Daniels and Findlay (No 2)

FAMILY COURT OF AUSTRALIA

DANIELS & FINDLAY (NO. 2)

[2009] FamCA 1352

FAMILY LAW – PROPERTY – Long Marriage – Equal contributions – No children

Family Law Act 1975 (Cth)

Kowaliw & Kowaliw (1981) FLC 91-092
Hayne & Hayne (1977) FLC 90-265
Garrett & Garrett (1984) FLC 91-539
Ferraro & Ferraro (1993) FLC 92-335
McLay & McLay (1996) FLC 92-667
JEL & DDF (2001) FLC 93-075

APPLICANT:

Mr Daniels

RESPONDENT:

Ms Findlay

FILE NUMBER:

MLC

1996

2008

DATE DELIVERED:

22 December 2009

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

DESSAU J

HEARING DATE:

30 November and 1, 2, 3, 4 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Molyneux QC

SOLICITOR FOR THE APPLICANT:

Holt & McDonald

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT:

Orders

That all applications shall be adjourned for orders on 4 February 2010.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1996 of 2008

MR DANIELS

Applicant

And

MS FINDLAY

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

After a 38-year marriage, Ms Findlay and Mr Daniels cannot agree on a property settlement.
There are four steps for me in a property case.
First, I must determine the pool of assets. In this case, there were many arguments on many fronts. They related mainly to add-backs.
Secondly I must consider the parties’ respective contributions, financial and non-financial, direct and indirect. The husband argued that overall the contributions were equal. The wife argued that she made the greater contribution, earning more money, and using special skills to build the family wealth. She estimated contributions on the basis of 59% / 41% in her favour.
Thirdly, I must consider the s 75(2) Family Law Act and other factors. The husband argued there should be no adjustment in either direction. The wife argued there should be an adjustment in her favour to reflect health problems on her part, and that she is worse off going into the future than the husband, who has entered a new relationship. On her reckoning it would bring the distribution up to 62% / 38% in her favour.
Finally, I must arrive at a decision that is just and equitable in all the circumstances. The parties disagree as to how the assets should be apportioned.

BACKGROUND

The husband is Mr Daniels, born in 1948 (aged 61). He is a semi-retired consultant. The wife is Ms Findlay, born in 1947 (aged 62), and she is a retired accountant / businesswoman. The parties married in 1969 in the UK, came to live in Australia in 1977, and separated finally in 2007. They had no children.
The husband is now in a relationship with Ms L. They live together in the home of Ms L’s elderly mother.
During their marriage, the parties operated a consultancy business through a company, A Pty Ltd, and invested in shares, primarily through their A Superannuation Fund. Late in the marriage, the wife bought a small group of companies collectively referred to as the P Companies.

MATERIAL RELIED UPON

The husband relied upon the following documents:
·His application filed 5 March 2008
·His affidavit filed 5 June 2009
·His amended financial statement filed 5 June 2009
·The affidavit of Mr I (N Accountants) filed 5 June 2009
·The affidavit of Mr U (N Accountants) filed 17 November 2009
·The N Accountants report filed 5 June 2009.
The wife relied upon the following documents:
·Her response filed 7 May 2008
·Her affidavit filed 22 May 2009
·Her financial statement filed 26 June 2009
·The report of Dr S dated 29 October 2009
·The report of Dr V dated 5 November 2009
·The affidavit of SR filed 25 June 2009
·The affidavit of Ms Q filed 7 May 2008.
None of the wife’s witnesses were required for cross-examination.
The husband was represented by senior and junior counsel. The wife represented herself. She did so very thoroughly. She is intelligent and has an extensive knowledge of accounting and financial principles so was across the material. Unfortunately, objectivity was difficult for her. I shall return to that.
I ensured that the wife received the relevant sections of the Family Law Act to assist her. Ms Molyneux QC made appropriate concessions, for example allowing the wife to make her final submissions after she had heard Ms Molyneux on behalf of the applicant.

