Castledown and Castledown

FAMILY COURT OF AUSTRALIA

CASTLEDOWN & CASTLEDOWN

[2008] FamCA 98

FAMILY LAW – PROPERTY - Settlement in relation to marriage

Family Law Act 1975 (Cth)

APPLICANT:

Mrs Castledown

RESPONDENT:

Mr Castledown

FILE NUMBER:

SYF

3682

2006

DATE DELIVERED:

26 February 2008

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

O'Ryan J

HEARING DATE:

23 February 2007, 23 May 2007, 24 May 2007 and 17 September 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Judge of Counsel

SOLICITOR FOR THE APPLICANT:

Demaine & Associates

COUNSEL FOR THE RESPONDENT:

Ms Snelling of Counsel

SOLICITOR FOR THE RESPONDENT:

Milne Berry Berger & Freedman

ORDERS

Pursuant to s 79 of the Family Law Act 1975 (Cth)

The Husband pay direct to the Wife by 4:00 pm on 8 April 2008 the sum of $257,483.
In the event that the Husband fails to pay to the Wife the amount in paragraph one hereof by the due date then the Husband forthwith thereafter do all acts and things and execute all documents and writings necessary to sell by public auction the former matrimonial home situate at and known as C in the State of New South Wales.
The following terms and conditions are to apply to the sale of the former matrimonial home by public auction pursuant to paragraph two hereof.
3.1.The Husband and Wife jointly appoint a real estate agent to conduct the sale of the former matrimonial home and if the parties do not agree on an agent by 4:00 pm on 20 April 2008 the agent will be appointed by the President for the time being of the Real Estate Institute of New South Wales or his/her nominee.
3.2.The solicitors for the Husband will be the solicitors in the conduct of the sale.
3.3.The Husband will vacate the former matrimonial home no later than seven days prior to the date fixed for completion of the sale.
3.4.The Husband will make the former matrimonial home available for inspection by prospective purchases at all reasonable times and on reasonable notice from the real estate agent appointed to sell the former matrimonial home.
3.5.The Husband will keep the former matrimonial home in a neat, clean and tidy condition and good state of repair and make a key available to the real estate agent appointed to sell the former matrimonial home.
3.6.The sale by auction is to take place at a reserve price of $550,000 or such other reserve price as the parties may agree in writing;
3.7.If at the first auction the former matrimonial home does not reach the reserve price and the parties are unable to agree on the sale of the former matrimonial home at a reduced price, the former matrimonial home is to be again offered for sale within 90 days at a reserve price to be agreed to by the Husband and the Wife or failing agreement to be determined by the agent.
3.8.In the event that the former matrimonial home does not sell at the second auction pursuant to paragraph 3.7 hereof, the Husband forthwith list the property for sale by public auction without a reserve price.
Upon settlement of the sale of former matrimonial home the proceeds of sale will be paid in the following manner and priority.
4.1.Payment of agent’s commission and auction expenses, if any, if due on the sale.
4.2.Payment of the legal costs and disbursements of the sale.
4.3.Reimbursement to either party for any expenses reasonably incurred as and from the date of these orders and which expense has at first been agreed upon in writing by the parties in preparing the home for sale.
4.4.Payment of 46.82 per cent to the Wife.
4.5.Payment of the amount required to discharge the mortgage secured on the title of the former matrimonial home and any other encumbrance affecting the home.
4.6.Payment of the balance to the Husband.
Pending completion of the sale of the former matrimonial home the Husband have the right to occupy the former matrimonial home to the exclusion of the Wife.
Pending completion of the sale of the former matrimonial home the Husband will make all payments of capital and interest including penalty interest in respect of any mortgage secured on the title of the former matrimonial home and indemnify the Wife and keep her indemnified in respect of those payments.
The Husband will pay as and when they fall due the following outgoings in respect to the former matrimonial home.
7.1.All municipal and water rates in respect of the home.
7.2.Any land tax assessed.
7.3.The premiums for insurance of the home and contents.
7.4.The telephone, gas and electricity accounts and all other normal domestic outgoings.
Pending compliance with this order the Husband not encumber by mortgage or charge or otherwise or transfer or assign his interest in the former matrimonial home without the prior written consent of the Wife.
Subject to the terms of this order in relation to the sale of the former matrimonial home each party be declared the sole legal and beneficial owner of all other items of property including superannuation interests in his/her possession, control or ownership as at the date of these orders.

Pursuant to s 117 of the Family Law Act

The Husband pay to the Wife by 4:00 pm on 8 April 2008 by way of costs the sum of $2,000

