to the sale of the properties at Property B and Property R aforesaid whichever is the later at the best possible price as nominated by the agent acting on the sale of the property at Property G aforesaid;

    (b)The Applicant Wife is to nominate the agent to act on the sale and the solicitor to act on the conveyance of the property at Property G aforesaid;

    (c)The parties are to do all acts and things to distribute the proceeds of sale of the property at Property G aforesaid as follows and in the following priority:

    (i)Agents’ costs;

    (ii)Legal costs pertaining to the sale;

    (iii)Adjustment of rates and levies;

    (iv)The amount of the shortfall to the wife including interest thereon; and

    (v)The balance if any to the husband.

  4. Except as provided above the Respondent Husband is declared to be solely entitled to the exclusion of the Applicant Wife to the following pieces of real property situate at and known as:

    (a)Property B in the State of New South Wales;

    (b)Property R in the State of New South Wales; and

    (c)Property G in the State of New South Wales.

  5. The Respondent Husband is declared to be solely entitled to the Toyota (omitted) currently in his possession to the exclusion of the Applicant wife.

  6. The Applicant Wife and the Respondent Husband are otherwise declared to be solely entitled to all personal property possessed by them or registered in their sole name within the (omitted) Bank including but not limited to bank accounts, superannuation funds, shares in limited companies, furniture, furnishings, household appliances, jewellery and all other items of purely personal use and adornment.

  7. Except as provided above, each party must indemnify the other and keep the other indemnified against any liabilities in his or her name.

  8. If either party refuses or neglects to comply with any direction to execute any deed or instrument or sign any document necessary to implement these Orders then a Registrar or Deputy Registrar of the Court is appointed in accordance with section 106A of the Family Law Act 1975 to execute the deed or instrument or sign the document in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the deed, instrument or document.

  9. If either party seeks an order for costs that party must file and serve an Application in a Case and an affidavit setting out the amount of costs and disbursements claimed and the basis upon which those costs and disbursements are claimed within one (1) month from the date of this Order.

IT IS NOTED that publication of this judgment under the pseudonym Carter & Carter is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 443 of 2011

MS CARTER

Applicant

And

MR CARTER

Respondent

REASONS FOR JUDGMENT

Application

  1. This is an Application by the wife for alteration of the parties’ property interests under s.79 of the Family Law Act 1975 (Cth).

  2. There are factual disputes between the parties on matters critical to the role of the court in determining whether and how the asset pool should be constructed and divided. The findings of the Court largely turn on the credit of the parties.

  3. The Wife seeks orders[1] (in summary) providing that:

    [1] Taken from Short Minute of Orders sought by Wife prepared by Wife’s Counsel

    a)she should transfer to the Husband all of her interest in properties in Property R, New South Wales;

    b)the parties should discharge the mortgage secured against the Property R properties and substitute a fresh mortgage in the husband’s name;

    c)the Husband should cause the Wife to be released from any personal guarantees given by her except in relation to the property at Property C, New south Wales;

    d)the Wife should relinquish her interest as a beneficiary of The Carter Family Trust;

    e)the Husband should pay to her the sum of $750,000.00;

    f)if the Husband does not comply with the above orders within six weeks:

    i)the Husband is to pay interest on the principal sum;

    ii)the parties should sell the property at Property B and the hotel at Property I in order to pay to the Wife the sum of $750,000.00 plus interest out of the proceeds;

    iii)if there is a shortfall the parties should submit the property at Property G, New South Wales to auction so that the shortfall in the amount due can be paid to the wife; and

    iv)other ancillary orders, including costs.

  4. The Wife also seeks interim orders to cover the period until the Husband complies with the final orders, being:

    a)restraining the Husband from selling or further encumbering the properties at Property R (including the hotel), Property B and Property G;

    b)requiring the husband to ensure that the buildings are insured at the appropriate values; and

    c)requiring the Husband to meet all mortgage repayments in respect of the properties.

  5. The Husband seeks orders[2] providing that:

    [2] Taken from Submissions of Respondent Husband “Effect of Orders Sought by the Husband”

    a)He should receive the following properties:

    i)Property R;

    ii)Property G;

    iii)Property B;

    iv)Property R, including hotel and stock;

    v)(omitted) Pty Ltd;

    vi)Monies in trust for legal fees;

    vii)(omitted) shares;

    viii)Furniture and contents;

    ix)Toyota (omitted) motor vehicle;

    x)Savings in the sum of $37,086.00;

    xi)Partial property order     $50,000.00;

    xii)Superannuation $340,761.00;

    xiii)Payment from the wife $180,000.00.

    b)The Wife should receive:

    i)Property C;

    ii)Furniture and contents;

    iii)Jewellery;

    iv)Add backs totalling $285,307.00;

    v)Superannuation totalling $97,761.00.

  6. In short, the Husband would receive a total of cash and assets to the value of $2,000,967.00. The Wife would receive cash and assets to the value of $358,312.00.

Background

  1. The Wife was born on (omitted) 1970. She is now 44 years of age. The Husband was born on (omitted) 1958 and is now 56 years of age.

  2. The parties commenced living together in (omitted) 1998. They were married on (omitted) 2004. There are no children of the marriage.

  3. The parties agreed that they separated temporarily between 2001 and 2002 but disagreed on dates. The Husband asserts that the separation took place between May or June 2001 and November or December 2002. His identification of the commencement of the separation comes from his purchase of a property at Property B at an auction in May or June 2001. His recollection is that the parties were separated at the time of the purchase.

