COWAN & COWAN

[2016] FCCA 1952

FEDERAL CIRCUIT COURT OF AUSTRALIA

COWAN & COWAN [2016] FCCA 1952

Catchwords:
FAMILY LAW – Property – application for property settlement – just and equitable – contributions of the parties – where contributions by wife significantly exceed those of husband – whether adjustment should be made for factors in Family Law Act 1975 (Cth) s.75(2) – adjustment in favour of husband – health issue – credibility – credibility of party’s evidence.

FAMILY LAW – Property – application in a case – application to restrain sale of matrimonial home – application for interim distribution of funds in controlled monies account.

FAMILY LAW – Contravention – application – contravention – where application never prosecuted.

PRACTICE AND PROCEDURE – Application in a case – application to reopen proceedings.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79, 81, 106A

Cases cited:

Baglio & Baglio [2013] FamCA 105

Bevan & Bevan (2013) 49 Fam LR 387; FLC 93-545; [2013] FamCAFC 116

Bremner & Bremner (1994) 18 Fam LR 407; (1995) FLC 92-560

Hickey & Hickey (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395

Money & Money (1994) 17 Fam LR 814; FLC 92-485

Pierce & Pierce (1998) 24 Fam LR 377; [1998] FamCA 74

Stanford v Stanford (2012) 247 CLR 108; 47 Fam LR 481; FLC 93-518

Way & Way (1996) FLC 92-702

Applicant: MR COWAN

Respondent: MS COWAN

File Number: SYC 4683 of 2013

Judgment of: Judge Scarlett

Hearing dates:

5-6 August, 18-19 November 2014,

18 December 2015

Date of Last Submission: 18 December 2015

Delivered at: Sydney

Delivered on: 27 July 2016

REPRESENTATION

Counsel for the Applicant: Ms Cohen (direct brief)

Counsel for the Respondent: Mr Sansom SC

Solicitors for the Respondent: McPhee Kelshaw

ORDERS

1. All previous Orders are hereby discharged.

2. Within twenty-eight (28) days from the date of these Orders the Applicant and the Respondent are to do all such things and sign all such documents, instruments, writings and things necessary to give all consents necessary to cause the real property situate at and known as Property W in the State of New South Wales being the whole of the land in Certificate of Title Folio Identifier (omitted) to be listed for sale and sold by public auction at a reserve price and with an Auctioneer to be agreed upon and in default of agreement for seven (7) days at a reserve price and with an Auctioneer to be appointed by the President of the Real Estate Institute of New South Wales acting as Expert not Arbitrator.

3. In relation to such auction of the property:

   (a)The costs for any advertising and Auctioneer’s and other expenses necessary prior to the auction are to be paid by the parties from the controlled monies account with the (omitted) Bank being account number (omitted) in the name of McPhee Kelshaw Pty Ltd CMA atf Ms Cowan & Mr Cowan; and

   (b)The parties must cooperate with the President of the Real Estate Institute of New South Wales and with the Auctioneer and Agent appointed to act with respect to the sale.

4. Upon the sale of the said real property the parties must do all acts and things necessary to apply the proceeds of sale in the following order and priority:

   (a)In payment of Real Estate Agent’s and Auctioneer’s costs and expenses;

   (b)In payment of conveyancing costs and expenses of the sale of the said real property;

   (c)In payment of any water and council rate adjustment;

   (d)In payment of a sum sufficient to discharge the registered mortgage over the said real property to the (omitted) Bank being registered dealing (omitted);

   (e)As to the balance then remaining in accordance with Orders (5) and (6) immediately following.

5. Prior to any dispersal of the net proceeds of the sale of the said real estate to each of the parties, they must do all things and sign all necessary documents to cause:

   (a)a private ruling by the Commissioner to the Australian Taxation Office to assess and calculate the capital gains liability, if any, arising from the sale of the said real property for each of the parties, with payment of any fees to be deducted from the funds held in the said controlled monies account; and

   (b)lodgement of the parties’ respective individual tax returns within two (2) months of the new financial year following the sale of the said real property and upon receipt of the Tax Return service on the other party within seven (7) days.

6. Upon receipt of the private tax ruling by the Commissioner to the Australian Taxation Office, or alternatively should this occur earlier in time, receipt of the Respondent’s individual tax return and assessment from the Australia Taxation Office for the year ending in which the sale of the said real property occurred, the balance then remaining is to be applied:

   (a)in payment to the Australian Taxation Office for the capital gains liability for the Respondent, if any;

   (b)in payment to the Respondent’s solicitors, McPhee Kelshaw on the Respondent’s behalf to 60%; and

   (c)in payment of the balance then remaining thereafter to the Applicant.

7. The Applicant must indemnify the Respondent and keep her indemnified in relation to any Capital Gains Tax Liability over the said real property whenever and however arising.

8. The legal work associated with the sale of the said real property is to be conducted by such independent solicitor or licensed conveyancer as agreed in writing between the parties and in default of such agreement within seven (7) days as to the identity of such solicitor or licensed conveyancer the President for the time being of the Law Society of New South Wales or his or her nominee shall act as Expert to appoint such solicitor, with the costs for any expenses necessary for such appointment by the President of the Law Society to be paid by the parties from the said controlled monies account.

9. The Real Estate Agent appointed to conduct the sale of the property is to be as agreed between the parties and in default of such agreement the parties must do all things necessary and each authorise payment of all fees necessary to have the identity of the Real Estate Agent determined by the President of the Real Estate Institute of New South Wales or his or her nominee to be deducted and paid by the parties from the said controlled monies account.