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3682 of 2006

Mrs CASTLEDOWN

Applicant

And

Mr CASTLEDOWN

Respondent

REASONS FOR JUDGMENT

Before me for hearing are applications for final property orders. The proceedings were commenced by application filed on 21 August 2006 on behalf of the Wife. The Respondent I shall refer to as the Husband.
The Wife seeks an order as set out in a further amended application for final orders filed on 17 November 2006. The Wife seeks that the former matrimonial home at C be sold and after payment of the costs of sale and an amount to discharge the mortgage on the title of the property the net proceeds be divided as to 65 per cent to the Wife and 35 per cent to the Husband. The Wife also seeks that all other assets be divided as to 65 per cent to the Wife and 35 per cent to the Husband.
The Husband seeks an order as set out in a response filed on 5 October 2006. He seeks that each party retain what assets they currently have and that he retain as part of his entitlement the property at C.
The Husband was born in July 1955 and the Wife was born in September 1964.
The Wife contended that the parties commenced cohabitation in March 1998. The Husband contended that the parties commenced cohabitation in October 1998.
The parties were married in October 1999 and separated in September 2005. The parties however remained residing under the same roof until 22 August 2006 when the Wife commenced to reside in rented accommodation at C. As seen, proceedings were commenced when an application was filed on behalf of the Wife on 21 August 2006.
There are two children of the relationship being twin sons born in June 2003.
For the purposes of the property settlement proceedings the parties agree as to the extent and value of their assets.
The Wife contends that I should assess the contribution based entitlements of each party expressed as a percentage of the net assets of the parties as to 60 per cent to the Wife and 40 per cent to the Husband. The Wife contends that there should then be a further adjustment in her favour of 5 per cent of the net assets to reflect consideration of the “other factors”. In the result, the Wife contends that I should make an order whereby she receive 65 per cent of the net assets and the Husband receive 35 per cent.
The Husband contends that I should assess the contribution based entitlements of each party expressed as a percentage of the net assets of the parties as to 65 per cent to the Husband and 35 per cent to the Wife. The Husband contends that there should then be a further adjustment in his favour of 5 per cent of the net assets to reflect consideration of the “other factors”. In the result the Husband contends that he should receive an entitlement of 70 per cent of the net assets of the parties and the Wife receive an entitlement of 30 per cent of the net assets of the parties.
There were parenting proceedings which were resolved by consent. It was agreed that the property proceedings be heard in accordance with Div 12A of Pt VII of the Family Law Act 1975 (Cth). Unfortunately, on one view, my attempts to try and resolve this matter in an expeditious and proportional way may have failed. The amount of written evidence I had before me, both in the form of affidavits and exhibits, was extensive.
I was informed that there have been apprehended violence order proceedings and also interim parenting proceedings. The parties have incurred very significant costs and my observation is that both parties, with the exception of the resolution of the parenting proceedings, were not prepared to make any concessions or comprises.
The Wife may have incurred costs in excess of $100,000 (Exhibit D). The Husband may have incurred costs in excess of $116,000 (Exhibit M).
The Wife also sought an order that the Husband pay her costs in relation to a hearing which was fixed for Wednesday 23 May 2007 which I vacated.

PROPERTY PROCEEDINGS-RELEVANT PRINCIPLES

The approach to the determination of an application pursuant to s 79 of the Family Law Act is well established by authority. Section 79(2) provides that I shall not make an order, under the section, unless I am satisfied, in all the circumstances, that it is just and equitable to make the order. I am required, in considering what order, if any, I should make, to take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s 79(4); the effect of any proposed order upon the earning capacity of the parties; the matters referred to in s 75(2), so far as they are relevant; any other order made under the Act affecting a party or a child, and any child support under the Child Support (Assessment) Act1989 (Cth).

