COPELAND & FRENCH

[2019] FCCA 571

FEDERAL CIRCUIT COURT OF AUSTRALIA

COPELAND & FRENCH [2019] FCCA 571

Catchwords:
FAMILY LAW –  Property – contributions – whether the husband’s legal fees and the sale proceeds from the wife’s shares ought to be “added back” to the property pool.

Legislation:

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

Cases cited:

Bevan & Bevan [2013] FamCAFC 116

Stanford & Stanford (2012) FLC 93-518

Applicant: MR COPELAND

Respondent: MS FRENCH

File Number: BRC 11449 of 2015

Judgment of: Judge Small

Hearing date: 1 May 2018

Date of Last Submission: 1 May 2018

Delivered at: Melbourne

Delivered on: 8 March 2019

REPRESENTATION

Counsel for the Applicant: Mr J. Bunning

Solicitors for the Applicant: Perry Coates Family Law

Counsel for the Respondent: Mr T.F. Jordan

Solicitors for the Respondent: Rice Naughton McCarthy

ORDERS

1. Within 60 days of the date of these Orders the husband shall do all such acts and things and sign all such documents as may be necessary to transfer to the wife at the expense of the wife, all of his right title and interest in the real property known as and situated at Property A in the State of Queensland, being the whole of the property more particularly described as Lot … on Registered Plan …, Title Reference … (“the Property A property”) (“the transfer”).

2. Contemporaneously with the transfer, the wife shall discharge the mortgage held over the real property and forever indemnify the husband against any liability of whatsoever kind in relation to the Property A property.

3. In addition to the Property A property, the wife shall retain the following:

   a)   her Motor Vehicle B registration no. …;

   b)     the proceeds of sale of her Shares C shares;

   c)     her Bank D Account No. …;

   d)     her furniture and chattels;

   e)     her superannuation entitlements; and

   f)   any payment due to her under paragraph 6 of these Orders.

4. Subject to the provisions of paragraph 6 hereof, the husband shall retain the following:

   a)   all the net proceeds of sale for the property situated at Bank E (“the Bank E property”) currently held in trust;

   b)     his CBA Account No. …;

   c)     his CBA Account No. …;

   d)     his CBA Home Loan Account No. …;

   e)     his Motor Vehicle F Registration No. …;

   f)   his Shares C portfolio, including any monies received from the sale of his Shares C shares;

   g)     the net monies withdrawn from the parties’ Viridian Line of Credit;

   h)     his Shares G shares;

   i)   his furniture and chattels;

   j)   his superannuation entitlements; and

   k)     any payment due to him under paragraph 6 of these orders.

5. The husband shall forever indemnify the wife against liability for the following:

   (a)His CBA Gold Awards Credit Card No. ending #...; and

   (b)Any Capital Gains Tax liability arising from the sale of the Property H property. 

6. Within 60 days of the date of these Orders (“the due date”) the husband and the wife shall do all such acts and things and sign all such documents as may be necessary to pay to the wife and, if necessary to the husband, from the joint accounts numbers … and/or … held with the Bank D, such sum as may be necessary to ensure that the net assets of the parties are divided between the parties 52.5% to the wife and 47.5% to the husband (“the payment”).

7. Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:

   (a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.

   (b)monies standing to the credit of the parties in any joint bank account are to be divided between the parties in the proportion of 52.5 per cent to the Wife and 47.5 per cent to the Husband;

   (c)insurance policies remain the sole property of the owner named thereon;

   (d)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;    

   (e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and

   (f)each party forgoes any claim they may have to any superannuation entitlements or inheritances to which the other party is entitled either presently or in the future.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 11449 of 2015

MR COPELAND

Applicant

And

MS FRENCH

Respondent

REASONS FOR JUDGMENT

Introduction

1. These were originally parenting and property proceedings arising from the breakdown of the marriage between Mr Copeland (“the Husband or “Mr Copeland”) and Ms French (“the Wife” or “Ms French”).

2. To the parties’ credit, parenting arrangements in relation to the child of the marriage, [X] born … 2013 (“[X]” or “the child”), resolved by agreement on the first day of trial with Final Orders being made by consent on 1 May 2018.

3. Thus the only remaining issues to be decided at trial related to the parties’ property.

4. At the commencement of trial, the Court was informed that the wife sought a 60:40 division of the parties’ property in her favour, while the husband sought an equal division.

5. The particular issues to be decided in this case, as in any property matter, are as follows:

   (a)Whether it is just and equitable to alter the property interests of the parties.

   (b)If it is just and equitable, what are the property interests of the parties and what is their value?

   (c)What were the parties’ contributions to the property?

   (d)Should there be an adjustment to the contribution-based entitlements of the parties after a consideration of the matters set out in s.75(2) of the Family Law Act 1975 (Cth) (“the Act”)?

   (e)In light of those findings, what Orders should be made to effect a just and equitable division of property between the parties?

Background

1. Mr Copeland was born on … 1972 and is therefore 46 years old. He is employed full-time as a professional. He is in good health.

2. Ms French was born on … 1974 and is therefore 44 years old. She is an health care professional employed 2 days per week for Employer and is also in good health.

3. [X] is the only child of the marriage. Ms French has a son from a previous relationship, [Y], born … 2001 (“[Y]”), who lives with her and spends school holiday time with his father.

4. The parties commenced cohabitation in … 2009. They were married on … 2013. The parties separated in mid-2015. As far as the Court is aware, they are not divorced.

5. Neither party had re-partnered at the time of trial.

Procedural History

1. The proceedings commenced in the Federal Circuit Court of Australia with the Husband filing an Initiating Application, Affidavit in Support and Notice of Risk on 27 November 2015. That Application related only to parenting matters.

2. The Wife filed a Response, Affidavit in Support and Notice of Risk on 25 January 2016. The Response also sought only parenting orders.

