Cimarosa and Cimarosa and Anor

FAMILY COURT OF AUSTRALIA

CIMAROSA & CIMAROSA AND ANOR

[2017] FamCA 108

FAMILY LAW– PROPERTY – Adjustment of property interests – Where it is just and equitable to make orders – Contributions of the parties – Where there is limited evidence – Where the wife made a significant initial contribution to the purchase of the property – Where the husband made greater contributions during the marriage and post separation – Where the husband contributed to the welfare of the wife’s children – Where superannuation assets and non-superannuation assets considered separately.

Family Law Act 1975 (Cth) ss 75(2), 79

Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387
Elford & Elford [2016] FamCAFC 45
Pierce v Pierce (1999) FLC 92-844; (1998) Fam LR 377
Robb and Robb (1994) 18 FamLR 489; (1995) FLC 92– 555
Stanford v Stanford (2012) 247 CLR 108
Williams & Williams [2007] FamCA 313

APPLICANT:

Ms Cimarosa

FIRST RESPONDENT:

Mr Cimarosa

SECOND RESPONDENT:

Ms A Cimarosa

FILE NUMBER:

PAC

6110

2014

DATE DELIVERED:

24 February 2017

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Hannam J

HEARING DATE:

22, 23 & 24 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Dr O’Shea

SOLICITOR FOR THE APPLICANT:

Hall & Partners

COUNSEL FOR THE FIRST RESPONDENT:

Mr Breeze

SOLICITOR FOR THE FIRST

RESPONDENT:

Bainbridge Legal

SOLICITOR FOR THE SECOND RESPONDENT:

Michael Vassili Barristers & Solicitors

Orders

That within 42 days of the making of these orders, the First Respondent shall do all such acts and things and sign all necessary documents so as to transfer to the Applicant all his right, title and interest in the former matrimonial home situate at and known as B Street, Suburb C in New South Wales and more specifically described as folio … (“the Suburb C property”).
That contemporaneously with the transfer set out above the parties do all such acts and things and sign all necessary documents so as to discharge the mortgage on the Suburb C property.
That contemporaneously with the transfer the Applicant pay to the First Respondent the sum of $289,729.20.
That if the Applicant does not transfer the sum specified in Order 3 above to the First Respondent within 42 days of the date hereof the Applicant and the First Respondent immediately do all acts and things and sign all documents necessary to list the Suburb C property for sale by private treaty with a real estate agent agreed between the parties and at a price agreed between the Applicant and First Respondent or failing agreement within 14 days after the date of these Orders then with an agent determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee and at a price recommended by that agent.
If the Suburb C property is not sold within three months after the date of listing pursuant to Order 4 then the Applicant and the First Respondent shall forthwith do all acts and things and sign all documents necessary to list the Suburb C property for sale by public auction with an auctioneer agreed between the Applicant and the First Respondent and at a reserve price agreed between the Applicant and the First Respondent or failing agreement as determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee.
In the event that the Suburb C property is not sold by public auction as provided for above then the Applicant and the First Respondent shall do all things necessary to relist the Suburb C property on the market for sale by private treaty with the real estate agent agreed between the parties and at a price agreed between the Applicant and First Respondent or failing agreement with an agent determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee and at a price recommended by that agent.
That the proceeds of sale of the Suburb C property be dispersed as follows:
(a)in payment of the costs of sale including real estate agent’s fees, legal fees and auctioneer’s fees, if any;
(b) in payment of the mortgages to St George Bank;
(c)in payment of any rate of adjustments as at the date of settlement of the sale;
(d)with respect to the balance remaining, if any, in payment to the parties as follows:
(i)70 per cent of the net proceeds to the Applicant; and
(ii)30 per cent of the net proceeds to the First Respondent
That each party be declared the sole owner in law and equity of all items of personalty, chattels and financial resources in their name, possession or control not otherwise dealt with in these Orders including but not limited to bank accounts, any choses in action and superannuation benefits.
That the parties 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 or neglects to execute any deed or instrument the Registrar or Deputy Registrar of the Parramatta Registry of the Court be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 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 upon being satisfied by affidavit of such neglect or refusal. A party shall be deemed to be in default if that party refuses or neglects to sign any document within seven days of being requested to execute that document, such request being made in writing.
That the Applicant’s application with respect to the property situate at and known as D Street, Suburb E in New South Wales and more specifically described as folio … (“the Suburb E property”) is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Cimarosa & Cimarosa has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 6110 of 2014

Ms Cimarosa

Applicant

And

Mr Cimarosa

Respondent

And

Ms A Cimarosa

Second Respondent

REASONS FOR JUDGMENT

Introduction

This matter concerns the division of matrimonial assets following the breakdown of the 14 year relationship of Ms Cimarosa (“the wife”) and Mr Cimarosa (“the husband”).
The wife contended throughout most of the proceedings that a property at Suburb E (“Suburb E”) owned by Ms A Cimarosa (“the husband’s mother”) should form part of the matrimonial property pool and as a result the husband’s mother is a party to the proceedings. However, during submissions on the third day of the trial it was conceded on behalf of the wife that even if the court found that the husband had a beneficial interest in Suburb E, the wife would have no entitlement to the property. The wife then withdrew her claim that Suburb E formed part of the marital estate and no longer seeks orders in relation to that property.
As the result of the wife’s concessions, the dispute is concerned with the adjustment of property interests in a small matrimonial property pool comprising the former matrimonial home, some household items and the parties’ respective superannuation interests.
The wife seeks orders that would see her receive 75 per cent of the non-superannuation matrimonial property pool and the husband receive 25 per cent. She proposes orders that the parties each receive 50 per cent of the total superannuation interests.
The husbands’ proposal is that the parties each receive 50 per cent of the marital property excluding superannuation and that no order be made with respect to superannuation.
The Application of the husband’s mother (“the second Respondent”) is that the wife’s Application as it relates to Suburb E be dismissed and that the wife pay the second Respondent’s costs.