THE POOL OF ASSETS

The parties agree on some assets, most particularly that:
·$406,530 is now in trust from the sale proceeds of a unit at T
·The M property in which the wife lives is valued at $300,000
·They have joint personal shareholdings of $130,028
·They have $1,614,744 mostly in shares and cash in their joint (A) Superannuation fund.
·They have received a joint total of $140,000 being $20,000 each from the T property proceeds “as a partial property settlement and $50,000 each from [A] to be characterised by the trial Judge.”
Other small items are also agreed. I shall note them later in the pool of assets. Very small items, such as a $51 bank account, have been omitted, for the sake of convenience.
One shared liability, being for substantial dental work received by the wife and paid for by her after separation, but agreed before separation, has been added back by agreement as a joint liability.
N Accountants prepared a business valuation. Mr U gave evidence that A Pty Ltd currently has $58,587 tax payable. It has an offsetting franking credit of $51,420 so that the tax liability would be reduced to $7,166 plus late-lodgement and penalties, if N Accountants receives the appropriate supporting documentation for the 2008 income tax return to be altered before it is filed. The wife has agreed to provide that material. If she does, it will be advantageous to the company’s tax situation. If not, there will be a small sum of tax to be paid.
Although for several days’ of the hearing the wife argued there should be many add-backs, ultimately she did not pursue some of them.
There was a purported add-back of $8,000, being monies that she said the husband should have collected on behalf of A Pty Ltd for work preformed for the body corporate of the T unit. In the course of evidence, she dropped her claim, agreeing that even if she ultimately took over these companies, she would not pursue that sum on behalf of A Pty Ltd. There was a risk that future litigation between herself and the body corporate could involve the husband, and she made the concession that it was appropriate to avoid that course.
She sought an add-back of $12,919, being monies she said were lost by the husband’s refusal for her to open a Euro account in order to collect a P business debt. Again, on an understanding that she would ultimately take over these companies, the wife did not pursue the $12,919 add-back, saying that she would decide whether or not she pursued that herself in due course.
She also dropped her claim for an add-back of $1,000 she said the husband wrongly used to pay car insurance and registration. And her claim to add-back the liability of $730 for a change of the locks to the M property when she took up residence. She reduced a claim of monies she said he spent wrongly on air-fares.
There had been a request from her to add-back $29,000 she said was “wasted” by the husband’s failure to accept an offer from her on their T unit, rather than proceeding to auction. It was ultimately not pursued, but she sought to resurrect the issue when she applied to lead fresh evidence after the hearing. I shall come to that.
The remaining items in dispute are as follows:
·Whether there should be the following add-backs to the assets as asserted by the wife
·$17,000, that the wife alleged the husband spent on his partner in the last 12 months of the marriage,
·$289,000, being a notional loss on A superannuation fund shares,
·$49,000, being a notional loss on the joint personal shares,
·$10,110, being A Pty Ltd client monies paid directly to the husband from December 2007 to September 2008,
·$2,117, being the husband’s withdrawal from P Global Pty Ltd for air fares for personal use,
·$2,500, that the wife asserts were extra funds received by the husband on the sale of a boat.
·Whether there should be an added-back liability for horse expenses met by the wife in the sum of $3,000.
It is convenient to deal with the wife’s attitude to the litigation as a backdrop to my findings on the issues that follow.
She is clearly a bright woman and has been a competent accountant and business woman. She describes herself as an “entrepreneur”. Whether or not that is a valid description, she has been, and the husband readily acknowledged, the one who has run the parties’ financial affairs. They have built up reasonable assets. They have both worked hard. Her assertion that he has not, is simply not borne out on the evidence. He has been in paid work throughout the very long marriage, since about 1990 as a consultant earning fees for their company, A Pty Ltd. In fact, there were periods when he was the main fee earner, when she concentrated her efforts on charity work and/or on-going education, sometimes well in excess of paid work. I shall return to this below when considering contributions.
There is no question that every aspect of the wife’s conduct since separation has shown her deep sadness, and her incapacity to adjust to the fact that the marriage ended with the husband in a relationship. She was clearly distressed that he had deceived her even though his relationship with Ms N commenced in the final throes of their marriage. Her bitterness about the husband’s relationship with his Ms N weaves its way through all her material. In a financial case, to have repeated references to the husband’s new partner suffering from genital herpes (whether or not it is true) is profoundly unfair to her and her privacy. It also gives insight into the depth of anger within the wife. She refers to it in the written material in a number of places, and had to be steered away from the topic several times during the hearing.
Although in 2007 the wife struck up a relationship with a “childhood sweetheart” in France, Monsieur C, and although she had hoped they would live together in M, he has now returned to live in France. According to her, they retain a friendship and spend holiday time together, but cannot live with each-other due to language constraints. It is probable that is another disappointment for her.
Unfortunately for the wife’s own mental health, and for the husband’s well-being, her scorn has been directly reflected in her behaviour. She has conducted herself very poorly in the long period leading up to and during the hearing, and then, since the hearing as well. There are many instances of her poor conduct. By way of illustration, I shall refer to just a few.
Between January and May 2009, the wife had sent no less than 120 emails to N Accountants who were preparing the forensic accounting report in this case. Even making allowances for the fact that the wife is a chartered accountant, that she controlled the financial affairs of the parties, and she may have had a valid contribution to the report process, the volume of emails was completely unreasonable. So was the tenor of many, containing offensive or abusive material that was not pertinent or productive. N Accountants, through Mr U, reckoned that an extra $3,000 to $5,000 in fees was incurred because of the emails up until May 2009.
