CKG & CWJ
[2002] FMCAfam 26
•31 January 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CKG & CWJ | [2002] FMCAfam 26 |
| FAMILY LAW – Property – modest asset pool – full and frank disclosure of financial position. |
| Applicant: | CKG |
| Respondent: | CWJ |
| File No: | ZM 8220 of 2001 |
| Delivered on: | 31 January 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 23 November 2001 |
| Judgment of: | Walters FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Stavrakakis |
| Solicitors for the Applicant: | MacGregor Solicitors |
| Counsel for the Respondent: | In Person |
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
ZM 8220 of 2001
| CKG |
Applicant
And
| CWJ |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court are the parties’ competing applications for property settlement.
The wife applied for ‘lump sum and periodic spousal maintenance’ in paragraph 9 of her amended form 3 application filed 8 May 2001. That application was abandoned, however, at the commencement of the trial.
Documents Relied Upon
The husband relied upon his affidavit sworn 31 July 2001, and his form 17 financial statement sworn on the same day.
The wife relied upon her affidavit sworn 2 August 2001 and her form 17 financial statement sworn 1 May 2001. She also relied upon her (handwritten) affidavit sworn 23 November 2001.
Both parties filed Case Outlines. The husband’s was filed on 1 August 2001 and the wife’s was filed on 14 August 2001.
The orders sought by the wife (in relation to property settlement) were those contained in her amended form 3 application filed 8 May 2001. The husband did not file a Response to the wife’s amended application, but Counsel for the wife advised the Court that no objection would be taken to the absence of a formal Response. The case proceeded on the basis that the orders sought by the husband — in relation to property settlement — were those set out in the Minute attached to his Case Outline.
Background
The husband and the wife were married on 17 December 1988. They separated on 22 November 1999.
There are 3 children of the marriage — AW born 12 October 1989 (aged 12 years), AF born 18 January 1991 (aged 11 years) and AR born 15 April 1992 (aged 9 years). AW and AF are boys. AR is a girl.
The husband is aged 46 years. He was born in April 1955. The wife is aged 41 years. She was born in April 1960.
Both AW and AF have serious medical problems. Both require regular medical treatment. The nature of their medical problems is described in paragraph 5 of the husband’s affidavit sworn 31 July 2001, and in paragraph 2 of the wife’s affidavit sworn 2 August 2001.
On 14 August 2001 various orders were made, by consent, in the Family Court of Australia in Melbourne. The effect of the orders is as follows:
a)all three children are to reside with the wife;
b)each party is to be responsible for the day to day care, welfare and development of the children during the times that they are in that party’s care;
c)the parties are to be jointly responsible for decisions relating to the long term care, welfare and development of the children;
d)the husband is to have defined contact with the children each weekend (although I suspect that the order has been incorrectly engrossed and that it should read “each alternate weekend”), and for half of all school holidays;
e)neither party is to allow any person to drive with the children in a motor vehicle if that person is affected by alcohol;
f)the parties are to advise each other in the event of the children or any of them becoming ill; and
g)the wife is to be responsible for transporting the children to and from medical and dental appointments.
The financial history of the marriage is described in the respective affidavits of the parties. I do not propose to dwell upon the same in these Reasons. That is because the parties conceded during the course of the hearing that their contributions — being their contributions under the various subheadings described in section 79(4) of the Family Law Act1975 — were equal from the commencement of cohabitation to the date of separation.
After the date of separation (22 November 1999) the wife continued to live in the former matrimonial home at Echuca. The children lived with her. The husband relocated to rented premises. He now lives at Tatura — which he describes as a “small country town about 80 kilometers from Echuca”.
The husband is a plasterer, and worked in that trade throughout the period of cohabitation and subsequent separation. The plastering business was carried on by T Pty Ltd (trading as E Plastering Services). T Pty Ltd had been incorporated by the parties during the period of cohabitation as the corporate vehicle through which the plastering business was to be operated. The husband and the wife were the directors and shareholders of T Pty Ltd.
In paragraph 38 of his affidavit sworn 31 July 2001, the husband said:
E Plastering has not traded since we separated in November 1999. The wife has in her possession all books of account relating to T Pty Ltd and to E Plastering. The wife has refused my numerous requests to be provided with these documents or at least copies of these documents. The wife has simply refused to do so.
