Childs and Childs
[2009] FamCA 434
•22 May 2009
FAMILY COURT OF AUSTRALIA
| CHILDS & CHILDS | [2009] FamCA 434 |
| FAMILY LAW – PROPERTY SETTLEMENT – CONTRIBUTIONS – Husband’s greater initial contribution discussed in context of impact of parties’ many, substantial and varied contributions in subsequent years – Pierce v Pierce (1999) FLC 92‑844; Kardos Sarbutt [2006] NSWCA 11 cited – No special contributions on behalf of the husband found – Mallett v Mallett (1984) 156 CLR 605 cited – Overall husband found to have made greater contributions both to date of separation by virtue of property gifted to husband and post separation by virtue of wife’s income and accommodation FAMILY LAW – PROPERTY – SECTION 75(2) – Adjustment in husband’s favour in light of wife’s superannuation and disparity in earning capabilities made | |
| Family Law Act 1975 (Cth) Part VIII Coghlan v Coghlan (2005) FLC 93-220 |
| APPLICANT: | Ms Childs |
| RESPONDENT: | Mr Childs |
| FILE NUMBER: | PAF | 1555 | of | 2006 |
| DATE DELIVERED: | 22 May 2009 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | COLEMAN J |
| HEARING DATE: | 23, 24 & 25 February 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr P.G. Maiden S.C. |
| SOLICITOR FOR THE APPLICANT: | Mark Brown & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr S.M. Stewart |
| SOLICITOR FOR THE RESPONDENT: | Matthews Folbigg |
Orders
That within two months of the date of these orders the wife transfer to the husband the whole of her right, title and interest in the property known as and situate at D in the State of New South Wales being the whole of the land contained in Folio Identifier … (“[D property]”) and vacate the said property.
That, as and from the date of the transfer referred to in Order 1 hereof, the husband indemnify the wife and forever keep her indemnified with respect to all liabilities and outgoings with respect to D property.
That, within two months of the date of these orders, the wife pay to the husband the sum of $56 851 and cause the mortgage to Westpac Bank with respect to the property known as and situate at T in the State of New South Wales being the whole of the land contained in Folio Identifier … (“[T property]”) in the sum of approximately $336 370 to be discharged and removed from the title to D property.
In the event of the wife failing to pay to the husband the sum of $56 851 in accordance with these orders the wife shall cause T property to be sold by private treaty at and for a price agreed in writing between the parties or failing agreement determined by the nominee of the Australian Institute of Valuers to be the market value of the property and to cause the proceeds of sale after payment out of agent’s commission, selling expenses and the Westpac Mortgage to be divided between the parties as tenants in common in shares of 77.2 percent to the husband and 22.8 to the wife.
That, within two months of the date of these orders, the husband transfer to the wife the whole of his right, title and interest in the property known as and situate at L in the State of New South Wales being the whole of the land contained in Folio Identifier … (“[L property]”) and vacate the said property.
That, upon the transfer to her of the husband’s right, title and interest in L property the wife indemnify the husband and forever keep him indemnified with respect to all liabilities and outgoings with respect to the said property.
That the wife be declared to have the sole right, title and interest in the following assets: -
(i)Her AMP, Navigator and Colonial super funds.
(ii)Her 2005 Toyota Celica Registration Number …
(iii)Her 1996 Toyota Celica Registration Number …
(iv)Her Telstra shares.
That the husband forthwith do all things and sign all documents necessary to cause the chattels referred to in Order 7 hereof to be transferred to the wife.
That the husband be declared to have the sole right, title and interest in the following assets: -
(i)His 1995 Holden Rodeo utility.
(ii)His E-Trade, Telstra and IMB shares, or the proceeds of sale.
(iii)His AXA life insurance policy or the proceeds of sale.
(iv)The parties’ jointly owned Perpetual shares, or the proceeds of sale.
(v)His Zurich superannuation policy or the proceeds of sale.
(vi)The sedan.
(vii)Tools in his possession.
That the wife forthwith do all things and sign all documents necessary to cause the chattels referred to in Order 9 hereof to be transferred to the husband.
That, in the absence of contrary agreement, the parties divide in specie the contents of their former matrimonial home at D by alternate selection provided that the husband shall be entitled to 56 percent of the total number of selections required for that purpose, and the wife to 44 percent thereof.
That the parties mutually indemnify each other as to one half of such liability as the parties shall be held, by agreement or adjudication, to have with respect to the shortfall resulting from the sale of the property at F formerly co-owned by the husband and wife as tenants in common in equal shares with third parties.
That the parties cause to be divided between them as tenants in common in shares of 56 percent to the husband and 44 percent to the wife any monies agreed or adjudged to be payable to the parties or either of them by the son of the parties who the husband asserts to be indebted to the parties in the sum of approximately $477 000.
That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
That in the event that either party refuses to execute any deed or instrument necessary to give effect to these orders, within seven (7) days of being requested so to do, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
That except as otherwise provided for in this order the husband and wife each be and remain the sole legal and beneficial owners of all items of all property including furniture, money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.
That costs be reserved.
IT IS NOTED that publication of this judgment under the pseudonym Childs & Childs is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAF 1555 of 2006
| MS CHILDS |
Applicant
And
| MR CHILDS |
Respondent
REASONS FOR JUDGMENT
By Application filed 20 December 2006 Ms Childs (“the wife”) sought orders for settlement of property against Mr Childs (“the husband”) pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
In essence, the wife sought the transfer to her of the husband’s interest in property at L, and that she retain property at T.
The wife’s application sought that her interest in the former matrimonial home of the parties at D be transferred to the husband. Various other orders with respect to personalty were also sought, as were machinery orders, and orders for costs.
By his Amended Response filed 27 July 2007, the husband opposed the granting of relief in the terms sought by the wife. Most significantly, the husband sought that the wife’s interest in the L and T properties be transferred to him and that, in consideration of such transfers, the husband pay to the wife in cash her entitlement by way of settlement of property pursuant to Part VIII of the Act. The husband did not oppose the transfer to him of D property.
Late in the trial of the proceedings, learned Counsel for the husband provided a document styled “Orders as Sought” comprising some 27 paragraphs. It seems from that document (paragraph 20), and was confirmed by his Counsel, that the husband sought that the wife receive 40 percent of the property of the parties. In his October 2008 case outline, Counsel for the husband contended that a 70‑30 division favouring the husband was appropriate. By his final document, the husband sought that he receive D property and L property, and that the wife retain T property.
As her Senior Counsel made clear, the wife’s claim has consistently been for 50 percent of the property of the parties. Such entitlement as sought to include L property and T property.
The parties have accordingly been in dispute as to the quantum of their respective entitlements. They have also been in dispute as to “who gets what”. It is now common ground that the wife should retain T property. Albeit ultimately not a major issue, some issues relating to determining and quantifying the property of the parties require determination.
Credit
The credibility of each party has potentially been impaired by virtue of unsustainable or mistaken allegations appearing in affidavits prepared and presented on their behalf. Subject to one notable exception, cross-examination of the parties however otherwise provided no rational basis for disbelieving the essential allegations of fact made by each of the parties.
The wife’s candour and willingness to make concessions in favour of the husband, and to volunteer information favourable to him was impressive, stands in stark contrast to the self-serving evidence of many parties to proceedings in this Court.
Albeit not on quite the same scale, the husband’s evidence was also impressive in those respects. Whilst the husband was less able to make concessions favourable to the wife than was she to him, to his credit, the husband resisted numerous opportunities to denigrate the wife or to seek to demean her contributions.
Ultimately, the resolution of the dispute between the parties does not generally turn on findings with respect to credibility. A major area where credibility does have the potential to impact upon issues in dispute relates to the date of the parties’ separation. Ultimately, the objective facts in relation to that issue do not appear to be greatly in dispute. What the parties said to each other is controversial. How each regarded the marriage is controversial. What the parties did or did not do however, appears largely uncontroversial.
Other than by a quite arbitrary and unfair pronouncement that the evidence of one party was inherently able to be preferred to that of the other, no satisfactory basis for preferring the evidence of one party to the other in relation to this topic emerges from the evidence. There is a lack of other direct or circumstantial evidence capable of impacting upon the probabilities.
Ultimately, the Court is less than clear as to the state of the marital relationship of the parties over a period of almost two years during which the wife asserts that the parties were separated and the husband asserts that they were not. Given that the focus of the present proceedings is on contributions and section 75(2) factors, and that the parties’ disagreement in relation to the date of separation does not materially impact on those issues, it is of only minor significance that the Court is unable to make a finding on the balance of probabilities as to the date upon which the parties separated.
It is apparent from the evidence that, whatever she communicated or did not communicate to him, the wife wished the marriage to be at an end rather sooner than did the husband. Against that background it is unsurprising that the wife has recollections of conversations with the husband which are at variance with his recollections. The Court could not fairly suggest that, whatever the truth, either party was being consciously or deliberately untruthful about the date of separation.
As the final submissions of Senior Counsel for the wife, and learned Counsel for the husband reveal, credit does not have any impact upon the Court’s findings of fact with respect to contributions. The contribution history of the parties is largely uncontroversial. The issue is ultimately primarily what, in the exercise of an undoubtedly broad discretion, the Court should conclude with respect to contributions in reliance upon facts which are largely not disputed.
So far as section 75(2) is concerned, the credibility of the husband has the potential to assume significance. As will be seen when the evidence in relation to the husband’s earning capacity is considered, a substantial issue at trial was whether, as he contends, the husband has a very limited capacity for appropriate gainful employment or self-employment, or whether, as was asserted on behalf of the wife, that capacity is significantly greater than the husband would have the Court believe.
In cross-examination of the husband, by reference to medical records and circumstantial evidence, Senior Counsel for the wife sought to establish that the husband had, in late 2006, when he accepted that the marriage was at an end, embarked upon a course of deliberately avoiding being employed, or being able to be shown to be or have been employable.
