CUMMINGS & CUMMINGS
[2011] FMCAfam 1293
•30 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CUMMINGS & CUMMINGS | [2011] FMCAfam 1293 |
| FAMILY LAW – Property – division of matrimonial assets – whether adjustment for past and future inheritance appropriate – s.75(2) factors. FAMILY LAW – Property – superannuation – equal division. |
| Family Law Act 1975, s.75, 75(2) and 79(4) |
| Hickey & Hickey & Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 Rosati & Rosati (1998) FLC 92-804 |
| Applicant: | MS CUMMINGS |
| Respondent: | MR CUMMINGS |
| File Number: | MLC 2541 of 2011 |
| Judgment of: | Cole FM |
| Hearing dates: | 15 and 16 August 2011 |
| Date of Last Submission: | 16 August 2011 |
| Delivered at: | Adelaide |
| Delivered on: | 30 November 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Williams |
| Solicitors for the Applicant: | Pearsons Barristers & Solicitors |
| Counsel for the Respondent: | Mr A Combes |
| Solicitors for the Respondent: | Makin & Kinsey Solicitors |
ORDERS
NOTING THAT pursuant to Section 81 of the Family Law Act 1975 (“the Act”) the parties intend that these orders as far as is practicable shall finally determine their respective property claims and financial matters between them.
The husband within 60 days do all such things and sign all such documents as may be required to transfer to the wife at the expense of the wife all his right title and interest in the former matrimonial home at Property G, [G] in the State of Victoria being the whole of the land comprised in Certificate of Title Register Book Volume [omitted] (referred to as “the real property”) contemporaneously with paragraph 5 herein.
Contemporaneously with the transfer referred to in paragraph (1) hereof the wife be responsible for and indemnify the husband with respect to the mortgage secured against the former matrimonial home and refinance that mortgage in her name alone removing the husband’s name from such liability.
The wife do all such things and sign all such documents as may be required to transfer to the husband at the expense of the husband all of her right title and interest in the real property known and situated at Property V, [V] in the State of Victoria.
The wife retain for her own use and benefit the following additional assets:
(a)all shares invested in her name;
(b)her Ford Territory motor vehicle; and
(c)the inheritance from her late father’s Estate.
Within 60 days the wife pay to the husband the sum of $62,944.75 (referred to as “the payment”) such payment to be made contemporaneously with the transfer of the property.
The husband retain for his own use and benefit the following additional assets:
(a)shares invested in his name;
(b)his motor vehicles;
(c)all of his interest in “[C] Pty Ltd” including all assets of the company and [L] Investment Trust;
(d)the [A] funds; and
(e)his boat.
The husband do all such things and sign all such documents as maybe required to transfer to the wife at his expense the 2009 Ford Territory motor vehicle.
The husband indemnify the wife for all liabilities in respect of the company “[C] Pty Ltd” and [L] Investment Trust including any taxation liabilities.
In accordance with Section 90MT(1) of the Act, whenever a splittable payment becomes payable in respect of the interest of the husband in the Cummings Family Superannuation Fund, the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using a base amount at the operative time of $56,437.73 and there be a corresponding reduction in the husband’s entitlement.
Paragraph 9 has effect from the operative time.
The operative time for the purposes of paragraph 10 of these orders is seven days from the date of judgment in this matter.
Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date. The furniture, personal possession and the like chattels in the matrimonial home are considered to be in the possession of the wife;
(b)each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other save and except the superannuation division referred to above;
(c)all insurance policies to become the sole property of the beneficiary named therein;
(d)each party 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; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
The husband within 28 days remove the contents of the shed and the yard at Property G, [G] in the State of Victoria.
Pending payment of completion of the funds to the husband:
(i)the wife shall have sole right and occupancy of the real property and pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property when they fall due;
(ii)the parties hold their respective interests in the real property on trust pursuant to these orders; and
(iii)neither party encumber or further encumber the real property without the consent in writing of the other party.
There be liberty to apply as to consequential orders.