In paragraph 40 of his affidavit, the husband said:
Financial statements and income tax returns have not been completed for each of the years ended 30 June 1999, 2000 and 2001. The returns have not been completed because of:
(a) the wife’s refusal to provide me with the source financial documents;
(b) the breakdown in communications between the wife and I.
During the course of his evidence, the husband said that he did not carry on the business as E Plastering Services after the date of separation. He asserted that he traded under his own name. He also said that he used the business overdraft facility after the date of separation, and until July or August 2000.
In his form 17 financial statement sworn 31 July 2001, the husband deposed to the fact that his income as a self employed plasterer was approximately $700.00 a week. During the course of cross-examination he said that his income from his trade fluctuates and that “....I could earn $200.00 per week or I could earn $1,500.00 per week”.
On 10 August 2001 the wife’s solicitors forwarded to the husband’s then solicitor, Mr Middlemis, an unsealed form 26 notice to produce.
I was advised by Counsel for the wife, and I accept, that a sealed copy of the notice to produce was provided to the husband, at Court, on
14 August 2001. The husband appeared in person on that day (and it was on that day that consent orders were made disposing of all issues relating to the children).
The notice to produce required the husband to produce a great many documents relating to his financial position “....on the 14th day of August 2001 at the hearing of the proceedings herein....”.
At no stage did the husband’s previous solicitor, Mr Middlemis, give notice to the Court that he was no longer representing the husband.
The husband conceded that he represented himself on 14 August 2001. He said that he had received back all his documents from his previous solicitor, but denied that he knew he was required to produce financial documents — either on 14 August 2001 or at trial on 23 November 2001. He maintained that he had not seen the notice to produce and was not aware of it. I do not believe him. Notwithstanding any potential confusion that may have resulted from the reference in the notice to produce to the previous hearing date of 14 August 2001,
I find that the husband was aware that he was obliged to produce financial documentation at trial and that he chose not to do so. That being the case, I infer that the financial documentation, if produced, would not have assisted the husband’s case. I do not infer, however, that the documents would necessarily have been unfavorable to the husband’s case.
Credibility
Before proceeding further in these Reasons, it is appropriate that
I comment upon the credibility of each of the parties.
I observed the husband carefully as he gave his evidence, and during the course of his submissions to me. He bore resentment towards the wife and was clearly embittered by what he perceives to be an unfair situation (and, perhaps, by other, unstated factors).
As stated in paragraph 22 above, I am of the view that the husband was well aware of his obligation to produce relevant documentation at trial, but chose not to do so. Although the credibility of the parties may not be a significant factor in the Court’s decision in this matter, I have discomfort in relation to the husband’s credibility — in particular, where it relates to his financial circumstances.
I also observed the wife carefully as she gave her evidence. Generally speaking, I prefer her evidence to that of the husband — notwithstanding that there were inaccuracies and instances of exaggeration in her evidence (for example, her suggestion that the bathroom or bathrooms in the former matrimonial home had been uniquely adapted to cater for the needs of the boys — which was clearly not the case).
The Law
The general approach that should be adopted by the court in relation to a property settlement application has been described in a great many cases (see, for example, Pastrikos (1980) FLC 91-987, Lee-Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595 and Whitely (1996) FLC 92-684). The Court must first identify the assets of the parties. It must then attribute a value to each of those assets — usually as at the date of the hearing. Thereafter, it must assess the extent of each party’s contributions under the various subheadings described in section 79(4) of the Family Law Act1975. Finally, the court must consider the financial resources, means and needs of the parties, and the other matters set out in section 75(2) so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment take place. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means.
In relation to the contribution of the parties under section 79(4) generally, it has been held that a ‘global’ approach will usually be more convenient than an ‘asset by asset’ approach — although the application of an asset by asset approach does not (of itself) amount to an error of law (see Norbis (1986) FLC 91-712).
Section 75(2) is concerned with the process of arriving at a just and equitable result. It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of section 75(2), support an adjustment in a party’s favour for matters which can not comfortably be described as being of financial or economic significance (see McMahon (1995) FLC 92-606 at 82,043).
Under section 79(2), the Court is required to be satisfied that the order to be made is just and equitable — not simply that the underlying percentage division of the net value of the parties’ assets is appropriate. In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered (see Russell (1999) FLC 92-877).