Given that, as each of the expert medical witnesses confirmed, their expert opinion evidence was significantly based upon accepting the husband’s statements with respect to his symptoms, the factual underpinning of such expert opinion evidence turned materially upon the credibility of the husband in relation to his alleged symptoms (see Makita (Australia) Pty Ltd v Sprowles [2001] 52 NSWLR 705).
Notwithstanding a number of curious aspects of the evidence in relation to the husband’s post 1998 medical history, the Court is not persuaded that the husband’s assertion that he has been genuinely unable to do more than he admits to having done, or has been shown to have done, can be rejected. Nor can it accept as proved to the requisite standard that his comparative inactivity was deliberate or other than genuine.
It is not without significance in this context that the expert medical evidence addressed the husband’s capacity for employment from the dual perspectives of the physical and the psychological. Given the significance which the husband’s capacity for employment has assumed at trial, more will necessarily be said about it later. That discussion is most logically undertaken within the context of section 75(2). It is sufficient for the purposes of the Court’s conclusions with respect to credibility to record that the Court does not accept that the husband has deliberately attempted to persuade the Court that his capacity for employment is and has been materially less than it actually is, or has been.
Two of the children of the parties, the parties’ son and the parties’ daughter, swore affidavits in the wife’s case and were cross-examined. Whilst each of them could be described as sympathetic to the wife’s case, and in the case of the son antipathetic to the husband’s case, the Court is not satisfied that emotion sufficiently clouded the recollections of either the son or the daughter to justify rejecting the allegations of fact made by them. Ultimately, little turns on their evidence. To the extent that the son’s evidence might be thought to be supportive of the wife’s contentions with respect to contributions, his evidence does little more than reinforce matters which are otherwise established, or not seriously in dispute.
Material Facts
The following material facts provide background to the dispute between the parties.
The husband was born in May 1949. He is accordingly 60 years of age.
The wife was born in November 1952. She is accordingly 57 years of age.
The parties married in January 1972, whereupon they commenced cohabitation.
At the date of commencement of the marriage, the husband had assets of monetary significance. The wife did not. Rather than divert attention from this recounting of background by referring to it in detail, the question of what, on balance, the husband had at the commencement of cohabitation will necessarily be explored later in these Reasons, in the context of evaluating the husband’s contributions.
In the year of their marriage, the parties purchased their first matrimonial home at M. The wife asserted that the property cost approximately $8000. The husband asserted that the property was purchased approximately six months prior to marriage for approximately $13 000‑$14 000.
The wife claimed that the bulk of the purchase price of the M property was borrowed. The husband maintained that he paid the totality of the purchase price from pre-marriage funds. Unsurprisingly, 37 years later, no documentation has been tendered before the Court to clarify the purchase price or the funding of the acquisition of the M property.
The first of three children of the marriage, the parties’ son, was born in January 1974. The son accordingly turned 18 years of age in 1992.
In 1975 the parties purchased three blocks of land at S. The purchase price was $13 500. The evidence is silent in relation to the funding of the acquisition of those blocks, and there is no contemporaneous documentation before the Court which sheds any light on the topic. As with all properties subsequently acquired, other than the T property which was acquired solely in the name of the wife, the property was acquired in the joint names of the parties.
In 1976 the parties purchased the property at C for $33 000. The M property was sold at about that time and the proceeds of its sale, together with monies borrowed from Westpac Bank, were utilised to complete the purchase of the property. The husband completed renovations and improvements to the property during the parties’ ownership of it.
In 1976 the husband sold his half interest in a block of land at G which he had co-owned with his brother prior to the date of the parties’ marriage. Howsoever actually deployed, the monies received by the husband on the realisation of that interest were utilised for the benefit of the family.
In 1978 the parties purchased a block of vacant land at B. The evidence is not instructive as to the cost of that acquisition or how it was funded.
In 1978 the husband commenced a part time course at TAFE. The course continued for two years.
In January 1979 the second child of the marriage, the parties’ daughter was born. The daughter turned 18 in 1997.
In 1980 the husband commenced self-employment in the building trade. He continued in that employment until 1991.
In about 1980 the wife commenced employment with her current employer or some earlier incarnation of that entity.
In 1980 the parties purchased D property for $225 000. D property was almost 8 acres of vacant land. The husband designed the substantial residence which was subsequently built upon the property. The husband undertook the building of the property. The parties completed the acquisition of D property and the construction of the home with a loan facility from Westpac Bank.
There was at the time of its acquisition, and continues to be, a cottage on D property. The parties occupied the cottage until completion of their new home on the property. The construction of the new home on D property was completed in December 1995. Thereafter, the cottage was rented out.
In 1982 the parties sold 2 of their 3 blocks of land at S for $11 000 and sold the third block for $15 000.
In 1982 the parties and the husband’s father purchased land at H. The husband designed and built 6 factory units on the property subsequent to its acquisition. The husband was not paid wages with respect to the work he did on the H property.
In 1983 the husband’s parents gave him 3 blocks of land at J. The husband designed and built houses on each of the blocks.
In 1986 the parties purchased vacant land at N for approximately $42 000. The husband designed and built a house on that property.
In June 1987 the third child of the marriage was born. That child turned 18 in 2005.
In 1987 the parties sold the N property for $180 000.
In 1988 the husband sold the J properties for a total of $270 000.
In 1991 the husband obtained employment in the building industry.
In 1996 the parties sold C property for $165 000.
In 1996 the husband suffered a back injury in the course of his employment and thereafter commenced to receive Workers Compensation benefits.
At about that time the parties and the husband’s father also sold the H property for $730 000, and from the proceeds of sale monies were applied to the mortgages secured on D property.
In 1999 the parties sold the vacant land at B for $650 000. Part of the proceeds were applied to the discharge of the Westpac loan over D property, and a substantial sum was provided to the parties’ son and his wife to assist them to acquire land and a home at P.
Part of the proceeds of sale were applied the following year for the purchase of property at L for approximately $304 000. An old house on the property was demolished and four townhouses constructed by the husband. The development has not been converted to strata title. All four units remain registered on the original title to the land.
In December 2001 the husband received approximately $90 000 by way of redemption of his rights under the Workers Compensation Act 1987 (NSW) with respect to his 1996 injuries.
In 2002 the parties entered into transactions with their son and their daughter involving the transfer of a property into the daughter’s name and the provision to the son of a sum of money which was applied towards his mortgage.
In 2002 the parties purchased T property for $401 000, the whole of which was borrowed from Westpac Bank. The property was, and continues to be, rented out to tenants.
In 2003 the parties purchased a 50 percent interest in F property as tenants in common in equal shares with their daughter and her husband. The property cost $260 000. The four purchasers jointly and severally borrowed $300 000 to complete the purchase. Thereafter the parties contributed 50 percent of the mortgage payments, the parties’ daughter and her husband the other 50 percent.
The wife contends that the parties lived separately and apart from May 2004. The husband asserts that the final separation occurred in November 2005.
In October 2006, by three withdrawals, the wife received $55 000 from the parties’ business account.
On 3 November 2006 the husband ceased employment and has had no employment since.
In December 2006 the husband was arrested and detained in custody until he was released on bail by the Supreme Court in February 2007. The husband’s incarceration arose from breaches of Apprehended Violence Orders against him in favour of the wife dating from September 2006.
In February 2007 the husband commenced to receive a Commonwealth Disability Pension. The husband continues to receive such pension.
In mid 2007, the borrowers having defaulted on their mortgage obligations with respect to the property at F, the mortgagee went into possession. The realisation of the property produced a shortfall of approximately $50 000 for which the husband and wife, the parties’ daughter and her husband remained jointly and severally liable.
Since the beginning of 2007 the wife has had exclusive use and occupation of D property and the husband has occupied one or other of two units at L.
The property of the parties
The identity and value of the major assets of the parties are not in dispute. At the commencement of the trial Counsel for the parties handed the Court a document headed “Wife’s Balance Sheet” which recorded a variety of real and personal property of the parties and the assertions of the parties in relation to the values of such items. The parties disagreed as to the value of a number of the items appearing on the balance sheet, they being marked by a pink highlighter pen.
At the conclusion of the trial Senior Counsel for the wife put forward an amended version of the balance sheet. It is less than clear whether learned Counsel for the husband accepted the document as reflecting agreement in relation to the items which had previously not been agreed. For more abundant caution, the Court will not, without further consideration, include those items in respect of which there is neither clear agreement nor admissible evidence of value. The Court does not believe that so doing has the potential to unfairly impact upon either party.
D property has been agreed to be worth $1 475 000.
T property has been agreed to be worth $410 000.
L property has been agreed to be worth $1 179 200.
The wife has two motor vehicles which have a combined agreed value of $37 400.
The husband has two motor vehicles with a combined agreed value of $26 000.
The wife has Telstra shares which are agreed to be worth $1 845.
The wife has a bank account with a balance of $5 141.
Both parties have jewellery in respect of which there is no agreed position with respect to values. Nor is there admissible evidence of the value of the parties’ jewellery.
The wife conceded in cross-examination that she would give the husband a number of items of jewellery referred to by his Counsel during cross-examination. Sensibly, Counsel for the husband did not press the husband’s request that the wife give him earrings which she has worn for many years. The Court would have declined to make such an order in relation to them in any event.
In the absence of reliable expert evidence or agreement as to their value, and particularly given that the wife has agreed to give the husband certain items of jewellery, the Court will make no order with respect to the parties’ jewellery.
Each of the parties has furniture and household effects. There is no agreement as to the value of such items, although it appears to be agreed that the husband will retain the “furniture and contents of family home”. The wife asserts a substantial sum ($16 955) to be the value of those items. The husband does not accept that figure or advance a contrary figure.
Whatever the furniture may be worth, and the Court has no reliable basis for suggesting any figure in that regard, it is not fair if the husband retained the totality of that personalty without compensating the wife. In the circumstances, the Court will order that the parties share the items in specie in accordance with their respective entitlements to their property. So doing will enable the parties to reach an accommodation whereby the husband retains the items and appropriately compensate the wife, failing which each party would, by alternate selection, receive their entitlements in specie. This is less than perfect. The alternative would be even more arbitrary and unfair.