IT IS NOTED that publication of this judgment under the pseudonym Cummings & Cummings is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 2541 of 2011
| MS CUMMINGS |
Applicant
And
| MR CUMMINGS |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties seek to divide the matrimonial assets between them.
They can agree on the identity and value of the asset pool. They also agree their contributions to the asset pool were equal for the period of the relationship.
They cannot agree on what adjustment, if any, should be made for the financial resources and needs of the parties nor can they agree, when considering that issue, on how the wife’s inheritance of $120,000 combined with her expectation that she would receive one third of a further $120,000 should be treated.
The parties commenced cohabiting in 1988.
They married [in] 1991 and finally separated in September 2010. The parties agreed that this is a relationship of some 22 years.
In the course of the relationship they had four children namely:
a)[W] born [in] 1992;
b)[X] born [in] 1993;
c)[Y] born [in] 1996, and
d)[Z] born [in] 1998.
[W] currently attends [omitted] University and lives on campus.
[X] lives with the husband. There is no dispute that [X] has mild autism.
[Y] is primarily based with the wife. [Y] has a heart condition for which he takes some medication.
[Z] resides with the wife. [Y] and [Z] spend regular time with their father.
[X], [Y] and [Z] all attend [school omitted].
The Evidence
The wife relies on:
a)her Amended Initiating Application filed on 7 June 2011;
b)her Affidavit filed on 25 March 2011;
c)her Form 13 Financial Statement filed on 25 March 2011;
d)her Affidavit sworn on 11 August 2011; and
e)her Affidavit sworn on 11 August 2011.
The wife sought orders that the matrimonial assets be divided with 60 per cent to the wife and 40 per cent in favour of the husband. Counsel then sought to amend that at the hearing seeking 65 per cent to the wife with 35 per cent to the husband.
The wife gave evidence and was cross-examined.
The husband relies on:
a)his Response to the Initiating Application filed on 29 April 2011;
b)his Affidavit in support of the Response to the Initiating Application filed on 29 April 2011;
c)his Financial Statement filed on 29 April 2011;
d)his additional Affidavit and its annexures and exhibits filed on 1 August 2011; and
e)his Amended Financial Statement filed on 10 August 2011.
The husband gave evidence and was cross-examined.
Orders were made by the Court on 9 May 2011 that the applicant husband serve any further Affidavit to be relied on by 4.00pm on 18 July 2011.
A further order was made for the parties to file and serve an Outline of Case document on or before 11 August 2011.
The wife chose not to file her Affidavit until 11 August 2011. Furthermore, she chose to file two Affidavits on that date. She was asked why she had failed to comply with the Court order. Her answer was that she just listened to her solicitors and did what she was told.
Her answer was completely unsatisfactory.
The husband filed and served his trial documents on time and the Case Outline from Counsel was received.
The Case Outline from Counsel for the wife was received at the commencement of the trial.
The husband in his Case Outline sought a division of the assets on the basis that he receives 60 per cent with 40 per cent to the wife. That was amended by Counsel at trial to seek an equal division of the matrimonial assets.
The wife’s evidence
I have already made some comment in respect to the wife’s answer to her complete failure to comply with the timelines of the Court.
Generally, the wife’s evidence confirms that the parties started with nominal assets and managed to accumulate the current asset pool through their joint endeavours.
She confirmed that the husband had been retrenched from [F] and to the best of her understanding, confirmed that some of the funds from his retrenchment package had gone to the superannuation fund.
She was not sure whether or not the husband had put any funds into establishing the business.
She was prepared to make broad and sweeping statements such as that she knew her husband “worked off the books for cash” without any evidence to back this up. Furthermore, it should be noted that the husband was not seriously challenged in respect of this matter during his evidence.
She confirmed that the husband had paid for the children’s expenses including school fees and uniforms up until May this year when he left the home.
She explained that her son [X] had a mild disability in respect of his autism and confirmed that he was attending for an interview with [employer omitted] within the next week.
She also noted that [W] lived away in [omitted] and returned to her father’s residence when she was in town. She confirmed that she and [W] did not have a relationship.
She also confirmed that she had made an arrangement with [W] to lend her the funds to purchase the motor vehicle ($9,000) which [W] was repaying at the rate of $50 per week. Her evidence was that $1,250 had been repaid to date.