3. Interim parenting Orders were made by consent at the first hearing date on 10 February 2016. The matter was otherwise adjourned for Directions on 16 May 2016.

4. On 16 May 2016, further Interim parenting Orders were made by consent and the matter was adjourned for Directions on 6 February 2017.

5. No Orders were made on 6 February 2017, but on 15 February 2017, Interim Orders were made by the Court with respect to further spend time arrangements between the child and the father. The matter was adjourned to 10:00am on 12 September 2017 for a callover of trials to be listed before Judge Spelleken.

6. The parties attended private mediation in relation to property matters on 11 April 2017 but were unable to resolve their differences.

7. On 6 September 2017, the Wife filed an Amended Response to Initiating Application, an Affidavit in Support and a sworn Financial Statement seeking property orders, and more specifically that the husband transfer to her the property at Property A (“the Property A property”), that she discharge the mortgage over that property, that the husband retain the property at Property H (“the Property H property”), and that each party retain their motor vehicles, bank accounts and various chattels.

8. On 8 September 2017, the husband filed an Amended Initiating Application in which he sought orders providing for a very similar structural settlement as that sought by the wife, save that he sought a cash payment from the wife.

9. On 8 September 2017, the parties also filed Case Outlines.

10. On 11 September 2017, the father filed an Application in a Case and an Affidavit in Support, seeking orders for an updated sworn valuation of the Property A and Property H properties.

11. At the callover on 12 September 2017, orders were made for an updated report on the value of the properties which are the subject of this litigation, and for the parties to attend a Conciliation Conference on 6 February 2018. The matter was otherwise set down for trial on 30 April 2018 for an estimated hearing time of 2 days.

12. The parties attended a Conciliation Conference on 6 February 2018, but were still unable to settle their property matters.

13. On 23 February 2018 the husband filed an Undertaking in relation to the proceeds of sale of the Property H property.

14. Various updated material, including valuations, Affidavits and an updated family report, were filed prior to the date of Final Hearing.

15. On 24 April 2018, the Husband filed a Further Amended Initiating Application, Financial Statement and Case Outline.

16. On 27 April 2018, the Wife filed a Case Outline.

17. Final parenting Orders were made by consent on 1 May 2018 after negotiations on 30 April 2018.  

18. The trial of the property applications ran on 1 May 2018.

19. Witnesses were the husband and the wife, and both were subjected to cross-examination by counsel.

20. After submissions by both parties’ counsel on 1 May 2018, I reserved my decision.

Issues and Evidence

1. It is not possible to refer to every fact and/or matter raised in the trial of these proceedings and nor is it necessary to do so. The parties should understand that I have had regard to the whole of the evidence, including filed Affidavits, my notes and the transcript of the trial on 1 May 2018, and if I have not referred to a particular fact or matter it does not mean that I have not considered it.

A.Whether it is just and equitable to alter the property interests of the parties

1. This question arises from the operation of s.79(2) of the Family Law Act 1975 (Cth) (“the Act”), which states that a Court may only make orders adjusting the property interests of married parties if it is just and equitable to do so.

2. In Stanford v Stanford[1] the High Court of Australia stated, at paragraph 42:

   In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, 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. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.

   [1] Stanford v Stanford (2012) FLC 93-518.

3. In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia said that the circumstances described in that passage of the Stanford judgment “encapsulate the vast majority of cases”[2] .

   [2] Bevan & Bevan [2013] FamCAFC 116 paragraph 70.

4. In this case, the parties were married and acquired property which, because of their separation, can no longer be jointly enjoyed. There is nothing in the circumstances of the present case which would remove it from the category of “the vast majority of cases” coming before this Court, and therefore I find that it is just and equitable to consider making Orders that would alter the parties’ property interests.

B.If it is just and equitable, what are the property interests of the parties and what is their value?

1. On the day of trial, the parties’ counsel handed up a document marked “Joint Schedule of Assets/Liabilities/Superannuation” which purportedly sets out the agreed property interests of the parties and their value at the time of trial.

2. Unfortunately, a perusal of that document reveals that there are some minor discrepancies between the parties’ schedules. Some of the figures in the document state that they are agreed, but they are different in the wife’s column and the husband’s column. They are fairly minor discrepancies, amounting to a total of $1088 in the assets column and $915 in the liabilities column. That means a difference of only $173 in the valuation of the overall property “pool”, as all superannuation values are agreed. As that discrepancy is so small, and the items which contain them are few, I will take each party’s valuation in turn to arrive at an agreed “pool”. Those items marked with an asterisk in the table below contain the value as the wife sees it, and those marked with a hash are as valued by the husband. All other values are agreed between the parties.

3. As far as the Court is able to tell, the property of the parties at the beginning of trial can be set out as follows:

Assets	Owner	Value
Property A (“the Property A property”)	Joint	$630,000
Sale proceeds from the sale of Property H (in trust) (“the Property H property sale proceeds”)	Husband	$538,000*
Bank D Account Number …	Joint	$102,673#
Bank D Account Number …	Joint	$120,500*
Bank D Account Number …	Wife	$636#
Bank D Kids Savings Accounts Numbers: …	Wife	Nil
CBA Direct Investment Account Number …	Wife	Nil
CBA Streamline Account Number …	Husband	$1,576
CBA  Smart Access Account Number …	Husband	$73,096*
CBA Direct Investment Account No. …	Husband	$20
CBA Complete Home Loan Mortgage Interest Saver Account (“MISA”)  No. …	Husband	$0#
Motor Vehicle F Registration Number …	Husband	$14,700
Motor Vehicle B Registration Number …	Wife	$16,000
Shares C share portfolio	Husband	$12*
Shares C share portfolio	Wife	Nil
Shares G shares	Husband	$7,159
Furniture and effects	Wife	$5,680
Furniture and effects	Husband	$3,430
Total Assets	$1,513,482
Liabilities
Bank D Owner Occupied Home Loan Account Number …	Joint	$104,248#
Bank D Owner Occupied Home Loan Account Number …	Joint	$600*
CGT on sale of Property H property	Husband	$22,000
CBA Complete Home Loan Account no. …	Husband	$0
CBA Gold Awards credit card ending in No. #...	Husband	$17,046#
Bank D Gold Visa Card …	Wife	$5,100
Australian Taxation Office	Wife	$1,000*
Total Liabilities	$149,994
NETT ASSETS EXCLUDING SUPERANNUATION	$1,363,488
Superannuation
Super Fund Accumulation Account	Wife	$179,047
Super Fund Defined Benefit Account	Wife	$71,238
Super Fund	Husband	$225,322
Super Fund	Husband	$22,622
TOTAL SUPERANNUATION	$498,229
NETT ASSETS INCLUDING SUPERANNUATION	$1,861,717