  4. For her part, the Wife claims that the separation lasted for approximately eight months between November 2001 and 1st July 2002.[3] However, in her original affidavit sworn in these proceedings on 25th January 2011, the Wife deposed:

    We separated for 5 months between January and June 2002 and separated on a final basis on 20 December 2010.[4]

    [3] Affidavit of Ms Carter 27.11.2012 at paragraphs [11]-[12]

    [4] Affidavit of Ms Carter 25.1.2011 at paragraph [3]

  5. It is submitted by the Husband that the Wife changed her affidavit evidence on this point after having become aware of a letter dated 1st November 2001 showing her address at Property A, an address into which she claimed to have moved when the parties separated in November 2001.[5]

    [5] Submissions of Respondent Husband at [30]

  6. The Wife dates the parties’ reconciliation to the Husband’s return from (country omitted) in July 2002, saying:

    On 1 July 2002 the husband and I reconciled and I moved back into the husband’s residence at Property B.[6]

    [6] Affidavit of Ms Carter 27.11.2012 at [12]

  7. Again, there is an issue between the parties as to this date, because the Husband said in cross-examination that he was still in (country omitted) in July 2002. It is his contention that cohabitation recommenced in November or December 2002 when the Husband was living with other people. Counsel for the Husband, Mr Duane, submitted that:

    a)it was the Husband’s unchallenged evidence in cross-examination that he was not living with the Wife in July 2002 as he was in (country omitted);

    b)the Wife conceded in her oral evidence that she recalled being picked up by the Husband in late October from her (omitted) address to go to a function in late October 2002; and

    c)this evidence is consistent with her living in (omitted) rather than with the Husband at the time.[7]

    [7] Submissions of Respondent Husband at [35]

  8. In the circumstances, I am satisfied that the evidence supports the finding that the parties were separated temporarily from approximately June 2001 until November 2002, as asserted by the Husband.

  9. There is no dispute between the parties that they separated on about 20th December 2010.

  10. At the time the parties commenced their relationship in 1998, it appears that:

    a)The Wife was employed as a (omitted), earning between $300.00 and $400.00 per week;

    b)She had no assets or savings of any great value;

    c)The Husband was (and still is) a (occupation omitted), then earning approximately $425,000.00 gross per year;

    d)He owned seven properties which had been purchased between 1984 and 1996 for a total of $1,420,000.00;

    e)These properties were sold between 2002 and 2007 for a total of $4,582,000.00.

  11. The Husband claims, but the Wife does not concede, that at the commencement of cohabitation he owned personal property worth about $32,000.00 and had a variety of other interests, including superannuation worth, he asserts, upwards of $300,000.00.

  12. From the commencement of the relationship in 1998 until the parties separated in December 2010 it is either agreed, or not contested, that:

    a)the Wife gained various qualifications, including a (qualifications omitted) in (course omitted) at Intermediate Level[8], a (course omitted)[9] and a qualification as a (omitted) in 2004;

    b)the Wife worked in various occupations, particularly:

    i)from 15th June 1998 to 25th March 2000 she was employed as a (omitted) for a (employer omitted);[10]

    ii)she qualified as a (omitted) and worked in that capacity between 2000 and 2002;

    iii)she worked as a (occupation omitted) for (employer omitted) at (omitted);

    iv)she worked on a full-time basis as a (occupation omitted) at (employer omitted) between 2003 and 2007;

    v)she worked as a (occupation omitted) for the Husband on a casual basis between July 2004 and December 2010; and

    vi)between 2009 and 2010 she worked casually as a (occupation omitted).

    [8] Affidavit of Ms Carter 27.11.2012 at [15]

    [9] Ibid at [21]

    [10] Ibid at [16]

  13. The Wife became a permanent resident of Australia in November or December 2000. She concedes that the Husband gave her some assistance in obtaining that status.

  14. Between 1998 and 2005 the Husband purchased a further seven properties for a combined purchase price of $4,910,100.00. He sold them between 2006 and 2008 for a combined sale price of $6,920,000.00.

  15. On 13th February 2001 the Wife purchased the property at Property C for $220,000.00.

  16. On 5th November 2001 the Husband purchased the property at Property B, for $1,200,000.00.

  17. On 17th April 2003, the Husband incorporated a company called (business omitted) Pty Ltd, now (business omitted) Pty Ltd, which became the trustee for the Carter Family Trust (now called the Carter Family Trust).

  18. On 5th May 2003 the Husband purchased the property at Property R, in the name of the (business omitted) Pty Ltd. The property is a hotel named the (omitted) Hotel. It was purchased for $2,500,000.00, of which the Husband’s brother contributed $185,000.00.

  19. The parties were married on (omitted) 2004. The Husband paid for the wedding and for the fares for the Wife’s parents to travel from (country omitted).[11]

    [11] Now the (country omitted)

  20. By July 2004 the Husband’s work as a (occupation omitted) had fallen off and, as a consequence, his income from that source was reduced. He worked as an (occupation omitted).

  21. In September 2004 the parties jointly purchased cabins at Property R for $644,000.00.

  22. On 27th May 2005 the Husband purchased the property at Property G for $1,200,000.00.

  23. On 30th June 2008 the parties moved to (omitted) to manage the (omitted) Hotel, which the Husband had purchased on (omitted) 2005. The property was sold in November of that year.

  24. On 18th September 2008, the Husband moved to the (omitted) Hotel. After the sale of the (omitted) Hotel, the wife moved to Property G.

  25. The Wife became the licensee of the (omitted) Hotel in approximately January 2009 and remained so until after the parties separated in December 2010.

  26. Between the date of separation in December 2010 and the date of the final hearing in December 2012 it is either agreed between the parties or not contested that:

    a)as at 30th June 2009 the Carter Family trust owed the Wife the sum of $50,175.00 in unpaid distributions;

    b)on 23rd December 2010 the Husband transferred $72,338.00 from the parties’ joint (omitted) Bank account number (omitted) to an account in his sole name (number (omitted)) and applied the amount of $51,881.04 from those funds as follows:

    i)$9,677.00 to a (omitted) Bank loan on 15th February 2011;

    ii)$8,397.94 to his (omitted) credit cards on 16th February 2011;

    iii)$21,000.00 in three separate withdrawals, two in February and one in March 2011;

    iv)$12,806.10 in two separate payments to the New South Wales Office of State Revenue; and

    c)Since January 2011 until the final hearing the Wife has been working on a full-time basis as a (occupation omitted).     

Procedural History

  1. The Wife commenced proceedings in this Court on 27th January 2011 when she filed an Application for property orders, along with a Financial Statement and an affidavit in support.

  2. On 30th March 2011 the parties were directed to attend a Conciliation Conference with a Registrar, which was scheduled to take place on 6th June 2011. The parties attended the Conference on 6th June but no agreement was reached.

  3. On 26th May 2011 the wife filed a Further Amended Application in a Case seeking the following interim orders:

    That within 7 days of the date of these orders that:

    (a)the Husband do all acts and things and sign all necessary documents in order to cause (business omitted) Pty Ltd as Trustee of the Carter Family Trust to pay to the Wife the sum of $50,175.00 by way of unpaid distribution in relation to the year ended 30 June 2009.