Property of the Parties at Trial
During the course of the trial, the identity and value of each item of property was agreed. Thus, the parties’ assets and liabilities at trial are as follows:
Former Matrimonial Home
Less: amount owing on mortgage
$
$
105,000.00
(67,646.00)
$
37,354.00
Wife’s motor vehicle
$ 5,750.00
Husband’s motor vehicle
$ 4,000.00
Husband’s camper van
$ 1,500.00
Husband’s business
$ 0
Husband’s utility
$ 3,000.00
Husband’s truck
$ 7,000.00
BMW Shell
$ 700.00
Husband’s tools
$ 1,000.00
Horse float
$ 0
Furniture (not taken into account by agreement)
$
0
Total $ 60,304.00
It was agreed that the liabilities as at the date of separation amounted to $21,764.00. As at the date of trial, they amount to $37,110.00.
It was the husband’s case that the Court should take into account the present value of the parties’ liabilities. The wife disagreed, and argued that the court should take into account the value of the parties’ liabilities as at the date of separation.
If the husband’s submission is correct, then the total net value of the assets presently available for distribution between the parties is $23,194.00. If the wife’s submission is correct, then the total notional net value of the assets presently available for distribution between the parties is $38,540.00.
Each of the parties has superannuation entitlements. The value of their respective entitlements is approximately equal — being some $11,000.00 each.
Some of the above figures require comment:
a)Business
Neither party placed any value on the husband’s business. Indeed, its structure was effectively ignored. I am aware, however, that T Pty Ltd continues to exist.
b)Horse Float
The fate of the horse float was less than clear. To the extent that I was able to understand the wife’s evidence in relation to it, however, I find that it was retained by the wife and later disposed of to, through or with the assistance of the wife’s mother. If the wife received any monies as a result of the disposal of the horse float, then I find that those monies have been properly utilised by her, for her or the children’s living expenses, or to meet liabilities, since the date of separation. I was not persuaded that any monies received by the wife were “wasted” (see, for example, Kowaliw (1981) FLC 91-092 and Browne v Green (1999) FLC 92-873).
c)Furniture
It was agreed that the Court should ignore the value of the furniture retained by each of the parties (or acquired by them since the date of separation). In any event, there was no admissible evidence of the value of the parties’ furniture, chattels and effects.
It is immediately apparent that the total net value of the assets available for distribution between the parties as at the present time is very modest indeed. If the husband’s version of the net asset pool is accepted as being correct, and if the parties’ respective contributions since the date of separation are ignored, then each party’s entitlement on the basis of contribution alone is $11,597.00. If the wife’s version of the net asset pool is adopted, and if the same assumptions are applied, then each party’s entitlement on the basis of contribution alone is $19,270.00.
It was the wife’s case that the value of the parties’ liabilities as at the date of separation should be adopted because the husband has had the responsibility for the conduct of the business since the date of separation, and during that time the overall debt position increased from $21,764.00 to $37,110.00. During the same period —
a)the husband paid no child support;
b)the wife worked as a process worker and received, in addition to her wages, child disability allowance and certain other benefits;
c)the wife continued to live in the former matrimonial home with the children;
d)the husband met the mortgage payments (or the majority of them) until approximately August 2000; and
e)the wife was obliged to meet the mortgage payments after August 2000.
The obligation which rests upon parties in property settlement proceedings to make a full and frank disclosure of all relevant financial matters has been emphasised in a long line of cases (see, for example, Black & Kellner (1992) FLC 92-287 and Weir (1993) FLC 92-338). If it is clear that there has been a non disclosure, then the court should not be unduly cautious in making findings in the favour of the ‘innocent’ party (see Stay (1997) FLC 92-751).
In the circumstances of the present case, and having regard to the husband’s failure to make full and frank disclosure of all details regarding his present financial position and the conduct of the plastering business since the date of separation, I find that the increase in the parties’ debt level between the date of separation and the date of trial should not be shared by them. I am cognisant of the principles set out in Kowaliw (1981) FLC 91-092 and BrownevGreen (1999) FLC 92-873. My findings in relation to the husband’s credibility and failure or refusal to produce relevant documentation relating to his financial position and the conduct of the plastering business since the date of separation lead me to conclude that he has embarked upon a course of conduct designed to minimise the apparent value of the assets presently available for distribution between the parties. Alternatively, he has retained in his possession assets which he has not disclosed and which are likely to be valued at not less than $15,346.00 (being the difference between the level of debt — excluding the mortgage — at the date of separation and the level of debt at the date of trial). I am not satisfied that no such additional assets are in existence and hence this is not a case of placing upon the husband the full burden of actual “losses” incurred, in some way, by the parties jointly. If there were actual losses, then they occurred over a period during which the husband had overall control of the venture which led to the losses. In my view, however, the wife was not a willing participant in that venture during the relevant period. The husband had effectively removed the conduct of the venture from her control, and he proceeded on the basis that the less she knew about the conduct of the business (and hence his financial position), the better.