Her behaviour in the course of this case was reprehensible. On the fifth day of the hearing, she made the astonishing admission that on the previous day she had remained in the court building, and in the courtroom, for some hours after the court day had finished. She said that she simply asked one of the guards in the building if she could stay on to work for several hours, and that she “let herself out” of the building at 7.30pm. Later she said it was at around 6.30pm. In any event, she said she had gone through private papers the husband had left in the courtroom, and had taken out papers pertinent to a controversial issue surrounding the sale of the T property. She told me what a particular document said and what it proved. In fact it appeared to add little to the evidence I had already heard, and did not support what she purported, but her audacity was breathtaking.
She claimed to have “come across” other documents when, within hours of the hearing completing, she started sending emails to the husband’s solicitors purporting to renege on agreements made in the course of the hearing. She wrote (on Sunday 6 December 2009 at 8.39pm):
…I intend to re-instate every claim that I have made hitherto [sic].
At 9.33am on Saturday 5 December 2009 (the hearing having finished on Friday 4 December) she wrote:
I am shaking! Whilst packing all my papers to go home I came across a bundle of papers I did NOT RECOGNISE. Many of these are copies of emails between myself and the Applicant before I lost all my emails on [P Company].com. The Applicant’s lawyer refused to provide the emails to me (requested under Disclosure). Now I know why!
In addition to saying that she “came across” the bundle of papers, at another point in the emails she says that she must have picked up some of Ms Molyneux’s papers “in error” from the chair beside her in the hearing. It is hard to have any confidence in any version given by the wife which would place an innocent interpretation on how or when she “came across” papers, or even if she in fact had them in her possession all along but sought to raise them only once she reflected on evidence already given.
The wife sent emails to Holt & McDonald at 9.33am on 5 December, 7.44pm on Sunday 6 December, 8.39pm on Sunday 6 December, 9.16am on 7 December, 9.29am on 7 December, and 11.34am and 9.08pm on 8 December.
They were filled with insults to the husband’s legal representatives referring to their “dirty tricks” and “reprehensible” conduct. In one she said:
The Applicant always laughed at my ESP and ‘the angel on my shoulder’. I hope he is laughing on the other side of his face!
She referred to the husband as “a liar and a thief”. She finished one email with “Have fun!”, and when forwarded the husband’s affidavit seeking the matter to be re-listed before me, her response was “You actually jumped a bit too quickly! My legal advice was to wait and see what Her Honour decided….”
During the trial, the husband had acceded to the wife’s request to take over the winding-up of the companies as part of the final orders. These emails, sent between 5 and 8 December, further details of which I shall turn to in a moment, were sufficient to satisfy me, on the husband’s application, that there was fresh evidence showing that such orders were simply not feasible. She agrees that she sent them. I could not have any confidence of an end to proceedings if the wife conducts the winding-up
The substance of the documents the wife “came across” purportedly related to events surrounding the sale of the T property and comprised mainly correspondence between herself and the husband or his solicitors when she was seeking to purchase the property. She was angry that he had not permitted her to do so. Although she had claimed $29,000 “wastage” as a result, she had to concede in evidence that if there were any wastage, it was very significantly less, around $3,330.
The wife sought to lead her own fresh evidence about this correspondence. I did not permit it. The expense of these proceedings was well out of hand and I could not justify new evidence in relation to such a small add-back. I was not confident that the material had not been available to her throughout the hearing, nor comfortable as to how she came by it if that were not the case. Moreover, I was not satisfied from what the wife told me that the documents would add sufficient to what I had heard, or were sufficiently pertinent to any substantial fact in issue.
The wife said they would prove her credibility which otherwise was destroyed by “the deceit” of the husband and his lawyers in not putting these documents before me. She was upset that Senior Counsel had suggested she had deliberately delayed the sale so the market would drop. The evidence did not sustain that motive. She did not need to disprove it. In any event, there were very many aspects of the wife’s conduct, behaviour, and evidence that put her credibility in doubt.
On the particular issue of the sale of T property, I accept that she made an offer to purchase the property but the husband went ahead with the auction. The 20 March 2008 orders did make it clear that the parties together were to determine the manner of sale and the details surrounding the sale. Contrary to that, the husband seemed to take over most of the dealings. He said that he did so because the first proposed auction date had to be deferred because the wife was not permitting proper access to the property. I accept his evidence about that and although I cannot condone his failure to strictly comply with the orders, it is easy to understand his genuine desire for the property to be sold in an orderly manner, and his valid concern that the wife would thwart that. In addition, he had already signed with an agent so would have to pay commission in any event.
It was not unreasonable for the husband to prefer to act at arm’s length. The wife could have but did not bid at the auction.
After the auction, the wife took a range of steps to interfere with the sale, causing embarrassment, irritation, and the expenditure of unnecessary monies. She contacted the purchaser directly, and made a report to the body corporate that unauthorised renovations had been conducted. Previously she had placed a caveat over the property without telling the husband. That caveat subsequently had to be removed by a court order with a Registrar signing the withdrawal when the wife was overseas.
The wife’s contact with the purchaser paints a graphic picture of what she conceded was a “massive tantrum” because she had not retained the T property. In early June 2008 she wrote three letters to the purchaser, in an effort to de-rail the sale. Each had its ugly elements. The third was the ugliest. It was as follows:
Dear Ms […],
Sorry I do not have any decent paper left but I am keeping my last sheet to write to the A.T.O to investigate how a Nurse, on a pittance of a wage, can put up $46,510 as a deposit on purchasing an apartment in [T] and then find the balance!
Obviously, if I do not hear from you within 48 hours, I will assume that you are quite happy to have your finances investigated. You will certainly be in a better position than my cheat and liar of a spouse.
[wife]@[P Company].com
Have a good life. I’m sure it will be better than my 40 years with a bastard.
[Wife] +++
with lots of friends in ATO
Unfortunately the “massive tantrum” has continued in one form or another, whether by her obstructive behaviour with N Accountants, petty and unsustainable add-back claims that made this hearing longer than necessary, or when she took the husband’s private papers from the courtroom.