    (b)The Husband pay to the Wife by way of part property settlement the sum of $37,000.00.

  4. The Application was heard on 20th June 2011. On 1st August 2011 the Court made the following Orders:

    (1)    Within seven (7) days of these Orders:

    (a)The Respondent must do all acts and things and sign all necessary documents in order to cause (business omitted) Pty Ltd as Trustee of the Carter Family Trust to pay to the Applicant the sum of $50,175.00 by way of her unpaid distribution in relation to the year ended 30 June 2009.

    (b)The Respondent must pay to the Applicant by way of partial property settlement the sum of $37,000.00.[12]

    [12] Carter & Carter [2011] FMCAfam 750

  1. On 4th July 2011 the wife again filed an Application in a Case. In this case, the wife sought orders providing:

    That pending further order of the court the husband be restrained from selling, transferring, assigning or further encumbering:

    (a)     Property R;

    (b)     Property B;

    (c)     Property G;

    (d)     Property I.

  2. The Application was heard on 1st August 2011. On 21st September 2011 the Court made the following Orders:

    (1)UNTIL FURTHER ORDER the Respondent husband is restrained from selling, transferring, assigning or further encumbering the following items of real estate without the written consent of the Applicant or leave of the Court:

    (a)     Property R;

    (b)     Property B;

    (c)     Property G; or

    (d)Property I in the State of New South Wales.

    (2)    The parties’ costs are reserved.[13]

    [13] Carter & Carter (No.2) [2011] FMCAfam 935

  3. On 12th October 2011 the Application was set down for final hearing for three days, commencing on 4th December 2012.

  4. On the first day of the final hearing, 4th December 2012, the Court made the following Orders by Consent:

    (1)That the Orders of this Court made on 30 March 2011 and 21 September 2011 be varied, as far as necessary, so that the husband, Mr Carter, be allowed to draw down on his (omitted) Bank account, BSB no. (not published), account no. (not published), to an additional amount of $100,000 and that the husband immediately thereafter cause that sum to be paid as follows:

    1.1$50,000 by way of partial property settlement to the wife, payable to the wife’s solicitors, Swaab Attorneys’ trust account; and

    1.2$50,000 by way of partial property settlement to himself, payable to his solicitors, Hamish Cumming Family Lawyers’ trust account.

    (2)Other than as varied in Order 1, the Orders of 30 March 2011 and 21 September 2011 continue.

Evidence

  1. Mr Johnston of Counsel appeared for the Wife. He relied on the following material[14]:

    a)Wife’s Amended Initiating Application filed 26th May 2011;

    b)Wife’s Affidavit, sworn 27th November 2012, filed 29th November 2012;

    c)Wife’s Financial Statement, sworn 19th November 2012, filed 29th November 2012;

    d)Affidavit of Mr S, sworn 30th November 2012, filed 30th November 2012;

    e)Affidavit of Mr D, sworn 3rd December 2012, filed 4th December 2012.

    [14] Particularised in Case Summary on behalf of the Applicant Wife

  2. Mr S and Mr D were not required for cross-examination.

  3. The Wife gave oral evidence and was cross-examined by Mr Duane of Counsel, who appeared for the Husband. My notes made at the time about the Wife were that she was a confident and assertive witness who was clearly intelligent and spoke good English. She gave precise answers and was firm in her evidence.

  4. Mr Duane set out in the Case Outline of the Respondent Husband that the Husband intended to rely on the following documents:

    a)The Husband’s Response filed on 30th March 2011;

    b)The Husband’s Financial Statement filed on 30th March 2011;

    c)The Husband’s affidavit filed on 30th November 2012;

    d)The affidavit of Dr T filed on 30th November 2012;

    e)The Report of Ms S dated 20th November 2012;

    f)The Husband’s Financial Statement filed in Court on 4th December 2012.

  5. The Husband also sought to rely on an affidavit by one Mr R but leave was refused.

  6. Dr T did not give oral evidence. Ms S, psychologist, was not required for cross-examination.

  7. The Husband gave oral evidence and was cross-examined by Mr Johnston of Counsel, who appeared for the Wife. My notes at the time were that the Husband appeared to be hesitant and nervous and not a good witness.

Orders Sought

  1. The Wife seeks a division of the asset pool as to 45% to 50%. In the Short Minute of Orders sought by Wife handed up in Court she seeks the following final Orders:

    1. That within 6 weeks of the date of Orders (“the due date”) and simultaneously:

    (a)The wife do all acts and things and sign all necessary documents in order to transfer to the husband her right, title and interest in Property R (“Property R”).

    (b)The parties do all acts and things and sign all necessary documents at the husband’s expense in order to discharge the mortgage secured against Property R and substitute a fresh mortgage in the husband’s name and provide to the wife a copy of the discharge of mortgage in registrable form.

    (c)The husband do all acts and things and sign all necessary documents in order to cause the wife to be released from any personal guarantees she has given to any financial institutions up to the date of separation, except in relation to Property C.

    (d)The wife do all acts and things and sign all necessary documents provided to her by the husband in order to relinquish her interest as a beneficiary of the Carter Family Trust.

    (e)The husband pay to the wife the sum of $750,000 (“the principal sum”).

    2. If the husband does not comply with Order 1 by the due date that:

    (a)The husband pay interest on the principal sum as and from the due date until the payment in full to the wife as prescribed by the Federal Magistrates Court Rules[15] (“interest”).

    [15] Now the Federal Circuit Court Rules 2001

    (b)The parties immediately do all acts and things and sign all necessary documents in order to effect a sale of Property B (“Property B”) and Property I, Property I (“the hotel”) by way of public auction which is to take place within 6 weeks of the due date, at the best prices possible as nominated by the agent acting on the sale.

    (c)The wife nominate the agent to act on the sale of Property B and the hotel and the solicitor to act on the conveyance of Property B and the hotel.

    (d)The parties distribute the proceeds of sale of Property B and the hotel as follows and in the following priority:

    (i)     Agents’ costs;

    (ii)    Legal costs pertaining to the sale;

    (iii)   Discharge of mortgage;

    (iv)    Adjustment of water rates and council rates;

    (v)     The principal sum and interest to the wife.