Analysis of the property of the parties then potentially proceeds to a consideration of the parties’ right to pursue recovery of monies alleged to have been advanced to their son, the right to contribution from the parties’ daughter and her husband with respect to the indebtedness to Westpac Bank arising from the default and subsequent realisation of the F property, and to various asserted “add-backs”. It is convenient to address each of these topics separately before proceeding to refer to the parties’ liabilities and superannuation interests.
The alleged indebtedness of the parties’ son
The husband clearly regards the parties’ son as being indebted to him and the wife, asserting in his February 2009 affidavit that the son was indebted as at the end of February 2009 in the sum of $476 847.
As is apparent from his evidence during his cross-examination, the son disputes any such liability.
The wife’s evidence in relation to the son’s indebtedness is less than entirely clear.
Sensibly, the son has not been joined as a party in the present proceedings and no orders have been sought against him pursuant to the Court’s accrued jurisdiction. Whether the accrued jurisdiction could have been successfully invoked had the son been joined is perhaps problematic, but speculation about that is unproductive and unnecessary.
Counsel for the parties agreed that questions of the son’s alleged indebtedness to the parties would, in the absence of agreement between them, fall for determination by a Court having jurisdiction to determine that issue. Counsel further agreed that any monies which the son may be held to owe the parties should, upon recovery, be shared by them in the same percentages as the Court determines that their other property should otherwise be shared. The logic underpinning those agreements is unassailable. The Court will make orders substantially in those terms.
To the extent that the wife may be a reluctant plaintiff in proceedings against the son, the Court would not understand that to be a bar to the husband proceeding against the son. The wife would be joined as a defendant to such proceedings notwithstanding that, if successful, she would share in the fruits of success pursuant to the orders of this Court.
The evidence does not enable the Court to make any findings of fact which could advance the issue in any event. Sensibly, given the matters to which reference has been made, Counsel for neither party sought to explore the merits of that dispute with the parties or with the son in cross-examination. Nothing more needs to be said about this topic.
The shortfall on the realisation of the F property
As is not in doubt, the shortfall consequent upon the mortgagee sale of the property at F which the husband and wife, their daughter and her husband acquired, currently approximates $50 000. That sum is probably increasing notwithstanding that the daughter has made, and is making, some payments with respect to the shortfall.
The husband and wife are jointly and severally liable with respect to the shortfall. Whilst the parties have more than sufficient assets to discharge the shortfall, there is no evidence before this Court which enables it to reach any conclusion as to the capacity of the daughter and/or her husband to meet half the shortfall to the Bank.
The difficulty in this case is that, whilst in theory the sum borne by the parties should be one half of the shortfall that is by no means a certain outcome. Realistically, the Bank would no doubt be aware that the property of the parties to the proceedings in this Court render them “easy targets” in terms of the recovery of the shortfall, leaving the parties to their rights of contribution against the daughter and her husband. Those rights may be worth nothing.
The daughter appears to be more aligned with the wife than the husband at present. However, there is no evidence that any collusive action might occur in relation to the shortfall. Nevertheless, to protect both the husband and wife, an order that the parties indemnify each other as to 50 percent of any liability incurred by either of them with respect to the shortfall would mean that the shortfall borne by the parties would be borne by them equally. This would in practical terms have the same effect as deducting from the property of the parties the amount of such shortfall.
The Court has raised with both Counsel the order proposed in relation to the F property shortfall. The Court does not understand that either party opposes an order in the terms proposed.
The add-back issue
At the conclusion of the trial, after there had been cross-examination and extensive examination of documents, the add-back issues were substantially refined. It is agreed that the sum of $52 209 of the $55 000 withdrawn by the wife from the parties’ operating cheque account in October 2006 should be added back. The reality that such sum is represented by the wife’s paid legal fees does not alter the balance sheet position.
So far as the husband’s claimed add-backs are concerned, Senior Counsel for the wife ultimately submitted that there should be three add-backs, they being $110 989 for the husband’s paid legal costs in family law proceedings, together with $25 000 with respect to the husband’s criminal law proceedings, and approximately $25 000 for rent received from the second residence on D property in the post separation period.
The last topic can most easily be disposed of. The husband gave evidence that during 2007 and 2008 he received rental from the second house at D in the sum of $245‑$250 per week, hence the figure of approximately $25 000. The evidence does not reveal that sum to currently exist. During the period the husband has received that sum, his sources of income have been social security disability benefits and, essentially, half the rental from L property. The husband has occupied one of the four units at L for almost all of 2007 and 2008.
The evidence does not reveal that the husband has had employment during that period. On balance, for reasons which will be more substantially detailed later, the Court does not accept that the husband has consciously and without reasonable excuse refrained from being employed or self-employed during that period. The wife has occupied the former matrimonial home at D during 2007 and 2008.
As is apparent from the valuation evidence, the residence which the parties caused to be constructed at D is very substantial, and affords a standard of living well in excess of that provided by any of the L townhouses.
During 2007/2008, albeit she had to work in order to do so, the wife has received income which currently approximates $65 000 per annum. The husband will of course be liable for any income tax referrable to the receipt of those rentals. This may necessitate the filing of amended tax returns on his behalf having regard to what appears to emerge from his 2007 tax return (Exhibit R8). Even so, the husband’s income in this period was significantly less than that of the wife.
In the circumstances, the Court does not propose adding back any part of the $25 000 which the husband has received by way of rental from D property. When contributions are assessed, the receipt of the funds will require consideration.
The question of the add-backs with respect to legal proceedings is more difficult. The husband was cross-examined with respect to two withdrawals from what could be styled “matrimonial funds” in late 2006, one transaction involving the drawing of $20 000, the second a drawing of $13 000. The husband was also cross-examined with respect to an IMB Building Society account in which he had approximately $45 000 in 2007.
The husband’s evidence in relation to the fate of the $78 000 covered by these three sums was unclear and not supported by documentation. In fairness, the husband readily conceded that he was not able to clearly or adequately explain where the money went. The husband clearly suggested in relation to the $33 000 and another $1000 which he had drawn that it had possibly been utilised, amongst other things, to pay legal fees.
Counsel for the husband submitted that the court ought to significantly write down add-backs for legal fees on the basis that they did not clearly or necessarily derive from capital referrable to the marital relationship.
The Court has some difficulties with that proposition. The husband’s inability to explain adequately how he funded the paid legal fees, the quantum of which is not in contest, gives rise in part to such difficulties. So does the absence of apparent or suggested income capable of being used for that purpose to any significant extent.
The balance sheets provided by way of aide memoir at the commencement and conclusion of the trial confirm, from the realisation of his bobcat, Coles shares, E-trade shares, AXA shares, Advanced Alliance Investment shares, IAG shares, Perpetual Investment, Telstra Shares, Zurich Retirement Superannuation, IMB Shares and his Commonwealth Financial Services account, the husband has had available to him at least $94 417.
The husband did not suggest that the funds represented by the drawings totalling $34 000 in late 2006 were referrable to the realisation of a number of assets which occurred after those transactions occurred.
It seems likely that $45 000 in the IMB account may, although the timing is not identical, have represented the proceeds of sale of the IMB shares given the similarity of the amounts.
The evidence is less than satisfactory. With respect to the husband, the events in question are not of such antiquity as to render it fair to the wife to lightly excuse the deficiencies in the husband’s explanations for the fate of monies under his control in the post separation period and the absence of documentation, which clearly should exist, evidencing those matters.
What is clear is that in the post separation period, the husband has, contrary to the submission of his Counsel, limited demonstrated capacity to have accumulated funds from income, whether from personal exertion or the rentals he has received. Objectively, the husband has probably paid legal fees of $135 989 from the funds which have come to him on the realisation of various separation period. That sum of $94 417 could have been available to the husband from the sources identified earlier and not in dispute. The question arises as to from what source the husband could have generated the difference between the amount available from those sources and the amount which he actually paid in legal fees, a difference of approximately $40 000. The Court proposes adding back $94 417 with respect to the items particularised earlier together with a further $40 000 approximately, the source of which the husband has not adequately explained. Although the Court cannot point to the probable source of the $40 000, that should not operate to the wife’s detriment. The wife has not been shown to be to blame for the amount the husband has spent on legal fees. The husband’s add-backs will accordingly total $135 989.
To the extent that the husband may complain about this approach, it was he who had the control of the funds. The husband better than anyone else could have demonstrated what became of them. This he has not adequately done. The husband’s own case is that he paid legal fees totalling approximately $135 000. He did not borrow to do so. His income at the time does not support inferring that any significant amount thus paid could have come from that source. After separation he did not acquire any significant assets to use for that purpose. On the husband’s own evidence, it is difficult to suggest how any significant part of the $135 989 which he paid out could not have come from the realisation of assets he held at separation. How the funds were utilised does not militate against adding them back in their entirety.
Although not appearing in the original balance sheet, in the final balance sheet submitted on her behalf, Senior Counsel for the wife included a St George account of $38 300 representing funds which the wife had at about the time of separation. There is no reason why those funds ought not to be included in the parties’ add-backs. Doing so is consistent with the approach taken to the husband’s funds at separation.
Assets
The assets of the parties accordingly comprise and are reflected graphically as follows: -
| Asset | Value | Total |
| D property | 1 475 000 | |
| T property | 410 000 | |
| L property (4 units) | 1 179 200 | |
| 2005 Toyota Celica | 28 550 | |
| 1996 Toyota Celica | 8850 | |
| Sedan vehicle | 24 000 | |
| 1995 Holden Rodeo | 2000 | |
| Telstra Shares | 1845 | |
| Wife’s bank accounts | 5141 | |
| Sub total | $3 134 586 | |
| Husband’s add-backs | ||
| Bobcat | 5500 | |
| Coles Group Limited Shares | 19 209 | |
| E-Trade Shares | 2080 | |
| AXA Shares | 1862 | |
| Advanced Alliance Investment Account shares | 3147 | |
| IAG Shares | 6791 | |
| Perpetual Investment | 1553 | |
| Telstra Shares | 2159 | |
| Zurich Retirement Superannuation | 9052 | |
| IMB Share proceeds | 41 335 | |
| Commonwealth Financial Services | 1729 | |
| Balance of paid Legal Costs | 41 572 | |
| Total husband’s add-backs | $135 989 | |
| Wife’s add-backs | ||
| Part drawn down from Childs Building Company account | 52 209 | |
| St George account | 38 300 | |
| Total wife’s add-backs | $90 509 | |
| TOTAL ASSETS | $3 361 084 |
Liabilities
The liabilities of the parties, save and except for the F property shortfall, are not in contest and total $336 370.