10. Pending the sale of the said real property any and all rental moneys received on behalf of the partnership Mr Cowan & Ms Cowan are to be applied towards the periodic mortgage repayments to the Bank (omitted) over the property.

11. Pending the sale of the property in accordance with these Orders, the Applicant is to be responsible for all mortgage repayments, council and water rates and insurances for the said real property and is to make all such payments as and when they fall due and must indemnify the Respondent and keep her indemnified against all such liabilities whenever and however arising.

12. Within fourteen (14) days of the date of these Orders each party must sign all necessary documents, instruments, writings and things to instruct or require (omitted) Accountants to finalise the taxation affairs of the parties’ partnership known as Mr Cowan & Mr Cowan and pay all such monies as shall be required out of the said controlled monies account.

13. The parties must do all acts and things necessary to cause the dissolution of the partnership known as “Mr Cowan and Ms Cowan”.

14. The Applicant is to indemnify the Respondent and keep her indemnified in relation to all and any liabilities including all taxation liabilities pertaining to the said partnership whenever and however arising.

15. Within one (1) month of the date of these Orders both parties are directed and ordered to sign all necessary documents, instruments, writings, things or authorities to apply the proceeds of funds held with McPhee Kelshaw Solicitors in a controlled monies account as follows, namely:

    (a)in discharge of monies outstanding with respect to the Bank (omitted) Visa Card account number (omitted) in the name of the Respondent but with the liability having been incurred by the Applicant approximating $4,119.00 as at 19 November 2014;

    (b)to the Applicant’s credit card debts to an amount not exceeding $93,000.00 and provided all outstanding statements are made available to the Respondent for proof of payments owing;

    (c)to the Australian Taxation Office in an amount sufficient to discharge the parties’ joint liability with respect to the Mr Cowan & Mr Cowan partnership; and

    (d)of the amount remaining as to 60% to the Respondent and 40% to the Applicant.

16. Notwithstanding any other order and as between the parties the Applicant is to be declared solely entitled to any and all interest in the business with ABN (omitted) known as:

    (a)(business omitted);

    (b)(business omitted); and

    (c)Mr Cowan

    AND the Applicant must indemnify the Respondent and keep her indemnified in relation to any and all liabilities, including taxation liabilities associated with the above business or businesses (business omitted) & (business omitted) and Mr Cowan whenever and however arising.

17. As between the parties, the Respondent is to retain all interest in her superannuation interest with (omitted) Super.

18. As between the parties the Applicant is to be responsible for paying as and when they fall due all costs the Applicant and Respondent have incurred with (omitted) Accountants in relation to all outstanding monies owed to them in relation to the preparation of the personal taxation returns and estimates of tax payable of the Applicant and the Respondent and the partnership up to the current financial year and the Applicant must indemnify the Respondent and keep her indemnified in relation to the said costs.

19. The Applicant must indemnify the Respondent and keep her indemnified with respect to any and all Capital Gains Tax with respect to the sale of her property at Property R in the State of New South Wales together with any tax payable with respect to the partnership Mr Cowan & Mr Cowan whenever and however arising.

20. As between the parties the Applicant is to be responsible for all liabilities arising from credit card debts in his sole name and the Applicant must indemnify the Respondent and keep her indemnified in relation to the said credit card debts whenever and however arising.

21. Subject to the above Orders the Applicant and the Respondent are to have the sole right, title and interest in:

    (a)any chattels, goods, furnishings and other property not previously dealt with as part of these orders which are, at the date of these Orders in their possession respectively;

    (b)any monies, shares, debentures and superannuation entitlements not previously dealt with as part of these Orders which stand in their sole name respectively as to the date of these Orders; and

    (c)each party must do all things necessary including providing all consents and executing all documents and writings necessary to give effect to these orders in the time periods prescribed in these Orders.

22. In accordance with section 81 of the Family Law Act 1975 the parties intend these Orders to determine finally all financial relations and issues between them and avoid further proceedings between them.

23. Both parties are hereby ordered to sign all necessary documents, instruments, writings and things and to sign any necessary authority to give effect to these Orders.

24. In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders within fourteen (14) days of being requested to do so, the Registrar or a Deputy Registrar of the Court is appointed under the provisions of section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed, document or instrument upon the Registrar or Deputy Registrar being provided with such verification of such refusal or failure by way of affidavit.

25. The Application-Contravention filed on 7 February 2014 is dismissed.

26. The Application in a Case filed on 10 April 2014 is dismissed.

27. The Application in a Case filed on 1 September 2015 is dismissed.

28. The Application in a Case filed on 24 November 2015 is dismissed.

29. All other Applications are dismissed.

THE COURT NOTES THAT

The parties have sold the former matrimonial home at Property L in the State of New South Wales and the net proceeds of the sale are held in a Controlled Money Account with the (omitted) Bank being account number (omitted) in the name of McPhee Kelshaw Pty Ltd CMA atf Ms Cowan & Mr Cowan.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 4683 of 2013

MR COWAN

Applicant

And

MS COWAN

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application for property settlement by the Husband.

2. The proceedings were commenced when the Husband filed an Initiating Application and supporting documents on 15^th August 2013.

3. The parties attended a Conciliation Conference with a Registrar of the Court on 18^th November 2013 but the proceedings did not resolve.

4. As well as the Application for final orders, there are no fewer than four other Applications open, all brought by the Husband:

   1)an Application – Contravention filed on 7^th February 2014;

   2)an Application in a Case filed on 10^th April 2014;

   3)an Application in a Case filed on 1^st September 2015; and

   4)an Application in a Case filed on 24^th November 2015.

5. The Contravention Application was never prosecuted and time has passed by the earlier two Applications in a Case. They will all be dismissed.