    3.     (a)    If there is a shortfall between the net proceeds of sale of Property B and the hotel and an amount equalling the principal sum and interest (“the shortfall”), that within one week of the date of exchange of contracts in relation to the sale of Property B and the hotel that the parties do all acts and things in order to effect a sale of Property G (“Property G”) by way of public auction, which is to take place within 5 weeks of the date of exchange of contracts in relation to the sale of Property B and the hotel, at the best possible price as nominated by the agent acting on the sale of Property G.

    (b)That the wife nominate the agent to act on the sale of Property G and the solicitor to act on the conveyance of the property.

    (c)That the parties do all acts and things in order to distribute the proceeds of sale of Property G as follows and in the following priority:

    (i)     Agent’s costs;

    (ii)    Legal costs pertaining to the sale;

    (iii)   Adjustment of rates and levies;

    (iv)    The shortfall to the wife;

    (v)     The balance to the husband (if any).

    4. That except as provided above, each party retain all other assets in his/her name or in his/her current possession or control, to the exclusion of the other party.

    5. That except as provided above, each party retain all other liabilities in his/her name to the exclusion of the other party.

    6. That if either party refuses or neglects to sign any document necessary to implement these Orders, that a Registrar of the Court be empowered to sign the necessary document on the part of the defaulting party, pursuant to Section 106A of the Family Law Act and that the defaulting party pay the other party’s costs on a lawyer/client basis.

    7. That the husband pay the wife’s costs of and incidental to these proceedings.

    Interim Orders

    8.  That pending compliance by the husband with Order 1 hereof:

    (a)The husband be restrained from selling, transferring, assigning or further encumbering the following property without the prior written consent of the wife or Court Order:

    (i)     Property R;

    (ii)    Property B;

    (iii)   The hotel;

    (iv)    Property G.

    (b)The husband immediately do all acts and things and sign all necessary documents in order to insure the building of the following properties if they are uninsured, at the value attributed to the properties by the valuers appointed by the wife:

    (i)     Property B;

    (ii)    The hotel.

    (c)The husband meet all mortgage repayments as and when they fall due in relation to the following properties:

    (i)     Property B;

    (ii)    The hotel;

    (iii)   Property R;

    (iv)    Property G.

  2. The Husband seeks a division of the pool effectively in his favour as to 85%. Whilst he did not set out any specific order that he wished the Court to make, his Counsel set out in his submissions the effect of the orders that the Husband seeks, being that:

    a)He should receive the following:

    i)Property R;

    ii)Property G;

    iii)Property B;

    iv)Property I, including the hotel and stock;

    v)(business omitted) Pty Ltd $65,190.00;

    vi)Monies in trust for legal fees $20,000.00;

    vii)194 (omitted) shares $858.00;

    viii)Furniture and contents $10,000.00;

    ix)Toyota (omitted) motor car $10,000.00;

    x)Savings $37,086.00;

    xi)Partial property order implemented since hearing $50,000.00;

    xii)Superannuation $34,761.00;

    xiii)Payment from wife $180,000.00.

    b)The Wife should receive:

    i)Property C;

    ii)Furniture and contents;

    iii)Jewellery;

    iv)Add backs totalling $285,307.00; and

    v)Superannuation totalling $97,761.00.

  3. Thus, the Husband would receive cash and assets totalling $2,000,967.00 in value and the Wife would receive cash and assets to the value of $358,312.00.

The proper approach to determination of a property application

  1. The way a court approaches a property application under s.79 of the Family Law Act 1975 is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[16] First, the Court must consider the requirement in subsection 79(2) of the Act that prescribes:

    The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

    [16] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518

  2. The High Court held that the Court must first identify the existing legal and equitable interests of the parties in the property (at [37]). Although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that is to be exercised according to an unguided judicial discretion” (at [38]).

  3. The third principle, and perhaps the most important, is:

    … whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial contributions) set out in s.79(4).[17]

    [17] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518 at [40]

  4. Thus, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four-step process set out by the Full Court of the Family Court in Hickey & Hickey.[18]

    [18] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143

  5. In Hickey, the Full Court set out a process of four inter-related steps that must be taken by a court when determining a property application:

    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 of the parties …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…including…the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should…resolve what order is just and equitable in all the circumstances of the case.[19]

    [19] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 at [39] per Nicholson CJ, Ellis & O’Ryan JJ

  6. It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under s.79(2), because the Court is considering the matter after having undertaking the three previous steps referred to in the decision.

  7. The requirement in Stanford that the Court should commence by considering whether it is just and equitable to make an order is really a way for the Court to decide at the outset whether it would be just and equitable to make a property order at all. If the Court cannot be so satisfied, then the further steps in the process need not be considered any further, in my view.

Just and Equitable

  1. I am satisfied that it would be just and equitable to make property orders as between the parties. They have separated permanently and are now divorced. They need to divide the property to which they are jointly entitled in a way that is fair to both. There have already been interim property orders under s.80 of the Family Law Act.

The Property and Liabilities of the Parties

  1. In my view, it is appropriate to adopt a “two pool” approach in dealing with the matrimonial asset pool (C & C[20]).

    [20] [2005] FamCA 429; (2005 33 Fam LR 414; FLC 93-220

  2. For the most part, the non-superannuation pool is agreed between the parties, but there are some contentious items needing resolution.

  3. First, the parties are at odds about the value of the Husband’s savings. He gives a figure of $37,086.00, whilst the Wife claims that the figure should be $66,345.00. The discrepancy arises out of the Husband’s two (omitted) Bank accounts. There is no difficulty about the Husband’s other accounts, being his (omitted) Bank account and his (omitted) Bank account, where the parties agree that the total amounts to $5,972.00.

  4. With the (omitted) Bank accounts, however, the Husband states that the balance of these two accounts is $31,114.00, as set out at items 37 and 38 of his Financial Statement filed in Court on the first day of the hearing. In cross-examination, the Husband said that he obtained this combined figure by accessing the balances of those accounts online on 3rd December, the day before the Financial Statement was handed up in Court.

  5. Mr Johnston submitted on behalf of the Wife that the Husband had failed to produce current bank statements for any of his accounts and thus had failed to make a full and frank disclosure (see Black & Kellner[21]). The Full Court of the Family Court held in Black & Kellner that full and frank disclosure of material facts was a fundamental requirement to be met in financial matters.

    [21] (1992) 15 Fam LR 343; FLC 92-287

  6. It was submitted that the best evidence available consisted of earlier bank statements ass at September and October 2012. The Court should ignore the figures in the Husband’s Financial Statement with regard to his accounts with the (omitted) Bank.