In respect of [X], it was agreed that he does not spend nights with her and was essentially cared for by his father. He loves being left alone. She said he has high spectrum autism. She considers that he will eventually move out as he has friends and will not want to stay at home forever.
She volunteered that all four children have a great relationship with their father. She was clear that she did not stop the children should they wish to spend time with their father.
Provided he was available to care for them and not leave them at home alone, she had no objection to them spending more time with him.
In relation to their expenses she confirmed that she had paid their most recent school fees. When asked why she did not ask the husband to contribute she explained that when she asked him to contribute towards their school uniforms she was abused. She did not intend to place herself in that position again.
She also confirmed that she had recently paid the orthodontist fees for [Z]. She confirmed that they did not receive a rebate in respect of these funds. The amount set out in her Affidavit is the amount that she was out of pocket.
She noted that [Y] is doing [sport omitted] with his father and his father had paid for those fees.
Inheritance
The wife had received an inheritance from her father’s Estate of $120,000, the probate of his Will being granted on 6 August 2009.
As part of the arrangements for the estate, she was holding on to an amount of $120,000 in a bank account in her name on behalf of Ms G. Her father’s Will apparently directs that the funds are to be used for the care of Ms G. On her death the wife will receive one third of the remaining amount. On the current evidence it is reasonable to assume that the amount will be in the vicinity of $40,000, there being no projected expenditure on behalf of Ms G.
When asked why she is holding the money for Ms G, she explained that Ms G was subject to a Means Test. She did not elaborate on this evidence. There may or may not be an issue in respect to this matter as neither Counsel saw fit to pursue the enquiry any further.
It was agreed that the husband could take the contents of the shed. Her evidence was that she did not know what was in the shed. She also agreed to the husband coming and collecting the items that remained around the yard.
In respect of the husband’s health, she did not accept that his arthritis would prevent him from working.
She confirmed that she too had arthritis, however she continued to work.
Her evidence was that she was looking at further increasing her hours which would mean she would go from casual rates to full-time rates (which are less) and would expect to receive in those circumstances some $68,000 to $69,000.
Her financial position has improved because she is working more hours and was receiving a greater income. She increased her hours to pay the bills that were coming in.
She noted that she had received no contribution to the children’s expenses since May. She did confirm however, in the next question that the husband paid the utilities for the house.
She also said it would be wonderful if he would pay for half of the school fees. In respect to the [sport omitted], she noted that this was something he chose to do with [Y] and was unable to understand why she would contribute to it.
In respect of the husband’s employment she noted that he had decided to go it alone when he was made redundant.
Her understanding was that his work relies on three major clients being [F], [E], and [omitted]. His weekend work however, had nothing to do with [F], or his other major clients.
She confirmed she was not registered with the Child Support Agency however, she had made contact with them recently.
The husband’s evidence
The husband gave evidence and was cross-examined.
He confirmed that in March 2009 he had been made redundant.
It was at that point he decided to work for himself and started working as a [omitted], an organisation which undertook maintenance for [F].
The children spend time with him most Wednesdays and most weekends. He confirmed it was an informal arrangement. He also confirmed that once he is better set up, he would be looking to increase the time with him.
He also noted that [W] spent time with him when she was in town from [omitted], usually from Saturday night to a Sunday afternoon.
When asked about shiftwork, he did not consider that he would be on nightshift on a regular basis and confirmed that he would not be having the children when he was asked to do nightshift.
In respect of his son [X], he accepts that he has a disability but agrees that he is high functioning in many respects. He is in Year 12 and undertaking [subjects omitted] amongst other things and it is hopeful that he will succeed.
The present arrangements meant however, that the two younger children were primarily residing with their mother. His evidence was that he was still trying to set up a home.
In respect of [Y], he agreed that [Y]’s heartbeat goes out of rhythm and is controlled by medication.
[Y] takes approximately one tablet a day. He noted however that [Y] was of an age where he was and is encouraged to be responsible for his own health.