Background

The wife was born in 1960 and was 56 at the time of the final hearing. The husband, born in 1961 was 55.
The parties met in March 1995 and almost immediately formed a relationship. At that stage the wife was divorced from her previous husband but they and their children remained living in their former family home and a final property settlement was still unresolved. The husband had resolved financial matters arising from his first marriage.
In 1995 the husband gave $25,000 to his parents which the parents used together with a bank loan to purchase Suburb E.
In 1996 the husband moved into Suburb E which he rented from his parents.
In 1997 the wife purchased a property in Suburb F (“Suburb F”) using funds from a property settlement from her first husband and moved into this property with her four children from that marriage.
In 2000 the husband and wife purchased a property together at Suburb C (“Suburb C”) for $455,000. This was funded entirely by a bank loan which was secured by a mortgage over the wife’s Suburb F property.
The parties and the wife’s four children moved into Suburb C in February 2000.
Both the husband and wife were working full time when they began living together.
In June 2000 the wife sold her property at Suburb F for $275,000 and says that she paid $227,500 from these funds to reduce by half that part of the loan from the bank which related to Suburb C. This is a matter of dispute dealt with later in these Reasons.
In November 2002 the loan and mortgage over Suburb C were renegotiated.
The husband and wife were married in 2003.
Over time the parties had financial difficulties as they had insufficient income to cover their expenses. On a number of occasions beginning in November 2002 they refinanced their loan or loans, increasing the amount borrowed each time. Each loan was secured by a mortgage over Suburb C.
The parties began experiencing some difficulties in their relationship from about 2010. In May 2010 the husband’s father died and for a few months from late 2010 the husband moved to live with his mother with whom he was very close.
In February 2011 the husband moved back into the family home but the parties’ relationship continued to deteriorate and they experienced ongoing financial difficulties.
The parties separated in January 2014 but continued living separately in Suburb C for some time. The husband then moved out of Suburb C. At the time of the proceedings the wife was residing in Suburb C with one of her adult children.
The parties were divorced in January 2016.

The matters in dispute

Contributions

Initial contributions

It is not in dispute that at the time the parties began living together in February 2000, the wife owned her property at Suburb F, a car, household furniture and a nominal amount of savings in the bank. It is also not in dispute that the husband owned no property at this stage other than a $40,000 interest in his superannuation fund.
It is common ground that the entirety of the funds to purchase Suburb C was borrowed by the parties, and secured by a mortgage over the wife’s Suburb F property.
The parties also agree that they decided to purchase Suburb C jointly and each party was to make a contribution after the property was purchased. They both regarded the initial loan of $487,000 as “bridging finance”. $455,000 of this sum was used to purchase Suburb C, pay stamp duty, and other fees and expenses associated with the purchase and some of the loan was used to refinance the husband’s car loan.
The only question to determine is whether the wife made a 50 per cent contribution to the acquisition of Suburb C as she contends.
The wife’s case is that the parties agreed to contribute half each to the purchase of Suburb C by selling the property owned by each of them. She maintains that the husband represented to her that he owned Suburb E and intended to sell it to contribute “his half” of Suburb C. Her intention was to sell Suburb F and use the proceeds to purchase “her half” of Suburb C. She says that with each party contributing the funds from the sale of their respective properties, the bridging loan was to be paid out in full with the result that Suburb C would be unencumbered within a short time after the date of purchase.
In her affidavit the wife says that shortly after purchasing Suburb C the husband told her that he had decided not to sell Suburb E but to lease it and use the rent to reduce the mortgage loan over Suburb C. The wife says that she still maintained the intention to sell her property and to use the funds for her half of Suburb C.
The wife says that she sold Suburb F for $275,000 days before the bridging loan on Suburb C was due to be repaid or renegotiated. She says that $227,500 from the proceeds of the sale (half of the $455,000) was applied to the bridging loan which was “closed off”. She says the husband alone then obtained a new loan to cover his half contribution to that property and the unspecified amount borrowed to purchase the car.
In other words it is the wife’s contention that by July 2000, months after the parties began living together, she had paid half the purchase price for Suburb C and had no outstanding liabilities.
Under cross–examination the wife remained firm as to her version of events. She was not challenged about her evidence that she paid half of the loan for the purchase of Suburb C in July 2000. There was little cross–examination concerning the purchase and any of the financial arrangements with respect to loans prior to 2002.
The husband’s evidence in relation to contributions to Suburb C is unclear and somewhat contradictory. Overall, he has little to say in his affidavit about the contributions made by the wife to the purchase of Suburb C.
The husband says that he did not have any property of significance when the parties decided to purchase a property together in around 2000 but that the agreement was that each of the parties would contribute half to the purchase price. Although he says that the parties agreed that they would each pay for half of this property and that the wife “needed to sell her [Suburb F] property” [to make her contribution to the half of the purchase price] he does explain how he intended to contribute to the purchase of the property. His only evidence on the matter is a denial that he ever had the intention to or stated that he would sell Suburb E and contribute the funds from that sale to the purchase of Suburb C. He has consistently maintained that Suburb E was not his to sell.
The husband’s affidavit is virtually silent in relation to the wife’s contention that she did make a lump sum payment of $227,500 effectively towards the purchase of Suburb C from the proceeds of the sale of her Suburb F property. He devotes a single sentence in his affidavit to this issue when he says “[the wife] retained the balance of the proceeds of sale from her Suburb F property in an account in her sole name.”
The husband does however state “when the mortgage was first taken out, we did consider that the original loan was my responsibility”. This is consistent with the wife’s contention that as she paid her half of the purchase price the husband’s contribution was to be made by he alone bearing responsibility for the repayments of the balance of the loan.
Under cross–examination the husband agreed that he does not set out anywhere in his affidavit his recollection of the circumstances surrounding the initial application for bridging finance. He agreed however that there was only one loan made at that stage by St George Bank for $487,000 and that he thought it was for about a six month period. He said that he could not recall the repayment arrangements for the six month loan but thought that it was for interest until the full amount was paid. The first mortgage for the bridging loan secured by the wife’s Suburb F property is annexed to his affidavit.
There are no other documents in relation to the bridging loan or any documentary evidence relating to repayments on any loan prior to 2002.
In making findings concerning the initial contributions of the parties and other factual matters in dispute I make the following general observations. First, I do not make a general credit finding preferring the evidence of one party over the other as to all matters.
Further, I have many concerns about the reliability of both parties’ evidence. Both make some assertions in their respective affidavits which are at odds with documents annexed purportedly in support of those assertions. For example, the wife deposes that the husband [alone] applied for finance [in November 2002] whereas the document said to support this application for finance is clearly in the name of both parties. The husband for example deposes to his income being applied to pay family living expenses (when the relationship was intact) whereas the bank statements he annexes in support relate to a period after the parties were separated. Many of his annexures do not relate to the corresponding paragraph in his affidavit.
In assessing each party’s version I also note that both made concessions under cross–examination which were so significant that questions are raised about the reliability of their evidence generally. For example, in her affidavit the wife says that she and the husband held a credit card that she “used occasionally for groceries”. Under cross–examination the wife agreed her affidavit was incorrect as to this matter and that she had used the credit card for many living expenses. On other occasions (for example in relation to the assertion that the husband alone applied for the loan in November 2002) the wife said her affidavit was “worded incorrectly”. The wife was also asked about numerous other occasions in which she and the husband made an application to refinance the loan. She agreed that she was intending the reader to accept that the husband solely was applying to refinance his own debts but she conceded under cross–examination that she had herself signed each of the applications to refinance the debt.
Similar questions arise in relation to the reliability of the husband’s evidence. For example, he gives a quite detailed account of the application for the original loan to purchase Suburb C conducted through a broker. It includes specific conversations between himself and the broker. After being cross–examined at some length about this topic, the husband ultimately conceded that all of the evidence he had given in relation to the first loan application in fact related to the first refinancing of that loan nearly two years later. He ultimately conceded that his affidavit was not correct and that he provided wrong instructions to his solicitor.
Overall, both parties’ affidavits lack detail as to many important events, and both parties were uncertain and had poor recollection about key matters. Accordingly, I am circumspect in making any findings upon the uncorroborated evidence of either party. However, there is an absence of corroboration as to a number of matters which raises significant difficulty in finding the facts where the parties are in dispute.
Notwithstanding my general comments, I am satisfied on the balance of probabilities that in about July 2000 the wife paid a lump sum of $227,500 in reduction of the bridging loan for the purchase of Suburb C.
I accept the wife’s evidence as to this matter for the following reasons. First, there is no dispute that the parties had an agreement to share the costs of the purchase of Suburb C and the wife’s share was to come from the sale of her Suburb F property. The husband does not dispute that the initial bridging loan included $455,000 to cover the purchase price of the property and associated costs. The initial mortgage, one of the only relevant documents in existence, encumbers the wife’s Suburb F property. It is also not a matter in dispute that the wife did sell Suburb F which must mean that the mortgage was discharged.