6. The hearing of the Application for final orders took longer than was anticipated and evidence was taken over four days, on 5^th and 6^th August and 18^th and 19^th November 2014.

7. The Application in a Case filed on 24^th November 2015 was heard on 18^th December 2015.

8. This decision will deal with the matters raised in the Application for final orders and the Application in a Case filed on 24^th November 2015.   

Background

1. The Husband was born on (omitted) 1943. He has recently attained the age of 73 years.

2. The Wife was born on (omitted) 1954. She is now 62 years of age.

3. The Husband in his written submissions has prepared a useful chronology and recourse has been had to that document in setting out uncontroversial background matters.

4. The parties met in (omitted) 1994.  The Husband was then aged 51.  The Wife was then aged 40. 

5. In December of 1994 the Wife settled the purchase of a property at Property R at a purchase price of $118,000.00. 

6. In (omitted) 1995, the parties commenced to live together in a property rented by the Wife.  The Wife had two infant children of a previous relationship living with her and an infant son living with his father.  She had one adult son who lived with the parties periodically.

7. In September 1995, the parties purchased a property at Property D in joint names.  The purchase price was $304,000.00, and stamp duty and renovations added to that.  They borrowed the sum of $230,000.00. 

8. At that time, the Wife was divorced from her previous Husband.  The parties remained living in a rental property until the renovations on Property D were completed.

9. In December 1995, the parties moved into the premises at Property D. 

10. The parties were married on (omitted) 1996.  In 1997, the Wife's son X, then under the age of 18, moved in to live with them.

11. The Husband is a (occupation omitted) by profession.  He had been working at (employer omitted), however, in March of 1998, he was made redundant at (employer omitted) and entered (business omitted).  He received a redundancy payout of $40,000.00 and he used this money to purchase a (business omitted) from one Mr M.

12. In June of 1998, the parties purchased the property at Property W, for $198,000.00. They purchased the property in joint names and 100% of the purchase price was borrowed, which was secured on the parties' home and other properties of the Husband. 

13. In March 1999, a property at Property A was sold for $330,000.00. 

14. In October 2002, the parties purchased a property at Property L for $830,000.00.

15. In April of 2003, they sold the Property D property for $766,000.00. 

16. The Wife's Property R property which she had purchased in December 1994 was sold in April 2007 for approximately $286,000.00.

17. The parties separated on 7^th June 2013.  At that stage, the Wife had money in bank accounts in the sum of $43,000.00. 

18. In August of that year, the Husband commenced proceedings by filing an Initiating Application.  The Application was returnable on 21^st October 2013, on which date orders were made by consent in relation to the sale of the home at Property L. 

19. A Conciliation Conference took place on 19^th November 2013 but the proceedings did not resolve. 

20. The Application was listed for final hearing.

21. There were Interim Applications made, including the Husband's Application-Contravention that was filed on February 2014 and was returnable on 28^th April 2014.  That contravention application was never prosecuted by the Husband and it should have been discontinued or withdrawn a considerable time ago.  It will be dismissed.

22. On 12^th April 2014, the property at Property L was sold at auction for $1,250,000.00.  The Wife vacated the property in June of 2014. It was agreed that she would receive a partial property settlement in the sum of $38,763.00. The balance of the money was placed into a controlled moneys account operated by the wife's solicitors, McPhee Kelshaw.

23. The Husband has not instructed solicitors to act for him.  He did, however, brief counsel to appear for him on a direct brief and Ms Elizabeth Cohen has appeared for him throughout these proceedings.

24. The Application was heard on 5^th and 6^th August and 18^th and 19^th November 2014.

Orders Sought

1. The Applicant Husband’s Case Outline, submitted by his Counsel, Ms Cohen, shows that he seeks the following orders:

   1.That the Wife transfer to the Husband the whole of her right title and interest in Property W[1] (with suitable indemnities).

   2.That the Husband indemnify the Wife in relation to the following debts which are referable to the parties’ ownership of Property W

   a.  Mortgage to (omitted) Bank   $488,000

   b.  BAS owing   $   3,748

   c.  Rates owing   $11,660

   d.  GST payable on the sale say 25% of $500,000 = $125,000

   [1] i.e. a property at Property W, New South Wales

   3.  That the Husband be responsible for the following debts

   (omitted) Visa   $36,754

   (omitted) Credit Card  $17,829

   Bank (omitted) Visa held in name of Wife              $4,101

   (omitted) Credit Card  $23,104

   Arrears and current rates Property W              $11,660

   Accountants – (omitted)   $26,106

   Bank (omitted) Credit Card   $10,000

   4.Subject to proof of liability by way of Bank Statement evidence the parties to cause the following debts of the Wife be paid from the joint controlled moneys account.

   Ms M  $9,000

   Ms C  $5,000

   Mr J   $5,000

   Mr V  $1,000

   Mr R  $2,000

   5.That the parties do all things necessary to pay from the controlled moneys account the sum of $118,000 to enable the husband to pay the debts mentioned in 3 above.