(a)Whether there should be add-backs to the assets

The sum of $17,000 the wife alleges the husband spent on his partner in the last 12 months of the marriage

It is against that backdrop that I assess the wife’s assertion that the husband spent $17,000 on personal expenses for himself and Ms N in the 12 months’ prior to separation.
The husband impressed me with his candour. He did not simply reject the claim that he would have spent some money on his partner during that time. He acknowledged that they had a relationship, and they dined out together up to 12 or 15 times. He said he would be surprised if they spent more than $1,500 between the two of them on such meals.

The wife cross-examined him about an excessive amount spent on alcohol. She said she tallied $5,097 between March and November 2007. He said it was “possible”, as he and the wife had always spent about $8,000 a year on wine, and he drank heavily. He denied that their wine cellar reduced by $3,000, saying simply that he had given one valuation earlier and re-valued it subsequently. When asked if he had rented a house with his partner in regional Victoria, he agreed that he did so, for one week-end.
During much of the relevant period, the wife was living in London. Like the husband, she was using the parties’ joint resources. She was participating in her own leisure activities, sometimes with Monsieur C.
This issue underlies the wife’s anger about the relationship, but there was no evidence to support the assertion that the husband spent $17,000 on Ms N. Any sum spent was very small and in the circumstances it would be difficult to determine, and petty to add it back into the pool.