BACKGROUND

In 1982 the Husband purchased a property at C for $63,000. To pay the costs he borrowed $40,000 from Westpac Banking Corporation. This property later became the matrimonial home of the parties.
In 1982 the Husband commenced to purchase a wine collection which he stored at his mother’s home.
Between 1983 and 1985 the Husband renovated the C property.
In 1988 the Husband tenanted the C property and the rent was applied to pay the mortgage payments.
In 1993 the Husband ceased residing with his mother and commenced to live in rented accommodation at R where he remained for approximately four years.
In April 1994 the Husband’s mother died leaving her estate to the Husband.
In 1994 the Husband worked for labour hire companies and as a taxi driver doing part time casual work.
On 16 July 1996 the Husband received $10,000 being compensation for a broken sternum he sustained in a motor vehicle accident.
On 29 September 1997 the Husband received an inheritance of $90,619.49 from the estate of his late mother.
In 1997 the Husband purchased 2,600 Telstra shares @ $2.20 per share.
On 17 December 1997 the Husband borrowed $40,000 from Westpac Bank to consolidate his car loan, home loan, personal loan and received $2,011.38.
The Wife contends that in March 1998 the parties commenced cohabitation.
On 29 September 1998 the Husband sent his wine collection to Miller’s Wine Storage facility.
The Husband contends that in October 1998 the parties commenced cohabitation.
At the commencement of cohabitation the Wife owned a property at S. The property was tenanted and the Wife contends that the rent always covered the mortgage payments and outgoings. The Wife contends that the mortgage debt was about $53,000.
After the parties commenced cohabitation they resided in the Wife’s rented flat. The Husband had tenants in his home at C and the Wife had tenants in her unit at S.
In January 1999 renovations were undertaken to the C property. A significant amount of the work was undertaken by the Wife’s brother in law, Mr Y.
Mr Y gave evidence on behalf of the Wife. He contends that in January 1999 he performed building works to the C property. He contends that he was in Sydney for four weeks and the amount which he charged was for 20 days for nine hours per day at the rate of $25 per hour. In total he charged $4,500 which the parties paid to him.
Mr Y contends that in April 2003 he did further work to the C property over a period of eight days and was paid $1,800 by the parties being for nine hours per day at the rate of $25 per hour. He contends that commercially he would have charged $50 per hour which would have resulted in a payment of $12,600 as opposed to a total of $6,300 plus a 15 per cent mark up on materials and labour for administration plus a 10 per cent profit margin. He did say that the majority of building materials were not purchased by him. He also gave evidence of his estimate, from a “commercial aspect”, of the value of the work which he undertook however, I do not propose to take this evidence into account. He is not a qualified valuer and there was no evidence from a quantity surveyor.
Mr Y swore a further affidavit and he contends that his current commercial rate is $60 per hour plus a 15 per cent mark up on materials and labour for administration plus a 10 per cent profit margin on all of these figures. He contends that he discounted his rate to $25 per hour because of his relationship with the Wife and he wanted to assist her financially.
On 27 May 1999 the Husband sustained a work related injury. His left index finger was injured and microsurgery was necessary. The Husband was off work but was paid workers compensation for two to three months.
In May 1999 the parties obtained a loan for $50,000 from the Westpac Bank. The funds were used to payout the Husband’s prior loan of $38,708.06 and the balance was used to pay for renovations.
On 15 June 1999 the Husband sold some of his wine collection for $1,326 and he contributed the proceeds to pay for the parties’ day to day expenses. The Husband may have also sold some wine for $1,385.50 and contributed the monies to pay for the parties’ day to day expenses.
The parties obtained market appraisal of the C property dated 6 October 1999 which said that the value of the property was between $320,000 and $330,000.
On 15 October 1999 the parties obtained a loan from the Westpac Bank secured by the C property with a limit of $236.000. The intention was to use the funds to purchase a jointly owned home. However, the parties did not proceed to acquire another home and the loan was used to payout the balance owed on the $50,000 borrowed in May 1999 from the Westpac Bank. The balance owing on the loan was $46,358.54. No more funds were drawn down on the account.
On 6 January 2000 the Wife refinanced the mortgage secured on her S unit with the Westpac Bank. She discharged a mortgage to the National Australia Bank in the sum of $46,954.24.
In 2001 the Husband received a payout for a workers compensation claim of approximately $45,000. This sum was contributed to family expenses.
On 21 November 2002 the Wife completed the sale of her S unit and realised $167,483.09 plus a deposit of $18,650 from the proceeds of sale. The Wife paid $40,021.90 to discharge the Westpac Bank mortgage secured on the unit and paid $126,155.17 into the mortgage account secured on the title of the C property. This payment discharged the $43,317.55 debt owed on the mortgage and left the account in credit.
In 2003 some further renovation work was done to the C property for a cost of about $1,800 plus materials.
In June 2003 the children were born.