He agreed that he will contribute half of the children’s expenses if that is the arrangement and went on to say if not he would pay more.
He was unable to specify exactly what the arrangement would be as his evidence was that he is not certain as to how the arrangement with the children would work.
On the second day of trial he disclosed that his company, [C] Proprietary Limited was the Trustee of the [L] Investment Trust.
The Trust was set up for distribution to the children for school fees.
He did not know the details, he did not know who the appointor or the guardian was, and his evidence was that he was simply following the advice of his accountant.
He was not sure whether any money had been put into the Trust.
He confirmed that he had refused to allow the wife access to his accountant which may well have resolved this matter earlier. His evidence was that he paid his solicitor to advise him and he accepted that advice. He agreed that this was the equivalent of being asked to find the information in the dark.
He agreed that his income for the 2008 financial year was approximately $160,000. For 2009 it was approximately $110,000 (he was made redundant in March 2009) whilst for 2010 it was $55,714.
He noted that since he had left [F], the business had gross sales of approximately $150,000 in 2010 and those sales had increased to $268,000 in 2011.
He confirmed that he worked as required. He did not work a regular schedule. His work was undertaken on a needs basis. For example, if a [F] employee went on leave, then he may be called in to replace him during that time.
He also confirmed he now has an employee who was a fellow previously employed by [F]. It was not possible he said to bring anyone in from outside to work on the [F] machinery.
He noted that he paid $50 an hour to the employee and charged him out at $85 per hour. He rightly pointed out however that additional costs had to be added to the $50 per hour including superannuation and the on‑costs of employment.
When questioned about his bank accounts he advised he did not have personal savings.
He agreed that whilst he was an employee with [F] he was earning $150,000 to $160,000 per annum. His base salary was approximately $80,000 and shift work and overtime were responsible for the remaining funds.
It was agreed that he did have the option of being employed but he did not think it would be on the same money. [F], on his evidence was the highest paying company in Melbourne.
He confirmed that [F] and [E] accounted for 90 per cent of his income. He had undertaken some private work, however he found out quickly that if his big clients required him to work then he had to be there. He is then in the position of doing the private work in the off hours. He noted that he was trying to get his work back to approximating a 40 hour week.
He was asked what was the nature of his work in Western Australia and he said that this was the [E] job to [omitted]. Instrumentation on the trailers needed to be installed and that was what he was asked to do. He did not think that there would be anymore jobs as the trailers were built in Victoria and that work could be dealt with there.
He was away in Western Australia from 4 July to 14 July 2011.
He was questioned on a number of transactions that were undertaken on the business bank account. His answers were credible and he was on a whole, able to advise what the transactions were about.
In re-examination, he attempted to explain that the opportunities for his work will be coming less and less and noted that he had not been asked to work overtime for a long time.
He also noted that the experience he had accrued whilst at [F] was initially unique when he went out on his own, however he was now being asked to advise on systems and methods which in effect meant that he was, to use his words, being “drained” of his knowledge which meant that others would be able to do the job.
In addition, he noted that the union were pressing to have others undertake what he had in the past been engaged to do.
The Law
In determining what orders should be made for the division of the matrimonial assets I am required to take an approach that involves four inter-related steps which are to:
a)identify and value the property, liabilities and financial resources of the parties at the date of hearing (“the Asset Pool”);
b)identify and assess the contributions of the parties within the meaning of s.79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”) and determine the contribution-based entitlements of the parties expressed as a percentage of the net value of the property of the parties (“Contributions”);
c)identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), including the matters referred to in s.75(2) of the Act so far as they are relevant, and determine the adjustment (if any) that should be made to the contribution-based entitlements of the parties established at step 2 (“Financial Resources and Needs”); and
d)consider the effect of these findings and determinations and resolve what order is just and equitable in all the circumstances of the case (“Review of Outcome”).
See Hickey & Hickey & Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143.
I will now consider those matters.
Agreed asset pool
The parties agree that the wife’s inheritance received from her late father’s estate of some $120,000 and the amount the wife is likely to receive on the death of Ms G of approximately $40,000 is to be taken into account when considering the financial resources and needs of the parties.