Superannuation
The wife has two superannuation interests with a total value of $46 237.
Although, as both Counsel acknowledged, the wife’s superannuation interests could be treated in other ways (see Coghlan v Coghlan (2005) FLC 93‑220), the tacitly agreed approach to the wife’s superannuation interests as financial resources pursuant to section 75(2) has sense and will be adopted.
The net property of the parties available for division in the proceedings is accordingly $3 024 714.
Contributions
It is convenient, and hopefully instructive, to consider the parties’ contributions by reference to a number of timeframes and topics.
The assets of the parties at commencement of cohabitation
As his submissions clearly revealed, Counsel for the husband relied upon the husband’s greater initial capital contribution in part support of his contention that the husband’s contribution based entitlement should be assessed at 60 percent and the wife’s at 40 percent.
The evidence leaves little room for doubt that, at the commencement of cohabitation, the husband’s assets exceeded those of the wife. Without being critical, the wife then had no assets of substance. The more difficult question is to what extent the husband’s assets exceeded those of the wife. As the authorities, and particularly the decision of the Full Court of this Court in Pierce v Pierce (1999) FLC 92‑844 and the judgment of Brereton J as a member of the Court of Appeal in Kardos v Sarbutt [2006] NSWCA 11 make clear, the significance of initial contributions is not necessarily confined to their quantum. What part those initial contributions played subsequently, in the light of the parties’ subsequent contributions, are also relevant to determining their impact.
The husband asserted that at the time the parties married he had an interest in land at G. The husband asserted that he acquired the interest in those three blocks of land by way of gift from his father in 1971. The husband alleged that he subsequently, at an unspecified time, but necessarily after his marriage to the wife, sold the blocks “for approximately $11 500‑$12 500 each”. The husband alleged that he “used the monies which I received from the sale of the blocks of land for the benefit of [the wife] and myself”.
The husband further alleged that he owned an unencumbered half interest in another block of land at G with his brother. The husband alleged that the block of land was sold for in excess of $50 000 after he and the wife married. At least inferentially, the husband thus asserted that he received in the order of $25 000 from the sale of that property. The husband alleged that the monies were utilised for “payment of existing liabilities at the time and for the benefit of [the wife] and myself”.
The third property which the husband alleged that he owned prior to marriage was the M property, which he asserted he had purchased in 1971 for approximately $13 000‑$14 000. The husband alleged that he utilised “funds from my savings” together with monies advanced by a bank to complete the purchase of the property.
In her affidavit evidence the wife said that “at the date of marriage [the husband] owned a one half share in a block of land at [G] which was sold in 1976 and the other co-owner was [the husband’s] brother […]. [The husband] had no other significant assets”.
The wife asserted that in 1972 she and the husband purchased their first home at M in the husband’s name for the sum of $8000. The wife was unable to “recall the precise source of funds used for that purchase”.
From the affidavits of the parties it can be fairly suggested that the wife admitted the husband’s allegations with respect to the block of land co-owned by the husband and his brother. The Court is thus able to find that an interest in land which the husband held at the date of marriage was realised subsequent to marriage and that such realisation generated in his hands approximately $25 000. As with any other funds received from the sale of property, there is no issue that the husband applied the funds for the benefit of the family.
Cross-examination of the parties shed no helpful light on the difference of opinion as to what the husband had at the commencement of cohabitation. That is not said critically. Three and a half decades after the parties married, it would be unrealistic to imagine that either party would have source documentation capable of impacting upon the probabilities. On the other hand, searches of the titles to the land presumably could have been undertaken and would have established objectively the dates of purchase and sale and the consideration for the purchase and subsequent sale of each of the assets. This is particularly relevant in the case of the M property.
Counsel for the husband submitted that there was no reason to reject the essence of the husband’s assertions with respect to his assets at the date of marriage. Senior Counsel for the wife sagely submitted that the evidence of the husband was sufficiently vague as to render findings on the balance of probabilities in accordance with his allegations less than reasonably open to the Court.
The issue is difficult. As noted earlier, there is no documentary evidence which assists the Court to make findings, nor is there any circumstantial or other evidence capable of assisting in that exercise. Nor can it be said that the subsequent acquisition of properties was consistent only, or more probably, with the husband having had substantial capital available to him from the sources asserted by him to have enabled those acquisitions to occur.
Ultimately, the Court approaches this issue by reference to the onus of proof.
The husband alleged the initial capital contributions. To the extent that they were disputed, he thus bore the onus of proving those contributions on the balance of probabilities. Objectively, what the husband asserted can neither be accepted nor rejected on that basis. He has accordingly failed to prove his allegations in accordance with the civil standard of proof.
On the evidence, the husband had an interest in land which, subsequent to his marriage to the wife, and inferentially not long after the marriage, realised $25 000 which was applied for the benefit of the parties. That was not an insignificant contribution. The fact that the use made of it cannot be identified with any specificity ought not reduce its significance.
The impact of the parties’ many, substantial and varied contributions over the following decades do however have the potential to “erode” that initial contribution. Objectively, and in isolation, its significance today could only be regarded as minimal.
The contributions of capital by or on behalf of a party to the marriage during cohabitation
It is not in doubt that in 1983 the husband’s family gave to him three blocks of land at J. The husband asserted that he sold the three blocks of land in “about the late 1980s”, by which time he had built a house on each of the blocks, for a total of approximately $270 000. The husband was not cross-examined to suggest that his allegations were other than substantially accurate, and sensibly so given that, albeit the wife asserted that the husband’s parents gave “us 3 blocks of land” the wife did not dispute the source of the blocks of land, or that they were later sold. The wife did not in her affidavit evidence, or otherwise, suggest what the sale price was.
Attached to the wife’s affidavit were copies of the memoranda of transfer pursuant to which the J blocks were transferred by the husband’s father. Those memoranda reveal that the parties acquired as joint tenants each of the three blocks. The husband was accordingly incorrect as to the identity of the transferees of those blocks of land.
There is no evidence before this Court which establishes that the contribution of the land at J should be seen other than as a contribution by or on behalf of the husband (see Kessey & Kessey (1994) FLC 92‑495).
Albeit not ever paid, the consideration stated in the transfers can be accepted as some evidence, or bearing some relationship to their market valuation. The figures were presumably accepted for stamp duty purposes. There was accordingly a contribution by or on behalf of the husband of $42 000 in 1983.
By 1990 all three blocks had been realised for $270 000. Given that funds of the parties and/or monies borrowed by them had been utilised to build on each of the three blocks of land, and that the husband had devoted his time to the “designing, detailing and constructing” of the houses “outside of my normal working hours and on the weekends in my spare time”, thus depriving the family of his time and non-financial contributions during those periods, what the properties realised on sale has no direct or identifiable nexus with the value of the blocks of land when they were contributed by or on behalf of the husband.
That is not ultimately a matter of concern given that, on any realistic view of the evidence, having been given three blocks of land upon which to build houses which in turn could be sold must be seen as a significant contribution by or on behalf of the husband. Whilst it cannot be quantified, the real value of the contribution can be seen as significantly more than the $42 000 value of the land when it was acquired.
Relevant to the assessment of the impact of this contribution is what became of the $270 000 which resulted from the realisation of the three improved property blocks of land in the late 1980s. What became of those funds was not suggested by the husband in his affidavit evidence or elsewhere. That, as Counsel for the husband reminded the Court, is however not decisive of the issue given that there is no dispute that, as with other monies which the parties received from the realisation of assets during their cohabitation, the monies were applied for the benefit of the family.
Had the evidence permitted a tracing of those funds into other discernable assets, it may be that the impact of “erosion” could better be evaluated. On the evidence however, the most the Court can say is that the funds were utilised for the benefit of the family. The significance of that contribution by or on behalf of the husband remains to this day. Quantifying it is difficult. Clearly the contribution is entitled to more than nominal or token recognition. On the other hand, in light of the matters referred to above, and other intervening contributions, it is entitled to be recognised in a sum significantly less than $270 000.
The H property.
The husband set out in his affidavit the moderately complex history of the acquisition, improvement and realisation of this interest (see paragraph 27).
To the extent that it is suggested, and it may not ultimately have been, that this venture involved any unrecognised or unrewarded contribution by or on behalf of the husband, the evidence falls short of establishing such to have been the case. Whilst there may have been commercial advantages for the parties in the arrangements that were struck, the evidence does not suggest that they were other than matched by the commercial advantages flowing to other members of the family from the venture. No adjustment of the contribution based entitlements of the parties by reference to this venture would in the Court’s view be justified.
The husband’s special or “incredible” contributions.
On behalf of the husband it was submitted that the evidence in relation to the husband’s work done in designing and constructing improvements and/or renovations to most if not all of the properties which the parties ever owned constituted an “incredible type of contribution” which, whether considered to be “special” contributions or otherwise, required recognition (see Mallett v Mallett (1984) 156 CLR 605).
The evidence, including plans and photographs tendered on his behalf, together with the unchallenged allegations contained in the husband’s affidavit, leave little room for doubt that the husband skilfully, diligently and persistently brought about the design and construction of improvements on vacant land (and particularly D property) from time to time owned or acquired by the parties as well as renovations, improvements and maintenance to both new and existing structures.
The husband worked long and hard in order to do the things he did. As the husband asserted, and the wife and the parties’ son both acknowledged, the husband worked long hours and undertook most of these works at times when he had employment or was self-employed. The husband was by profession a builder. The works which he undertook utilised those skills. Some of those skills were acquired during the cohabitation.