   6. The parties to cause the sum of $50,000 from the controlled moneys account to be paid to the husband (to equalise the partial property settlement already received by the wife and to reimburse the husband for the wife's failure to pay the mortgage on Property L, pursuant to orders made in October 2013, and payment of various debts form the estate of his late mother;

   7. The husband to retain all motor vehicles now held by the husband and to be responsible for the loans of $67,000 and $25,000 owing to BMW Finance;

   8.The wife to deliver to the husband forthwith the (omitted)-

   
   

   camera valued at $400 in husband (omitted) Valuation to the husband;

   9.The wife to retain her partial property settlement paid on the sale of Property L;

   10. The wife to retain her interest in (omitted) Superannuation Fund;

   11. The husband to retain his interest in (omitted) Superannuation Fund;

   12. The parties to cause the balance of the funds in the controlled moneys account to be paid 65 per cent to the husband and 35 per cent to the wife;

   13. The husband and wife to divide between equally the husband's watches, the furniture mentioned in the husband (omitted) Valuation at Property W, and the husband (omitted) Valuation at Property A, and in the event that there is property that is not required by either of the parties, that the parties sell that property and divide the same equally between them;

   14. The wife to be declared the absolute owner of all property and bank accounts now held in the possession of the wife;

   15. The husband to be declared the absolute owner of all property now in the possession of the husband;

   16. The husband to withdraw his application for contravention orders and each party to pay their own costs of those proceedings and these proceedings.

1. The Respondent Wife seeks somewhat different orders, which are, in summary:

   1)To sell the property at Property W;

   2)That within 14 days from the date of these orders, the parties are to do all things necessary to cause the property situated and known as Property W to be sold by auction;

   3)Details relating to the costs of the auction;

   4)Upon the sale of the property, the parties are to apply the proceeds of sale in the following manner:

   i)in payment of real estate agents and auctioneers' costs;

   ii)in payment of conveyancing costs and expenses;

   iii)in payment of any water and council rate adjustment;

   iv)in payment of a sum sufficient to discharge the mortgage over the property to the Bank (omitted);

   v)the balance then remaining in accordance with orders (5) and (6).

   5)That the parties should obtain a private ruling from the Commissioner to the Australian Taxation Office in respect of capital gains liability arising from the sale of the property, any fees to be paid from the funds held in the controlled moneys account, and (b), the parties should lodge their individual tax returns within two calendar months of the new financial year following the sale of the property, and upon receipt, the tax return served on the other party within seven days.

   6)Upon receipt of the private tax ruling by the Commission to the Australian Taxation Office the balance of the proceeds of sale of Property W should be applied:

   i)in payment to the Australian Taxation Office for any capital gains tax liability for the Wife;

   ii)payment to the Wife's solicitors, McPhee Kelshaw, on her behalf as to 62.5% of the moneys;  and

   iii)the balance to be paid to the Husband.

   7)The Husband should indemnify the Wife in relation to any capital gains tax liability over the property.

   8)The legal work should be conducted by an independent solicitor or licensed conveyancer. In default of agreement, the President of the Law Society should appoint such a person.

   9)A real estate agent should be appointed to conduct the sale of the property and if the parties do not agree on the choice of the agent, then an agent be determined by the President of the Real Estate Institute of New South Wales.

   10)Pending the sale of the property, any rental moneys received on behalf of the partnership should be applied towards the mortgage repayments to the Bank (omitted) and the policy.

   11)Pending the sale of the property, the husband should be responsible for all mortgage payments and council and water rates and insurances for the property.

   12)Within 14 days from the date of these orders, the parties should sign all necessary documents to dissolve the partnership Mr Cowan and Ms Cowan.

   13)Proposed order (13) is to similar effect.

   14)The husband to indemnify the wife for all liabilities pertaining to the partnership.

   15)The parties within two months from the date of the orders to apply the proceeds of the funds held of McPhee Kelshaw in the controlled moneys account towards:

   i)discharge of money outstanding with respect to the Bank (omitted) Visa card in the name of the wife;

   ii)to the husband, credit cards debts to an amount not exceeding $93,000;

   iii)to the Australian Taxation Office an amount sufficient to discharge the parties' joint liability with respect to the partnership;  and

   iv)62.5% of the balance remaining to the wife and 37.5% to the husband.

   16)Notwithstanding any other order, the husband should be declared solely entitled to his (business omitted) in a variety of different business names and should indemnify the wife for any taxation liabilities owing.

   17)The wife should retain all her interests in the superannuation interests with (omitted) Super.

   18)The husband is to be responsible for paying all costs that the parties have incurred with (omitted) Accountants.

   19)The husband is to indemnify the wife in respect of any capital gains tax payable with respect to the sale of the property at Property R.

   20)As between the parties, the husband is to be responsible for all liabilities arising from credit cards debts in his sole name.

   21)The husband and wife would have the sole right, title and interest in any chattels, goods, furnishings and other property not previously dealt with in their respective possession, and (b), any moneys, shares, debentures and superannuation entitlements not previously dealt with, and (c), each party is to do all things necessary, including providing consent and executing documents necessary to give effect to the orders.

   22)Under section 81 of the Family Law Act 1975 (Cth), providing the parties intend the orders to determine finally all financial relations between them.

   23)Both parties to sign all necessary documents to give effect to the orders.

   24)In the event that a party refuses or neglects to execute any deed, document or instrument within 14 days, then the Registrar of the Court is to be appointed under the provisions of section 106A of the Family Law Act to execute such document in the place of the party who failed or refuses or neglects to sign it.

Evidence

1. Each party relied on a number of affidavits of themselves and of Mr N, a Chartered Accountant. 

2. The Husband and the Wife both gave oral evidence.  Mr N, the Chartered Accountant, was also cross-examined by Ms Cohen of Counsel who appeared for the Wife.  The Husband's cross-examination by Mr Sansom of Counsel (more recently of Senior Counsel) extended into a third day. 

3. The Wife gave oral evidence and was cross-examined by Ms Cohen of counsel on 19^th November 2015.  My contemporaneous note of her evidence was that she seemed an honest and credible witness.