  7. Against this, Mr Duane submitted for the Husband that he had given sworn evidence that he had obtained up to date balances for those accounts. It was not put to the Husband in cross-examination that he had wrongly accessed account balances or otherwise misled the Court in relation to the balances or that the balances were so different from the earlier balances that they were unreliable. The Husband’s evidence was unchallenged on that point. Certainly the Husband concedes that there is a difference of some $20,000.00 between the October statements and the December figures, but he also submits that the sum of $20,000.00 went out of one of the accounts and into his solicitors’ trust account for the payment of legal fees. This amount appears in item 38 of the Husband’s Financial Statement under the description “Investments – Hamish[22] Family Lawyers Trust Account”.

    [22] sic

  8. I am not satisfied that the Husband failed to make a full and frank disclosure of the two bank accounts. As Mr Duane submitted, on the day the Husband swore his Financial Statement he obtained up to date balances for the two accounts, being $28,588.00 for one account and $2,526.00 in the other, a total of $31,114.00.

  9. By adding the total of $31,114.00 to the total of the (omitted) Bank and (omitted) Bank accounts, an uncontroversial $5,972.00, I arrive at a total of $37,086.00 for the value of the Husband’s savings.

  10. The second item about which the parties disagree is the value of the Husband’s furniture. The Wife asserts that the value is $20,000.00, whilst the Husband claims that it is only $10,000.00. Neither party addressed this discrepancy in their written submissions.

  11. The Husband’s figure of $10,000.00 for his furniture is to be found at item 43 of his Financial Statement. I propose to accept the Husband’s contention that the value of his furniture is $10,000.00.

  12. The third matter relates to the Husband’s legal costs. There is authority for the proposition that both parties’ legal costs should be added back into the asset pool (Farnell & Farnell[23]). The agreed figure for the Husband’s costs is $23,920.00 and I propose to add that amount back into the pool.

    [23] (1996) 20 Fam LR 513; FLC 92-681

  13. The next contentious item concerns the Husband’s credit card debts, amounting to $30,142.00. He contends that this liability should be included in the pool, because the debts were incurred in the management of the jointly-owned hotel. The Wife disagrees, as the debts were incurred after the parties’ separation, and the Husband has not proved that the debts relate to the management of the hotel.

  14. I am not satisfied that the Husband’s credit card debts amounting to $30,142.00 should be included in the pool.

  15. The Husband claims that the sum of $3,969.00 should be included in his liabilities, being the amount due for rates on the property at Property B. The Wife disagrees. Mr Johnston submitted that the Husband had been in a position to let the Property B property, of which he is the sole owner, but has failed to do so.

  16. I accept the submission of Counsel for the Wife and find that the amount due for rates on Property B, should not be included as a liability in the asset pool.

  17. Similarly, the Husband asserts that the amount of $16,360.00 said to be owing for the cabins at Property R should be included in the liabilities in the pool because the property is owned jointly with the Wife. Against this, Mr Johnston submitted on behalf of the Wife that the Husband has had the benefit of the income from the cabins but has failed to pay the rates. In addition:

    He has also failed to produce a single document to prove the sum of $16,360 and that applies to Property B as well. This should not be a matrimonial debt but rather the husband’s debt.[24]

    [24] Submissions on behalf of the Applicant Wife page 10 at [21]

  18. In my view there is merit in that submission. The amount of $16,360.00 said to be owing for rates on the cabins at Property R should not be included in the liabilities in the asset pool.

  19. Again, the Husband contends that the amount of $2,931.00 said to be owing for rates on the property at Property G, should be included in his liabilities. This is also contested by the Wife. Mr Johnston submitted that “the husband allowed the property to remain vacant for most of the last two years and the sum should not be included as a matrimonial debt”.[25]

    [25] Ibid at [22]

  20. The Husband seeks to include the amount of $117,115.00 set out in an annexure to the Husband’s Financial Statement which was allowed as assertion under s.136 of the Evidence Act 1995 (Cth). He produced a folder of bills and accounts.

  21. However, Counsel for the Wife submitted that the Husband had failed to prove any single liability. He had not prepared the accounts for the hotel for the financial years ending 30th June 2011 or 30th June 2012. The Husband had come under notice from the Australian Taxation Office accordingly. He gave evidence that he had been given an extension and he would “do his best” to file his Income Tax Returns.

  1. Mr Johnston submitted that this promise by the Husband is not good enough and the Court would be asked to order the Husband to file his income tax returns. I am not disposed to make such an order in the circumstances of this case. Whilst it is true that the Court has on many occasions ordered a party to submit income tax returns, this has usually been in the context of a matter such as enforcement of a child support liability, where the Child Support Registrar requires a party to submit an income tax return on a regular basis in order to prepare updated assessments of child support. In this matter, however, whilst it is an obligation of every taxpayer to submit an income tax return when required, the Court does not need to make such an order in the context of litigation between two parties about the distribution of their matrimonial property.

  2. However, I accept Mr Johnston’s submission that the Court should not allow the asserted debt of $117,115.00 to form part of the financial pool.

  3. Each party received an interim distribution of $50,000.00 as a result of the Consent Orders made on 4th December 2012. It is uncontroversial that these payments will be included in the pool.

  4. The Wife seeks that the sum of $30,000.00 should be added to the pool, being the cash money that the husband withdrew from the parties’ joint account and kept for his own purposes on 23rd December 2010, shortly after the parties separated. There was evidence that he had originally withdrawn the amount of $72,338.16 on 23rd December 2010[26]. I propose to allow that amount.

    [26] Carter & Carter [2011] FMCAfam 750 at [46]

  5. There are also some claims by the parties about amounts that should be added back into the pool, in fairness to the party who did not benefit from the early distribution of the funds (see Townsend & Townsend[27]).

    [27] (1995) 18 Fam LR 505; FLC 92-569

  6. First, the Wife claims that an amount of $60,000.00 should be added back as a loss resulting from the Husband’s failure to apply funds acquired from a successful insurance claim to repair cabins no. 7 and no. 8 after they had been damaged by fire. She claims that this was wasteful conduct by the Husband which led to the parties not being able to obtain rental income from those cabins (see Kowaliw & Kowaliw[28]).