Items in dispute

1. At trial, the parties were in dispute about whether the proceeds of sale from the wife’s shares, and the monies the husband used from joint funds to pay for his legal fees, ought to be “added back” to the property pool.

   The parties’ Shares C share sale proceeds

2. It is the husband’s evidence that the sale proceeds of the wife’s Shares C shares between 3 February 2016 and 7 April 2017 amounted to $64,270.38[3]. He says that those proceeds ought to be “added back” so as give a more accurate view of the property pool and the parties’ current financial positions.

   [3] The affidavit of Mr Copeland sworn 3 April and filed 4 April 2018 paragraph 391.

3. At trial, Mr Copeland confirmed that evidence, and his evidence that the sale of Ms French’s shares in the 2016 – 2017 financial year had been at a loss of $6567.

4. He was forced to concede, however, that in the previous financial year, there had been a capital gain of $10,243 on those shares.  He said he had not looked at that financial year in this context.

5. In his affidavit material[4], Mr Copeland had been critical of Ms French for selling the shares, and sceptical about her deposed need to sell them in order to supplement her income to pay her living expenses.

   [4] The affidavit of Mr Copeland sworn 3 April and filed 4 April 2018 paragraphs 389 to 408

6. When it was put him that Ms French’s most recent Financial Statement, sworn and filed 4 April 2018, disclosed a shortfall between her income and her expenses, Mr Copeland would only say “that’s what she states” or “she’s stating that expense” and “has she – has she met that expense?  She has stated that expense.  Whether she has met it or not I can’t say”.

7. He would not concede that it had been necessary for Ms French to sell her Shares C shares, and was clearly sceptical and mistrustful about her stated income and expenses set out in her Financial Statement.

8. He did agree, most grudgingly, that his net income was significantly greater than that of Ms French.

9. The wife’s evidence[5] corroborates the husband’s in that she says that she sold her Shares C shares between January 2016 and May 2017 for a total of $64,270.  She says that she applied those monies to “the living expenses for myself, [Y] and [X], including but not limited to child care fees and [Y]’s private school fees”. Apart from giving her Shares C share portfolio a value of “Nil” in her table of the parties’ property interests contained in paragraph 372 of the same Affidavit, Ms French’s Trial Affidavit is otherwise silent on the issue of the sale of her Shares C shares.

   [5] The Affidavit of Ms French sworn 3 April and filed 4 April 2018 paragraph 429.

10. At trial, under cross-examination, Ms French referred to her “response affidavit” as containing “a breakdown of what was paid from the (sale of her) Shares C shares”.

11. In paragraph 128  of  her Affidavit sworn 16 April and filed 18 April 2018, filed in response to the husband’s Trial Affidavit  filed  4 April 2018 , Ms French states as follows:

    I sold my shares in order to pay living expenses of myself, [Y] and [X], including school fees, childcare fees, medical expenses, [Y]’s school trip, music lessons project, a new desktop computer for [Y] a new laptop for [Y], medical expenses, groceries, household bills and new toilet for the Property A property.  I also applied approximately $12,000 of those funds towards my legal fees. 

12. In paragraph 134 of the same Affidavit, the wife refutes “that I did not need to sell my Shares C shares to meet the living expenses of the children and I (sic)”.   

13. At trial, Ms French agreed that she had spent a total of $128,157 to her lawyers up until about one month before trial.  She confirmed her affidavit evidence that $81,000 of that sum had been loaned to her by her sister, and that therefore the sum of $47,157 had come from another source.  She said that some, but not all of those funds had come from the sale of her Shares C shares, although she did not say exactly how much.  I find, therefore, that the sum of $12,000 was paid towards her legal fees from the sale proceeds of her Shares C shares.

14. On the evidence before the court, it is impossible to say exactly how the remaining $35,157 was spent, but there is no evidence to refute Ms French’s affidavit evidence set out above that those moneys were applied to family expenses.

15. Nevertheless, the evidence set out in paragraph 49 above indicates that at least some of those funds were used to pay for [Y]’s school fees (which Ms French agreed, under cross-examination, were about $15,000 per year), his laptop, and his personal computer.  Given that [Y] is not a child of the marriage, and that Ms French supports him with the assistance of child support from his father, it is difficult to see how the funds expended on his computer equipment, unquantified as they are, were used for the purposes of the family comprised of Mr Copeland, Ms French and [X].

1. It is Ms French’s evidence that some of the remaining $35,157 was spent on a new toilet for the Property A property.  Again, while that is contribution to the property of the parties, it is simply unquantified in these proceedings.

2. In all the above circumstances, I will “add back” the $12,000 spent on legal fees, and the $15,000 spent on [Y]’s school fees to the property pool for the purposes of these proceedings.