Submissions

1. It was submitted on behalf of the Husband that there are four major assets: 

   (1) the money in the controlled moneys account, which after payment of credit cards and accountants’ debt of 118,000.00 would be reduced to $242,997.00; 

   (2)the parties' equity in the property at Property W, namely, $226,000.00; 

   (3) the Wife's superannuation with a value of $171,000.00; and

   (4)    addbacks by the Wife totalling $113,476.00, made up of: 

   (i) partial property settlement of $38,763.00; 

   (ii) $17,000.00 taken from her superannuation since the separation; 

   (iii) $43,000.00 savings balance at the date of separation; and

   (iv) $11,213.00 in arrears of mortgage payments on the property in Property L, payable by the wife under orders of the Court but not paid by her.

2. It was submitted that the total assets of the parties including superannuation was seven hundred and thirty-two dollars and two hundred and seventy-eight cents.  If there is a 60/40 split in favour of the Husband, the Husband would get $439,667.00 and the Wife would get $292,911.00.

3. It was submitted that it would be the Husband's wish that he take the following assets: 

   (1)The property at Property W with a value of $720,000.00 less a mortgage of $494,000.00, leaving an equity of $226,000.00; 

   (2)BMW and (omitted) motor vehicles less loans, $28,000.00; 

   (3)A (vehicle omitted) motor car, $2,000.00; 

   (4)Pens and model cars and cameras at Property W, the sum of $3,562.00; 

   (5)The husband's (omitted) Superannuation, $1,374.00; 

   (6)The moneys in the controlled moneys account, $234,731.00; making a total of $439,667.00.

4. It was submitted that the Wife would retain the money she had already received included as addbacks in the Husband's balance sheet at the sum of $113,476.00.  The Wife would also retain the whole of her superannuation and the balance of the controlled moneys accounts.

5. It was also submitted that much of the cross-examination of the Husband was directed to the Husband's inability to retain and refinance the commercial property at Property W. It was submitted that the Husband had done all he could to continue to maintain the property since separation by negotiating with the bank and by making extra payments on outgoings and obtaining new tenants when they were available to assist in the mortgage payments, and payment of rates, utilities and insurances.  The Wife has declined to contribute to the outgoings, it was submitted.

6. As to the initial financial contributions of the parties, the Husband submits that at the start of cohabitation he had the following assets:

   (1) property at Property A, with an estimated value of $250,000.00; 

   (2) an investment in Property F at an estimated $100,000.00; 

   (3)an investment unit at Property T to an estimated $150,000.00;  totalling $600,000.00 less moneys owing to the (omitted) Bank under a mortgage of an estimated $322,000.00. 

   Plus he submitted that he had total real estate with a value of $278,000.00 at the commencement and had motor vehicles, the only significant one of which was a (omitted) BMW motor car which was used as a part deposit on the property in Property D.

7. Further, the Husband claims to have had superannuation drawn down to buy the home unit at Property T and moneys from a compensation case from an accident in 1990 estimated at $50,000.00, which went towards the deposit on the property at Property D.

8. It was submitted that the Wife's financial position at cohabitation was that she had mainly old household effects, the property at Property R which she purchased in December 1994 with a value of $118,000.00, a mortgage to the (omitted) Bank, however, $80,000.00, leaving net real estate of $38,000.00.  She had a Mitsubishi motor vehicle, $10,000.00 in the bank and superannuation with at that stage a value of $3,570.00.

9. As to the contributions of the parties during the marriage, the Husband submitted that the property at Property D was purchased in joint names in 1995 and that he made non-financial contributions by painting, paying to have a doorway closed, contributing quality furniture and household effects, purchasing bedroom suites and bookcases and installed back-to-base security. 

10. The Wife contributed household effects, a refrigerator and a washing machine, helped with the renovation.  The property at Property D was sold in March 2003 for about $760,000.00.  The net proceeds went into the property at Property L.  The Wife also had a property at Property F which was purchased by the Husband prior to cohabitation.  It was a negatively geared investment sold in 1997 to purchase another property in (omitted).  That was also negatively geared and was sold at a small profit in 1999.  There was then a villa Property H, which was the unit that had been occupied by the Husband's mother.  She had a place in the retirement village but the unit did not sell.  The property was purchased in the Wife's name in 2001 to remedy that position.  It sold at around 2002 at a small profit.  Any taxation advantages were received by the Wife.

11. Again, the property at Property A was purchased in January 1988 by the Husband for $145,000.00.  It was mortgaged to the (omitted) Bank and it was divided into two separate residences, one of which was rented and the other one was used as a weekend retreat for the Wife and Husband.  Further, there was a commercial unit in Property C purchased in joint names in 1999 for about $261,000.00 plus set-up costs.  It was sold not long after for about $305,000.00, and that was purchased (business omitted).

12. The Husband submitted that he contributed to the purchase of the Wife's property at Property R and that in 2007 the property was renovated at the Husband's cost for sale and it was sold for $286,000.00. The Husband submitted that he made further contributions by maintaining the garden and paid for a house cleaner, paid for house maintenance, purchased food, paid mortgages on investment properties, electricity and gas, council and water rates, private health insurance, utilities, telephone, fax, photocopier, cable TV, house maintenance and repairs and contributed financially and non-financially to the Wife's children, both before and after they were 18 years of age.  The Wife had four children who were born between (omitted) 1974 and (omitted) 1983.