The loan application for the refinancing of the parties’ debt in November 2002 indicates that there was a balance of $257,750 on that loan at this time. It is both parties’ evidence that they were already experiencing financial difficulties by this stage and needed to borrow more money. It can be inferred therefore that the parties had made little headway in reducing their indebtedness. It can also be inferred that the only way that this loan could have been reduced to this extent is through the payment of a significant sum or sums.
The balance of the parties’ loan in November 2002 being $257,750 is entirely consistent with the wife having paid $227,500 off the total initial loan of $487,000. There is no other evidence before the court to explain this significant reduction in the parties’ debt at this time. The small reduction of only $1750 in the two and a half years after the wife says she made this payment is consistent with the parties struggling to reduce their indebtedness.
Further it was not suggested to the wife under cross–examination that her evidence about this contribution was incorrect or inaccurate. She was also not challenged about her other evidence concerning the bridging loan, such as, that it was for a short term and due to expire in July 2000 at about the same time that she made this payment. The husband also made some concessions under cross–examination consistent with the wife’s contentions in this regard including that the first bridging loan was short term and for about six months. Finally, the mortgage over the wife’s Suburb F property must have been discharged when the property was sold, consistent with the wife’s contention that in July 2000 when she made this payment the bridging loan was closed off.

Contributions prior to separation

The wife’s employment and income

It is agreed between the parties that both of them were working full time when they moved in together and each made contributions from their respective earnings to the household expenses. There is however, a dispute about the wife’s employment and utilisation of her income at other stages throughout the relationship.
The wife says that other than for a period of about three months in early 2002 when she was unemployed, she remained in full time employment until December 2008. She sets out in some detail each of the positions in which she was employed throughout this period and provides the names of each employer and the periods of time for which she was employed. She says that she ceased working in December 2008 as she had severe joint pain that was later diagnosed as rheumatoid arthritis. The wife was not challenged about her evidence concerning her employment.
The husband says that the wife stopped work “after four to five years” (that is around 2004 to 2005) and that he was the sole income earner after this time. In general he does not dispute that when the parties were both in full time employment they “were able to cover the living expenses and mortgage repayments” though in some parts of his affidavit he claims that he did not know how the wife spent her income and asserts that he solely supported the wife, her children and himself throughout the marriage.
There is virtually no evidence to support the husband’s contention that after around 2004 or 2005 the wife stopped work and he was the sole income earner.
For the reasons given earlier about the parties’ reliability I attach particular weight to corroborative evidence for the parties’ contentions. Information provided by the parties in connection with a loan application in February 2008 includes that the wife had been employed in her then current position on a part time basis for the previous twelve months and had prior to that been employed by the same employer for five years. This is generally consistent but not identical to details of her employment deposed to in her affidavit and is not consistent with the husband’s contention that she was unemployed from about 2004 or 2005.
In documents associated with a further refinance of the mortgage loan in June 2009 it is stated that the wife was a full time employee who had been in her current position for two years and four months. This is inconsistent with both the husband’s assertion that she had been unemployed for some years and her own evidence that she had left her employment in December 2008 due to a medical condition. By the time the parties borrowed a further $20,000 in September 2009 the wife stated on the loan application that she had a $0 yearly gross income consistent with her case that she was not working by this stage.
It is not in dispute between the parties that at some stage the wife engaged in a business. The wife says that she began being engaged in this business from February 2009 when she was not otherwise employed due to her illness. She says that she undertook this work from home and was engaged in the business throughout the day from around 10 am after completing her household chores. She says that the husband’s father (who has since deceased) gave her $6,000 to start this business. Although she was originally to pay the money back she says the husband’s father said to her a number of times in the course of various conversations “don’t worry about it [the debt]”. The wife says that the husband’s father passed away in May 2010 without this sum having ever been repaid.
The wife says that she struggled with business commitments and that this business “never became a realistic commercial proposition” which I understand to mean it did not make a profit.
The wife deposes that in about February 2010 she became ill and was admitted to hospital. She was subsequently diagnosed with myocarditis which she understands is “probably due to rheumatoid arthritis”. She says that following her discharge from hospital she reduced the hours associated with her business which she ultimately discontinued. The wife says that she then began to work casually and then obtained part time work from about early 2013 and worked in this position until “perhaps August 2013”.
Although the wife adduces no evidence in relation to her medical condition there was no dispute that she was diagnosed with rheumatoid arthritis in November 2011. There was little cross–examination concerning her evidence about her business except to challenge the time she contends she was engaged in it and the extent to which it was unprofitable. It was put to her that she spent two to three hours per day engaged in her business though she remained firm that she spent more time than that. It was also suggested to the wife under cross–examination that she incurred an overall loss of about $10,000 from the business but she said that she could not recall whether this was the case.