The parties agreed that the asset pool was comprised of the following:
PART 1: ASSETS
Real Estate
Former Matrimonial Home –Property G, [G]
$560,000.00
Vacant Land – Property V, [V]
$110,000.00
Subtotal
$670,000.00
Shares - Husband
13,087 [F] Shares
$64,257.17
86 [G] Group Shares
$184.90
417 [P] Shares
$1,659.66
Subtotal
$66,101.73
Shares - Wife
1,337 [I] Shares
$5,561.92
350 [P] Ltd Shares
$1,393.00
75 [G] Group PLC Shares
$161.25
325 [R] Group Shares
$2,453.75
325 [R] Trust Shares
$754.00
Subtotal
$10,323.92
Motor Vehicle
2009 Ford Territory Motor Vehicle
$36,000.00
2002 Toyota Land Cruiser Motor Vehicle
$18,600.00
Subtotal
$54,600.00
Boat
5.2 metre Twinfisher 11.5 hp Yamaha 4 stroke
$45,000.00
Subtotal
$45,000.00
Investment
[A] Fund
$18,394.00
Subtotal
$18,394.00
[C] Pty Ltd Business
[C] business including work van, tools of trade and spare parts, contents in shed and at work, and bank.
$50,000.00
Subtotal
$50,000.00
$914,419.65
PART 2: LIABILITIES
Real Estate
Mortgage with the National Australia Bank as of May 2011 (date husband vacated the property)
$97,066.00
Subtotal
$97,066.00
Investment
[A] Fund as of 11 August 2011 (“[A] debt”)
$5,875.16
Subtotal
$5,875.16
Net Value Assett Pool (excluding superannuation)
$811,478.49
Superannuation – Agreed divide equally
Wife’s [H] Superannuation
$40,000.00
Husband’s [B] Superannuation
$1,017.28
[Cummings] Investments Pty Ltd self-managed Superannuation Funds
$151,858.18
Subtotal
$192,875.46
$1,107,295.11
INHERITANCE – included as financial resource
Inheritance from Mr B, deceased
$114,000.00
Further payment on passing of Ms G
$40,000.00
Subtotal
$154,000.00
Agreed Orders
The parties also agreed that there be orders that:
a)the husband transfer his interests in the former matrimonial home at [G] to the wife;
b)the wife indemnify the husband in respect of the mortgage;
c)the wife transfer her interest in the Property V, [V] property to the husband;
d)the wife retain:
i)the shares invested in her name;
ii)the Ford Territory motor vehicle; and
iii)the inheritance from her late father’s Estate
e)that within 60 days of the approval of the orders there be a payment by one party to the other of such sum as the Court considers appropriate;
f)that the husband retain:
i)the shares invested in his name;
ii)his motor vehicles;
iii)his interests in the [L] Trusts and [C] Proprietary Limited including all assets of the company;
iv)the [A] emerging market funds; and
v)his boat.
g)the husband transfer the Ford Territory vehicle to the wife;
h)the husband indemnify the wife in respect of [C] Proprietary Limited and [L] Trust;
i)the husband and the wife split their superannuation funds equally (and I will refer below to the discussion of how this should be done);
j)that each party otherwise keep what they have;
k)the husband remove the contents in the shed and the yard at [G] within 21 days; and
l)that it be noted that the orders are intended by the parties to be final pursuant to section 81 of the Family Law Act 1975.
Contributions
The parties agree that the contributions to the assets are equal.
I would support that conclusion. This is a 22 year relationship, the parties having commenced cohabiting in 1988 and separated in September 2010.
The parties, at the commencement of cohabitation, had few assets.
In the course of their relationship they had four children, two of whom are still under the age of 18.
They worked as a partnership over the years of the relationship, each making financial and non-financial contributions to the acquisition, conservation and improvement of the assets.
Each also contributed as able, to the welfare of the family.
They were able, at the conclusion of the relationship, to accumulate the assets set out earlier in these Reasons. Save for the inheritance received by the wife, they agree and I accept their agreement, that the asset pool came about as a result of their joint endeavours.