13. Post-separation contributions by the Husband were that the Husband paid the whole of the mortgage on the matrimonial home at Property L, of about $4,000.00 a month from June till October 2013, along with utilities and telephone.  He also paid various debts from his inheritance of $100,000.00 from his mother's estate.  The mortgage on the Property W property has fallen into arrears by about $12,000.00 due to lack of tenants to pay the mortgage.  On the other hand, the Husband submitted that the Wife had used matrimonial assets, including her $43,000.00 savings at separation and $17,000.00 taken from her superannuation fund since the separation and declined to share the costs of the matrimonial debts but has spent the matrimonial assets.  She has, as has been set out previously, taken a partial property settlement.

14. In summary, it was submitted the Husband made a much larger initial financial contribution, in his view at least, five times the size of the Wife's initial contribution.  He worked much longer hours than the Wife and if that work did not contribute as much taxable income as the Wife's income, it could not be alleged, he submitted, that the Husband did not do his best during the marriage and worked far harder than most men of his age, having been 51 at the commencement of the cohabitation and being aged 70 when the parties separated.  Since separation, the Husband has made greater financial contribution and has contributed to repaying some of the debts of the parties from the $100,000.00 he inherited from his late mother.

15. Against this, it is submitted the Wife made no contribution to the joint assets of the parties.  It was conceded that from about the year 2000 the Wife's taxable income was higher than that of the Husband.

16. It is submitted on behalf of the Husband that he would leave the marriage with less assets than he had at the commencement of the marriage and the Wife would leave the marriage with greater assets.

17. It is submitted by the Husband that having regard to his contributions that the assets of the parties should be divided between the Husband and the Wife as to 60% to the Husband and 40% to the Wife.  He also submitted that subsection 75(2) factors call for a further 5% of the assets being transferred to him on the basis of:

    (a) his lower income,

    (b) his age, which would affect his ability to work, and

    (c) the fact that the wife would retain her superannuation, which is more valuable due to the fact that it is retained in the superannuation fund.

18. Against this, it was submitted on the part of the Wife that she gave her evidence in an honest and straightforward fashion and made appropriate concessions against her own case, or in favour of the Husband's case from time to time.  Mr Sansom submitted that his client was quite an impressive witness and as I have indicated earlier, my contemporaneous notes support that contention.  However, it was submitted that similar observations could not be made in relation to the evidence given by the Husband.  Mr Sansom submitted that the Husband had difficulty providing direct answers where appropriate and wished to provide an explanation, even though not asked for or called for.

19. It was submitted that the Husband's case was incredible, given the concession that he had to make through his cross-examination that between 2003 and 2012 his own income was so minimal as not to require taxation to be paid.  The Husband's evidence, it was submitted, did him little credit and meant that the Court would be reluctant to accept prima facie what he said.  It was further submitted the issue of the Husband's credit deteriorated further in respect of a variety of matters that were raised in cross-examination.

20. Mr Sansom of Senior Counsel referred the court to the decision of the High Court of Australia in Stanford v Stanford[2] and contended that the decision in Stanford provided no barrier to the Court making an order for alteration of property interests in this regard. He noted that in paragraph 42 of their Honours’ decision in Stanford it was said:

    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 a 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.[3]

    [2] (2012) 247 CLR 108; 47 Fam LR 481; FLC 93-518

    [3] (2012) 247 CLR 108 at [42]

21. It was further submitted on behalf of the Wife that in respect of contributions the parties' period of cohabitation was approximately 18 years and three months, during which time various of the Wife's children lived with the parties at various times.  The Wife's initial contributions were largely unchallenged, being: 

    (1)the property at Property R, purchased in December 1994 for $118,000.00, subject to a mortgage of $80,000.00, giving her a net equity of at least $38,000.00; 

    (2)    her savings from a previous property settlement of $10,000.00; 

    (3)    furniture and furnishings; 

    (4)    a (vehicle omitted) coupe; 

    (5)    superannuation entitlement of $3,096.00. 

22. Mr Sansom submitted that the Husband's contributions were less clear but included the property at Property A, the property at Property T, BMW which he sold in 1995 for $28,000.00 and superannuation of an unspecified value, cash savings of an unspecified amount and various - what Mr Sansom described "various interesting cars" of an unspecified value.

23. It was submitted that the Court will recall the effect of initial contributions is now well settled.  The Court was referred to the judgment in Money & Money[4], which was cited with approval by the Full Court of the Family Court in Bremner & Bremner[5] and Way & Way[6], and was more recently approved in 1998 in Pierce & Pierce[7].

    [4] (1994) 17 Fam LR 814; FLC 92-485

    [5] (1994) 18 Fam LR 407; (1995) FLC 92-560

    [6] (1996) FLC 92-702

    [7] (1998) 24 Fam LR 377; [1998] FamCA 74

24. The Full Court of the Family Court said in paragraph 28 of Pierce:

    In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached in all the circumstances to the initial contribution.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.

    It was submitted by Mr Sansom that the Wife's contributions have in effect not eroded but weighed and considered along with other contributions that the parties made through the marriage.

25. The Husband's contention that whilst the Wife had been a high income earner from 1998 but had not contributed to the parties, this could not be accepted.  It was submitted that the Husband clearly inflated his own contributions and undervalued those made by the Wife.  The Wife, it was submitted, through her income which had grown through the marriage commensurate with her position as a (occupation omitted) and her taxation income had grown from $50,943.00 per annum in 2001 to $111,979.00 per annum in 2013 when the parties separated.

26. Mr Sansom went on to submit that the contrast between that of the contribution of the Wife and that of the Husband could not be more stark.  The Husband had to concede that between 2003 and 2012 his income was such that he did not have to pay any income tax.  It was minimal.  However, when assessing his contributions through the same period, first, he ran up significant credit card debts in the order of $100,000.00 to fund his (business omitted) on his evidence and second, that he relied from time to time upon the Wife to provide very significant and timely financial support to the parties, to him and to his business.