Although the husband deposes to initially not supporting the wife when she first proposed setting up a business he subsequently says when the parties sought to borrow money from his father he thought “it looks like a good system” and “we might make some money”. He agrees that as he and the wife had no money they approached his parents and asked to borrow $6,000 to help her set up the business.
The husband maintains that the money advanced by his father was a loan which was not ever repaid. He says in his affidavit that the wife’s business did not make a profit and that the parties lost “well over $25,000 in relation to this business”. The husband deposes that due to her health the wife was not working full time and was involved in the business for two to three years.
I am satisfied that the wife continued to work, mainly full time, up until the end of 2008 when she became unwell, that she was engaged in a business for about two or three years and thereafter did a small amount of part time work until about mid-2013. In this regard I prefer the evidence of the wife to that of the husband. Although he deposes that the wife stopped work after four to five years, he conceded under cross–examination that the wife worked most of the time during the marriage in a full time capacity. The contention in his affidavit that he was the sole income earner from about 2004 or 2005 was not put to the wife in cross–examination. She was also not challenged about her more detailed evidence concerning her particular employers and periods of employment during this time. Further, while documents completed by the parties at the time in connection with the various loan transactions are not exactly consistent with the wife’s evidence concerning her employment, they are generally consistent with her contention that she was employed at this time by particular employers and inconsistent with the husband’s contention that she was unemployed.
The wife was also not challenged about specific evidence concerning her earnings during this period. The wife relies upon Notices of Assessment from the Australian Taxation Office (“ATO”) for all of the tax years ending June 2004 to 2013. These Notices indicate a very varying taxable income. For the first few years until mid-2008 she had a taxable income of between $31,874 and $52,422. For the tax year ending June 2009 her taxable income according to her Notice of Assessment was $15,543 and by June 2010 was $647. In 2011 it was just under $10,000 and in 2012 was just under $5,000. This is more consistent with the wife’s evidence about her pattern of employment over the years of the relationship prior to separation and is inconsistent with the husband’s assertion that the wife stopped work after four to five years from 2000.
The next issue in dispute concerns the use by the parties of their respective earnings during the relationship. Both of the parties make complaints about the spending patterns of the other and the application of income to expenses or lack of knowledge about this issue. However, although the husband deposes at various points in his affidavit that he alone supported the wife and her children for whom he had no legal responsibility, he ultimately did not dispute that the wife worked full time for a number of years and that at that time together were able to meet living expenses and mortgage repayments.
It is also common ground that the parties were effectively living beyond their means for most of the relationship and that they refinanced the mortgage loan numerous times as their financial position worsened. Essentially, the main matter of dispute is that each contends that the other was extravagant and needed to curb his or her spending. The wife generally contends that many of the expenses incurred throughout the marriage were those of the husband alone and the husband contends that he solely paid for expenses which were not his responsibility.
Although the wife deposes in her affidavit that the husband alone was responsible for the loan on each occasion it was refinanced when confronted with the loan documents under cross–examination she conceded that the loan was a joint liability. She also agreed that the husband alone made repayments to service this debt.
Although both of the parties maintain that they each bore responsibility for particular expenses which ought to have been the responsibility of the other, in my view, it is artificial to approach the matter in this way. I am satisfied that their finances were intermingled and that the household operated as a single financial entity. I am also satisfied that both parties contributed through their income to pay all of the outgoings and expenses associated with maintaining the household to the extent they were each able to do so. I make these findings for the following reasons.
In his affidavit, even though the husband contends that he paid for expenses related to the wife’s children, he concedes that the accumulated debts over time were based on “joint expenses”. The husband concedes that the wife contributed her income towards the weekly food bill. It is also generally the tenor of the husband’s evidence that the refinancing and increasing the loan over the years from 2002 until mid-2013 was necessary “as our debts accumulated” (emphasis added). Some of the loan advances were also used, according to the husband, to improve the jointly owned Suburb C property. According to the husband’s affidavit in conversations with his father concerning a loan for the purposes of the wife’s business the husband referred to the parties’ together hoping to make some money from the business. At one point in his affidavit the husband refers specifically to working out “our household budget” and notes in this regard that he and the wife spent between $10,000 – $15,000 more each year than they earnt [together]. He also deposes to borrowing money from his parents, which he spent towards the mortgage repayments and “general living expenses for the whole family”.
Although the wife continued to maintain that in the main the debts incurred throughout the marriage were essentially the responsibility of the husband, under cross–examination it became apparent that the joint credit card used by the parties was for a range of household expenses and that the husband alone paid for many expenses including mortgage repayments from which the entire household benefited
The general tenor of the wife’s evidence also supports a finding that she and the husband operated their household as a single financial unit. She refers “our finances bec[oming] strained after the beginning of 2002”. As previously noted although she generally attempted to assert that the debts incurred over time were the husband’s alone it became clear under cross–examination that she was a party to each of the refinance agreements and was also liable for the repayments.