In all the circumstances, I conclude that the net value of the assets presently available for distribution between the parties is $38,540.00 (comprising assets valued at $60,304.00 less liabilities of $21,764.00 [being the value of the liabilities as at the date of separation]). Alternatively, and if I am wrong in my approach in relation to the composition and value of the asset pool, then I find that the present value of the parties’ liabilities is $37,110.00, but that there is an additional, undisclosed asset in the husband’s hands — amounting to $15,346.00. In such a case, the total value of the assets available for distribution between the parties is $75,650.00. In either case, the total net value of the assets available for distribution at the present time is $38,540.00.
Contribution
It was agreed between the parties that their contributions (in all their various guises) were equal from the commencement of cohabitation to the date of separation. Since that time, the events described in paragraph 38 above have occurred. Although it is possible to identify, to some extent, the financial contributions made by the wife since the date of separation, it has not been possible to identify the financial contributions made by the husband. If the approximately $15,500.00 referred to in paragraph 41 above is treated as a notional asset in the hands of the husband, then it is apparent that the husband has made a financial contribution to this asset. The wife has made a financial contribution to the preservation of the assets by working and utilising her income (from all sources) to meet the mortgage payments.
Of considerable significance, it seems to me, is the fact that the wife has remained the principal care giver for the children since the date of separation. Her role is an onerous one, due to the health problems suffered by the boys.
It is difficult in the present case to adopt an ‘asset by asset’ approach to the issue of contribution, if for no other reason than that it is difficult to confine a party’s contribution under section 79(4)(c) — in other words, a party’s contributions to the welfare of the family — to specific items of property. Similarly, the considerations inherent in the application of the section 75(2) factors require the Court to take a broad overview of the parties’ respective financial positions. In all the circumstances, I consider that a “global” approach to the assessment of the parties’ respective contributions to the asset pool and to the welfare of the family is appropriate.
It is the case that the Court is not necessarily inclined to give greater weight to financial contributions than to other forms of contribution. It has been held that contribution as homemaker and parent cannot and should not be confined to matrimonial or “personal” assets (if any assets can be so categorised), but also extends to (for example) business assets (see Ferraro (1993) FLC 92-335). The Court is not prepared to assume that one form of contribution is automatically or inherently more significant than any other form of contribution.
Taking into account the various aspects of the parties’ contributions discussed above (but bearing in mind that the information presented at trial was extremely limited), I conclude that an appropriate division of the parties’ assets available for distribution between them at the present time — on the basis of contribution alone — is approximately 60% to 65% to the wife and the balance to the husband. I find that it would be intellectually dishonest for me to adopt one of the percentages to which I have referred in preference to the other, and therefore adopt a midpoint position of 62.5%.
Section 75(2) Factors
So far, in considering the question of property settlement, I have addressed the question of contribution only. Quite clearly, the Court is entitled to make an adjustment to a party’s property settlement entitlement on the basis, inter alia, of both parties’ respective means and needs.
The Family Court has been critical of “short hand terms” being used to describe the last step in the property settlement exercise — preferring to refer to it simply as “the section 75(2) factors” (see Clauson (1995) FLC 92-565). In essence, section 75(2) is concerned with the process of arriving at a just and equitable result (see Waters& Jurek (1995) FLC 92-635).
It is not easy to identify the section 75(2) factors from the wife’s documents. They appear to be dealt with in one paragraph only — being paragraph 11 of the wife’s affidavit sworn 2 August 2001, which reads:
The husband has not paid child support at all. The children require greater than usual care due to the medical condition of both AW and AF. I am prepared to pay all medical and dental expenses, including trips to the Royal Children’s Hospital and to the pediatrician in Shepparton if the husband does the pick-ups and drop-offs during his access weekends.
The wife’s Outline of Case Document added very little. The relevant paragraphs were as follows:
(I)Financial Resources
The wife has superannuation the details of which have been provided in her form 17 financial statement. The wife does not know the details of the husband’s superannuation benefits.