1. Further, in relation to the Husband's income on 20^th March 1998, he left the (employer omitted) to enter (business omitted) and it could therefore be presumed that between 1995 and 1998 he earned a good salary in his employment with the (employer omitted).  From the time of cohabitation, he earned a reasonable income for only three of the 18 years of the parties' relationship.  It is unlikely that between 1998 and 2003 that he earned any income of significance.

2. Mr Sansom went on to submit, somewhat unkindly:

   Indeed, it must be said that the husband is not someone who should undertake (business omitted) with a view to making a profit.

   The Husband did make concessions that things became so bad that he needed to rely on credit cards.

3. The Husband's financial contributions were such that his lack of any substantial income and his incurring of sufficient debts weighs very heavily against him as to the assessment of his contributions.  He did indeed in cross-examination make the concession that he should not have relied upon credit cards when he did.

4. Turning to the assessment of the parties' contribution to superannuation, it was submitted that the parties' superannuation assets totalled some $171,046.00.  As a percentage of the total asset pool, or to pools if a two-pool approach is used, superannuation amounts 29.21% of all the parties' assets.  Whichever approach is used, that is the global approach or the approach of two asset pools, the parties' respective contributions to superannuation should be weighed and assessed.  Neither party has made any contribution directly to the superannuation of the other.  The Wife's contributions amount to some 99.19% towards the total superannuation, which needs to be afforded appropriate weight.  The superannuation contribution of the Wife is about $169,679.00 in a total pool of assets of $585,425.50, or 28.9%.

5. Generally it was submitted that the Husband has had the benefit of possession in relation to the Property W property since separation, which carries with it the obligation for its payment.  The Husband is spent of the inheritance cash he received of about $100,000.00.  Only his shares remain.

6. In relation to the net non-superannuation assets of the parties, it was submitted that the parties' respective financial contributions made to the acquisition, maintenance, conservation and improvement of those assets should be found to be 70% in favour of the Wife and 30% in favour of the Husband, because: 

   (a) during the quite lengthy marriage of the parties, the husband's financial contributions were minimal; 

   (b) by contrast, the wife's contributions from income were significantly greater to the extent they supported the husband's business;  and

   (c) the Husband was away from home on many occasions working six or seven days per week. 

   It was submitted that the assessment of contributions with respect to supervision should be 99% to the Wife and 1% to the Husband.

7. As to the future needs factors, looking at matters under subsection 75(2), the Husband was 71 at separation and the Wife aged 60.  They are now aged 73 and 62.  It is clear from the evidence of the Husband that he does not intend to retire at any time in the immediate future.  There is a cloud over his health, in that the Wife's evidence was that the Husband suffers from diabetes but he does have a capacity to earn a substantial income, even though, it was submitted, he continues at his choice not to exercise that capacity and maximise his income. 

8. The Wife is now 62 years of age, works in the (employer omitted), is earning some $104,808.00 per annum as a (occupation omitted) and for that she gives some financial support to her youngest son X.  It is the Wife's intention to work for the next three to four years.

9. It was submitted that there is one factor that requires an adjustment to be made in favour of the Husband.  That, it was submitted that a far greater share of the assets go to the Wife, both as to superannuation and non-superannuation assets, as neither party seeks a splitting order in relation to superannuation assets and as a result of the contributions finding, the vast bulk of the available assets will be received by the Wife.  This will require an adjustment in favour of the Husband.

10. It is contended that an adjustment of between 5% and 10% of the net non-superannuation assets is appropriate, or between 35 – 40%, say, 37.5%, at the midpoint, to the Husband, and 60 to 65, say, 62.5%, at the midpoint, to the Wife.  And it was submitted that such a division would be just and equitable.

11. As for orders to be made, whilst the Husband had indicated a desire to retain the Property W property, the Court should not make such an order because the Husband, although he has had ample opportunity to put evidence before the Court of borrowing capacity has not done so.  His financial position is parlous and it is unlikely as a result of these proceedings the Husband would have sufficient capital income to permit him to retain the property at Property W and if he were allowed a period of time to raise the funds it would be to the Wife's prejudice who was content to wait for sale.

The proper approach to determination of a Property Application

1. As a first step, the Court must follow the decision of the High Court in Stanford v Stanford[8] and consider first of all whether it would be just and equitable to make a property order under subsection 79(2) of the Family Law Act 1975.  The High Court in Stanford set out three fundamental propositions:

   [8] supra

   37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying according to ordinary common law and equitable principles the existing legal and equitable interests of the parties in the property.

   38.Second, although section 79 confers a broad power on a Court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.

   …

   40.Third, whether making a property settlement order is " just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters, including financial and other contributions set out in subsection 79(4).[9]

   The High Court in Stanford did not refer to or endorse the four-step process set out in the decision of the Full Court of the Family Court in Hickey & Hickey[10] but in my view, the Court will still obtain valuable guidance from the decision in Hickey after considering the decision in Stanford.  The Full Court of the Family Court in Bevan & Bevan[11] when discussing the decision of Stanford noted that the High Court neither approved nor disapproved of the process but indicated that the decision served to refocus attention on the obligation only to make an order adjusting property interests where it was just and equitable to do so  (see also Baglio& Baglio[12]).

   [9] (2012) 247 CLR 108 at [37]-[38], [40]

   [10] (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395

   [11] (2013) 49 Fam LR 387; FLC 93-485; [2013] FamCAFC 116

   [12] [2013] FamCA 105

2. The four steps set out in Hickey at [39] require the Court to:

   (a)make findings about the identity and value of the property, liabilities and financial resources of the parties; 

   (b)     identify and assess the contributions of the parties; 

   (c) identify and assess the other factors in subsection 79(4), particularly the matters referred to in subsection 75(2) of the Family Law Act1975;  and

   (d)     resolve what order is just and equitable in all the circumstances.