As the husband’s own affidavit evidence makes clear, much of the work relied upon in support of his claim for recognition of “incredible” contributions was done outside of “normal working hours” on weekends, spare time, or during the day, in which case the husband discharged the duties referrable to his day job “in the evening time”.
In cross-examination the wife conceded that but for the work the husband did, and the land his parents gave them, the parties would not be in the financial position in which they now find themselves. The wife volunteered that the husband worked long hours and that his work saved them a “considerable amount of money” which otherwise would have had to be paid to others to do the work which the husband did.
Whilst, fairly, there is no suggestion that the husband discharged these various undertakings with anything but skill and success, with respect to him, there is no evidence that he did so in a way which involved either a demonstrable level of skill and commitment in excess of that reasonably required, or that the complexity of the work undertaken met that description. None of this is said critically of the husband, but to put the matter in context.
It is significant that, until 2005 the parties had at least one child who had not attained 18 years of age. The wife was working and contributing her income during the period in which the husband was undertaking the design, construction and maintenance work upon which he relies in support of his claim for extra recognition of his contributions.
The wife was also, as is not disputed, making the greater (but by no means entire or overwhelming) contribution as homemaker and parent.
To the extent that the husband can be seen as enhancing his contributions by doing what he did in the design, building and maintenance of property arena, during hours when he was not available to the family, the wife’s greater contributions as homemaker and parent can be seen as counterbalancing those contributions.
With respect to Counsel for the husband, to accede to his submission in relation to the husband’s design, building and maintenance contributions would in the circumstances of this case be to regard contributions to property as superior to contributions to the welfare of the family. Apart from the unfairness of so doing, it would be unrealistic to do that.
Only by having the wife discharging her areas of responsibility in the manner in which she undoubtedly did during those times was the husband able to utilise his skills in the way in which he undoubtedly did. In their respective areas both parties were doing the best they could for the family. The success of their endeavours is evident from the assets which they have acquired and maintained.
There are undoubtedly cases where “special” or “incredible” contributions do call for appropriate recognition. It is sufficient only to say that this is not such a case, and that so concluding is by no means demeaning the value of the husband’s contributions.
Periodic contributions from the date of marriage to the date of separation.
During this period, the evidence is clear that the husband made the greater financial contributions but that the wife made by no means a token financial contribution. During this period the wife made the greater (but by no means entire or overwhelming) contributions as homemaker and parent.
During this period the husband made the greater non-financial contribution to the physical acquisition and conservation of the property of the parties. The wife’s assistance in this regard was more than minimal, albeit overshadowed by the efforts of the husband.
During this period the parties bought and sold property, almost invariably in their joint names. The parties borrowed monies for which they were both liable.
To view the periodic contributions of the parties as other than equal would in the circumstances of this case be unfair.
The contribution based entitlements of the parties at the date of separation.
For reasons which the Court has earlier recorded, it is not realistically possible to record a finding on the balance of probabilities as to the date upon which the parties first separated.
It is clear that by the end of 2005 the parties had fully and finally separated.
It is also clear that, whatever the status of the marriage might be considered to be for the purposes of an application for dissolution of marriage, between early 2004 and the end of 2005, the parties continued a relationship which can be seen as having been less than a state of full cohabitation in the usual sense, but significantly less than full separation. That is because the undisputed evidence reveals that the parties spent time in each other’s company at social events (for whatever reasons), occupied the same premises at times (albeit on a decreasing basis), contributed to each other’s welfare (on a declining basis), had sexual intercourse from time to time and, perhaps most importantly, did not seek to disentangle their financial relationship.
In the circumstances, to differentiate between the parties in relation to contributions in reliance upon events between early 2004 and the end of 2005 would not only be difficult, if possible, but quite artificial.
Objectively, the contribution based entitlements of the parties as at the end of 2005 turn in the Court’s view on the impact of the husband’s initial capital contribution and the impact of the contribution by or on his behalf of three blocks of land from his father in 1983.
Judicial pronouncements which guide the exercise of discretion in relation to this topic are numerous. The “principles” are not in doubt. There is no basis in logic for disputing the reasoning which permeates those judgments or the principles emerging from them. The more difficult issue is how to apply the principles to the facts of a particular case in the exercise of an undoubtedly broad discretion.
As noted earlier, Senior Counsel for the wife submitted that the parties should be seen as having an equality of contribution based entitlement. Counsel for the husband submitted that the contributions should favour the husband by 10 percent (60 percent/40 percent).
The court has endeavoured to record such figures as emerge from the evidence in relation to the two capital contributions requiring consideration. There is no direct nexus between what those contributions were worth when they were made, or subsequently realised, and the value of the parties’ assets today.
On the other hand, of necessity, regard must be had to the current value of the assets when determining the adjustment in favour of the husband which is appropriate to be made because of those contributions. In this case the net assets of the parties are worth $3 024 714. The Court accepts in principle that to fail to reflect the contributions of the parties as unequal, or other than favouring the husband, would be unfair given the magnitude and probable impact of his initial and subsequent capital contributions.
On the other hand, to reflect those contributions in the manner asserted by Counsel for the husband, thereby concluding that the husband’s contribution based entitlement exceeded that of the wife by $600 000 (20 percent of $3 000 000) would be to substantially fail to have regard to the totality of the parties’ other contributions, as well as the contributions that intervened between the date of the each of those contributions and the date of the parties’ separation.
In the Court’s view, to conclude that the contribution based entitlements of the parties should favour the husband by 52 percent to 48 percent on the part of the wife, thereby producing a disparity of 4 percent, or approximately $120 000 would, in the Court’s view, be a necessarily subjective and somewhat arbitrary reflection of what appears, in the light of all the evidence, and subject to the qualifications which have earlier been expressed, a fair and reasonable reflection of the disparity of contributions of the parties to the date of separation.
The post separation period
In the post separation period each of the parties was accommodated in premises which the parties owned. As noted earlier, the wife was better accommodated than was the husband. The husband however had reasonable accommodation.
The rental from L property has essentially been equally shared between the parties.
The wife has made the bulk of the payments with respect to the mortgage over T property whilst the husband has had the benefit of the rental from the second cottage at D property.
The Court has earlier added back certain monies but declined to add back the rental income. The husband’s evidence in relation to financial matters in the post separation period was vague, and the Court is not able to find with precision how he dealt with his funds. The capital available to the husband has been added back in full. The husband had employment until the end of 2006. There is no reliable evidence before the Court as to the quantum of the income he received in that time, although it seems to have been on a contract basis.
In the post separation period, whilst the husband may not have been actively seeking employment, or actively pursuing self-employment, for reasons which will be later advanced, the Court is not satisfied that the husband has had any significant unexercised capacity for appropriate gainful employment or self-employment.
The wife has had an income from personal exertion which currently approximates $65 000 per annum. The capital available to the wife has been added back in full.
In all the circumstances, and accepting that it is necessarily a less than empirically based conclusion, the Court considers that events in the post separation period justify a modest adjustment to the contribution based entitlements of the parties at the date of separation. That is essentially because of the fact that the wife had a substantially greater income than the husband could have had in the post separation period and occupied the most valuable of the parties’ assets.
An adjustment in the husband’s favour of 0.5 percent, a disparity of 1 percent or approximately $30 000, would, in the Court’s view, be a reasonable reflection of the disparity of the positions of the parties in the post separation period.
The contribution based entitlements of the parties accordingly become 52.5 percent to the husband and 47.5 percent to the wife.
Section 75(2)
It was submitted on behalf of the wife that, irrespective of the Court’s conclusions with respect to the parties’ contribution based entitlements, no section 75(2) adjustment should be made in the husband’s favour, in reliance upon the disparity of earning ability asserted on behalf of the husband.
Counsel for the husband, sensibly, conceded that if he succeeded in persuading the Court that the contribution based entitlements of the parties should favour the husband by 60 percent to the wife’s 40 percent, no section 75(2) adjustment in favour of the husband could be justified. In terms of section 75(2)(n) of the Act, such an approach would be difficult to resist in the circumstances of this case.
The evidence not providing the necessary foundation for Counsel for the husband’s submission with respect to contributions to be accepted, it is accordingly necessary to consider section 75(2) of the Act. Counsel for the husband can be seen as having inferentially submitted that an adjustment in his client’s favour of 7.5 percent was appropriate pursuant to section 75(2).
Such adjustment was sought in reliance upon two factors, one of which is controversial, one of which is not. It is not controversial that the wife has a superannuation interest which is worth, on what basis it is not clear, $46 237. The Court infers that to be in the nature of the value to the wife at present in the event of her ceasing to be employed and resigning from the superannuation funds of which she is a member.
The Court is not aware of any clear evidence in relation to when the wife could retire and receive her superannuation entitlements. It is likely that the wife could retire at age 60, four years hence although it is conceivable, but not necessarily certain in the light of events in recent times, that her resignation benefit might be worth more at that time.
There is no clear evidence as to precisely when the wife’s superannuation entitlements accrued but it is reasonably clear that the great bulk of her entitlement must have coincided with the marriage of the parties.
In broad terms, to adjust the contribution based entitlements of the parties in favour of the husband by approximately $20 000 would in the Court’s view be a reasonable reflection of that factor. The adjustment in the husband’s favour would be made out of funds which currently exist albeit the adjustment is referrable to a fund which the wife could presumably only access now by surrendering her employment.
To the extent that the wife has made contributions with respect to the fund for a period of approximately 3 years since the parties separated, the other matters relevant to the post separation period to which reference has earlier been made militate against relying upon that period to diminish the adjustment which would otherwise be appropriate to be made in the husband’s favour.
The more difficult, and hotly controversial aspect of section 75(2) relates to the husband’s capacity for appropriate gainful employment. That issue assumed very considerable significance at trial and is not without complexity.