The sum of $289,000 being a notional loss on A superannuation fund shares

On the second day of the hearing, the wife advised that she was claiming for a notional loss on the A Superannuation Fund shares to be added back into the pool, at $289,000. She said that she had been conscious of the sub-prime problems in the USA, and had predicted the looming global financial crisis in the latter part of 2007. She said that the husband prevented her from selling the shares on 10 December 2007, when they would have been worth $951,000, as opposed to the current value of $662,350. That is how she determined the loss to be added back.
Although the wife managed the parties’ assets and determined their investments, I do not accept that her expertise gave her a prescience ahead of the rest of the world. I can take judicial notice that the global financial crisis did not strike in earnest for months beyond late 2007, and she conceded that the serious “correction” in the market was not until substantially later, in October 2008.
The chronology in relation to these shares is important. The wife had left for London in March 2007. At that time the parties were talking about a separation, although they later contemplated a reconciliation, and to that end the husband went to see her in London in August 2007. In the course of discussions in September, they discussed sharing the superannuation fund equally. To that end, the wife wanted to retain cash and the husband wanted to retain shares. Although that probably reflected her view that higher risk lay with the shares, I still do not accept that she predicted the global financial crisis as such.
In any event, in September 2007 they sold about $200,000 worth of shares so that the superannuation fund comprised shares and cash of about equal value. The husband was to set up his own self-managed fund when he returned to Australia, for the split to be made.
The wife returned to Australia on 29 November 2007 with Monsieur C. The next day, she discovered the husband’s relationship with Ms N and was furious that he had been “cheating” on her. At that stage the parties still agreed to an equal division of assets (including their superannuation) and together they saw a solicitor. However, the discussions fell apart in mid-January 2008 and the solicitor advised that he could no longer continue to act for both of them.
There was nothing in the evidence to suggest that in December 2007 there had been any change in the parties’ joint proposal for the husband to retain the shares in the A superannuation fund and for the wife to retain the cash. In that light, there was no reason for the wife to be selling at least the A superannuation fund shares as at 10 December 2007.
I accept the husband’s evidence that on 9 December she had told him she was going to sell the shares. Given her fury about his relationship with Ms N, the husband had every reason to be concerned about her actions. In the circumstances, taking steps to ensure that the shares were not sold – by having them “frozen” – was not unreasonable conduct on his part. It was subsequently validated on 20 March 2008 when an order was made by consent that no shares be sold.
It is opportunistic for the wife to argue now that the husband has caused the loss or wastage of nearly $250,000, because the stock market fell. The test for wastage is reckless, negligent or wanton conduct (see Kowaliw and Kowaliw (1981) FLC 91-092). The husband’s conduct did not fall under those headings. Making a genuine and sincere endeavour to preserve the assets does not amount to wastage, even though with the benefit of 20/20 hindsight the sale could have been advantageous.

The sum of $49,000, being the notional loss on the joint shares

Similarly, I do not accept the wife’s argument in relation to the parties’ personal shareholding, whereby she argues that the difference between the value of the shares at 10 December 2007 ($179,000) as opposed to the current value of $130,000, means that $49,000 should be added back into the pool.
I should add that when the wife sought to lead fresh evidence a week after the hearing, she said that “going through the papers” she had found that the husband had purchased $150,000 worth of shares in June 2007 without her authority, and the shares had now “lost” $50,000.
Again I did not permit that evidence. It seemed it was in material available to her during the hearing. The number and value of shares has not been in issue. It was too late for such new allegations. And anyway it was improbable that he would have made any significant share purchases without her knowledge. It was clear on all the evidence that at that time, while the wife was in England, the husband asked her about even minor financial matters as he simply “held the fort” in Australia.
The whole issue of losses on shares was only emphasised by the wife on the second day of the hearing, as I have noted. She had ample opportunity to raise it when the add-backs were discussed in detail at the start of the case on the previous day. An attempt to later raise more issues about share prices went beyond what was reasonable in terms of certainty and finality of the proceedings.

A Pty Ltd client monies paid directly to the husband from December 2007 to September 2008, being $10,110

The wife asserted that the husband wrongly re-directed funds to himself for consultancy work that he did on behalf of A Pty Ltd, and that the fees should have been directed to A Pty Ltd.
The husband readily agreed that he invoiced a client, between December 2007 and September 2008, in his own name. He swore that he did so with the wife’s approval.
The husband produced an email (H4) in which he asked the wife on 6 January 2008 if it would be “fair” for him to charge that client directly, with her response of 7 January 2008 in which she said “Yes”.
It was only a few weeks later, after negotiations broke down between the parties in relation to their property settlement, that she seemed to take a different view.
I am satisfied that the husband, acting properly and transparently, and with the wife’s consent, invoiced the client directly, when the marriage was over. The sum should not be added-back.

The husband’s withdrawal from P Global Pty Ltd of $2,117 for air fares for personal use

The wife’s claim in relation to these air fares typified her petty approach to the add-backs. She complained that the husband had wrongly expended $1,400 on an air fare in October 2006, and $2,117 on an air fare to London in August 2007.
The husband was open about these air fares. The first related to a return air fare from South Africa. Once prompted, the wife conceded that it was a valid expenditure, and not to be added back into the pool. The second related to an air fare to London when he went over to meet her while she was there.
In the final analysis, the wife’s complaint appears to be that the husband charged the air-fare against P Global Pty Ltd (in which she was the shareholder), when he was not entitled to do so.
Even though he said that on the way to London, needing to add a stop-over, he stopped in Hong Kong and saw “Ms J”, a business contact for P Global, I am not persuaded he was conducting business. I am persuaded however that, at a time when the parties were both using joint resources, and he was trying to run the accounts in the wife’s absence, he probably entered the fares against the wrong entity. There was nothing in the evidence to suggest any dishonesty or subterfuge on this part. I am not satisfied it was sinister, or that it should be an add-back.