3. Mr Copeland also conceded that he had sold his own Shares C shares in late June 2016 for about $52,000, but stated that he had done so because he had moved back into the Property H property, and had to make payments to that property’s outstanding mortgage.  It was his evidence that he had “already put back in the pool… In its entirety” the income from those share sales. 

4. However, he was then forced to concede that his net income after tax had been $6993 in June 2016 and $6560 in July 2016, and that in the period from January 2016 to June 2016, he had paid a total of $1406 towards the Property H mortgage while receiving net income of $13,500.

5. Counsel put to the husband that his affidavit evidence that he had not received any income between February 2016 and May 2016, and was therefore forced to apply monies from his CBA MISA account to meet his living expenses, was therefore simply incorrect.

6. Upon receiving a negative answer, Counsel took him to five separate occasions between January 2016 and the end of May 2016 when Mr Copeland had received from his employer, from share dividends and from the Australian Taxation Office, a total of $15,548.

7. On the basis of that evidence, it is clear that Mr Copeland did not apply the proceeds of his own Shares C sales of about $52,000 to the mortgage encumbering the Property H property.

8. I can only find, therefore, that he, too, used those funds for his own benefit.

9. Consistent with my decision in relation to the proceeds of sale of Ms French’s Shares C shares, I will therefore include the sale proceeds from Mr Copeland’s Shares C in the property pool to be distributed between the parties.

   In dispute: the husband’s legal fees

10. The wife’s evidence is that the husband spent $125,000 of the parties’ joint funds on his legal fees for these proceedings. She says that as those monies were joint monies, they ought to be “added back” and counted as monies of which the husband has had the sole benefit.

11. Mr Copeland was cross-examined at trial about his payment of legal fees from the parties’ Viridian Line of Credit (“the VLC”).

12. He conceded that he had actually spent about $134,000 in legal fees from the VLC, but stated that he had also transferred the sum of $102,000 to the VLC from his CBA Streamline account, into which his salary is paid, over the same period.

13. That fact was confirmed by the wife while under cross-examination by the husband’s counsel.

14. Mr Copeland was adamant that none of the monies he removed from the VLC should be included in the pool to be distributed between the parties.

15. Mr Copeland confirmed that the VLC’s balance at the time of separation was zero, and that he had had almost $101,000 in his MISA account at that time.  He agreed that he had deposited the proceeds of sale from his own Shares C ($52,000) into his MISA account in 2016, so that its total deposits came to about $153,000.

16. He agreed with counsel that he had transferred the sum of $80,000, which he had deposed was the balance of that account, from his MISA account to his CBA Smart Access account on 14 February 2018.

17. Mr Copeland further conceded that that evidence indicates that he had spent the sum of about $73,000 from his MISA account between the date of separation in mid-2015 and 14 February 2018.

18. When it was put to him that he had been earning $125,000 a year during that period Mr Copeland demurred, saying that he had not had continuous employment throughout that period, that he had earned $70,000 in the 2014 – 2015 financial year, and $90,000 in the 2015 – 2016 financial year.

19. He denied that those monies, that is the $73,000 by which his MISA account had been depleted between mid-2015 and mid-February 2018, had been expended on his legal fees, insisting that those funds had been applied to his expenses, including those incurred in moving and setting up his accommodation after separation. 

20. From the above evidence, I find, on the balance of probabilities, the following to have occurred:

    ·    Mr Copeland transferred the sum of $134,000 out of the parties’ joint VLC post separation to pay for his legal fees.

    ·    he transferred the sum of $102,000 from his salary into the VLC account post separation, leaving a net withdrawal from the VLC of $32,000 which was applied to his legal fees.

    ·    he transferred the sum of $52,000 from the sale of his Shares C shares to his MISA account post separation.

    ·    he has had the sole benefit of the net moneys derived from the VLC ($32,000) and the $52,000 transferred from the sale of his Shares C shares deposited to his MISA account post separation.

21. The husband has therefore had the sole benefit of some $84,000 of joint monies since separation, and I will “add back” that sum to the pool of assets.

    Final statement of assets, liabilities and superannuation entitlements

22. After adjustments based on the decisions above, the final statement of assets, liabilities and superannuation entitlements can be set out thus:

Assets	Owner	Value
Property A (“the Property A property”)	Joint	$630,000
Sale proceeds from the sale of Property H (in trust) (“the Property H property sale proceeds”)	Husband	$538,000*
Bank D Everyday Options Account Number …	Joint	$102,673#
Bank D Everyday Basics Account Number …	Joint	$120,500*
Bank D Everyday Basics Account Number …	Wife	$636#
Bank D Kids Savings Accounts Numbers: …	Wife	Nil
CBA Direct Investment Account Number …	Wife	Nil
CBA Streamline Account Number …	Husband	$1,576
CBA  Smart Access Account Number …	Husband	$73,096*
CBA Direct Investment Account No. …	Husband	$20
CBA Complete Home Loan Mortgage Interest Saver Account (“MISA”)  No. …	Husband	$NIL#
Motor Vehicle F Registration Number …	Husband	$14,700
Motor Vehicle B Registration Number …	Wife	$16,000
Shares C share portfolio	Husband	$12*
Proceeds of sale from Shares C shares	Husband	$52,000
Shares C share portfolio	Wife	Nil
Net moneys withdrawn from the VLC account for legal fees	Husband	$32,000
Proceeds of sale from Shares C shares	Wife	$27,000[6]
Shares G shares	Husband	$7,159
Furniture and effects	Wife	$5,680
Furniture and effects	Husband	$3,430
Total Assets	$1,624,482
Liabilities
Bank D Owner Occupied Home Loan Account Number …	Joint	$104,248#
Bank D Owner Occupied Home Loan Account Number …	Joint	$0*
CGT on sale of Property H property	Husband	$22,000
CBA Complete Home Loan Account no. …	Husband	$0
CBA Gold Awards credit card #...	Husband	$17,046#
Suncorp Gold Visa Card …	Wife	$5,100
Australian Taxation Office	Wife	$0*
Total Liabilities	$148,394
NETT ASSETS EXCLUDING SUPERANNUATION	$1,476,088
Superannuation
Super Fund Accumulation Account	Wife	$179,047
Super Fund Defined Benefit Account	Wife	$71,238
Super Fund	Husband	$225,322
Super Plan	Husband	$22,622
TOTAL SUPERANNUATION	$498,229
NETT ASSETS INCLUDING SUPERANNUATION	$1,974,317

[6] This sum comprises the $12,000 Ms French spent on legal fees and the $15,000 spent on [Y]’s school fees

C.What were the parties’ contributions to the property?