The Wife contends that she remained at home for approximately five months and then resumed paid employment for two days per week. The Husband contends that both parties remained at home to care for the children immediately after the birth. The Husband contends that he obtained employment which allowed him to be home early in the evening to care for the boys before the Wife returned from work.
On 29 November 2003 the parties withdrew $79,155.77 from the mortgage account and deposited the funds into a Cash Management Account, in joint names, at the Westpac Bank. These funds were used to pay for family expenditure. The Wife provided particulars as to how this money was spent and it included $28,000 on an IVF programme and birth expenses.
An examination of the Wife’s income tax return and notice for assessment for the year ended 30 June 2003 reveals that she had a taxable income of $86,941 which included a capital gain of $231,153. She received an assessment to pay tax of $4,497. This debt for tax was a result of the inclusion in her tax return for the year ended 30 June 2003 of a capital gain from the sale of her unit at S.
The Wife contends that between March 2004 and August 2006 the parties received periodic financial assistance from her sister of a total of $20,091. It was said to include $8,491 for airfares.
The Wife contends that in approximately August 2005 she commenced paid employment for four days per week.
The Wife contends that the parties separated in September 2005 but remained living together in the C property.
Proceedings were commenced when on 21 August 2006 an application was filed on behalf of the Wife.
On 22 August 2006 the Wife ceased living in the C home and commenced to live at rented premises also in the suburb of C.
On 23 February 2007 I made the following final parenting orders:
Parenting
18.    The Husband and the Wife continue to have equal shared parental responsibility for the children of the marriage, […] and […] born […] June 2003.
19.    The children shall live with the Husband at the following times:
(a)On a two week cycle commencing today,
(i)from after day care or school on Friday until Tuesday morning, with the Husband to deliver the children to day care or school on Tuesday morning in the first week, and
(ii)from after preschool or school on Thursday until the commencement of school or preschool on Friday in the second week.
20.    The children shall live with the Wife at all other times except for those specified in Order 21 herein.
21.    Special occasions
21.1Easter
(a)The children shall be with the Husband from 5pm on the Thursday preceding Good Friday until 5pm on Easter Saturday in 2007, thereafter in alternate years.
(b)The children shall be with the Wife from 5pm on Easter Saturday until 5pm on Easter Tuesday in 2007, thereafter in alternate years.
Otherwise Easter holidays shall be shared equally and any time spent pursuant to this order shall be part of each parties half share of the term 1 school holidays if Easter falls in those holidays.
21.2Birthdays
(c)In the event that the children’s birthday or either parent’s birthday occurs when the children are otherwise with the other parent, the children will spend four hours as agreed or from 4pm until 8pm with the other parent.
21.3Mothers Day and Fathers Day
(d)If the children are not with the mother on mother’s day the children shall be with the mother for 6 hours from 9am until 3pm.
(e)If the children are not with the father on father’s day, the children shall be with the father for 6 hours from 9am until 3pm.
21.4School holidays
(f) The July (term 2) and September (Term 3) and Term 1 and Term 4 school holidays shall be shared equally by agreement, subject to Orders 21.1(a) and 21.5(h).
21.5Other Special family functions
(g)Each party shall give favourable consideration to any request by the other for the children to attend any special family function with them. The parties agree that they shall provide the other with compensatory time in these circumstances.
(h)Christmas
(i)The children shall be with the Husband from 5pm on Christmas Eve until 3pm Christmas Day, and these days shall form part of the Husband’s school holiday time with the children.
(ii)The children shall be with the Wife from 3pm Christmas Day and thereafter for a period of 7 – 10 further days and these days shall form part of the Wife’s school holiday time with the children.
22.    The Husband and the Wife shall attend upon the Family Consultant […] for the purpose of reviewing these arrangements within 6 months of these orders.
23.    In the event that the Husband is unable to take the children to school or preschool or collect them in accordance with these orders, he shall give the Wife the first option to do so.
24.    In the event that the Wife is unable to take the children to school or preschool or collect them in accordance with these orders, the father undertakes that he will do so if he is available.
25.    The Husband and the Wife are each released from the undertakings they gave to the Court on 21 November 2006.
26.    The children shall have reasonable telephone communication with their parents and the Husband and the Wife shall encourage the children to telephone the other parent.
27.    The Court notes that the Husband and the Wife shall endeavour to make reasonable attempts to resolve parenting issues and they shall set aside an agreed period of time to discuss matters pertaining to the children once a week.
28.    The Husband and the Wife shall attend at a Parenting and Separation course as nominated by the Family Consultant.
29.    Until such time as the children commence school the parties shall organise holiday time with the children as agreed between them.
30. That pursuant to s.65DA(2) and s.62B of the Family Law Act 1975, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