Extra funds received by the husband on the sale of a boat $2,500

In February 2007 the parties put a boat on e-Bay for sale. The wife was handling the e-Bay enquiries. The husband sold it before the end of the auction period, accepting, he says, $6,000, of which he forwarded $3,000 to the wife.
It was the wife’s case that the bidding was up to $8,500 when he sold the boat. She asserts that he must have kept a profit from her.
I can understand why the wife is suspicious. One would have expected that the husband would not sell the boat until the end of the auction period. That said, I accept his evidence that the price obtained was in fact $6,000, and that his logic in selling at that point was reasonable.
The husband gave a credible account of having received a quote from a boat dealer of between $4,000 and $4,500 before the e-Bay sale. As the auction on e-Bay was “subject to viewing”, and it was very difficult to arrange a viewing given there was no water in Lake …, it was reasonable that when someone came, saw the boat, and offered $6,000 cash, he formed the view that overall it was an attractive offer, and he accepted it.
I accept his evidence over the wife’s evidence, because throughout this case his evidence was the more measured, and although the wife made many and varied claims about many and varied items, she had little proof. In this instance she had no proof that the e-Bay auction price had risen well beyond $6,000 as she claimed. I do not find that the husband secretly retained $2,500. There will be no add-back.

(b)Whether there should be add-backs to the liabilities

The wife’s payment of horse expenses $3,000

The wife claimed that after separation she spent $3,000 for horse feed, veterinary bills, a farrier, horse dentist, and tack, in relation to the parties’ two horses retained at M. It was hard to make head or tail, so to speak, of this part of the evidence. She seemed to argue that it was somehow the husband’s fault that she had to continue to maintain these horses that she loved and retained on the M property where she lived, but at the same time she was extremely critical of him for having one of the horses put down.
His evidence was that “T” needed to be put down. She was 30 years’ old and very ill. Ultimately, the wife, who complained about the expense of T’s medication, conceded that the husband was not wrong to have the horse put out of her misery, but she simply could not decide to do it.
The wife did not produce any documents to substantiate a claim for $3,000. Given the vagueness of the evidence, the very small sum, and the circumstances I have described, I am not able to make a specific finding that the sum should be added back as a shared liability.
The assets and liabilities are as follows:

ASSETS

Real property:

Balance of Net proceeds of T property $ 406,530
M property $ 300,000

Personal Shares:

Joint personal shareholdings $ 130,028

Bank accounts:

Joint

Bendigo Bank Account $ 6,843
Barclays (UK) Account $ 1,799

Husband

MLC Account superannuation $ 5,590

P Group

A Superannuation Fund$1,614,774

Add-backs:

Distribution to parties per court orders $ 140,000
Wife’s monies in Barclays account advanced to her sister $ 30,729
Funds withdrawn by wife from A Pty Ltd account,
October 2008 $ 10,900
Monies received by wife for sale of chattels $ 6,000

Other:

Motor-home $13,000
M property contents $6,000
Wine collection $ 14,100
$2,686,293

LIABILITIES:

Outstanding fees to N Accountants $ 6,500
Add-back for wife’s payment of dental fees $ 15,405
$ 21,905