    [28] (1981) FLC 91-092

  7. Whilst the Husband conceded in cross-examination that the insurance monies were not entirely used to repair the cabins, his evidence was that he used the money to service the debt on the property and install closed circuit television cameras for security purposes. This was conceded by the Wife in her affidavit.

  8. Mr Duane submitted for the husband that:

    In view of the husband’s evidence concerning problems with assaults, break-ins and loss there is no basis for the Court to be in the position to find that spending money on CCTV footage[29] rather than repairs to a cabin results in a loss, let alone a loss of an established amount which is self-admitted to be gross rather than net.

    The period of alleged losses commenced well prior to separation and there is a notable absence of any evidence about any steps the wife took as a joint owner to have a different course of action in relation to repair of those two cabins.[30]

    [29] sic

    [30] Submissions of Respondent Husband 8 February 2013 page 16 at [106]-[107]

  9. In my view, the submission on behalf of the Husband should be accepted. I am not satisfied that the Wife has demonstrated either that the Husband had embarked on a course of conduct designed to reduce or minimise the effect or value or worth of the cabins or that he had acted recklessly, negligently or wantonly with the cabins, the overall effect of which was to reduce or minimise their value.

  10. In short, the Wife has failed to establish a claim of wasteful behaviour on the part of the Husband as is understood from the decision in Kowaliw.[31]

    [31] supra

  11. The Husband claims that the sum of $50,175.00 should be added back because of the payment of that sum to her from the Carter Family Trust as a result of the Orders of 1st August 2011. It will be recalled that the Court made an Order on 1st August 2011 after an interim hearing that:

    The Respondent must do all acts and things and sign all necessary documents in order to cause (business omitted) Pty Ltd as Trustee of the Carter Family Trust to pay to the Applicant the sum of $50,175.00 by way of her unpaid distribution in relation to the year ended 30 June 2009.[32]

    [32] Carter & Carter [2011] FMCAfam 750 Order (1)(a)

  12. The grounds for the Husband’s submission are that the payment was made as a lump sum to the Wife, it was funded by the Husband’s borrowings which are included under his liabilities in the asset pool, the payment is not already included in the pool on behalf of the wife, and there is no evidence to show how she used the funds.

  13. This submission is opposed by the Wife. Mr Johnston submitted that to make this amount an add-back would be wholly inappropriate in the circumstances, where the Order for payment of the money only came because the Husband had withheld the money, the Wife was required to pay income tax on the amount and she had worked in the parties’ hotel for no wages.

  14. The circumstances that led to the order for payment of the sum of $50,175.00 to the Wife were discussed in the decision of Carter & Carter[33] at [18] and [46]-[47].

    [33] supra

  15. I am not satisfied that the amount of $50,175.00 ordered to be paid to the Wife by the Order of 1st August 2011 should be added back into the pool.

Non Superannuation Asset Pool

  1. I find the non-superannuation assets to be:

    a)Property R  $650,000.00

    b)Property C  $427,500.00

    c)Property G  $800,000.00

    d)Property B  $1,825,000.00

    e)Property I (incl. hotel & stock)     $1,305,000.00

    f)(business omitted) Pty Ltd  $   65,190.00

    g)Husband’s savings  $   37,086.00

    h)Husband's (omitted) shares  $      858.00

    i)Husband’s furniture  $   10,000.00

    j)Wife’s furniture and contents  $   1,000.00

    k)Wife’s jewellery  $   1,000.00

    l)Toyota (omitted) motor car  $   15,000.00

Add-backs

m)Wife’s legal costs  $185,132.00

n)Husband’s legal costs  $   23,920.00

o)Interim property Order (1)(b) 1.8. 2011 to wife       $  37,000.00

p)Further interim Order 4.12.2012 to wife                   $   50,000.00

q)Further interim Order 4.12.2012 to husband            $   50,000.00

Total   $5,483,686.00

Liabilities

  1. I find the parties’ liabilities to be:

    a)Mortgage Property C  $152,000.00

    b)Mortgage Property B  $1,732,841.00

    c)Mortgage Property G & Property R               $1,289,540.00

d)Line of Credit from (omitted) Bank  $122,256.00

Total liabilities  $3,296,637.00

  1. By deducting the total liabilities of $3,296,637.00 from the total of the non-superannuation asset pool, being $5,483,686.00, I arrive at a net total of $2,187,049.00.

  2. I find the net total of the non-superannuation asset pool to be $2,187,049.00.

Superannuation

  1. I find the parties’ superannuation to be:

    a)Wife's (omitted) superannuation  $   56,231.00

    b)Wife's (omitted) superannuation  $   41,530.00

c)Husband's (omitted) superannuation               $340,761.00

Total Superannuation  $438,522.00

  1. By adding the total of the parties’ superannuation entitlements, namely $438,522.00, to the net total of the non-superannuation asset pool, being $2,187,049.00, I arrive at a total of $2,625,571.00.

  2. Accordingly, I find the total net asset pool to be $2,625,571.00.

The Parties’ Contributions

  1. There is no issue between the parties that the Wife made no initial financial contributions. She had no assets or savings of any value and was earning a modest income as a (occupation omitted).

  2. By contrast, the Husband was earning a considerable income as a (occupation omitted), approximately $425,000.00 per annum, owned seven properties and had other assets. Certainly, the Husband made a far greater initial contribution than did the Wife. However, the parties do not agree about the monetary value of the Husband’s initial contribution, as they disagree about the value of the properties that the husband owned at the time.

  3. Mr Johnston submitted on behalf of the Wife that the Husband’s estimates of value in Annexure “A1” to his affidavit of 30th November 2012 are evidence of the value as at the date of commencement of cohabitation in January 1998. The only evidence before the Court is the purchase prices. It was submitted that the sale prices of the properties in the years 2002 and 2003 cannot be indicative of the value of the assets as at January 1998.

  4. The difficulty with that submission, however, is that the properties were purchased at various times between 1984 and 1996, and it would not appear that the purchase prices of the properties would be any more indicative of their value in 1998 than their sale prices in 2002 and 2003.

  5. The Husband’s estimates of the values of the real estate at Annexure “A1”are calculated as at 25th June 1999 and appear to offer the best guide to the values of the real estate at the commencement of cohabitation. The estimated values are:

    a)Property E  $525,000.00

    b)Property O  $550,000.00

    c)Property W  $500,000.00

    d)Property L   $500,000.00

    e)Property M   $150,000.00

    f)Property S   $800,000.00

g)Property P  $100,000.00

Total  $3,250,000.00

  1. As for contributions during the marriage, the wife contends that she made contributions from her income in full-time employment. She worked in various positions and occupations, being a (occupation omitted), a (occupation omitted) and a (occupation omitted).