On 23 February 2007 I made the following orders:
Property
1.     Within 28 days of the date of these orders each party provide to the other all documents/records in his/her possession or control which establish his/her contentions as to the current extent and value of the assets and liabilities of the parties such documents to include tax returns, bank statements and credit card statements.
2.     The parties lodge with my Associate within 36 days a joint list of assets and liabilities which is to include the items about which there is agreement both as to identity and value and the items about which there is dispute whether as to identity and/or value.
3.     Within 28 days of the date of these orders the parties exchange costs memorandums in accordance with the Family Law Rules.
4.     In respect of the Husband’s wine collection a single expert be appointed for the purpose of undertaking a valuation of the collection such expert to be as agreed between the parties and subject to further order the costs of the single expert be paid as to one half by each party.
5.     It be NOTED that it is currently not intended to include in the joint statement of assets in order 2 hereof the furniture and furnishings currently in the possession of each party and any current bank balances.
6.     Within 28 days of the date of these orders each of party provide to the other party all documents/records in his/her possession or control which establish his/her contentions as to the assets and liabilities each party had at the commencement of the relationship together with any documents/records in his/her possession or control which establish how such assets were subsequently dealt with including by way of sale.
7.     The Wife file and serve within 28 days of the date of these orders an affidavit setting out the evidence in chief of her brother in law in relation to physical work he undertook with respect to renovations of the former matrimonial home and the costs of such work and further provide all documents/records in the brother in law’s possession or control relating to such work and cost.
8.     The Wife file and serve within 28 days of the date of these orders an affidavit setting out the evidence in chief of her sister relating to monies provided by the Wife’s sister to the parties which it is contended was a total of approximately $12,000 and further provide all documents/records in the Wife’s sister’s possession or control which establish her contentions in relation to such payments.
9.     Within 28 days of the date of these orders each of party provide to the other party a copy of his/her income tax returns relating to earnings that were received by each party during the relationship of the parties and if necessary obtain from the Australian Taxation Office a copy of any missing tax returns.
10.    The Husband file and serve within 28 days of the date of these orders an affidavit setting out his evidence in chief in relation to a Worker’s Compensation payment he contends he received during the relationship of the parties and further provide to the Wife all documents/records in his possession or control relating to the receipt of such Worker’s Compensation and its disbursement.
11.    Within 28 days of the date of these orders counsel for the Wife provide to counsel for the Husband a chronology of relevant marital and financial historical events.
12.    Within 14 days of receipt of the chronology referred to in the preceding order counsel for the Husband provide to counsel for the Wife the Husband’s response, if any, to the said chronology.
13.    Not less than 48 hours prior to the commencement of the further hearing the parties lodge with my Associate a copy of the settled joint chronology.
14.    Within 28 days of the date of these orders each party provide to the other particulars of all current superannuation interests together with a Form 6 value of such interests and all documents/records in his/her possession or control in relation to the identity and value of such superannuation interests.
15.    Within 28 days of the date of these orders the Wife file and serve an affidavit setting out her evidence in chief which she contends establishes the contributions she made as homemaker and parent.
16.    The Husband file and serve within 14 days of receipt of the affidavit of the Wife’s brother in law, the affidavit of the Wife’s sister and the Wife’s affidavit in relation to her contribution as homemaker and parent an affidavit setting out his evidence in chief in relation to the issues raised in the Wife’s affidavits.
17.    The property proceedings be listed for final one day hearing on 23 May 2007.
The applications for final orders were fixed for hearing before me commencing on 23 May 2007. The Husband however, was unable to attend and he contends that this was due to a psychological breakdown which required assessment and treatment. The Husband attended a general practitioner who referred him to the Hospital Psychiatric Unit (Exhibit J).
On 23 May 2007 I made the following orders:
1.    The hearing be vacated.
2.     It be NOTED that the Wife has made an oral application for her costs of and incidental to the vacation of the trial such costs being sought on an indemnity basis and that that application be adjourned to the hearing of the applications for final orders.
3.     The Wife be granted leave to issue subpoena to produce documents directed to AMP, State Superannuation and the Government Insurance Office seeking the production of documents in relation to any superannuation interests of the Husband including any insurance policies.
4.     It be NOTED that the Wife has prepared a schedule in which there is identified the superannuation interests she contends may be relevant including those in respect of which leave has been granted to issue subpoena.
5.     The matter be listed for mention before me at 2.15 pm on 24 May 2007.
6.     In addition to the application referred to above for costs of and incidental to the vacated hearing the Wife makes an application for costs of and incidental to the property settlement proceedings relying amongst other things on the conduct of the proceedings and discreetly the Husband’s compliance of the orders of 23 February 2007.
7.     A copy of the transcript of today’s proceedings be taken out.
8.     (In chambers) I grant to the parties and their legal representatives leave to inspect documents produced to the Court in response to subpoena by Westpac Bank.
On 24 May 2007 the Husband consulted Mr G, who is a psychologist. Mr G prepared a report dated 24 May 2007 which was attached to an affidavit sworn on 24 August 2007. Mr G saw the Husband for a psychological assessment. In his report Mr G said that in his opinion the Husband’s current psychological condition would fulfil a diagnostic criteria for generalised anxiety disorder with a concurrent major depressive episode. Mr G also provided answers to a number of questions and said:
·the Husband demonstrated problems with verbal expression in organisation and was not capable of managing his affairs effectively and giving proper instructions;
·the Husband was not able to cope with the stress of the Family Court case because of his predominant anxiety and depression and his inability to organise and manage himself effectively;
·the Husband was in need of psychological treatment because of the degree of emotional distress that he reported and his inability to function effectively day to day;
·the Husband could not cope with giving evidence and that in a stressful environment of a courtroom he would have difficulty in staying calm, comprehending questions and responding appropriately; and
·the Husband was not able to cope with the pressures of a legal trial.
Mr S, psychologist, first saw the Husband on 29 May 2007 for assessment and psychological counselling. Mr S prepared a report dated 21 August 2007 which was attached to an affidavit he swore on 24 August 2007. Mr S consulted with the Husband on 11 occasions between 29 May 2007 and 21 August 2007. Mr S was of the opinion that the Husband is suffering from an anxiety disorder which he suspects began following the marriage breakdown and that he has significant depression. Mr S had significant concerns about how the Husband would cope with the court case and how he would manage afterwards if the home at C was sold.
On 23 August 2007 I made the following orders:
1.    The solicitors for the wife have leave to issue a subpoena directed to the Westpac Banking Corporation, the Advance Bank and the ANZ Bank seeking banking records, account and investment statements, statements of assets and financial position and loan applications in relation to any accounts, loan applications or investments in the name of the husband, his mother […] or the estate of the late [mother] for the period from 1 August 1997 to 31 December 1998 and for the period from 1 January 2005 to date.
2.     The solicitors for the wife have leave to issue a Subpoena directed to the Advance Bank to produce all investment statements, controlled monies account statements, authorities or directions in relation to the payment of funds, directions in relation to the drawing of cheques and cheque requisitions in relation to Account number […] held with the Advance Bank at […] or any other account held in the name of [the husband’s mother] or the Estate of [the mother] for the period from 1 July 1997 to 31 December 1998.
3.     The solicitors for the wife have leave to issue a subpoena directed to Royal Prince Alfred Hospital, the husband's general practitioner/s and any other medical professional that they have reason to believe may have been consulted by the husband in the last twelve months for production of clinical notes and records.
4.     The leave granted to the solicitors for the wife on 23 May 2007 in relation to the issue of subpoenae to various superannuation funds, is extended to the issue of a subpoena to any superannuation fund, insurance company or legal entity in relation to which they have reason to believe that the husband holds or has held during the course of the marriage, superannuation or insurance interests, policies or entitlements.
5.     Leave be granted to the husband to file and serve a report by the husband's medical practitioner and his treating physiologist on or before 24 August 2007.
6.     Leave be granted to the wife to file and serve an Affidavit in response to the Affidavit that the husband's treating medical and physiological practitioners by 17 September 2007.
The hearing concluded on 17 September 2007 and by that time the parties had reached agreement in relation to the net assets. On behalf of the Wife it was submitted that her solicitors had gone to some effort after 23 August 2007 to ascertain the value of the Husband’s superannuation interests (Exhibit E).