TOTAL: $2,664,388

CONTRIBUTIONS

The wife claims that a substantial adjustment should be made in her favour in relation to contributions because of her superior earnings, and her special skills. I do not accept that. I agree with the husband’s position that the contributions in this case should be regarded as equal.
These are hard-working and intelligent professional people. In the course of a very long marriage, not having the responsibility of children, each worked to the best of their ability towards the common goal of building wealth.
The wife placed great emphasis on her diagnosis of osteoarthritis in 1982/1983, as the motivator for her to build wealth as quickly as possible, so as to have financial security when she was no longer able to work. That may or may not have been a particular motivation, but it in no way detracts from the fact that as a couple they together worked hard. The husband worked full-time in outside paid work, or in their own consultancy business. The wife did too, but at times undertook less or little paid work, working with charities, undertaking further education, and managing the family’s financial affairs and asset-building.
The husband in no way suggests that the wife managed their finances other than well, except when it came to her purchase of the P Group of companies late in the marriage. It was a source of irritation to him and conflict between them, and he does appear to be on solid ground in his complaints in that even on her own evidence, the venture lost around $170,000. That does not detract from her contributions overall. When it comes to financial matters, there will be some wins and losses and the husband was not suggesting that the wife should be penalised when it came to contributions on the basis that the P group monies had been expended. Nor did he suggest he should get more because of modest inheritances that he received in the course of the marriage.
Although the wife put forward complex calculations as to what each party had earned dollar for dollar, to prove she had earned more than the husband, the authorities are clear that it is a flawed approach. That has been recognised from the earliest jurisprudence in this court.
In Hayne and Hayne (1977) FLC 90-265, Pawley J held that financial cases cannot be approached “with an eye for meticulous detail”, but rather “broadly”, so that the end result can be said to be just and equitable.
In Garrett and Garrett (1984) FLC 91-539 the Full Court (Evatt CJ, Lindenmayer and Straus JJ) held that in a long marriage, where the parties resources and incomes had been devoted to the benefit of the family as a unit, it is impossible to have a detailed accounting of the amount of the parties’ respective financial contributions. A broad estimate of the financial contribution of each party is appropriate.
Otherwise the wife argued at the start of the case that she had “special skills” that should be recognised. She did not refer to it by the end of the case, but I am assuming that, as an unrepresented litigant, she may have overlooked it, rather than that she was no longer pursing it. In any event, I am not satisfied that this is a case of special skills whereby there should be an adjustment to contributions.
The Full Court has recognised a special contribution of the party whose skills built the family wealth in cases such as Ferraro & Ferraro (1993) FLC 92-335, where the husband’s special skills increased the assets of the parties (to about $12 million at trial).
In the current case, the parties’ wealth is reasonably modest. The authorities are clear that modest wealth does not in itself mean that it is not open to the court to find a special contribution by one party. The Full Court in McLay & McLay (1996) FLC 92-667 rejected the husband’s submission that the dominant feature in assessing that contribution must be judged by the “financial product”, that is the amount of the assets built up.
In JEL & DDF (2001) FLC 93-075, the Full Court noted that in qualitatively evaluating the parties’ respective contributions, there may arise special factors attaching to the performance of the particular role of one of them. It emphasised that the determination of a “special” contribution is not necessarily dependent upon the size of the asset pool. It is a question of the judge’s discretion as to the justice and equity in each case.
This has been a controversial area of the law about which much has been written judicially and extra-judicially. This case does not warrant a further more detailed analysis. Nothing in the evidence satisfies me that this case falls into the category of a special contribution as recognised in the authorities. I underline that both parties were contributing, either through direct paid work, or in the wife’s case, often by paid work, but at times with less paid work and on-going management of the parties’ assets. That was simply the breakdown of the parties’ roles and responsibilities according to their respective strengths, and the agreement between them.
It cannot be that in every family where one party has taken on the major responsibility for financial decisions, that it necessarily flows that they have made a special contribution. I emphasise that the fact that the wife lost some of the parties’ money in investment does not detract from her overall good management of the parties’ affairs. It just underlines an ebb and flow of success in their ventures. Fortunately for them that hard work resulted in more success than failure, and a sound result.

SECTION 75(2) FACTORS

It was the wife’s case that there should be an adjustment of 3% in her favour, to recognise that she has health issues, that she will need help in the form of someone living in with her, and that the husband is in the stronger position in his new relationship with Ms N.
It was the husband’s case that there should be no adjustment.
The wife is 62 and the husband is 61. She is no longer in paid work and he is undertaking a little paid work.
The wife does have some health issues. Her rheumatologist’s assessment indicated that she has generalised osteoarthritis which is currently most troublesome in both knee joints. He noted that she has had a good response to a right knee replacement. Her left knee is severely osteoarthritic and will be replaced in the near future. He recommended that she use ibuprofen, which she has been taking without adverse consequences, a little bit more frequently.
The rheumatologist assessed the wife’s osteoarthritis as “mild in the spine, hips and hands with the exception of the knees where it is severe.” He said she would likely require anti-inflammatories and analgesics on a regular basis plus physiotherapy from time to time, but apart from the left knee replacement he did not anticipate any further surgery would be needed in the near future. He said:
Her prognosis is good, although the osteoarthritis in all locations will worsen gradually over time; it is impossible to say how rapidly. Her disease is a little worse than one would typically see for a patient of this age.
In 1995 the wife had a segmental mastectomy in the left breast. She was examined by the surgeon and oncologist every six months from 1995 until 2008 and there has been no recurrence of cancer.
Her general practitioner noted that she has had some mental health issues and takes anti-depressants. For some time she has taken regular medication for chronic migraines and suffers irritable bowl syndrome. She suffers some allergies. She also has Lymphodema and borderline diabetes. She is epileptic and had a seizure in October 2008 requiring hospitalisation.