1. This question is mandated by s79(4) of the Act, which states:

   s.74

   In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)  the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)  the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)  the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)  the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)  the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)  any other order made under this Act affecting a party to the marriage or a child of the marriage; and

(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

Initial contributions

1. At the time of cohabitation in mid-2009, the husband deposes[7] that he owned the following:

   [7] The Affidavit of Mr Copeland sworn 3 and filed 4 April 2018, paragraph 281.

   (a)the Property H property with an equity of between $424,173 and $444,173;

   (b)a CBA Offset account connected to the Property H property mortgage in the amount of $14,606;

   (c)Shares J and Dividend Cash worth $55,000 and $6354 respectively;

   (d)Shares C worth about $211,327;

   (e)Shares G shares worth about $4176;

   (f)Motor Vehicle K worth approximately $10,000;

   (g)some furniture and chattels; and

   (h)superannuation entitlements in two funds with a total of about $50,000 to $85,000.

2. Mr Copeland sets out the wife’s initial property contributions as comprising a motor vehicle, the property at Property L (“the Property L property”) and superannuation entitlements worth about $80,000.  He deposes that he estimates that the Property L property was worth about $340,000 with a mortgage debt of $196,312 at that time, and he accepts the wife’s car valuation at $10,000[8].

   [8] The Affidavit of Mr Copeland sworn 3 and filed 4 April 2018 paragraph 285(a)(i).

3. Ms French deposes[9] that when the parties began to live together she held equity in the Property L property of about $143,688, a motor vehicle worth $10,000, furniture and effects, and superannuation entitlements of about $81,000.

   [9] The affidavit of Ms French affirmed 5 and filed 6 September 2017 paragraph 65.

4. It is Ms French’s evidence that the Property H property owned by Mr Copeland had an equity of about $414,766, that his motor vehicle was worth about $7000, that his shares were estimated to be worth $119,415, that his Shares J Trust Account held funds of about $60,000, that he had nominal furniture and effects, and that his superannuation entitlements were worth approximately $90,000.

5. At that time, both parties were employed on a full-time basis, Ms French with Employer earning approximately $89,000 per year, and, she says, Mr Copeland with Employer earning about $135,000 per year including annual bonuses.   

6. On the basis of this evidence, none of which was contradicted at trial, I estimate the initial contributions of the parties to fall in favour of the husband, as the assets he held at the date of cohabitation were worth considerably more than those held by the wife.

   Contributions during the marriage

7. The parties commenced cohabitation in mid-2009 in the Property L property.  It is the husband’s evidence that he paid to the wife $150 per week in cash as rent for his occupation of the property until the parties purchased the Property A property. In other words, the monies so paid were in the form of rent and not contributions to Ms French’s mortgage.

8. It is the wife’s evidence that at the date of cohabitation, Mr Copeland moved into the Property L property and the Property H property was rented out for about $410 to $430 per week, those moneys being used to buy shares, to pay for child care, and to pay for the husband’s post-separation rent for about five months.

9. The husband’s evidence essentially confirms those facts, save that he says that the rent paid by the tenants decreased from $450 per week in 2009 to $430 per week in 2015,  and that the rent  was also applied to reduce the Property H property’s mortgage and to pay for repairs and capital works on the property.

10. By reference to his Income Tax Returns for the financial years 2009 to 2015, Mr Copeland deposes that he received a total of $39,284 from the rental of the Property H property during the relationship and marriage[10].

    [10] The affidavit of Mr Copeland sworn 3 April and filed 4 April 2018, paragraph 327.

11. The husband says in his Affidavit material that from the date of cohabitation until February 2013, the parties kept their finances separate, even to the extent that they operated separate home loan accounts for their shares of the payments for the Property A property mortgage after its purchase in 2010. It is his evidence that the parties kept a journal of expenses to ensure that all the parties’ expenses were equally paid for.

12. However, under cross-examination at trial, Mr Copeland conceded that the parties had essentially begun to mingle their finances in … 2010, upon the settlement of purchase of the Property A property. He also conceded that monies Ms French contributed to the mortgage accounts securing the Property A property were not entirely equal to his own, in that she had contributed significant monies from her inheritance in 2011 and 2012.

13. In mid-2010, the parties purchased the Property A property as tenants in common in equal shares.  The husband says that the purchase price was $587,000 and the wife says the parties paid $570,000 for the property.  I do not think that anything turns on that discrepancy. 

14. It is the evidence of both parties that each party obtained a home loan of about $286,000 from Bank D and those loans, secured by mortgage over the Property A property, were serviced separately by each party. That is, they borrowed virtually the entire purchase price for the Property A property.

15. The wife sold the Property L property for $360,000 soon after the purchase of the Property A property, and, she deposes[11], applied $125,900 from the net sale proceeds to her Bank D mortgage loan secured by the Property A property. In his Affidavit material, Mr Copeland states that Ms French contributed the sum of $110,000 from the sale of the Property L property to her Property A mortgage loan, but at trial, he conceded that the sum was actually $125,000.  