Contributions following separation

The final factual dispute concerning the party’s contributions relates to the period following separation. Although there was very limited cross–examination and virtually no submissions concerning this period I understand the husband to contend that he alone continued to bear responsibility for all or most of the household expenses including the mortgage repayments at this time which the wife disputes.
The parties seem to agree that there was an incident in December 2013 which effectively ended their relationship and from January 2014 they were “separated under the same roof”. There is limited evidence about the length of time in which this arrangement operated which was not explored under cross–examination. The wife deposes to the husband remaining at Suburb C until the end of December 2015 which was not challenged under cross–examination while the husband’s affidavit is silent as to that matter. There appears to be no dispute that one of the wife’s adult children has continued to reside at Suburb C since the parties’ separation to the date of the proceedings.
So far as the financial arrangements following separation are concerned there appears to be no dispute that there were two loans secured by mortgages over the Suburb C property at the time of separation and at the time of hearing both of which have been serviced by the husband alone during this period. The parties also agree however that the husband has not always met the obligations under the loan agreements and has missed some repayments.
There are incomplete Statements relating to the repayment of the mortgage loans from January 2014. The most recent Statements which are annexed to the husband’s affidavit relate to the period from 9 November 2015 to 8 May 2016. These records indicate that on occasions the payments were in arrears and there were times where no weekly payments were made for a period of several weeks.
The husband also says that he has paid $325 per month for home and contents insurance for the Suburb C home. He deposes to making no other payments towards expenses after separation other than in relation to specific liabilities which are dealt with later in these Reasons. He gives no evidence about his income since separation other than to say it is “variable”.
The husband appears to contend that the parties have both made contributions towards utility bills and other household bills since separation as he refers to the wife paying “her share” of bills and leaving a note with a request to pay “his share”.
The wife gives limited evidence in relation to financial matters following separation. She concedes that the husband paid for the mortgage loans and rates but says that after separation she assumed responsibility for the telephone and internet bills. Otherwise the wife deposes to making a one off payment of $2,000 to a gardener to clean the property on one occasion after November 2014 where it had fallen into disarray and says she has continued to pay an unspecified amount for a gardener once a month. The wife also deposes to making payments to maintain the swimming pool of $80 to $160 each fortnight since April 2015. At the date of the proceedings she says that the costs associated with this maintenance are $5,325.
Although it is difficult to make any detailed findings, as there was no challenge to the wife’s contention that the husband remained living in the home until the end of 2015, I am satisfied that that occurred. I am also satisfied that the husband alone has been responsible for paying the two mortgage loans since separation, that the wife has taken responsibility for expenses with respect to gardening since November 2014 and pool maintenance since April 2015 and has also paid the telephone and internet account since separation. Otherwise, I am satisfied that the parties shared responsibility for any other household expenses until the husband ceased living at Suburb C at the end of 2015.

Liabilities

The husband contends that three particular debts should be treated as joint liabilities in these proceedings while the wife contends that these should be treated as liabilities of the husband alone.
First there is a liability described as “G Finance” which the husband asserts is a debt of $15,000. This is also described in the husband’s Financial Statement as a loan in the husband’s name in the sum of “E12,000”. Second it is the husband’s case that an amount of $26,990 for “credit cards debts” should be treated as a joint liability. Third, the husband contends that a loan from his son should be treated as a joint liability. In the Balance Sheet this loan is specified as standing at $32,000 which the husband’s counsel conceded in the course of submissions should only be regarded as a joint liability as to $10,000.

Car Loan

There is limited evidence in relation to the G Finance debt. The husband deposes in his affidavit:
My current liabilities include:…
(c) G Finance motor vehicle loan for the motor van with approximately $15,000 outstanding.
He also deposes to purchasing this van in 2010 “under my business ABN” and says that it “was purchased under motor vehicle finance and the amount of approximately $15,000 is currently outstanding”. The husband was not cross–examined about this loan or purchase of this vehicle.
In her affidavit the wife deposes that the husband owns a van which she says was purchased at the beginning of 2014 after the parties had separated. She says that she is unaware of the arrangements under which the van was acquired. The wife was not cross–examined about this evidence.
There are no documents in relation to this loan and the husband’s own evidence that he purchased the vehicle “under [his] business ABN” suggests that the liability may be a company liability. The loan is however listed in his Financial Statement as a loan in his own name with an estimated outstanding amount of $12,000. In circumstances where in the husband’s case, it is a loan for which he is solely responsible it may be expected that he would adduce evidence of the existence of the loan at the very least. Further, the wife was not challenged on her assertion that the husband told her he had purchased a van after the parties had separated and that she had no knowledge of the financial arrangements surrounding it. I cannot be satisfied as to the existence of the loan or that it was incurred by the husband prior to separation. I am not satisfied that any vehicle loan should be included as a liability of the parties for the purposes of this property settlement.