According to GP, many of her complaints are stress related. As for the migraines, he said that these will require medication but it is hoped that with the stress of these proceedings over, they will reduce. Her epilepsy requires medication and reduced stress and reduced alcohol, all of which should reduce the frequency of seizures. The irritable bowel probably has a strong link with the stress as well, which should reduce when the stress reduces. It is likely she will need to continue treatment indefinitely for depression.
There is no question that the wife faces specific health issues, even though some are long-standing and many are expected to settle when the stress of these proceedings is over. Given her age and stage, it is hard to say what impact her health has on her earning capacity. Both parties are at an age when they are very much winding down their working lives in any event, and she did not express a desire to be working at full pace. Her keenness to retain the companies at the end of this case related to her expressed desire simply to call in any outstanding debts and to wind them up without paying an outside accountant.
The husband swore of his own health issues including controlled hypertension, a gastric hernia, and a rapid rise in his PSA reading, which is now being monitored. Although there was no independent evidence, he was not challenged about his health. Any work that he does is only part-time. There was no suggestion that it was substantial.
The evidence did not support the wife’s assertion that she required a full-time carer to live with her. Her claim about that struck me as an exaggeration. The medical evidence did not support it in any way.
The husband lives with Ms N in her mother’s home. Her very elderly mother lives with them. She receives a pension. There is the prospect that in due course they will continue to have that home to live in. I cannot put it higher than that. Their relationship is still relatively new and I cannot find that it gives the husband substantial financial prospects.
The parties are both in the fortunate position that it appears they will be housed. From the wife’s perspective, she has the unencumbered M property. If they put their retirement plans into place, both parties can each draw about $1,000 per week from their respective superannuation funds.
I am satisfied in the circumstances that there should be no adjustment in either party’s favour.

CONCLUSION

If the assets are divided equally, I am satisfied that the result is just and equitable. Each party will have a reasonable pension to draw by way of superannuation. The wife has an unencumbered home. The husband has the prospect of a rent-free home with his new partner.
It is agreed that the superannuation fund should be split. By the end of the case the parties agreed that the husband would retain cash and the wife would retain shares.
The monies each has received so far should be considered as a partial property settlement, as part of their equal division.
Apart from the MLC account ($5,590) to be retained by the husband, the wife will retain the other assets, except the T property sale monies held in trust which shall be divided to effect the equal division, with the small adjustment required for the dental fees fully met by the wife.
As I have noted, the wife’s series of emails to the husband’s solicitor immediately after the hearing, and her purported “back-flip” on agreements made in the course of the hearing, left no doubt that the only way to ensure finality is to have N Accountants control the winding-up process of all the parties’ entities including the trustee of the Superannuation Fund.
There will be expenses. In addition to current outstanding fees, N Accountants will need to be paid for preparing all outstanding income tax returns for all of the entities, plus professional costs and disbursements of the winding-up. To this end, a sum should be retained in trust from the T property monies. Senior Counsel for the husband suggested $80,000. It is hard to be certain as to what is required. It is important to hold back more rather than less, so there is no impediment to a resolution of outstanding matters. I propose allowing the $80,000 sum as requested. Any balance should be distributed equally between the parties.
I will extend to the wife the opportunity to forward relevant documents to N Accountants, within a tight time-frame, to enable the best result by way of the franking credits and the adjustments referred to in the course of these reasons. It would be to the parties’ financial benefit. However, in the event that she does not forward all relevant documents within the specified time-frame, N Accountants should be instructed to go ahead to prepare the income tax returns.
There cannot be any further delay or expense caused by the wife bombarding N Accountants with correspondence or documents, or to the contrary, failing to respond or fully respond. Also to this end, the husband alone will be able to sign any financial statements, income tax returns and any documents required to effect the winding up of any company of which he is a director. I also propose an order for a Registrar to sign any document that the wife must sign, if she refuses.
By the end of the hearing it was agreed that the orders would need to be drafted after I delivered my reasons for judgment. When the case came back on the point of new evidence, Senior Counsel for the husband handed up proposed orders. I have only since been able to consider those proposed orders in detail.
I am satisfied that the order sought by the husband to ensure that the wife does not commence any proceedings against the husband in any court or tribunal is broader than I can properly make. I shall however, as requested, make specific orders for the wife to release and discharge the husband from any liabilities or indebtedness to P companies that she controls. That is important given her attitude and the need for finality. Otherwise, my orders in this case will finalise every aspect of the financial issues and relationship between the parties through their various entities as well as directly between themselves.
I am satisfied too that I cannot make orders for costs as sought without hearing argument.
It is important to note that although the case proceeded on the basis of $1,614,774 in the superannuation fund, it is apparent in the orders proposed for the husband that it holds $1,709,425 being shares at $662,350 and cash at $1,047,075.
The proposed orders are otherwise complex. I propose allowing submissions.

I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate:

Date: 22 December 2009

[2009] FamCA 1352

22 December 2009

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