    [11] The affidavit of Ms French affirmed 3 April and filed 4 April 2018 paragraph 390.

16. It is Ms French’s evidence, accepted by the husband at trial, that she received an inheritance of $528,025 from the estate of her late father in instalments in 2011 and 2012.

17. She deposes that she applied those monies as follows[12]:

    (a) approximately $170,000 towards my half of the mortgage for the Property A property.  This resulted in the mortgage, and therefore the interest being reduced to almost NIL;

    (b) approximately $100,000 into the offset account linked to Mr Copeland’s half share of the mortgage secured by the Property A property.  This resulted in the interest required to be paid to be reduced almost NIL;

    (c) approximately $131,000 into the offset/MISA Commonwealth Bank account linked to the mortgage for the Property H property; and

    (d) approximately $120,000 invested in term deposits.  Mr Copeland also contributed some funds towards these term deposits, although this amount was significantly less than the sum contributed by myself from the inheritance received.  The term deposits made approximate (sic) $20,000 interest.  From the invested funds, approximately $60,000 was paid towards renovations to the Property A property completed in 2013 and a further $30,000 was paid to purchase a car in March 2015. 

    (e) The remaining funds were paid into an account in joint names and at one point were in an account in the name of my son, [Y].  (…)

    [12] The affidavit of Ms French affirmed 7 September and filed 11 September 2017, paragraph 71.

18. Ms French says she also inherited “a significant amount of furniture and effects” from her father’s estate.

19. However at trial, Mr Copeland accepted the following propositions that were put to him by counsel for Ms French in relation to how she applied her inheritance:

    ·    She paid $161,000 into her Bank D home loan secured by the Property A property

    ·    She paid $80,000 into her Everyday Options account

    ·    She paid $260,000 into a term deposit with Bank D

    ·    She paid $133,500 into the husband’s MISA account

20. Those sums add up to $634,500, some $106,475 more than the inheritance she received.

21. Nevertheless, at trial, Mr Copeland would only concede that “most” of Ms French’s inheritance was applied to “grow your and her assets and freed up both of your income to allow you to build towards the increase in your asset pool”.

22. Mr Copeland was then referred to paragraph 369 of his Affidavit sworn 3 April and filed 4 April 2018, which states:

    369.  When Ms French and I separated in June 2015, I was the registered owner of the (Property H) property and the home was still tenanted.  The CBA mortgage secured over the property had a balance owing of $101,032 with an offset balance of $100,968.  The mortgage was set to interest only and the interest payments were minimal due (sic) the entire mortgage debt effectively being offsetted (sic).

23. The following exchange then took place:

    Mr Copeland: Around what time is that?  So potential time – so if you give me a time I will say yes.  I’m saying that if there is a time – – –

    Counsel: June 2015, it seems.

    Mr Copeland: Yes.  Yes.  Then that’s right, yes.

    Counsel: And the reality of it is that the reason why the mortgage payments were minimal because the entire mortgage debt had effectively been offset was because my clients funds from the inheritance caused that to occur; that’s right?

    Mr Copeland: Not true.

    Counsel: Not true?

    Mr Copeland: It was partly.

    Counsel: Partly?

    Mr Copeland: And partly – – –

    Counsel: You’re prepared to make that concession?

    Mr Copeland: And partly – yes, yes.  And – and partly through the rent received, which was pumped out.  So all the income from that property, rentals was pumped back in.

24. This was only one of many examples where Mr Copeland was reluctant to give Ms French credit for her contributions to the parties’ property. His answers were sometimes evasive and grudging in their tone, and it was clear that he wished to give the Court the impression that it was he who had made the majority of the contributions to the parties’ property.

25. However, Ms French’s contribution to the parties’ joint assets from her inheritance was very significant, in that it reduced the overall mortgage liability on the Property A property to nil in real terms.

26. Ms French states that Mr Copeland sold shares at various times during the relationship and marriage, and that he applied the proceeds of the sales to his share of the Property A mortgage.

27. In September 2014, the husband resigned from his employment and remained unemployed for a period of almost 8 months until May 2015.  It is the wife’s evidence[13] that he cashed in his Shares J shares at that time and received about $60,000, that sum being used for the family’s expenses while he was unemployed and the wife was on maternity leave.

    [13] The affidavit of Ms French affirmed 7 and filed 11 September 2017, paragraph 79.

1. The husband deposes that he received the sum of $60,302 from the liquidation of those shares in November 2014, and in addition he received $7389 in accumulated savings and interest.

2. It is his evidence that the Shares J shares were the result of an investment made with monies received from an inheritance he received after the death of his parents in 1980.  The corpus of £33,000GBP did not come under his control until he turned 25, although interest on those funds was to be used for his education.  He says that the capital remained untouched until November 2014 when he liquidated the shares.  By reference to his income tax returns for the years 2009 to 2015, Mr Copeland deposes that the total amount of foreign income he declared from the Shares J investment was $12,532[14].

   [14] The Affidavit of Mr Copeland sworn 3 and filed 4 April 2018 paragraph 330

3. Mr Copeland says that the money realised from the share liquidation was applied as follows[15]:

   [15] The Affidavit of Mr Copeland sworn 3 and filed 4 April 2018 paragraph 301

   (a)$4,500 on taxes and bills;

   (b)$1,500 to the MISA account;

   (c)$35,000 to [Y]’s Bank D account (held by Ms French on trust);

   (d)$10,000 to Ms French’s CBA direct investment account;

   (e)$2,500 to Ms French’s Bank D account;

   (f)$3,700 to the credit card;

   (g)Balance on living expenses as neither Ms French nor I were receiving an income from paid employment.

4. At trial, under cross-examination, Ms French conceded that $35,000 had been paid into [Y]’s account from the sale of the Shares J and that $10,000 had been paid to her investment account.  She was not asked any further questions about Mr Copeland’s sale of his Shares J.