  2. It is the Husband’s case that he made a significant ongoing financial contribution through his fees as a (occupation omitted). However, his work as a (occupation omitted) fell away and he decided to embark on a career as an (omitted), which must be said to have been less than successful.

  3. It is the Wife’s case that she made significant non-financial contributions to the relationship, not only in her role as homemaker, but as a professional support person, bookkeeper and assistant in the Husband’s employment and business ventures, including management of properties.  She claims that she provided considerable emotional support to the Husband, not only in the running of his practice as a (occupation omitted), but in the litigation in which he was involved with his brother and in his role as a (occupation omitted).

  4. Mr Johnston, for the Wife, was critical of the Husband’s credibility:

    In addition, the husband had about $95,000.00 in accumulated superannuation entitlements. Your Honour would find that the husband had no savings. When it was suggested to him that no interest was declared in his 1997/1998 Income Tax Return, he answered that he would not necessarily have declared any interest to the Australian Taxation Office. Your Honour would find that to be a significant matter going to the husband’s credibility.[34]

    [34] Submissions on behalf of the Applicant wife page 12 at [27]

  5. Mr Johnston was also in his submission critical in his submission about the business decisions made by the husband in respect of the hotels and generally:

    28.Building up to 2007, the husband insisted on purchasing hotels at Property R and (omitted) which he conceded were unwise decisions. He continued to buy further property and found himself owing the (omitted) Bank the sum of $12 million by the year 2007 which he could no longer adequately service. Instead of cooperating with the bank and, in particular, Mr J who advised him to sell the hotels in September 2007, he insisted on arguing with the bank, telling it that it behaved in an unacceptable and unconscionable manner towards him as both a customer and shareholder. He did not listen to Mr J and it is submitted that the husband behaved in a reckless fashion. The wife wanted him to sell the hotels, he wanted to sell Sydney property and that is what he did. He missed the hotel market.

    …

  6. It was submitted that the Husband had received an offer on the Property G property of $2,000.000.00 and an offer on the Property B, Property B, property of $2,300,000.00. He did not accept those offers and the properties were valued at only $800,000.00 and $1,825,000.00 at the date of the hearing:

    Had the husband sold those properties at that time, he would not have found himself in the financial dilemma that he finds himself in today.[35]

    [35] Submissions on behalf of Applicant wife page 13 at [29]

  7. It was submitted that the Husband’s behaviour was “financially reckless” when he increased his indebtedness to $12,000,000.00 in 2007 in circumstances where he had lost his (occupation omitted) income in 2004. Further:

    30.Although the husband contributed seven properties of unknown value at the date of commencement of cohabitation, his contribution has been offset…by virtue of his reckless financial behaviour thereafter including making bad decisions relating to the hotels and by virtue of his failure to rent two cabins, the Property G penthouse and Property B whilst he was living at the hotel.[36]

    [36] Ibid at [30]

  8. Mr Johnston submitted that the Wife had made very significant contributions, both financially and non-financially to the acquisition, conservation and improvement of the parties’ property, and that the contribution based entitlements of the parties ought to be assessed at 35% to the Wife and 65% to the Husband.

  9. By comparison, Mr Duane for the Husband submitted that both parties made non-financial contributions, “with the Husband significantly involved in personally effecting, organising and paying for significant renovations and improvements of various parcels of real estate as well as managing the tenancy of the same.[37]  

    [37] Submissions of Respondent Husband page 22 at [165]

  10. Further, it is submitted that:

    169.On any objective analysis it is clear that both of the parties worked hard throughout the relationship both in paid work and in non-financial terms.

    170.Although the wife alleges that the Husband was wasteful, any objective analysis would result in the opposite finding, that is to say, far from wasteful he was frugal and energetic.[38]

    [38] Ibid page 23 at [169]-[17]

  11. The submission is that the Husband had worked extremely hard during the relationship and did his best to acquire, improve, maintain and manage the assets. The Wife’s claims of waste, recklessness or loss have no substance.

  12. In summary, Mr Duane submitted for the Husband that:

    a)The parties cohabited for a little over 10 years[39];

    b)There are no children of the marriage;

    c)The Husband made an overwhelming initial contribution of real and personal property which was income earning in nature;

    d)Real estate owned and purchased by the Husband almost without exception resulted in substantial capital appreciation albeit in the context of interest and other expenses;

    e)The Wife has not made out any of her waste/loss arguments;

    f)The Husband has made a greater contribution than the Wife since separation by virtue of his management of the hotels under very difficult circumstances;

    g)The Wife’s claim for a contribution finding of 35% is well outside of the range; and

    h)In view of particularly the Husband’s initial financial contribution and his other contributions financially and otherwise including post separation a finding on contributions of 85% in favour of the Husband is submitted.[40]

    [39] This appears to be an under-estimation

    [40] Submissions of Respondent Husband page 57 at [379]-[385]

  13. It is clear that the Husband’s initial contribution was significantly greater than that of the Wife. Each party worked hard during the marriage and made significant non-financial contributions. The Husband’s income was always greater than that of the Wife, although his income as an (business omitted) has been significantly less than he was earning at (employer omitted). Whilst he was earning a gross figure of $425,000.00 as a (occupation omitted) it is apparent that he has been earning significantly less than that since then. At the time of the hearing he was earning a gross figure of approximately $170,000.00 per annum.

  14. Whilst his counsel has described the Husband as having been frugal in his dealings, it is apparent that from 2007 onwards the Husband has been in significant financial difficulties. This hardly supports his claim of having been a frugal and efficient financial manager. The impressions that come from the evidence are that the Husband’s business practices were impulsive and chaotic.

  15. Nevertheless, the Husband’s financial contributions both at the outset and throughout the parties’ relationship have always been greater than those of the Wife. Whilst the Wife’s claim of a contribution finding of 35% appears to be overly optimistic, so too, in my view, does the Husband’s claim of a contribution of 85% in his favour.

  16. The Wife’s non-financial contribution to the marriage should not be under-estimated. Having heard his evidence and having observed the Husband acting for himself in the interim proceedings prior to the final hearing, in which he very sensibly obtained legal representation, I formed the view that the Husband would have been a difficult, argumentative and impulsive person with whom to live. The very circumstances of his termination of the parties’ relationship are an illustration of the Husband’s behaviour.