Loan from the husband’s son

There is also a paucity of evidence in relation to the loan from the husband’s son he contends should be treated as a joint liability. The only reference in the husband’s affidavit to this loan is contained in a paragraph relating to various loans said to have been made by the husband’s son to the husband totalling $32,000. Five of these loans were made after the parties separated and the husband does not contend that these sums should be included as joint liabilities. In relation to the $10,000 which he asserts is a joint liability the husband says the following:
In 2013 I said words to [my son] to the effect of “I’m in a bit of a bind, can I borrow some money”. I borrowed $5000 on 29 July 2013 and a further $5000 on 5 August 2013 whilst [the wife] and I were still together.
The husband says that this $10,000 was used to assist with the daily living expenses of both parties and the wife’s children and to assist him with mortgage and other credit card debt repayments. The husband was not cross–examined in relation to this evidence.
There is no other evidence supporting the existence of this loan. In particular there is no evidence from the husband’s son to confirm that the money was advanced nor is there any banking or other record of the loan. Importantly, while the husband says that this sum has not been repaid, he does not assert that he is required to repay it within a particular time or at all.
It is submitted on behalf of the husband that as the wife does not challenge the husband’s assertion that this loan was made and the manner in which it was spent I should be satisfied that it exists and is a joint liability of the parties.
In my view, real questions are raised about the existence of the loan. For the reasons given earlier, I approach the uncorroborated evidence of both parties with great caution. Moreover, even if I accept the husband’s evidence that his son gave him $10,000 at this time, there is no evidence that he has any obligation to repay it. For this reason this sum should not, in my view, be regarded as a matrimonial liability.

Credit card debts

The third liability is listed in the Balance Sheet as “credit card debts” in the sum of $26,990 with no further details. In the husband’s Financial Statement the credit card liabilities are listed as $5,586 for Woolworths Money, $3,567 for Coles Mastercard, and $5,049 for GO Mastercard. These amounts total $14,202. There is no evidence at all that $26,990 is outstanding in relation to credit card debts.
In the husband’s affidavit he deposes to his current liabilities as including credit card debts in relation to four credit cards. The annexures setting out the balances do not relate to some of the credit cards referred to in his affidavit. One of these credit cards (which according to the evidence was used by both parties when the relationship was intact) has a current outstanding balance of nil. Annexures to the husband’s affidavit indicate that the other three credit cards have sums outstanding totalling $14,202 as listed in his Financial Statement.
Each of the three credit card accounts which the husband contends are joint liabilities are in the husband’s name alone and in each case there is no evidence to indicate when the accounts were opened.
Cross–examination in the proceedings was limited to the single credit card in the name of both parties which has a nil balance and which appears not to have been utilised for many years.
It is submitted on behalf of the husband that a statement in his affidavit that “the Woolworths credit card was opened for daily living expenses and to purchase [business] products” refers to the Woolworths Money account with an outstanding balance of $5,585.80. However, there is no evidence (including an account number) to indicate that “the Woolworths credit card” referred to in his affidavit is the same account as the “Woolworths Money Visa Card” which has the outstanding balance.
The husband makes no reference in his affidavit to the circumstances in which he obtained the three credit cards which have generated the debts which he contends should be treated as joint liabilities. The wife was not challenged about her evidence that the parties only held one joint credit card which was utilised by both parties. In the course of submissions it was conceded on behalf of the husband that there was no evidence that these credit cards were used to purchase any items or expenditure during the marriage.
In summary, there is no evidence which could form the basis for the wife’s liability for current credit card debts in the name of the husband alone. There is no evidence to suggest that these particular accounts were opened prior to separation or that any of the balances outstanding in 2016 related to expenditure during the course of the marriage.
For the foregoing reasons there is no basis upon which the wife should be responsible for the three categories of liability as the husband contends.

The Motor Vehicle

The husband seeks an order that the he transfer to the wife’s daughter (Ms H) a motor vehicle and that he be indemnified by the wife against any guarantee in relation to finance or any other liability regarding this motor vehicle. There is no evidence at all concerning this vehicle other than a brief reference at [80] and [121] of the husband’s affidavit. There was also no cross–examination concerning this vehicle. The vehicle has not been clearly identified, nor is there any detail concerning the guarantee or any other liability. This proposed order was not addressed in submissions, and I do not propose to make the order as proposed by the husband.

Valuation

After the wife abandoned her contention that Suburb E should form part of the property available for distribution, it was agreed that the joint property of the parties is comprised by two assets. The first is the Suburb C property which the parties agree had a value of $1,375,000 at the date of the hearing. The second is the household contents which the parties agreed were jointly owned in the possession of the wife. The wife estimated the value of these items to be $12,500 in the Balance Sheet and the husband estimated their value as $2,000. In the course of submissions the husband adopted the wife’s estimated value and although there were effectively no submissions made in relation to this matter it appears that the parties proceeded on the basis that the wife’s value is correct.

The Law & Discussion

The approach to the determination of an application for property settlement orders is set out in Stanford v Stanford[1], which was considered in detail by the Full Court in Bevan & Bevan.[2]
[1] (2012) 247 CLR 108.
[2] [2013] FamCAFC 116.
The starting point is a consideration of “whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles the existing legal and equitable interests of the parties in the property.”[3]
[3] Stanford & Stanford (2012) 247 CLR 108 at [37].
This involves identifying the existing interests and then considering whether having regard to the particular circumstances before me, it would be just and fair to make orders for the alteration of property interests.
I should next consider the matters set out in s 79(4)(a) to (c) of the Family Law Act 1975 (Cth) (“the Act”), that is the financial and non–financial contribution made by the parties to the property and to the welfare of the family constituted by the parties.
I must then consider the remainder of the matters in s 79(4) including the matters referred to in s 75(2) so far as they are relevant, and determine on this basis whether there should be a further adjustment to the parties’ contribution–based entitlements.
Finally, I must then consider the justice and equity of the proposed orders. As was said in Bevan (supra) at [86], the just and equitable requirements are “not a threshold issue, but rather one permeating the entire process”.