5. In those circumstances I accept Mr Copeland’s evidence on that point.

6. Ms French says that in June 2016, Mr Copeland sold his remaining Shares C shares for $53,600, and deposited the entire amount to the offset account connected to the Property H property mortgage.

7. I have dealt with that matter in paragraph 73 above and found that Mr Copeland had used the proceeds of sale from his Shares C shares in 2016 for his own benefit.

8. The husband deposes[16] that he sold most of his original Shares C share portfolio to fund the Property A property purchase in 2010.  It is his evidence that he used some of those funds ($21,000) for the deposit on the property, the purchase costs, a removalist, furniture, white goods and tools, and for a fence around the property.  He says he then applied $180,000 from the Shares C share sale to his Property A property mortgage account, and that he had paid capital gains tax on the sale.

   [16] The Affidavit of Mr Copeland sworn 3 April and filed 4 April 2018 paragraphs 303 – 304.

9. In paragraph 389 of her Affidavit sworn 3 April and filed 4 April 2018, Ms French deposes that each of the parties borrowed the sum of $286,000 from Bank D to acquire the Property A property, which was virtually the whole purchase price.

10. At trial, Mr Copeland was cross-examined on this issue as follows:

    Counsel: (Ms French) says that … when you bought the former matrimonial home... you each took out, effectively, a 50% liability for the purchase price; that’s right?

    Mr Copeland: Yes.

    Counsel: Because each of you owned homes at that point in time, so you borrowed the entire purchase price?

    Mr Copeland: Yes.

11. I am satisfied, therefore, that the proceeds of sale from Mr Copeland’s original Shares C share portfolio in the sum of about $200,000 were applied to the purchase of /and/or to reduce the liability over the Property A property.  That is a contribution by the husband from property owned by him prior to the parties’ cohabitation[17].

    [17] Affidavit of Mr Copeland sworn 3April and filed 4 April 2018 at paragraph 281(e).  He denied, when questioned trial, that he had told Ms French that those shares were worth $120,000 at the date of cohabitation and was not pressed on that point.

12. The wife deposes that between January 2016 and May 2017 she sold her shares and received approximately $55,000, which she applied to supplement the family’s income in order to meet general living expenses.  I have already dealt with her application of those monies in paragraphs 40 to 54 above.

13. I feel compelled to note, at this stage of this judgment, that the husband has gone to some lengths to set out his financial contributions to the property of the marriage in detail.

14. He refers to his tax returns to show that he has earned certain income during the relationship and marriage, and there is a sense in his filed material, and in his oral evidence, that he expects to be compensated for, or at least credited with specific financial contributions.

15. That is not how the Family Law Act 1975 (Cth) operates.

16. The question of contributions is rarely one to be answered by finely detailed examination of parties’ earnings. As a general rule, and unless there is specific evidence to the contrary, such as the contribution of an inheritance or the sale of a previously-owned item of property to the joint property, the contributions of the parties are often considered to have been equal during the period of cohabitation.

17. That is because de facto relationships and marriages are partnerships, and where both partners are either working and bringing income into the marriage, or are caring for the household and/or a child of the marriage, those are all significant and qualitatively equal contributions to the partnership.

18. I approach this case on that general principle, while being mindful that there have been financial contributions from both parties from previously-owned property and from inheritances.

19. In terms of non-financial contributions during the period of cohabitation, it is the wife’s evidence that she conducted the vast majority of the homemaker and parent role in the family, while the husband sometimes cared for [X] and “did the yard work”.

20. Mr Copeland, not surprisingly, states that he shared [X]’s care and the tasks around the home.

21. Given that he was working for most of the relationship and marriage, while Ms French was working part-time or taking maternity leave to care for [X], it is unlikely that Mr Copeland’s contributions to the homemaker and parent roles were as significant as he claims.

22. Nevertheless, I approach non-financial contributions in much the same way as described above, and in those terms, the non-financial contributions of the parties are likely to have fallen on the side of the wife.

23. Overall, I find that the contributions to the parties’ property during the cohabitation fall significantly to the wife, as the amount contributed from her inheritance and the sale of the Property L property were greater than those contributed by the husband from the sale of his previously owned Shares C and Shares J shares.

24. Otherwise, the contributions of the parties during the period of cohabitation were essentially equal, as each was either working and bringing in income, or staying at home and caring for the household and the parties’ child.

    Post-separation contributions

25. In his Trial Affidavit sworn 3 and filed 4 April 2018, the husband states that the Property H property was sold at auction on 3 March 2018 for a sale price of $690,000. It was agreed between the parties that the net sale proceeds would be held in  trust pending the outcome of these proceedings, save that the husband was to have funds released to him to purchase another property provided that the funds required would be no more than 50% of the purchase price. That agreement was the subject of an Undertaking the husband gave to the Court on 23 February 2018.

26. Post separation both parents have cared for [X], although most of that task has fallen to Ms French.

27. I therefore find that the post-separation contributions to the parties’ property fall very significantly to the husband in the form of the proceeds of sale from the Property H property.

28. When I take all of the above into account, I assess the parties’ contributions to the property of the marriage to fall 57.5% to the husband and 42.5% to the wife.

D.Should there be an adjustment to the contribution-based entitlements of the parties after a consideration of the matters set out in s.75(2) of the Family Law Act 1975 (Cth) (“the Act”)?

1. Section 75(2) of the Act sets out the factors the Court must take into consideration when making orders for the maintenance of a party to a marriage.