(J)Other Matters
The two elder children have special needs. The husband does not pay child support. It is likely that the wife will be primarily responsible for all three children in the future.
Neither the submissions of counsel for the wife nor the wife’s oral evidence served to supplement the above passages.
The relevant paragraphs in the husband’s affidavit are as follows:
43.I am presently self employed as a plasterer. I obtain work in the Shepparton and Tatura area and I presently average about $700.00 gross income per week.
44.I have to pay my business expenses from this amount.
45.I am 46 years old and enjoy reasonable health. I am able to work, although I experience some back problems and difficulties with my knees. I do not anticipate that these problems will affect my current capacity to work but as I get older I continue to slow down.
46.The breakdown of our marriage has led me to become depressed. I have consulted my general practitioner about this and I have also seen Fran Smullen, a loss and grief counsellor in Shepparton. My general practitioner prescribed anti depressants in December 2000. I took that medication for about four to six weeks. I felt extremely tired and unwell whilst taking it and really couldn’t work. I ceased taking the anti depressant medication and I am now not on any medication. I have come to recognise through the counselling that a lot of my unhappiness relates to the wife seeking to restrict my relationship with our children. I also attend a “Men’s Group” in Echuca for about six months after separation. I found the group to be supportive and of assistance to me.
47.I have been in a relationship since separation with H. H and I lived together for about eleven months, commencing June 2000. H has four children and at the moment only one of those children (3 years old) is residing with her. The breakdown of H’s marriage was extremely acrimonious and the wife has involved H’s husband in our dispute. As I understand the situation the wife has subpoenaed health and community service files relating to H’s children. I am currently in relationship with H but we are living apart. I do not know what the future of our relationship is. H has been distressed by the allegations made against her by her former husband and by the wife.
48.I do not know whether the wife has re-partnered or is in a relationship with anybody else.
Apart from a reference to the parties’ superannuation entitlements, the section 75(2) factors were not expanded upon in the husband’s Outline of Case Document. Similarly, the husband’s oral evidence, and his addresses to me, did not serve to supplement the brief analysis of the section 75(2) factors contained in the husband’s trial affidavit.
The wife was not cross examined by the husband in relation to the assertion that she had (presumably inappropriately) sought to restrict the husband’s relationship with the children. Nor was the wife cross examined in relation to her alleged involvement in the dispute between H and her husband. In the circumstances of the present case, and notwithstanding that the husband was not cross examined on his allegations, I give little weight to these matters. The reality is that the parties were able to reach agreement in relation to all matters affecting the welfare of the children. I accept, however, that the husband was affected emotionally by the breakdown of the marriage and its aftermath and that, for a short time at least, he may have found it difficult to find the motivation to continue working. Overall, though, these are factors more properly considered when analysing the ‘contribution’ elements of the property settlement exercise (as opposed to the section 75(2) factors).
Lest it be thought that I have not taken into account the matters referred to in the previous paragraph when considering an appropriate division of the parties’ assets on the basis of contribution alone, I confirm that
I have indeed given consideration to these matters in reaching the conclusion described in paragraph 46 above.
I have already recorded the ages of the parties. Both parties now appear to be in reasonable health.
I have already made reference in these Reasons to the parties’ property and financial resources, and to the husband’s income. The wife is employed on a part time basis as a process worker. Her gross income is $442.00 per week. She also receives what she has described as a “single parent payment” from Centrelink, together with “family tax benefit and the child disability allowance”. The quantum of these allowances or benefits is described in the wife’s form 17 sworn 1 May 2001. Amongst her weekly expenses, the wife includes an amount of $49.00 for superannuation and $5.00 for union fees. She is presently paying $162.00 per week in respect of the mortgage encumbering the former matrimonial home. She pays $52.00 per week by way of loan repayments to the National Australia Bank and has a credit card debt of $4,289.00.