Just and equitable

1. The parties have been engaged in litigation since the Husband filed his initiating application.  They are now divorced.  A divorce order was made in this Court on 21^st August 2014.  I am satisfied that it is just and equitable to make orders for settlement of the parties' property.

The parties' assets and liabilities

1. I find the parties' assets and liabilities to be as set out in the following paragraphs. 

Non-superannuation assets: 

(1)    Property W   $720,000.00 

(2) Controlled moneys account with (omitted) Bank on behalf of the parties    $360,977.40 

(3)    (omitted) Bank account  $540.00 

(4)    (omitted) Bank account   $1,102.00 

(5)    Specified items inspected at Property W                $3,562.00 

(6)    Account with (omitted) Credit Union   $100.00 

(7)    (omitted) Bank account   nil 

(8)    various shares   $79,449.10 

(9)    (vehicle omitted) Coupe, now sold by the Husband; 

(10) (omitted) motor vehicle     $2000.00

Total   $1,167,730.50

Superannuation assets: 

(1) Wife's (omitted) Super,   $165,679.00 

(2) Wife's (omitted) Super   $3,993.00 

(3) Husband's (omitted) Super  $1,374.00

Total superannuation   $171,046.00

The Parties' Liabilities: 

1. I find the parties’ liabilities to be:

   (1)mortgage over the Property W property, business loan to the Bank (omitted)  $491,232.00 

   (2)    Bank (omitted) Visa card incurred by the husband  $4119.00

   (3) loans from friends and family: 

   (a) from sister Ms M    $9,000.00 

   (b) Ms C    $5,000.00 

   (c) Mr J   $5,000.00 

   (d) Mr V       $3,000.00 

   (e) Ms L            $10,000.00

   (f) loan from brother-in-law, Mr R     $2,000.00 

   (4)Husband’s financial institutions credit card debts   $93,000.00 

   (5)Husband’s various alleged trade creditors and accountants                   $27,000.00. 

   (6) Wife's outstanding debt to her lawyers:    $56,000.00 

   (7)Husband's debt to his counsel        $50,000.00 

1. Capital gains tax on the sale of Property W                      Nil

Total $755,351.00

1. In summary:

   1)non-superannuation assets             $1,167,730.5 0    

   2)less liabilities             $755,351.00 

   3)net non-superannuation assets                            $412,379.50 

   4)adding superannuation assets                 $171,046.00

   5)Total assets of all types                 $583,425.50

The Contributions of the Parties

1. I have considered the submissions on behalf of the Husband and on behalf of the Wife.  I am firmly of the view that the contributions favour the Wife to a significant extent as set out in the submissions of Mr Sansom of Senior Counsel.  It is to my mind particularly relevant that the Wife's income far exceeded that of the Husband for most of the years of the parties' cohabitation.  The Husband's (business omitted) appears to have been one that returned minimal income and indeed on occasions he did not incur or acquire a taxable income at all.

2. I assess the parties' contributions to the non-superannuation assets as 70% in favour of the Wife, 30% in favour of the Husband.

3. As to the superannuation, I am of the view that the superannuation contributions were made almost entirely by the Wife. It is a fair assessment that 99% by the Wife and 1% by the Husband represents the parties' contributions to superannuation.

Other factors taken into account under subsection 79(4)(d) to (g)

1. Paragraph (d) of subsection 79(4) requires the Court to take into account the effect of any proposed order on the working capacity of either party.  There does not appear to be any likely effect on either party's working capacity.

Subsection 75(2) matters

1. Paragraph (e) of subsection 79(4) requires the Court to take into account the matters referred to in subsection 75(2) so far as they are relevant. 

2. The Husband was born on (omitted) 1943.  He is 73 years of age.  He is a semi-retired (occupation omitted) but appears keen to continue working.  The Wife was born on (omitted) 1954.  She is 62 years of age.  She is a (occupation omitted) by profession.  She earns $104,808.00 per annum.  It was her evidence that she intends to work for another three or four years.

3. Neither party has the care or control of a child of the marriage under the age of 18 years.  Neither party has re-partnered.

4. The only factors under subsection 75(2) that appear to call for an adjustment are the Husband's health, he suffers from diabetes and the fact that the bulk of the available assets will be received by the Wife.

5. Neither party seeks a superannuation splitting order. The Wife's contribution to the superannuation pool of $171,046.00 is approximately 99%.

6. It was submitted by Mr Sansom of Senior Counsel for the Wife that an adjustment of between 5% and 10% of the net non-superannuation asset pool would be just and equitable.  He submits that this should see the Husband's share increased between 35% and 40% and suggests a midpoint of 37.5% to the Husband and a corresponding 62.5% to the Wife.  My own view, with respect, is that there should be a 10% adjustment in favour of the Husband, so that the parties' shares of the non-superannuation asset pool would be as to 40% for the Husband and 60% for the Wife.

Just and equitable

1. The Husband wishes to retain the Property W property but he has not demonstrated a borrowing capacity to allow him to borrow sufficient funds in order to pay the Wife.  The Property W property will, in my view, need to be sold.

2. I am satisfied that in all the circumstances it is just and equitable to make orders along the lines submitted by senior counsel for the Wife, with the exception that the Husband should receive 40% of the net non-superannuation assets rather than the 37.5% that Mr Sansom suggested.  I will order accordingly.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Date: 28 July 2016