In essence, the case for the husband is that at 60 years of age, with psychological and physical problems, his capacity to derive income from employment and self-employment in the future, whether as a builder, building supervisor or project manager is problematic. It was asserted on his behalf that, to the extent that the husband may have a capacity to derive income in some fashion in the future, such capacity could not be found to exist for at least one and possibly as many as three years hence, and even then only in the event of a number of contingencies being resolved in his favour.
Senior Counsel for the wife essentially submitted that the husband had contrived to try to falsely persuade the Court that he had, and would continue to have, little or no capacity for employment, when in fact he had a significant capacity as either a builder, or in some supervisory or managerial context within the building industry.
Counsel for the husband relied in support of his primary contention upon the evidence with respect to the husband’s work history and the matters emerging, or failing to emerge, from the extensive medical records which were before the Court.
In essence, Senior Counsel for the wife submitted that, if the husband’s claims were true, the husband’s recorded medical history would not have failed to reveal evidence of complaints or treatments to anything like the extent it did over a long period of time.
On each of the occasions the husband walked across the court room to enter or leave the witness box, he moved slowly and with an apparent limp. He appeared somewhat stooped for a man of his age. The Court draws no inferences, either way, from the husband’s demeanour. With respect to the husband, his demeanour in Court was as consistent with his Counsel’s assertions that he was a man with physical problems as it was with the submissions of Senior Counsel for the wife that the husband was “putting it on” for the benefit of his case.
Cross-examination of the husband in relation to his medical history revealed some curious anomalies but, in the Court’s view, does not preclude acceptance of his claims with respect to pain, discomfort and restrictions on his ability to undertake physical activities.
Whilst it may be, as was suggested to the husband during cross-examination, that it is odd that a number of his complaints did not find expression in clinical notes, the husband’s explanations of how that might have come about cannot be rejected as fanciful.
Senior Counsel for the wife understandably placed reliance on the husband’s own evidence in relation to physical activities undertaken by him subsequent to his 1998 surgery in support of his case with respect to contributions. Reconciling those activities with the husband’s asserted symptoms is not easy or automatic.
The husband’s explanation of how he was able to do the things which he claimed he did, and particularly those things which involved his operating a bobcat, had the ring of truth. Not insignificantly, the physical work which the husband did during that period was largely if not entirely confined to projects within or property owned by the family.
The husband suggested that, notwithstanding his pain, he persisted with these activities by proceeding slowly and carefully. The difficulty which arises in relation to these matters, as the expert medical opinion evidence confirms, is that only the person experiencing pain can truly appreciate the extent to which it does, or might limit the ability to do certain things, and that the ability to persist in the face of pain varies greatly from individual to individual.
Essentially, though not necessarily expressly so stated, the husband’s contention was whilst he has in the past been able to get by on a limited basis doing the things which he detailed in his affidavit, he would not be able to discharge any of those duties in a manner which would see him successful in the quest for employment ahead of younger fitter persons.
The husband suggested that whilst he had operated a bobcat on a limited basis and done so at a restricted pace, he would not be able to compete for work operating a bobcat with operators who were younger, quicker and not restricted by pain in their operation of the machines. Similarly, the husband asserted that his ability to procure office work was limited by his inability to remain seated for the lengthy periods of time needed to undertake that work.
The husband conceded that he could probably, albeit he asserted on a limited basis, undertake building supervision work, but not the physical aspects of building works themselves.
The husband’s claims are difficult to refute. Unlike the situation in common law proceedings, there was no surveillance film showing the husband doing things that were inconsistent with his claims. Disproving his claims was a difficulty confronting Senior Counsel for the wife. On the other hand, the nature of the husband’s injury, and necessity of the expert medical practitioners to rely significantly upon what he said about his symptoms, restricted the ability of Counsel for the husband to prove that the husband’s medical condition was as he asserted, and not totally or largely reliant upon acceptance of his claims.
Objectively, the evidence suggests that, when motivated to do so, the husband has in the past been able, albeit on a limited basis and at a restricted pace, to undertake activities despite the physical limitations arising from his 1996 injury and/or his 1998 surgery.
So concluding is not inconsistent with the history emerging from the medical records which are before the Court, a helpful summary of which has been provided by Senior Counsel for the wife. To the extent that a number of the husband’s complaints do not find expression, or more frequent expression, in those records, it may be that, as the husband suggested, after a time either the medical practitioner considered that nothing could be done about those matters and did not record them, or that the patient, feeling that nothing could or would be done about them, did not complain.
It might also be noted that if, as Senior Counsel for the wife contended, the husband set about to create a false impression with respect to his health, he must have decided to do so a long time ago. It is surprising if that were the case, that the husband did not ensure that at each and every opportunity which arose, he was careful to repeat his complaints with respect to his asserted symptoms.
The Court has been assisted by expert medical opinion evidence. Dr R, a consultant physician with specialist qualifications in occupational health, provided a report on 7 October 2008. Dr R had previously been appointed as a joint expert.
Dr R saw the husband on 2 October 2008. At that time the husband provided Dr R with his “Past Medical History”, his “Family and Social History”, “Occupational History”, “History of Current Complaint” and “Current Complaints”.
Dr R examined the husband and recorded his findings under the heading “Examination” in the following terms: -
He was neat and tidily dressed. His general manner was polite. He reacted in a reasonable and consistent manner at examination.
He had a mild leg length discrepancy with the right leg being slightly longer than the left and with a compensatory pelvic tilt and a scoliosis concave towards the right. On assessing movement of the lower back forward flexion was to 80 degrees and backward extension 20 degrees. Lateral movement was 30 degrees bilaterally and rotation 20 degrees bilaterally. There was limited expansion of the lumbar segment throughout all these movements. A surgical scar was noted over the lumbar back with some tenderness there. Straight leg raising was on the right 60 degrees and on the left 90 degrees both resulting in back pain. Sciatic stretch test was negative. I could not detect any wasting or specific muscle weakness involving the lower limbs. Calf diameter at maximum was 36 cm and thigh diameter 10 cm suprapatellar 44 cm bilaterally. On testing reflexes the right knee jerk was equivocally less than the left. Ankle jerks were equal. There was an area of diminished sensation around the first and second toes predominantly on the undersurface. Examination of the right knee was normal except for a positive McMurrays sign and some tenderness over the medical knee joint. Examination of the left knee was normal.
Under the heading “Investigations”, Dr R recorded: -
A number of investigations have been undertaken and copies of the reports are enclosed. Initial scanning suggested a lesion compressing the L4 nerve root which appears was found to be a disc protrusion. His last CT scan demonstrated some minor bulging at L4/5 but no evidence of nerve root impingement at any level.
As is apparent from his affidavit, Dr R had available to him a number of earlier radiology reports, the latest of which was dated 23 August 2007, the earliest of which were dated 23 October 2007, 7 August 2001, 2 November 1998 and 23 October 1998.
Dr R’s diagnosis recorded under the heading “Diagnosis and Consistency”: -
[The husband] developed lower back pain in a relatively minor incident in 1998. Investigations demonstrated a lesion which resulted in pressure on the L4 nerve root on the right. He undertook surgery and was told that this was due to a disc prolapse. He had a laminectomy/decompression with minor relief. He has had ongoing pain since that time. He presents now with an appearance of lumbar pain with residual radiculopathy. He also has some minor arthritis involving his knees particularly the right with some degenerative medial meniscus on the right.
As mentioned above he reacted in a reasonable and consistent manner at examination.
Dr R’s prognosis was “for ongoing low back pain radiating to the right leg. There is no indication for further surgery” and that the husband’s “symptoms will persist and increase and decrease on a cyclical basis”.
Of the husband’s “Fitness for Work” Dr R said: -
His basic medical restrictions at the moment are that he not lift greater than 5 kilograms and this only at waist height. He should avoid bending to lift. He should avoid repetitive bending. He should avoid the maintenance of fixed and awkward positions of the back and be able to vary his position between sitting and standing at will.
If work can be found for him within these restrictions there would be no need to restrict hours.
He is capable of performing some form of draftsman type work of [sic] some form of supervisory work in the building industry. He could do something along the lines of despatch.
Having said that he would be difficult to employ considering his history and the unpredictability of his back pain. There may also be some other problems from a psychological and behavioural point of view but this is outside my area of expertise to comment on.
During cross-examination Dr R was referred to the Panadol which the husband had from time to time been prescribed. Dr R indicated that, in his opinion, such regime ranked at about 2 out of 10 on an increasing scale of 1 to 10. The Nurofen which the husband had been prescribed was ranked by Dr R as 4 on the same scaling basis. The husband’s Endone medication was ranked as 7 to 8 on that scaling basis.
Dr R confirmed in cross-examination that he had no recollection of the husband telling him that he had driven a bobcat from time to time. Observing that there was “usually a fair bit of jarring in a bobcat”, Dr R suggested that doing so would be “not ideal for a person with a bad back”. Dr R clarified that a person with the husband’s complaints and symptoms would “avoid it if he could”.
Notwithstanding that driving a bobcat would be not ideal for someone with a back complaint, Dr R suggested that the ability to do so would depend on the person’s “pain tolerance”. As noted earlier, that evidence is consistent with the husband’s evidence, and has the added attraction of according with what commonsense would suggest the position might be.
Dr R agreed that the prognosis he expressed in his report was significantly dependent upon accepting the husband’s assertions with respect to his symptoms. He reiterated however that this did not mean he was “only reliant upon the reliability of the patient”. From the medical reports which he had seen, and the husband’s treatment history, Dr R expressed the expectation that the husband would have experienced pain on the basis he suggested in his report and be restricted in the ways which his report suggested.
Senior Counsel for the wife referred Dr R to the absence of recorded complaints of pain or limitations on his ability to function in the medical records which had been tendered.
As noted earlier, the thrust of Senior Counsel for the wife’s contention was in effect that the weight appropriate to be given to Dr R’s evidence ultimately depended upon the reliability of the husband’s evidence with respect to his symptoms. The husband’s evidence was suggested to be unreliable, largely on the basis that, if he had genuinely experienced the symptoms of which he complains in these proceedings, there would have been far more numerous reported complaints to his medical practitioners in the clinical records which came before the Court, and far more evidence of either ongoing prescriptions of anti-inflammatory medication or, as the clinical notes in 2004 suggest, some success in treating pain by their use. Thus, through no fault of his, Dr R’s opinion evidence was said to be entitled to little weight.