FINANCIAL CIRCUMSTANCES

The first step is to determine the extent and value of the property, liabilities and financial resources of the parties at the time of the hearing.
The parties have the following assets including superannuation interests:
Assets
$
·C property (h)  550,000
·Honda CRV (w)  20,000
·Honda Accord (h)  3,000
·Shares (h)  11,310
·Wine (h)  8,500
·Westpac Bank investment policy (h)  3,460
·Superannuation (h)  78,360
·Superannuation (w)  61,592
Total736,222
Less
Liabilities
·Lease on CRV (w)  17,000
·Credit card (h)  1,800
·ANZ personal loan (h)  1,700
Total (20,500)
Balance$715,722
I repeat that there was an issue about the extent and value of the Husband’s superannuation interests however ultimately it was agreed that such interests have a value of $78,360 (Exhibit E). Neither party sought a splitting order.
Both parties have significant liabilities in relation to loans obtained to pay their respective legal costs. It is agreed that I should not include in the list of assets and liabilities any amounts with respect to legal costs paid or monies owing for funds obtained to pay legal costs because the consequence of such an exercise would have no material net outcome to the advantage or disadvantage of either party.
I have included an amount of $1,700 in respect of the ANZ Bank personal loan because I was informed that it is agreed that this was the amount of the debt at the date of separation. The debt is currently an amount of $73,000 however this is because the Husband borrowed funds in order to pay his legal costs.

CONTRIBUTIONS

At the commencement of cohabitation whether it was in March 1998 or October 1998 the Wife owned the property at S. The property was tenanted and the rent was sufficient to pay the mortgage payments and other outgoings. The Wife contends that at the commencement of cohabitation the mortgage debt was approximately $53,000. The property was sold in November 2002 and the Wife received $126,155.17 which I accept she contributed for the benefit of the parties.
At the commencement of cohabitation the Husband owned the property at C subject to a mortgage to the Westpac Bank for an amount of $40,000. The property had an agreed value as at March 1998 of $260,000. Thus, at the date of commencement of cohabitation, contended for by the Wife, the Husband had an equity in the property of $220,000. Renovations were undertaken to the property in 1998-1999 and also some work was done 2003. The property is now valued at $550,000 and it is the most significant asset of the parties.
The Wife contends that she is entitled to the benefit of the contribution made by her brother in law, Mr Y, of “reduced price renovation work” to the C property. On behalf of the Husband it was submitted that Mr Y undertook handyman tasks only and was paid in cash for his work. Further, there was no admissible evidence of either the commercial value of the work undertaken or any increase in the value of the home as a result of this work. It was submitted that there was no retrospective valuation which would provide me with evidence of an increase in value as a consequence of this work. The Wife’s brother in law was paid at an hourly rate. I am of the view that Mr Y did make a contribution that should be recognised in favour of the Wife. However, overall I do not consider this to be significant.
As well, at the commencement of cohabitation the Husband had Telstra shares and also had various building items and whitegoods which were at the C property and were utilised during the course of renovations subsequently carried out to the property. The Husband used the inheritance from his mother’s estate to purchase the items. The Husband also had part of his wine collection.
I accept that during the relationship both parties, from time to time, were in paid employment and contributed their earnings. The Wife’s earnings from paid employment were greater than those of the Husband. The Husband did receive some periodic compensation payments which included a lump sum of $45,000 he received as compensation for a work related injury. However, even allowing for these payments the Wife’s earnings were greater than those of the Husband and thus the Wife made a significant contribution of her earnings from paid employment (Exhibit F).
The Wife is entitled to the benefit of the financial contribution made by her sister who during the relationship of the Husband and Wife provided financial support to them.
I accept that both parties made a contribution of personal labour, time and skills to the improvement and maintenance of the properties owned by the parties.
The Wife contends that she made a significant contribution as the primary homemaker and parent. This is disputed by the Husband who contends that household care and parenting duties were jointly undertaken. In fact he contends that he was more responsible for cooking. I accept that neither party sought to mislead me and that perhaps they are each, to an extent, exaggerating what they recall occurred. However, overall I accept the Husband’s contention because there was a period of time after the birth of the children when he was not employed and also he had rostered days off work. However, the Wife contends, and I accept, that she has made a significant contribution to the welfare of the children in the capacity of parent since the parties separated. The Husband has provided some limited financial assistance.
The Wife contends that during the relationship her financial and non financial contributions were made more onerous and more significant by the Husband’s refusal to have mail sent to the former matrimonial home and his failing to pay household accounts as and when they fell due. I do not consider this to be very material.

Conclusion - contributions

The matters that favour the Wife are the proceeds of sale of the S unit, her greater earnings from paid employment, the work done by Mr Y, the financial assistance from the Wife’s sister and the Wife’s greater contribution since separation as homemaker and parent. The significant matter that favours the Husband is his contribution of the assets he had at the commencement of the relationship. The current assets include the C home at a value of $555,000 in which at the commencement of the relationship the Husband had equity of $220,000, the Telstra shares valued at $11,310 and the wine collection valued at $8,500.
In all the circumstances, I am of the view, that the contribution based entitlements of the parties, expressed as a percentage of the net assets, should be assessed as to 55 per cent or $393,647 to the Husband and 45 per cent or $322,075 to the Wife being a disparity of $71,572.