Financial resources and needs
The wife was born [in] 1964 and is currently aged 47. The husband was born [in] 1963 and is currently aged 48.
The wife is employed as a [omitted] at [omitted] on a part-time basis and also undertakes additional contract work.
The husband is a self employed [omitted] operating a business known as [C] Pty Ltd.
Each party complains of arthritis, however neither party produces any medical evidence which can be relied upon to suggest that their condition in any way impacts on their ability for appropriate gainful employment.
Both parties’ evidence, particularly considering the critical importance of their ability to earn an income in this matter, was vague. The wife on her evidence was able to produce one PAYG certificate and an invoice. She was unable however, to provide exact details of the amount of money earned by her for the 2011 financial year. I have difficulty with this, particularly in view of the fact that this had been an issue that had been pressed by the parties for some time.
In addition, she indicated that she would be seeking to increase her hours which would in effect mean that she would no longer work at casual rates and she would be engaged on a full time basis.
Her evidence was that this would mean that her income would stay roughly the same which would be in the region of $66,000 to $69,000.
The husband had similar difficulties. His failure to disclose a Trust until the second day of the hearing was extraordinary.
The husband in the course of these proceedings had filed three Financial Statements to advise the Court of his current circumstances, the last suggesting he had an income in the vicinity of $90,000.
The husband on his application to rent premises had advised the landlord that his income was $100,000.
Either way, it could be taken that the husband’s income was in the vicinity of $90,000 to $100,000.
The allegation that he was not declaring all of his income was unsubstantiated. The suggestion that he could earn more as an employee, was on the evidence I received, no more than speculation.
He is a small business proprietor who, having been made redundant, is now operating on his own with one employee. There is nothing in the evidence on which I can safely rely to find that his income is as much as the wife asserts it is, or in the alternative should be, namely $150,000 to $160,000.
Having heard both parties I consider it appropriate to find on the evidence before me that the wife is capable of earning income in the region of $66,000 to $69,000 whilst the husband is capable of earning income in the vicinity of $90,000 to $100,000.
There is nothing in the evidence that I can rely on to suggest that either of them does not have the physical or mental capacity for appropriate gainful employment.
Consideration does have to be given however to the financial resources of the parties.
The wife received an inheritance of $120,000 from her father’s estate. She has used some of those funds to purchase a car for her eldest daughter. On the wife’s evidence, those monies are being repaid.
At trial, on the agreed statement of assets and liability she declared an amount of $114,000.
Counsel subsequently attempted to tender a bank statement showing that that amount had dropped due to the wife’s payment of her legal fees. In view of the fact that the wife had filed her documents on 11 August 2011, four days prior to the trial commencing, I declined to accept that evidence. If the evidence had not been contained in the wife’s Affidavits, then I could see no reason for it to be tendered on the second day of trial. If I am wrong then the wife’s use of the funds demonstrates the financial resources available to her.
Counsel for the wife argues that consideration of the s.75(2) factors is an exercise that looks to the future. If the wife’s evidence was accepted then it would follow from that submission that she would be going forward from this trial, without having the obligation to pay a significant sum in legal fees.
Counsel conceded, if this amount had been included in the pool and the wife then chose to access these funds to meet legal expenses, there would be a strong argument for the amount to be added back. It is agreed however, that it be considered as a resource and in so doing, whether I consider it as the entire amount, noting the outstanding debt for legal costs or as the reduced amount with the debt paid makes little difference.
I considered it open to me to have regard to the fact that the wife has had access to a financial resource of $120,000 and will have access to a further $40,000 on the death of Ms G. The wife’s reason as to why she is holding these funds raises serious concerns, but without further evidence I do not propose to take that matter further.
[W] resides on the campus at [omitted], [X] resides with his father, while [Y] and [Z] reside primarily with their mother spending regular time with their father.
The evidence would not support the finding that the two younger children spend equal time with each parent. Instead, I would find the children primarily reside with their mother whilst spending substantial and significant time with their father.
The wife made it clear that the children did not reside with the husband whilst he was away or occupied on afternoon or nightshift.