As noted earlier, and as Dr R suggested, there are a number of reasons why more recorded complaints might not appear. It is unnecessary to speculate about any of those matters, other than to record that each has a certain logical underpinning. Dr R said in cross-examination that the lack of complaints and curious aspects of the husband’s medical records over a period of years was “not totally medically inconsistent” with the prognosis he concluded and reported.
It was noted earlier when considering the husband’s evidence with respect to his symptoms, that the nature of his complaints precluded the husband from conclusively proving the substance of his allegations, just as it did those opposing him from disproving his allegations.
Dr R was placed in a not dissimilar position. It was, fairly, not suggested by Senior Counsel for the wife, whose cross-examination revealed substantial experience and expertise in the jurisprudence of common law personal injury cases, that Dr R failed to have regard to any relevant documentation. Nor was it suggested that Dr R failed to undertake any relevant examination of the husband, or that his methodology was otherwise inadequate or inappropriate. It is inherent in expert opinion evidence that it almost invariably relates to matters which are not capable of empirical demonstration. But for that, expert opinion evidence would seldom be required, or useful.
Dr R was, fairly, not suggested to be partisan in the way that is sometimes suggested of medical practitioners giving evidence in personal injury cases (see Vakauta v Kelly (1989) 167 CLR 568).
Dr R’s evidence that the husband’s medical records were not “totally medically inconsistent” with the prognosis appearing in his report was significant. Dr R was clearly aware of the reality that he was significantly reliant upon the veracity of the husband’s claims with respect to his symptoms. Without reading too much into Dr R’s answers to Senior Counsel for the wife’s questions, he appeared to have expressed his expert opinions conscious of those limitations.
As is apparent, Dr R’s conclusion as to the husband’s “Fitness for Work” was carefully and moderately expressed. Importantly, having given qualified endorsement to the husband having a capacity for work in the terms he described, Dr R observed that the husband would be “difficult to employ considering his history”.
The history is not in dispute. The husband did undergo a back operation in 1998. It can be safely inferred that the specialists who advised and undertook that surgery did not do so lightly. There is a material distinction between a person who has an objectively documented history such as the husband has, and a person who has no such treatment history, and is thus simply reliant upon his or her own uncorroborated claims.
It also ought not be overlooked that, as the documentation before the Court reveals, the husband was assessed in early 2007 as eligible for a Commonwealth Disability Pension. It can be safely inferred that disability pensions are not simply handed out to each and every person who applies for such benefits. Nor can it be assumed that, having once demonstrated eligibility for a disability pension, such entitlement remains forever thereafter unchecked and untested.
On the evidence before the Court, and notwithstanding the various curious aspects of the husband’s history of complaints and treatment, as those matters emerged from cross-examination of the husband by Senior Counsel for the wife, the Court accepts Dr R’s opinion as to the husband’s fitness for work in the terms in which Dr R expressed that opinion.
The concluding sentence of Dr R’S report provides a convenient segue to the evidence of the other expert medical practitioner, Dr I.
Dr I, a medical practitoner with specialist qualifications in psychiatry, prepared a report in relation to the husband on 15 September 2008 in reliance upon interviews he conducted with the husband prior to preparing such report. As he readily conceded, Dr I was even more reliant upon the credibility of the information provided to him by the husband than was Dr R.
Dr I commenced his report with a very detailed “Background” which was based entirely upon what the husband told him. Dr I proceeded to chronicle the husband’s “Past Medical History”, again in reliance upon what he was told by the husband.
Comparatively uncontroversial matters were then recorded under the heading “Background History”. Under the heading “History of Psychiatric Symptoms”, Dr I recorded a number of matters of which the husband had informed him, and the medication which the husband also informed him he had been prescribed from time to time.
Dr I provided a “Mental State Examination” and a “Diagnostic Opinion”. The latter was expressed in the following terms: -
[The husband] is suffering from what could be described as a Reactive Anxiety State. It is however diagnosable according to the DSM-IV as Generalised Anxiety Disorder (GAD). What “reactive anxiety state” means in effect is that rather than this being an anxiety disorder which is brought about largely by a constitutional factors, it is a disorder that is brought about by a reaction to life events and explainable entirely on the basis of those life events, and yet meets diagnostic criteria for GAD. DSM-IV defines this as a disorder characterised by excessive anxiety and worry occurring more days than not for a period of at least 6 months about a number of events or activities. In this case, the worry is about his current situation and its antecedents. It also is required that he finds it difficult to control the worry – this is indeed the case as he is constantly preoccupied with it. The anxiety and worry need to be associated with at least 3 accompanying symptoms, which in this case include fatigability, difficulty concentrating, muscle tension, and sleep disturbance –four such symptoms present which more than adequately meets this criterion. Exclusion criteria such as the anxiety and worry not being part of another psychiatric disorder are met which is consistent with the diagnosis. The anxiety and worry have caused significant distress and have impaired his ability to concentrate and therefore have interfered with his occupation, having been associated with the loss of one job. The disturbance is not due to the direct psychological effects of a substance or general medical condition acting on directly on his brain and does not occur in the course of a mood disorder (i.e. a depressive disorder or similar), a psychotic disorder, or a pervasive developmental disorder. There are no panic attacks present and therefore this writer would exclude that.
Dr I was further of the opinion that: -
It is entirely consistent with this disorder, with the symptoms of which [the husband] complained, and also with his appearance and behaviour in the interview that he is currently unable to work. It is likely that from the time he was dismissed from his job in November 2006 that he has been unable to work. [The husband] is attempting to get help for this condition. To the present point of time, therefore, it is this writer’s opinion that the psychiatric symptoms of Generalised Anxiety Disorder have been a major contributing factor in preventing him working.
The prognosis for the husband suggested by Dr I was that: -
When [the husband] can obtain a permanent financial separation from his wife, and thereby isolate himself from the perceived negative actions of his children, his symptoms are likely to improve. This will probably not happen immediately, but will happen over a period of time and this writer will estimate that the improvement would take place somewhere between 18 months and 3 years. It is likely that from the point of view of his psychiatric symptoms in isolation, he would in all probability improve from a symptomatic point of view enough to return to work at least in some limited capacity between 1 and 3 years. That however would still leave the problem of his back pain, which is contributing significantly to his impaired concentration and is also rendering him a less than desirable employee.
Dr I also said: -
It is likely given his back problems (this writer is making the assumption that he has described these reasonably accurately) then the problem is one that is going to be one that prevents him from working in a physical capacity i.e. doing any work that requires lifting, bending etc, and would stop him working as a hands-on builder. It is however also likely that the painful condition will interact with even residues of his anxiety disorder and make it difficult for him to concentrate. Taking both disorders into account therefore, it is more likely than not that [the husband] will not be able to work in the foreseeable future given that this writer’s view of work is not merely obtaining a position, but also being able to sustain it i.e. to be able to function as an employee who is acceptable to an employer. If the psychiatric disorder were to be taken in isolation i.e. in the absence of a chronically painful back condition, then this writer would predict that he would be able to return to work in a period between 1 and 3 years from the time that his financial affairs are completely separated from those of his wife i.e. not from the date of the court case, but from the date where the property division is finalised.
In the course of brief cross-examination, Dr I further explained the nature of the husband’s anxiety state and its precursors. He reiterated that if the husband’s circumstances improved in that the “stressors went away” the husband’s condition would improve. Dr I also reiterated that in his opinion the husband’s dispute with his family was the main cause of his anxiety. Once the family litigation is over it would be reasonable to expect the husband to “get over his anxiety”. Dr I adhered to the broad timeframe within which the husband might reasonably be expected to “get over” his psychological and/or psychiatric difficulties and be able to more effectively pursue employment or self-employment.
With all due respect to the probing cross-examination of him by Senior Counsel for the wife, nothing emerging from the cross-examination of Dr I provides a rational basis for the Court declining to accept his expert opinion evidence. Dr I has impeccable qualifications and vast experience in the specialist field of psychiatry. There was, sensibly, no suggestion that his methodology was in any way unorthodox or unacceptable.
As noted earlier, cross-examination of the husband, though revealing some curious anomalies, did not provide a basis for rejecting the substance of his allegations in relation to his symptoms. As such, the factual underpinning of Dr I’s report cannot be regarded as having dissolved in a Makita (supra) sense.
Having accepted the thrust of Dr R’s expert opinion evidence and that of Dr I, and having regard to the circumstantial evidence in relation to the husband’s ongoing entitlement to Commonwealth Disability Benefits, the Court is able to find that there are physical, psychological and/or psychiatric constraints upon the husband’s capacity for future employment or self-employment.
Those matters however are not conclusive of the issue. The husband recently turned 60 years of age. He has not had employment or self-employment of any substance for more than two years. Commonsense, and the expert medical evidence which the Court has accepted suggest that the husband would be “starting from behind” in terms of any position of employment for which he made application, assuming that his qualifications and experience were appropriate for such positions, as can safely be assumed. Why that is so is as both Dr R and Dr I expressly or impliedly suggested in the concluding portions of their reports.
Put simply, if qualifications and experience were otherwise not vastly unequal, it is difficult to see how, at least within the time frame to which Dr I referred in his evidence, the husband would be successful over other candidates in the quest for employment. Paradoxically, at the time when, in Dr I’s opinion, the husband would be best equipped psychologically to pursue employment, he would be 63 years of age. Assuming that he had not had significant employment in the intervening period, the husband would then have had more than five years out of the workforce. Commonsense suggests that, to the extent that the husband would be better able psychologically to seek employment, that may well be offset by his greater age and absence of recent employment history.