What are the existing interests of the parties?

There is agreement between the parties as to a number of assets and liabilities, and I have made findings concerning certain discrete other issues. The parties otherwise agreed that certain assets and liabilities acquired after separation would not form part of the Balance Sheet.
On the basis of those findings and agreement, the current interests of the parties are set out in the following table:

LIST OF ASSETS AND LIABILITIES
ASSET	HUSBAND	WIFE			JOINT
Suburb C property	$1,375,000
Household contents	$12,500
Total Assets	$1,387,500
LIABILITIES	HUSBAND	WIFE		JOINT
Mortgage Suburb C property (Residential loan)	$326,381
Second mortgage (Residential loan)	$95,355
Total Liabilities	$421,736
Net Assets excluding Superannuation	$965,764
SUPERANNUATION	HUSBAND	WIFE		JOINT
AMP Flexible Super	$36,000
CBUS	$187,000
Total Superannuation	$187,000		$36,000		= $223,000

The question to be determined is whether it would be just and equitable to leave the property rights intact having regard to there currently being total assets excluding superannuation to the value of $965,764 owned equally between the parties and superannuation interests of each party totalling $223,000.
As was indicated in Stanford (supra) the requirement that it would be just and equitable to make an order is in many cases readily satisfied by observing that at [42]:
108.… as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. … any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marriage relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the Court make a property settlement order. …
In this case, the parties were in a relationship for 14 years before separating. The wife brought a significant financial resource to the marriage while the husband had no property to speak of other than his interest in superannuation. The parties’ only substantial asset, the Suburb C property, increased in value significantly over this time. Although the parties did not accumulate any other property, the increased equity in their home would have provided for their future life together. That an arrangement came to end upon separation.
As the parties accept that there will not be common use of the property by both of them in the future and they both seek adjustment orders but are unable to agree to the adjustment, I am satisfied that it is just and equitable to make orders under s 79 of the Act.

The Balance Sheet

A two property pool approach

Although the wife seeks orders that would see each party receiving half of the total superannuation interests virtually no attention was given to this matter in the proceedings. As previously indicated the proceedings were almost exclusively concerned with the question of whether the husband had a beneficial interest in the Suburb E property purchased by his parents and owned by his mother at the time of the final hearing.
There is no evidence about the wife’s superannuation interest at all except that its value at the time of the final hearing was $36,000. There is virtually no evidence concerning the husband’s superannuation interest except that he says it was valued at $40,000 when the parties began living together in 2000. The husband’s interest had a value of $187,000 at the time of the final proceedings.
So far as the wife’s contribution to the husband’s superannuation interest is concerned this is not a case where the husband alone maintained his income earning capability while the wife took on the principal role as homemaker. The parties had no children together and the way in which the wife arranged her affairs in relation to her children was a matter for her alone. For many years the wife worked full time and accumulated her own superannuation. She also worked part time thereafter and was working full time at the time of the final proceedings. On this basis, I cannot find that the wife made any contribution to the husband’s superannuation.
The husband’s position in relation to superannuation fluctuated over the three day hearing and even in the course of submissions made on his behalf. Ultimately, he did not seek any order with respect to superannuation interests on the basis that it was just and equitable to leave the superannuation interests of the parties intact.
In circumstances where I find that the wife made no contribution to the superannuation interests of the husband and each party has their own superannuation interest, I am of the view that it is appropriate to deal with the superannuation interests separately. In these circumstances, I am of the view, that it is not just and equitable to make any orders adjusting the superannuation interests of the parties. Accordingly, the balance of this judgment will deal with the non–superannuation interests.

Contributions

Under s 79(4) of the Act, in considering what order should be made in property settlement proceedings, I must take into account the financial and non–financial contributions directly or indirectly made to the acquisition, conservation or improvement of any of the property of the parties and the contributions made to the welfare of the family and any children, including contributions as a homemaker or parent.
For the reasons given, I am satisfied that the wife made a 50 per cent contribution to the major asset of the parties being the Suburb C property and this should be treated as an initial contribution. The wife also made a contribution by securing the parties’ initial “bridging” loan over her own property and applying some other unspecified sum towards initial improvements to the property. The Suburb C property was also utilised by the parties for the purpose of securing all the other loans throughout the marriage as they were refinanced from time to time.
I was not assisted in any way by submissions made on behalf of the husband as to the weight to be attached to the wife’s contribution to the acquisition of the this valuable asset. Although the husband disputed that the wife had made such a contribution, no submissions were made on his behalf about the weight that should be attached to her contribution if I found that she effectively paid half the purchase price in July 2000 as she contended. I can only infer from the manner in which the issue of contributions was approached that the husband contends that the contributions in mortgage repayments that he made over time has eroded the wife’s initial contribution to such an extent that each party’s contribution should be regarded as equal.
I was also not assisted by submissions made on behalf of the wife concerning the way in which the court should give weight to the wife’s initial contribution to an asset which has significantly increased in value over time.
In accordance with the principles in Williams & Williams[4] the court must not simply have reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time of the hearing as this may not give adequate recognition to the importance of the contribution at the time of the hearing.
[4] [2007] FamCA 313.
In these proceedings, there is some evidence that the parties improved the value of Suburb C over time to some extent both through borrowing funds to carry out capital improvements and in their personal efforts. However, it is reasonable to infer that the main increase in the value of this asset was a result of market forces.
In Williams (supra), the Full Court considered a series of cases determined in the New South Wales Court of Appeal concerning de facto property adjustment claims. Each of the cases referred to in that judgment considered the circumstances where the increase in the value of the asset had more to do with the increase in the property market than to “joint efforts of wage earning, home making and parenting and mutual support”. The Full Court at [26] considered that:
…there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions.
The Full Court in Williams also referred to the Full Court decision in Pierce & Pierce[5] which had also dealt with the relevance to be paid to initial contributions. In Pierce the Full Court at [28] said:
In our opinion it is … a question of what weight is to be attached, in all the circumstances to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
[5][1998] FamCA 74.
In the present proceedings the Suburb C property is the only asset owned by the parties. Without it, the parties would not have been able to offer security for the many loans that they took out over the course of their relationship. The parties lived beyond their means virtually throughout their relationship. In my view, it is unlikely that if the Suburb C property had not been acquired at the outset there would be any property now available for distribution.
In circumstances where the husband made no contribution to the initial purchase of this property which significantly increased in value mainly as a result of market forces, the wife’s contribution to half the purchase price should, in my view, be treated as a contribution to half an asset having a value of $1,387,500.
In assessing the financial contributions other than to the acquisition of the property I note that throughout the marriage each party earnt an income which they each applied to living expenses and in the case of the husband to the mortgage loans. Although the husband is likely to have earnt more over 14 years than the wife, I have found that the wife worked full time until the end of 2008 and thereafter worked part time. It was not an issue between the parties that to a large extent she was unable to undertake full time employment at that stage due to her illness.
In addition to each party contributing their income to the household the husband also made two larger payments towards living expenses and jointly incurred debts being $6,514.56 for long service entitlements in March 2011 and a redundancy payment of $15,664 in April 2013.
The husband also received rent from a part of his parents’ Suburb E property from around 2002 of $200 per week which he applied to the household expenses throughout the marriage. The husband’s parents on one occasion gave the parties $6,000 towards the wife’s business which may be treated as the husband’s contribution.