Both parties appear to have the physical and mental capacity to engage in appropriate gainful employment. There was no suggestion that the wife was doing other than properly exercising her earning capacity (having regard to her responsibilities associated with the care of the children). I am not satisfied, however, that the husband is properly exercising his earning capacity, and I refer to the matters which I have discussed in paragraphs 38 to 40 above. To use the vernacular, I find that the husband has “taken his foot off the pedal”. Whilst I accept that he had or may have had difficulty coping with the breakdown of the marriage (see paragraph 46 of the husband’s affidavit sworn 31 July 2001), I am satisfied (from seeing and hearing the husband) that the husband now has the ability to concentrate on his trade and the business associated with it and to work hard and diligently in those pursuits. I find that the husband’s resentment of what he perceives to be the wife’s improper or unreasonable behaviour has led to a degree of churlishness on his behalf — which was apparent during the course of the trial. I do not suggest that the husband conducted himself in other than a courteous and civil manner, but his displeasure with the wife, his frustration and indignation were apparent. I suspect that only the finality that the Court’s decision in this matter may bring will permit the husband to refocus on his trade and commence to rebuild his business (if, indeed, it requires rebuilding).
The wife has the care and control of the children of the marriage — none of whom has attained the age of 18 years.
The commitments that the parties require to enable them to support themselves and the children are reflected in their respective financial statements.
Neither party has a legal responsibility to support any other person.
I am conscious that each of the parties is entitled to a standard of living that is reasonable in all the circumstances. Unfortunately, and having regard to the very modest (net) value of the assets available for distribution between the parties, the reality is that even if I were to order the wife to pay to the husband his full “entitlement” on the basis of contribution alone (which entitlement I have found to be the equivalent of 37.5% of the net value of the asset pool), the overwhelming likelihood is that the husband’s standard of living would be unaffected. On the other hand, any order that I may make to the effect that the wife is to pay to the husband a relatively significant amount of money may result in the wife having to sell the former matrimonial home (see paragraph 9 of the wife’s affidavit sworn
2 August 2001). Although the sale of the former matrimonial home need not inevitably lead to a reduction in the wife’s standard of living, in the circumstances of the present case (and having regard to the fact that the wife is principally responsible for the care and supervision of the children) I find that that is likely to occur.
There is no evidence that the duration of the marriage has affected either party’s earning capacity, and no evidence was presented to the effect that specific orders are required to protect either party’s role as a parent.
The wife is not cohabiting with any other person. The husband and H lived together for approximately 11 months from June 2000. According to the husband, he is “currently in a relationship with H”, but they are “living apart”. During the course of his evidence, the husband said that H made a financial contribution to joint expenses whilst they lived together.
I do not know why the husband and H are not presently cohabiting. Having regard to the finding that I have made regarding the husband’s attitude to the wife and to the proceedings generally, I conclude that it is likely that the husband and H will recommence cohabitation in the near future, and that upon such cohabitation being recommenced H will make a financial contribution to the expenses of their household. I have no evidence, however, as to other aspects of H’s financial circumstances.
The husband’s evidence was that he has never paid child support and that he has never offered to pay any.
I have already recorded details of the parties’ superannuation entitlements.
I am not aware of any other fact or circumstance which should be taken into account in order to do justice to the parties.
Having regard to the evidence, I conclude that the most significant of the section 75(2) factors are the following:
a)the children of the marriage reside with the wife;
b)the husband’s earning capacity is not being exercised to the extent of which the husband is capable;
c)the husband’s earning capacity is significantly greater than that of the wife;
d)the husband has provided to the wife little or no child support; and
e)the husband’s present standard of living (which he has not asserted is anything other than reasonable in the circumstances) is unlikely to be improved as a result of the receipt of a modest amount of money from the wife, but the requirement that the wife pay a modest amount of money to the husband would probably or could possibly result in an appreciable reduction in her and the children’s present standard of living (which is a standard of living that is not unreasonable in all the circumstances).
On the basis of the evidence before me, and having regard to the fact that the purpose of the section 75(2) adjustment is to assist the Court with the process of arriving at a just and equitable result, I conclude that an adjustment should be made to the wife’s entitlement (on the basis of contribution alone) by increasing that entitlement from 62.5% to 90%. On the basis of the figures set out in paragraphs 31 to 41 above, this means that the wife should receive by way of property settlement assets to the total value of $34,686.00 (being 90% of $38,540.00).
The value of the assets currently in the wife’s possession, or otherwise to be retained by her, is as follows:
a) net value of former matrimonial home $
37,354.00
b) wife’s motor vehicle
5,750.00
Total $
43,104.00
It follows that, if the wife is entitled to assets to the total value of $34,686.00, then she should be obliged to pay to the husband the amount of $8,418.00 — in order to ensure that she retains or receives assets totaling 90% of the value of the asset pool as I have found it to be.