The husband’s working hours as set out by him were significant. The fact that he was able to increase the gross sales of his business to some $268,000 (from $150,000) supports this.
I do not question the husband’s desire to have the children eventually spending equal time with him however, it is unclear from the evidence as to how that would work given his commitments to his business.
The wife is able to tailor her working hours to be available to support the children and I would accept that she is likely to be the primary carer for some time to come, with the husband to have substantial and significant time with his children.
Commitments of the parties
Save and except that the two younger children are primarily residing with the wife and this will involve a significantly greater financial commitment on her part, the position remains that one child is away at university and self supporting, the eldest child lives with the husband whilst the two youngest children live with the wife.
Neither party has any responsibility to support another person.
[X] is 18, and there is no dispute that the adults will continue to support their children until they are independent.
Counsel for the wife however points out that the same logic should apply to [Y] and [Z] in due course. In other words, the position is unlikely to change when the younger children come of age.
The issue of the husband’s current contribution to the costs and the commitments of the children was raised during the course of these proceedings.
I accept the husband’s evidence that he would be prepared to pay at least half of the expenses of the children.
Furthermore, it is not disputed that the husband was until May, paying for the children’s expenses. On his departure from the former matrimonial home, those payments stopped. There is therefore only a short history of some four to five months where the husband has not been contributing.
Neither party is eligible for a pension allowance or benefit from the Commonwealth or any superannuation fund or scheme.
The husband submits that at present, his standard of living, taking into account the fact that the wife is in the former matrimonial home, is less than reasonable in all the circumstances and that he is seeking to re-establish himself. Save for the fact that he is renting and is in the process of re-establishing his household arrangements whilst the wife is not, there is very little evidence supplied in support of this.
Neither party seeks to continue in their role as a full-time parent. Each party concedes that they must work on a full time basis.
Neither party is cohabiting with another.
The arrangement that the parties have reached in effect allows for the wife to take over the former matrimonial home with the husband to take a selection of the remaining assets.
The husband’s intention is to establish himself in a home for the children and then hopefully to increase his time with the children. There is little evidence as to when or how this will happen.
It is not possible for the husband to establish himself without having to sell some of the assets.
Any of the assets that the husband sells would be subject to an assessment for Capital Gains Tax.
The wife on the other hand has the primary place of residence and is able to rely on that equity in that property for her future needs.
Counsel urged me to have regard to the matter of Rosati & Rosati (1998) FLC 92-804 when considering this matter.
I do not consider this to be a matter where there can be a calculation of the financial consequences for the husband in the event of a sale of assets. Neither party has seen fit to provide that information.
I do consider however in view of the future outcomes for the parties that this is a matter that cannot be ignored.
I therefore consider taking into account all of the above and in particular:
a)the inheritance received by the wife which has not been included in the asset pool of some $114,000;
b)the wife’s expectation to receive approximately $40,000 on the passing of Ms G;
c)the fact that the wife has received the matrimonial home whilst the husband has received the remaining assets;
d)the fact that the husband has a greater income earning potential, (the present evidence showing he is earning approximately $30,000 per annum more);
e)the wife has the primary care of the two youngest children of the marriage, the husband has the care of the second eldest, whilst on the husband’s evidence the eldest child is living at university and visiting him occasionally; and
f)that there should be an adjustment of 6 per cent in favour of the wife.
Just and equitable
The wife under the agreed orders will retain the following namely:
The Former Matrimonial Home
$560,000.00
Shares
$10,323.92
Ford Territory
$36,000.00
Subtotal
$606, 323.92
Mortgage NAB
$97,066.00
Subtotal
$509,257.92
The husband will retain:
The [V] property
$110,000.00
Shares
$66,101.73
Land Cruiser
$18, 600.00
The boat
$45,000.00
The [A] Fund
$18,394,00.00
[C] business
$50,000.00
Subtotal
$308, 095.73
Less “[A] debt”
$5,875.16
Subtotal
$302,220.57
The net asset pool excluding superannuation (which the parties have agreed to divide equally between them) is $811,478.49.
Fifty-five per cent of the net asset base is $446,313.17.