OTHER FACTORS

The Husband is aged 52 years and the Wife is aged 43 years. The Husband is ten years older than the Wife.
The Wife is in good health. The Husband does have some health issues.
As a result of my findings as to the contribution based entitlements of the parties the Husband has greater assets than the Wife.
The Wife swore a Financial Statement on 13 September 2007 and she disclosed an average weekly income of $1,549.90 which comprises a salary from casual employment of $960, family tax benefit of $201, rent assistance of $59, child support of $58.90, child support arrears of $11, telephone allowance from employment of $80 and motor vehicle allowance from employment of $180. The Husband swore an amended Financial Statement on 18 May 2007 and he gave his occupation as a labourer. He revealed a total weekly income of $687.54 gross being the salary from his employment. He revealed no other source of income. I am satisfied that the Wife has a greater income than the Husband.
I am also satisfied that the Wife has a greater earning capacity than the Husband. This is corroborated by the extent of earnings of the parties during the relationship and their current income and employment.
The Husband will have responsibility for the care of the children during each school term for five nights in each 14 day period and the Wife will have responsibility for the care and accommodation of the children for nine nights in each 14 day period. Once the children have commenced to attend school the parties will have an equal responsibility for the accommodation and support of the children during the school holidays. However, overall I accept, among other things, because of the Husband’s limited income, that the Wife will have a greater ongoing obligation to provide care and support for the children.
The Husband has had the benefit of occupation of the C home since August 2006 although he has maintained the property.

Conclusion – other factors

The matters that favour the Wife are the greater assets of the Husband and the greater responsibility of the Wife for the care and support of the children. The matters that favour the Husband are his age, his state of health, the Wife’s greater income and Wife’s greater earning capacity. The Husband will provide support for the children when they are in his care. In all the circumstances, I am of the view, that there should be no adjustment in favour of either party.

EFFECT OF ORDERS

The Wife will receive an entitlement of 45 per cent of the net assets being $322,075 which will comprise the following:-
Assets
$
·Honda CRV   20,000
·Superannuation   61,592
·Payment by Husband  257,483
Total  399,075
Less
Liabilities
·Lease on CRV   (17,000)
Balance$322,075
The Husband will receive an entitlement of 55 per cent of the net assets being $393,647 which will comprise the following:-

·C property  550,000
·Honda Accord   3,000
·Shares   11,310
·Wine   8,500
·Westpac Bank investment policy  3,460
·Superannuation   78,360
Total654,630
Less
Liabilities
·Credit card (h)  1,800
·ANZ personal loan (h)  1,700
·Payment to Wife  257,483
Total (260,983)
Balance$393,647

The Husband seeks the opportunity to retain the home at C and I can understand why given he owned the home at the commencement of the relationship. I will give him this opportunity although I think it unlikely he will be able to afford to pay out the Wife and the home will have to be sold. There will then be costs of sale.
Both parties may also have to pay further legal costs.

COSTS

On 27 February 2007 I made orders in relation to the property settlement proceedings and fixed the applications for final hearing on 23 May 2007. The Wife filed and served various documents in accordance with the orders I made on 23 February 2007.
The Wife contends that on the evening of Friday 18 May 2007 her solicitors were served with a large number of documents purporting to be in compliance with the orders I made on 27 February 2007 and a lengthy affidavit of the Husband which went beyond the scope of the orders. On behalf of the Wife it was submitted that this occurred only after the solicitor for the Wife communicated her concern on a number of occasions in relation to the failure of the Husband to serve various documents in accordance with the orders I had made. The Wife’s lawyers were concerned about the potential prejudice occasioned to the Wife because of the late service of the Husband’s documents and gave notice to the solicitors for the Husband that they would seek indemnity costs in respect of any adjournment or further hearing date occasioned by the late service of documents. The Wife’s lawyers were concerned that any perceived costs advantage to the Wife having consented to the matter being heard on a non adversarial basis would be lost by reason of the Husband’s late service of documents. In particular, the solicitors for the Wife were concerned about the failure by the Husband to comply with Order 14 made on 27 February 2007 insofar as he not supplied the “form 6” documents in relation to his entitlements.
As seen, I vacated the hearing fixed on 23 May 2007 and did so because of the non-attendance of the Husband. The Wife and those advising her only became aware on 22 May 2007 of the possibility of non attendance of the Husband on the following day.
The Wife is now seeking her costs on an indemnity basis of the vacated hearing. The Wife seeks an amount of $10,527. The Wife is also seeking an amount of $18,487.53 which she contends relates to costs thrown away by reason of the Husband’s non-compliance and non-disclosure.
In support of the Wife’s application an affidavit was sworn on 12 September 2007 by her solicitor Carolyn Demaine. Ms Demaine attached to her affidavit a copy of a costs disclosure agreement from the Wife’s counsel and also a copy of a costs disclosure agreement between the Wife and her solicitors. Ms Demaine attached to her affidavit a copy of memorandum of fees of the Wife’s counsel, Ms Judge for $7,260 being the costs of preparation and for the hearing on 23 May 2007 which it was contended were thrown away by reason of the Husband’s non attendance on that day. Ms Demaine also attached to her affidavit a copy of her costs memorandum for the hearing on 23 May 2007 being $3,267 inclusive of goods and services tax by reason of the Husband’s non attendance on that day. In summary, the Wife is seeking a payment of $10,527.
An examination of the memorandum of fees of Ms Judge reveals that she charged the following:
$
·18 May 2007 – preparation including joint chronology and advice – 3 hours        900
·20 May 2007 – preparation – reading Husband’s documents and case
outline – 6 hours  1,800
·22 May 2007 – preparation including case summary and draft submissions
re contributions – 4 hours  1,200
Total  $3,900
The balance of Ms Judge’s fees included $2,400 for a brief on hearing on 23 May 2007 and $300 for a telephone attendance and reading of a report on 24 May 2007. According to Ms Judge’s costs agreement she negotiated a fee of $6,000 for work associated with preparation and conduct of the matter including, amongst other things, research, drafting documents, memorandum of advice and advice by telephone. This amount was exclusive of her brief fee of $2,400 per day plus goods and services tax.
The amount claimed by the solicitors was $3,267 being for nine hours at $330 per hour.