  17. I assess the parties’ contributions at 80% to the Husband and 20% to the Wife.

The effect of any proposed order upon the earning capacity of either party

  1. Subsection 79(4) requires, at paragraph (d), that the Court consider the effect of any proposed order upon the earning capacity of either party to the marriage. In my view, the proposed orders will not have any effect upon the parties’ earning capacity.

Relevant matters referred to in subsection 75(2)

  1. The Wife was born on (omitted) 1970. She is 44 years of age and good health. At the date of the hearing she was working as a (occupation omitted) earning a gross salary of $75,746.00 per annum. She intends to continue working in that occupation.

  2. The Husband was born on (omitted) 1958 and is now 56 years of age. He has been suffering from depression. At the date of the hearing he was working as an (omitted) by occupation earning approximately $170,000.00 gross per annum. He also derives income from rent, but he said that this goes directly into off-setting various mortgages. In cross-examination, the Husband conceded that he could return to (occupation omitted).

  3. During the parties’ relationship, the Wife obtained qualifications in (omitted), (omitted) (although she had already qualified in (omitted) in her home country), (omitted) and (omitted). This Husband contends that she was able to do so because of his ongoing financial support.

  4. The parties’ relationship lasted for over eleven years. I find that the parties cohabited from January 1998 to May 2001, and from November 2002 until December 2010, a total of 11 years and 5 months. They enjoyed a comfortable lifestyle during that time.

  5. There are no children of the marriage. Neither party is cohabiting with anyone else.

  6. It is submitted for the Wife that there should be an adjustment in her favour of some 10% to 15% for the following reasons:

    a)The Husband has “failed miserably to make a full and frank financial disclosure”[41] and an adjustment should be made in the Wife’s favour on income alone;

    b)There is a factor under s.75(2)(o) in respect of the Husband’s non-disclosure and waste; and

    c)Under s.75(2)(n) in respect of the disparity in the contribution based entitlements and the significantly greater amount of property that the Husband will have over the Wife.

    [41] Submissions on behalf of the Applicant Wife page 14 at [34]

  7. Against this, Counsel for the Husband has submitted that the s.75(2) factors, depending on the contribution made, warrant little or no adjustment. He submits that the Wife is considerably younger than the Husband, enjoys good health and has a stable and substantial income as a (occupation omitted).

  1. However:

    The husband is older, in poor health and has real question marks over his earning capacity which must be viewed in the context of his interest and expense commitments.[42]

    [42] Submissions of Respondent Husband page 58 at [388]

  2. The Wife’s income and asset position have improved considerably during the relationship.

  3. Overall, it is submitted on behalf of the Husband that a division of 85% to 15% or 80% to 20% in favour of the Husband would be just and equitable.

  4. In my view, the s.75(2) factors slightly favour the Wife. There is a disparity between the parties’ incomes in favour of the Husband and he will receive a substantially greater amount of property than she will.

  5. Against this, the Husband’s depression is a factor and there is some strength to his counsel’s submission that there are some question marks over his earning capacity in the future. My own observations of the Husband do not suggest that if he were to return to (occupation omitted) he could expect to earn the same substantial income that he previously earned.

  6. In my view, there should be a 10% adjustment in favour of the Wife.

  7. This would lead to a division of property in the ratio of 70% to the Husband and 30% to the Wife.

Whether the proposed orders are just and equitable

  1. Again, the Court must consider whether the proposed orders are just and equitable. The Wife will receive 30% of the net asset pool and the Husband will receive 70%. The Wife will receive substantially less than the Husband, even allowing for a 10% s.75(2) adjustment in her favour. However, in all the circumstances, I am satisfied that the proposed orders are just and equitable.

Orders to be made

  1. The net asset pool amounts to $2,625,571.00. 30% of that figure is $787,671.00 (rounded down to the nearest dollar).

  2. The Wife would receive the following:

    a)Property C  $427,500.00

    b)Furniture and contents  $   1,000.00

    c)Jewellery  $   1,000.00

    d)Superannuation  $   97,761.00

    e)Add-back (legal costs)  $185,132.00

    f)Interim property order 1.8.2011  $   37,000.00

g)Further interim order 4.12.2012  $   50,000.00

Total   $799,393.00

Less amount owing on mortgage over Property C        $152,000.00

Net total  $647,393.00

  1. Thus, to receive cash and assets worth $787,671.00, the Wife would need to receive a cash payment in the sum of $140,278.00. The Wife will have to relinquish her interest in the Carter Family Trust. The parties will need to discharge the mortgage secured over the Property R property and substitute a fresh mortgage in the Husband’s sole name. The Wife will need to be released from her personal guarantees over any property except for Property C.

  2. The Wife seeks an order that the Husband should have six weeks to comply with the orders. I am of the view that a period of three months would be a more reasonable time to allow the Husband to make those arrangements.

  3. I propose to make the interim orders sought by the Wife until the final orders are complied with, being:

    a)an order restraining the Husband from transferring, selling of further encumbering the properties at Property R, Property B and Property G;

    b)requiring the Husband to keep the buildings insured; and

    c)requiring the Husband to continue to meet the mortgage repayments.

  4. The Husband will receive:

    a)The properties at Property R, Property G and Property B;

    b)The company (business omitted) Pty Ltd;

    c)The monies held in trust by his solicitors;

    d)The (omitted) shares;

    e)His savings;

    f)His furniture; and

    g)The Toyota (omitted).

Costs

  1. Each party seeks an order for costs. In my view, if either party wishes to obtain a costs order, he or she should file and serve an Application in a Case and an affidavit setting out the amount of costs and disbursements claimed and how the costs and disbursements sought are calculated. I will allow one month for that to be done.

I certify that the preceding one hundred and forty-six (146) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate:

Date:  29 August 2014


Key Legal Topics

Areas of Law

  • Family Law

  • Property Law

  • Equity & Trusts

Legal Concepts

  • Remedies

  • Costs

  • Injunction

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Cases Citing This Decision

0

Cases Cited

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Statutory Material Cited

4

CARTER & CARTER [2011] FMCAfam 750
CARTER & CARTER (No.2) [2011] FMCAfam 935
Stanford v Stanford [2012] HCA 52