One of the most difficult aspects of the present case is the very modest size of the asset pool. The Full Court has cautioned against assessing section 75(2) factors in percentage terms without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is “the critical issue” (see Clauson (1995) FLC 92-595). In the present case, the section 75(2) adjustment equates to $10,589.50 (being 27.5% of $38,540.00). I am satisfied that the adjustment is proper.
I am conscious of the wife’s relatively precarious financial position, and the obvious burden that the payment of the amount referred to in paragraph 72 above will impose upon her. Having regard to the findings that I have made in these Reasons (and, in particular, the findings summarised in paragraphs 39, 40, 58 and 69 above) I am of the view that it is appropriate that the wife be granted an extended period within which to pay the relevant amount. I have determined that she should be required to pay the relevant sum by 30 June 2003.
Orders
Having regard to the findings I have made, I propose to make orders to the following effect:
(1)The wife pay to the husband the sum of $8,418.00 on or before 30 June 2003.
(2)Upon receipt of the said sum of $8,418.00 referred to in (1) above, the husband do forthwith transfer and assign to the wife all his right, title and interest in the former matrimonial home.
(3)The husband do forthwith transfer and assign to the wife all his share and interest (if any) in the following:
a)the wife’s motor vehicle;
b)the furniture, chattels and effects presently in the wife’s possession;
c)all monies standing to the credit of the wife in any account in any bank, building society or other financial institution; and
d)the wife’s superannuation entitlements.
(4)The wife do forthwith transfer and assign to the husband all her share and interest (if any) in the following:
e)the business (including the goodwill, plant and equipment, trading stock, work in progress, bank accounts, debtors, intellectual property and all other assets what so ever of the said business);
f)T Pty Ltd;
g)the husband’s motor vehicle;
h)the husband’s camper van;
i)the husband’s utility;
j)the husband’s truck;
k)the husband’s BMW Shell;
l)the husband’s tools;
m)the furniture chattels and effects presently in the husband’s possession;
n)all monies standing to the credit of the husband in any account in any bank, building society or other financial institution; and
o)the husband’s superannuation entitlements.
(5)The wife do forthwith:
a)transfer to the husband, or to his nominee, her shareholding (if any) in T Pty Ltd;
b)resign any office she may hold in the business and T Pty Ltd (including, but not limited to, the office of director of T Pty Ltd); and
c)transfer and assign to the husband the whole of her share and interest in any loan account or indebtedness —
(i)due or owing by her to the business or to T Pty Ltd; or
(ii)due or owing to her by the business or by T Pty Ltd.
(6)The husband indemnify the wife and keep her indemnified from all debts, liabilities and obligations of the wife relating to or arising out of:
a)the business;
b)T Pty Ltd;
c)any security, charge, promise, personal guarantee or undertaking given by the wife to any bank, building society or other financial institution or commercial entity in relation to the business and/ or T Pty Ltd;
d)the property dealing, loans, undertakings, business or affairs of the business and T Pty Ltd, including all taxation liabilities or duties (including income tax, capital gains tax and stamp duty and all penalties and interest not yet paid) hereafter assessed against the wife in respect of income (if any) derived by the wife from, or allocated to the wife by, the business and/ or T Pty Ltd;
e)any loan account or indebtedness due or owing by the wife to T Pty Ltd;
f)the creditors of the business and T Pty Ltd;
g)all charges or other encumbrances affecting the plant and equipment or other property of the business and/ or T Pty Ltd;
h)the three accounts referred to at trial and referred to by their last three digits as #648, #902, #234,
and from all actions, proceedings, costs, claims and expenses in respect thereof.
(7)The wife indemnify and keep indemnified the husband from all debts, liabilities and obligations of the husband relating to or arising out of the mortgage to Homeside (NAB) presently encumbering the former matrimonial home, and from all actions, proceedings, costs, claims and expenses in respect thereof.
(8)The wife do forthwith deliver up to the husband (and sign all such documents and do all such acts and things as shall be necessary to cause her solicitors and her agents to forthwith deliver up to the husband) all documents in her possession, custody or power (or in the possession, custody or power of the wife’s solicitors or agents) relating to:
a)the business; and
b)T Pty Ltd.
I propose to hear the parties as to the precise form of the orders to be made, and any related matters.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Walters FM
Associate:
Date:
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