RELEVANT PRINCIPLES-COSTS

Section 117(1) Family Law Act provides that subject to s 117(2) and s 117AA and s 118, each party to proceedings under the Act shall bear his or her own costs.
Section 117(2) provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to sub secs (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) provides that in considering what order (if any) should be made under s 117(2), the court shall have regard to the matters set out in paras (a) to (g).

CONCLUSION-COSTS

At this stage I am only dealing with the Wife’s application for her costs of the vacated hearing date. I accept that the Husband’s failure to appear was because of difficulties he experienced which have now been explained in the evidence of Mr G and Mr S. However, the Wife was blameless and she has suffered loss by reason of having to pay legal costs for that day.
The Wife has thus established a justifying circumstance namely the conduct of the Husband. However, the Husband should not have to pay all of the Wife’s claimed costs but only make a contribution towards such costs.
I have come to the conclusion that the Husband should, in the circumstances, make a contribution towards the costs of the Wife and I propose to order that he pay the sum of $2,000.

ORDERS

Pursuant to s 79 of the Family Law Act 1975 (Cth)

The Husband pay direct to the Wife by 4:00 pm on 8 April 2008 the sum of $257,483.
In the event that the Husband fails to pay to the Wife the amount in paragraph one hereof by the due date then the Husband forthwith thereafter do all acts and things and execute all documents and writings necessary to sell by public auction the former matrimonial home situate at and known as C in the State of New South Wales.
The following terms and conditions are to apply to the sale of the former matrimonial home by public auction pursuant to paragraph two hereof.
3.1.The Husband and Wife jointly appoint a real estate agent to conduct the sale of the former matrimonial home and if the parties do not agree on an agent by 4:00 pm on 20 April 2008 the agent will be appointed by the President for the time being of the Real Estate Institute of New South Wales or his/her nominee.
3.2.The solicitors for the Husband will be the solicitors in the conduct of the sale.
3.3.The Husband will vacate the former matrimonial home no later than seven days prior to the date fixed for completion of the sale.
3.4.The Husband will make the former matrimonial home available for inspection by prospective purchases at all reasonable times and on reasonable notice from the real estate agent appointed to sell the former matrimonial home.
3.5.The Husband will keep the former matrimonial home in a neat, clean and tidy condition and good state of repair and make a key available to the real estate agent appointed to sell the former matrimonial home.
3.6.The sale by auction is to take place at a reserve price of $550,000 or such other reserve price as the parties may agree in writing;
3.7.If at the first auction the former matrimonial home does not reach the reserve price and the parties are unable to agree on the sale of the former matrimonial home at a reduced price, the former matrimonial home is to be again offered for sale within 90 days at a reserve price to be agreed to by the Husband and the Wife or failing agreement to be determined by the agent.
3.8.In the event that the former matrimonial home does not sell at the second auction pursuant to paragraph 3.7 hereof, the Husband forthwith list the property for sale by public auction without a reserve price.
Upon settlement of the sale of former matrimonial home the proceeds of sale will be paid in the following manner and priority.
4.1.Payment of agent’s commission and auction expenses, if any, if due on the sale.
4.2.Payment of the legal costs and disbursements of the sale.
4.3.Reimbursement to either party for any expenses reasonably incurred as and from the date of these orders and which expense has at first been agreed upon in writing by the parties in preparing the home for sale.
4.4.Payment of 46.82 per cent to the Wife.
4.5.Payment of the amount required to discharge the mortgage secured on the title of the former matrimonial home and any other encumbrance affecting the home.
4.6.Payment of the balance to the Husband.
Pending completion of the sale of the former matrimonial home the Husband have the right to occupy the former matrimonial home to the exclusion of the Wife.
Pending completion of the sale of the former matrimonial home the Husband will make all payments of capital and interest including penalty interest in respect of any mortgage secured on the title of the former matrimonial home and indemnify the Wife and keep her indemnified in respect of those payments.
The Husband will pay as and when they fall due the following outgoings in respect to the former matrimonial home.
7.1.All municipal and water rates in respect of the home.
7.2.Any land tax assessed.
7.3.The premiums for insurance of the home and contents.
7.4.The telephone, gas and electricity accounts and all other normal domestic outgoings.
Pending compliance with this order the Husband not encumber by mortgage or charge or otherwise or transfer or assign his interest in the former matrimonial home without the prior written consent of the Wife.
Subject to the terms of this order in relation to the sale of the former matrimonial home each party be declared the sole legal and beneficial owner of all other items of property including superannuation interests in his/her possession, control or ownership as at the date of these orders.

Pursuant to s 117 of the Family Law Act

The Husband pay to the Wife by 4:00 pm on 8 April 2008 by way of costs the sum of $2,000

I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Ryan

Associate:

Date: 26 February 2008

[2008] FamCA 98

26 February 2008

Key Legal Topics

Areas of Law

Family Law

Property Law

Legal Concepts

Costs

Remedies

Injunction