2. The inclusion of this exercise in property proceedings is required by s.79(4)(e) (see paragraph 76 above).

3. Section 75(2) of the Act states that the court must consider the following matters when deciding whether to further alter property interests of parties [18]:

   [18] I have omitted sub-sections which do not apply to these parties

   (a) the age and state of health of each of the parties; and

   (b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (d) commitments of each of the parties that are necessary to enable the party to support:

   (i)himself or herself; and

   (ii)a child or another person that the party has a duty to maintain; and

   (e) the responsibilities of either party to support any other person; and

   (f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i) any law of the Commonwealth, of a State or Territory or of another country; or

   (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l) the need to protect a party who wishes to continue that party’s role as a parent; and

   (m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and

   (n) the terms of any order made or proposed to be made under section 79 in relation to:

   (i) the property of the parties; and

   (na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.

4. In this case, the parties are of similar age, and it is agreed that each will retain a property (or the means to purchase one), a motor vehicle and their bank accounts[19] as a result of these proceedings.

   [19] Save for their joint bank account Bank D account ending #... (“the joint account”) which is a matter in dispute in these proceedings.

5. Both have the capacity for gainful employment, although the husband has the greater potential in terms of income.

6. Pursuant to the Final parenting Orders made by consent on 1 May 2018, [X] is to live with the wife, the husband spending time with her in a gradually increasing regime leading to the situation where, by the commencement of school Term 2 in 2020, [X] will live with her mother for eight days in each fortnight and with her father for six.  School holidays and special days such as birthdays, Mothers’ and Fathers’ Days, and Christmas will be shared equally between the parents.

7. I note that while [Y] is not a child of this marriage, he lives with Ms French during the whole of school terms and sees his father, who lives some distance away, only in school holiday periods.  Ms French supports [Y] with child support from his father of approximately $200 per week.

8. I note that while [Y] is now in Year 12 at school and will turn 18 at the very end of 2019, it is possible that he will be at least somewhat dependent on Ms French for his support after that time.

9. I also take into account, under s75(2)(o) that the wife has a debt to her sister in the sum of $81,000 which she has borrowed to pay for her legal fees. I note that Mr Copeland did not challenge the evidence of that debt at trial.

10. When I take all of those matters into account, I find that there should be an adjustment on the wife’s side of 10% as a result of her lesser earning capacity, her slightly greater care of [X] into the future, her debt her sister, and her need to provide for [Y].

E.In light of those findings, what Orders should be made to effect a just and equitable division of property between the parties?

1. The end result, after the matters set out under section 79(4) and s.75(2) of the Act are considered, is that the husband’s greater financial contributions to the property are offset by the wife’s greater needs under s75(2).

2. That results in a division of the parties’ property between them in the ratio of 52.5% to the wife and 47.5% husband.

3. I have found that the parties’ property net of superannuation is worth $1,476,088.  52.5% of that sum is $774,946[20].

   [20] I have rounded numbers, at this stage of the exercise, up or down to the nearest dollar for convenience of calculation.

4. It has been agreed between the parties that the wife will retain the Property A property, which has a net value of $525,290[21].  She will also retain her motor vehicle worth $16,000, the proceeds of sale from her Shares C shares in the value of $27,000, the Bank D Everyday Basics Account worth $636 and furniture and effects worth $5,680.

   [21] $630,000 - $104,260 - $450 = $525,290

5. That means she will retain assets worth $574,606.

6. Ms French’s liabilities amount to $5,100 owed on her Bank D Gold Visa Card, which means that she will retain net property worth $569,506[22] plus her superannuation entitlements of $250,285. Clearly there will have to be a cash payment to Ms French to take her retained assets up to 52.5% of the total.

   [22] $574,606 - $5100 = $569,506

7. The husband will retain the proceeds of sale of the Property H property in the sum of $538,000, his motor vehicle worth $14,700, the net monies withdrawn from the VLC account for his legal fees in the sum of $32,000, the proceeds of sale from his Shares C shares of $52,000 and his current Shares C share portfolio worth $12, his Shares G shares worth $7,159, and funds in various CBA accounts worth $73,634,[23] total assets worth $717,505.

   [23] $1576 in CBA Streamline Account number …, $72,012 in CBA Smart Access Account number …, $20 in CBA Direct Investment Account number …, and $26 in CBA MISA Account number …

8. Mr Copeland will retain responsibility for the Capital Gains Tax payable on the sale of the Property H property in the sum of $22,000, and his credit card debt of $16,293, which means that he will retain net assets worth $679,212[24] plus his superannuation entitlements of $247,944.

   [24] $717,505 - $22,000 - $16,293 = $679,212.

9. I note here that the parties’ superannuation entitlements are very similar (as at the time of trial), although the husband has a greater earning capacity than the wife, so I do not think it appropriate to alter those entitlements by way of a superannuation split.

10. Of course, that leaves the funds in the joint accounts of $102,974 (Bank D Account No. …) and $120,573 (Bank D Everyday Basics Account No. …) and any interest earned on those or any other of the parties’ accounts since the time of trial. Those amounts will need to be added to the total asset pool for the purposes of calculating the final settlement.

11. For that reason, I will not make Orders for a particular sum to be paid to Ms French, but rather for the property to be divided so that she receives 52.5% of the net assets not including the parties’ superannuation entitlements, and Mr Copeland receives 47.5%.

12. I have confidence that the parties and their respective legal representatives will be able to undertake that task.

Conclusion

1. These parties remain in some conflict.

2. While it is to their credit that they were able to resolve their differences about [X]’s future parenting arrangements, they could not come to agreement entirely about their financial future.

3. The percentage of assets I have decided upon, coincidentally, is somewhere between those sought by the parties, and it is to be hoped that once the final settlement is executed, they will be able to put their differences aside for [X]’s sake, and concentrate on being the best parents they can be for her, rather than focussing on whether they “won” or “lost” in the property settlement.

I certify that the preceding one hundred and fifty-six (156) paragraphs are a true copy of the reasons for judgment of Judge Small

Date:8 March 2019