The husband’s contribution to household expenses was also of benefit not only to the parties but also to the wife’s children who he had no obligation to maintain. Although the wife said under cross–examination that the husband made no contribution to the maintenance of her children, I am of the view, that the children clearly benefited from the husband applying his income to the total household expenses including the mortgage loan over the home in which they lived and to other outgoings such as utilities and insurances. I consider this to be a financial contribution made on behalf of the husband that may be considered here by application of s 79(4)(e) and s 75(2)(o).
In Robb & Robb[6] the Full Court set out the principles for property adjustment on the basis of one party contributing to the welfare of children of the other party who are not children of the marriage. The Full Court said, at 501, that:
…in contributing to the support of these children the wife was merely honouring a legal obligation which she owed to the children, whilst the husband, in making his contribution, was acting essentially as a volunteer assisting the wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the husband’s contribution to be taken into account under s 75(2)(o), the same cannot be said of the wife’s contribution.
[6] [1994] 18 FamLR 489; (1995) FLC 92– 552.
In Elford & Elford[7] the Full Court recently applied the principles set out in Robb, saying the following at [35]:
In Robb and Robb (1995) FLC 92-555, this Court made the point that because s 79(4)(c) refers, relevantly, to contributions made to “contributions to the family constituted by the parties to the marriage and any of the children of the marriage”, contributions of the type made here by the husband to children who were not his, needed to be taken up by reference to s 75(2)(o). Although not recognised in those terms by his Honour, he was plainly alive to that distinction and gave consideration both to the important s 79(4)(c) contributions made by the wife and to the husband’s “contributions” to the children who were not his, albeit that this needed to occur by reference to s 79(4)(e) rather than s 79(4)(c).
[7] [2016] FamCAFC 45.
Overall, for the foregoing reasons, I am of the view that the wife made a very significant direct financial contribution to the acquisition of the property of the parties at the beginning of cohabitation and the husband made a greater financial contribution than the wife thereafter. This is especially in the post separation period, which continued up until the date of the hearing as he alone has made mortgage repayments including for over a year in which he has not lived in the home. He also made a financial contribution to the wife’s children.
The parties’ respective non–financial contributions to the conservation or improvements of the property are assessed as roughly equal.
Although the wife’s contribution to the welfare of her children was greater than the husband’s, this is not taken into account as they were not children of the marriage and she alone had the obligation to support them. The husband made a small non–financial contribution to the welfare of the wife’s children such as providing transport to activities and assistance with vehicles.
In summary, significant weight is to be attached to the wife’s 50 per cent initial contribution to the acquisition of the only asset of the parties. In circumstances where she also used her own property to secure the bridging loan, the Suburb C property increased significantly in value over time (in the main due to the increase in property values) and was also used to secure loans I treat it as a 50 per cent contribution to the property available for distribution.
Balancing all other contributions and in particular the husband’s greater financial contributions throughout the marriage and after separation, I make a 10 per cent adjustment in favour of the husband.
Accordingly, I assess the respective entitlements of the parties as 70 per cent of the property excluding superannuation to the wife and 30 per cent to the husband.

Section 75(2) Factors

The wife deposes in her affidavit to some matters which appear to relate to matters in s 75(2). Further, in the wife’s case outline there is a reference to s 72(2) matters and at the commencement of final submissions reference was made to her “future needs”. However ultimately, in final submissions, the suggestion that some s 75(2) matters were relevant was abandoned and no matters in s 75(2) were said to be relevant such that a further adjustment in favour of the wife was justified.
The husband’s affidavit and case outline do not appear to raise any s 75(2) factors and in final submissions there was no reference to matters which relate to s 75(2).
As previously noted, the justice and equity of the final orders is one which permeates the entire process. The duration of the parties’ marriage was of moderate length, there was no accumulation of assets (other than Suburb C) throughout the marriage, and the wife’s initial contribution to the asset which forms the majority of the matrimonial asset pool is significant. I am satisfied that a distribution which will see the husband receive $289,729.20 and the wife receive $676,034.80 out of a pool of $965,764, is a just and equitable distribution of the of the totality of the matrimonial asset pool.

I certify that the preceding one hundred and forty (140) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 24 February 2017.

Legal Associate:

Date: 24 February 2017

[2017] FamCA 108

24 February 2017

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