The wife has assets with a net value of $509,257.92. This would in effect require that the wife pay the husband the sum of $62,944.75 leaving the wife with $446,313.17.
The husband would then have assets with a net value of $302,220.57 plus $62,944.75 being $365,165.32.
Each party in addition will receive one half of the combined superannuation estimated to be $192,875.46 which will be approximately $96,437.73.
The wife has access to the inheritance funds of some $114,000 which her Counsel in submissions says that in the two days from the filing of her Trial Affidavit has reduced to some $80,000. If the submission is correct her debt would have reduced accordingly.
She has the capacity to pay the husband out and to do so forthwith.
The parties have agreed to divide their superannuation benefits equally between them. While I have some reservations about the mechanics of this order, I do not propose to go around the agreement.
The current figures for the funds would indicate that the total value for all of the superannuation is $192,875.46. The funds held by the wife in her [H] Fund has an agreed value of $40,000. One half of $192,875.46 is $96,437.73 meaning that the amount to be paid to a fund nominated by the wife would be $56,437.73. The current fluctuations in the funds including those with share portfolios make the setting of a precise sum difficult as it may give one party, due to the rise and fall in the share market, amongst other things, an unfair advantage.
Counsel for the wife submits that an order requiring the husband to liquidate the shares in the fund would resolve any issues regarding value. The difficulty with this is that such an order is likely to incur taxation consequences. The entire fund does not need to be liquidated to pay the wife her share and to so order to set the value of the fund, would be akin to ordering the sale of a house to set its value.
Counsel for the husband submits that the evidence of the current value of the funds is before the Court. Assets and liabilities have been agreed. In the event of there being dramatic changes it may well affect the case.
I accept that I must deal with the evidence before me. I do not consider it appropriate, for the purposes of calculating the parties’ entitlement to order the liquidation of the Fund.
The submission that the share market may rise or fall, may also apply to the wife’s superannuation fund. There is however, no evidence as to what portion of the fund is held in shares.
The parties seek finality with these orders. They concede that they have difficulty communicating.
The proposal of the wife’s Counsel and the order sought requires the parties to join in seeking assistance of the accountant for the fund in calculating the parties’ share.
There is the potential for further conflict and possibly further litigation if they cannot agree on any matter.
The agreed value for the wife’s fund is slightly more than the value shown in her Financial Statement sworn 21 March 2011 ($39,714.76). The husband acknowledges this and is prepared to proceed on the agreed figures to obtain certainty.
I accept the submission of the husband’s Counsel and would make a splitting order whereby a base amount of $56,437.73 is to be paid to a fund to be nominated by the wife.
The husband is the sole director and shareholder of the Trustee Company [Cummings] Investments Pty Ltd. The fund holds the major portion of its equity in shares. Procedural fairness is not raised as an issue.
To pay the wife her share of the fund it may be necessary to sell some of the shares. This may have tax consequences for the fund. It is implicit in the husband’s submission that this will be borne by the Fund.
It is appropriate that they be bought to account when considering the value of the fund for determining the amount for the division of the wife’s share.
I would not consider it appropriate to make any further adjustments.
Conclusion
The wife’s case was based in part on the assertion that the husband having had an income of $160,000 in the past when employed by [F], had since minimised his earnings and would no doubt return to that level of remuneration once judgment had been delivered. The evidence did not, in my view, support this.
It did, I consider, support a conclusion that after 22 years of their relationship, the wife was working with an income of $66,000 to $69,000 per annum, the husband’s income was $90,000 to $100,000 per annum, two of the teenage children resided with their mother and spent regular time with their father. The 18 year old lived with the husband and was seeking employment. The parties’ eldest child lived independently, relying on some support from the husband, when she resided with him when home from University, and some support from her mother, being the interest free car loan.
The wife had the benefit of the inheritance received from her father with a further payment to come.
In the circumstances, allowing for those factors and for the reasons set out above, I would propose to make orders set out at the commencement of these reasons.
I certify that the preceding one hundred and seventy-one (171) paragraphs are a true copy of the reasons for judgment of Cole FM
Date: 30 November 2011
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