The husband has retained his builder’s licence. As he acknowledged in cross-examination, that licence enables the husband to undertake almost any kind of building work. Whilst there is no specific evidence in relation to the topic it is difficult, largely for the reasons suggested by Dr R and Dr I, to accept that, at least during the time frame to which Dr I referred, the husband could successfully tender for any significant building work in the face of competition, and possibly intense competition, from others with a recent track record in that regard.
The evidence suggests that since 1998, the husband has not undertaken any building work of substance, other than in a family context. That is not to demean what the husband has done in that context, but to recognise the reality that in a competitive industry, it has been a decade since the husband could point to external projects successfully completed.
If the matters to which reference has been made are cumulatively insufficient to support the Court’s conclusion with respect to the husband’s capacity for future employment, there are other matters which can be relied upon. Without being critical, there is no evidence as to the availability of employment for the husband in areas which would utilise or require his skills and experience. Nor is there evidence of those matters in relation to self-employment. It is tempting to suggest that in the current economic conditions, opportunities in the building industry are more likely to be declining than increasing. In the absence of evidence or any concessions in that regard, or any invitation to make submissions about those matters having been issued by the Court, the Court does not rely upon any matters of that kind.
In addition to the absence of evidence of opportunity, there is simply no evidence of the likely remuneration on any weekly, hourly or other basis in relation to any of the areas from which the husband might derive income.
The evidence does not establish that the husband has no future capacity for earning. He probably has a modest capacity to derive some income in the future. When that will be cannot be suggested with any confidence. Whether that be pursuant to employment or self-employment cannot be suggested with certainty. What any such endeavours may return cannot be suggested.
The wife has a demonstrated capacity for employment. There is no suggestion that her employment is in jeopardy. There is no uncertainty about what the wife earns. The wife is some years younger than the husband and thus has both the capacity to earn more than the evidence suggests the husband has at the present time, greater certainty in that regard, and the potential to exercise her greater capacity for longer than the husband has to exercise whatever his capacity might be.
It would be artificial to attempt to be more specific about the comparative earning capacities of the parties than the Court has been. The Court’s acceptance of the thrust of the evidence in relation to the husband’s assertions with respect to his earning capacity, both lay and expert, require finding that the wife has a demonstrably greater earning capacity than does the husband. Such capacity is more secure and potentially enduring than that of the husband. A significant adjustment in the husband’s favour is warranted by virtue of this factor. As is generally the case, the more difficult question is determining an appropriate adjustment. In reaching this conclusion, the Court is mindful of the husband’s ability to earn $250 per week by way of rental from the cottage on D property.
Whilst it might be thought that the parties’ states of health assume potential significance, the Court does not accept that such is the case given that, integral to the earning capacity considerations in the case are the Court’s conclusions with respect to the husband’s state of health. To address the husband’s state of health again in those circumstances would potentially be to count the same thing twice. This the Court will not do.
No other section 75(2) factor has, or has been suggested to have, significance.
To adjust in the husband’s favour by 3.5 percent, which translates as the sum of approximately $105 000, a disparity of 7 percent, or approximately $242 000 would in the Court’s view appropriately recognise the two section 75(2) factors to which reference has been made, by far the greater component of such adjustment being referrable to the disparity of earning ability of the parties. As with all discretionary determinations, this adjustment lacks scientific transparency. It represents a substantial capital sum in a case where the husband’s capital exceeds that of the wife by virtue of the Court’s conclusion with respect to contributions.
The husband is thus entitled to 56 percent of the parties’ assets and the wife to 44 percent of the assets.
The dispute over L property
Before proceeding to consider section 79(2), and whether the orders proposed by the Court are just and equitable, it is necessary to determine the disputed claims to receive L property in specie. As noted earlier, both parties seek to be awarded L property.
The wife’s unchallenged evidence was that she would occupy one of the units in L property and rent out the other three units. Depending upon the outcome of the case and which party receives T property, the wife may or may not receive net rental income from the three rented units at L if she is awarded the property.
The transfer to either party would be subject to the Capital Gains Tax roll-over provisions, on its ultimate sale, or potentially if it were converted to strata title in the meantime upon realisation CGT would almost certainly be payable, or payable on three units if the wife continued to occupy one unit, or on all four if the husband acquired L property given that his evidence was that he would live in the D property. The evidence suggests that CGT would impact more substantially on the wife than the husband, at least until the wife retires from her employment.
When invited to make submissions in support of his client’s claim that he receive L property, the husband’s Counsel was sensibly constrained. As the husband’s Counsel fairly conceded, on the husband’s own figures, if he were awarded L property, he would have to raise and pay to the wife something in the order of $1 000 000.
If the husband borrowed that sum at an interest rate of 5 percent per annum, and rented all four units at approximately $300 per week, the only figure emerging from the evidence as the rental value of the units, after paying rates, taxes and other outgoings on the property, the rental income would barely service the interest payable on the loans raised to pay out the wife.
In the circumstances, as Senior Counsel for the husband submitted, the only basis upon which the husband could seek to be awarded L property was in order to provide him with a capital asset, albeit that capital asset would be heavily encumbered to meet the wife’s entitlement.
The cohabitation of the parties was lengthy. Their contributions over that period were very substantial and not greatly uneven in the Court’s assessment of them. To the extent that the husband’s contribution based entitlement exceeds that of the wife, that is referrable to the Court’s conclusions with respect to the impact of the assets he brought to the cohabitation at its commencement and in 1983.
It is clear that the most valuable asset of the parties is D property. The husband wishes to have that property and the wife does not oppose that. Whilst the Court does not discount the husband’s entitlement because of it, the reality is that D property would provide the husband with a significantly superior standard of living to that which the wife would enjoy were she to occupy one of the units at L. D property would be substantially CGT free in the hands of the husband. D property has the added attraction of generating income of $250 per week from the second residence which has always been on the property.
L property is the second most valuable asset produced by the parties’ cohabitation. Whilst the Court’s discretion could possibly be exercised in the way the husband seeks, in the absence of compelling, or even persuasive reasons for doing so, in the circumstances outlined above, fairness suggests that L property should be awarded to the wife.
To the extent that the husband might complain that receipt of L property by the wife provides her with a capital asset and an income stream, such complaint overlooks the reality that, whilst not a matter warranting criticism of him, the husband’s retention of a property which provides more substantial accommodation for him than he reasonably needs, or that which the wife would be occupying, reduces his capacity to generate investment income. It also overlooks the reality that L property would not generate net income in his hands, and leave the wife without real estate worth anything approaching the value of the husband’s real estate.
The wife also sought that she retain T property. The equity in T property is less than $70 000. Neither the wife nor the husband can point to any compelling or even persuasive reasons why T property should be hers or his. As both parties seek that the wife retain T property, and doing so does not disadvantage the husband, that should happen. It is difficult to see how the husband could afford to retain T property in any event.
The effect of the orders proposed by the Court can be expressed in tabular form. The wife will have the following property with the values which have earlier been recorded: -
Asset
Value
Total
L property
1 179 200
T property
410 000
2005 Toyota Celica
28 550
1996 Toyota Celica
8850
Wife’s bank accounts
5141
Telstra shares
1845
Subtotal
1 633 586
Wife’s add-backs
Part drawn down from Childs Building Company
52 209
St George account
38 300
Total wife’s add-backs
90 509
Total
1 724 095
Less Mortgage on T property
336 370
NET TOTAL
$1 387 725
The wife will retain her superannuation interests ($46 237) and will have her income from her current employment, net rentals from three of the L property units and, if she exercises the option to retain T property, will have to pay the husband $56 851. The wife will thus receive in total $1 330 874.
The husband will have the following property with the values which have earlier been recorded: -
Asset
Value
Total
D property
1 475 000
Sedan vehicle
24 000
1995 Holden Rodeo
2000
Subtotal
1 501 000
Husband’s add-backs
Bobcat
5500
Coles Group Limited Shares
19 209
E-Trade Shares
2080
AXA Shares
1862
Advanced Alliance Investment Account shares
3147
IAG Shares
6791
Perpetual Investment
1553
Telstra Shares
2159
Zurich Retirement Superannuation
9052
IMB Share proceeds
41 335
Commonwealth Financial Services
1729
Balance of paid Legal Costs
41 572
Total husband’s add-backs
135 989
Sub Total
1 636 989
Cash from Wife
56 851
TOTAL
$1 693 840
If the wife does not exercise the option with respect to T property, the property should be sold, and the equity in it shared between the parties as to 77.2 percent to the husband and 22.8 percent to the wife in order to preserve the overall percentage division of the parties’ assets which the Court proposes to order.
It is necessary to consider whether the orders proposed by the Court are just and equitable and not in breach of the requirement of section 79(2) of the Act.
As the reasons for the proposed division of the property of the parties hopefully reveal, the husband’s overall greater entitlement of 12 percent arises from the Court’s conclusion that his contributions modestly exceed those of the wife and that section 75(2) of the Act entitles the husband to a further adjustment. Twelve percent of the asset pool approximates $360 000. Having regard to the duration of the cohabitation, and the nature and quality of the contributions of both parties, this represents a substantial disparity in the ultimate entitlements of the parties. The Court does not consider that such disparity unjustly favours the husband over the wife.
As the Court’s Reasons endeavour to explain, the husband’s contributions are entitled to somewhat greater recognition than those of the wife, essentially because of two capital contributions by or on his behalf. Whilst it is no fault of the wife, the Court concludes that the disparity of current earning capacity, and its likely duration, combined with modest recognition of the wife’s superannuation interest justify the section 75(2) adjustment which is proposed.
The end result of the proceedings is that the husband will be placed in a better position than the wife in terms of assets. For her part, the wife will however have a greater and more certain present and ongoing capacity to support herself from employment and a modest superannuation interest for when that capacity is no longer being exercised.
The Court concludes that, though less than scientific or empirically based, there is an essential fairness in the division of the property of the parties which the Court proposes.
Costs
As foreshadowed at the conclusion of the trial, the costs of both parties will be reserved.
I certify that the preceding two hundred and seventy (270) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman.
Associate:
Date: 22 May 2009
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Injunction
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Jurisdiction
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