Darvis & Darvis - [2024] FedCFamC2F 575

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Darvis & Darvis [2024] FedCFamC2F 575

File number(s): MLC 13287 of 2022

Judgment of: JUDGE HARLAND

Date of judgment: 9 May 2024

Catchwords: FAMILY LAW – property - long marriage – addbacks – consideration to be given to initial contributions - whether there should be an adjustment pursuant to s.75(2) - wife seeking periodic spousal maintenance - whether or not there should be an order for lump sum or periodic spousal maintenance

Legislation:
Evidence Act 1995 (Cth) s.50

Family Law Act 1975 (Cth) ss. 72, 75(2), 77A, 79(1), 79(2), 79(4), 90XE, 90ZXA , 90XT(1)(a)

Family Law (Superannuation) Regulations 2001 Part VI

Income Tax Assessment Act 1997 (Cth) s. 126.5

Cases cited:
Beaton & Ballam [2014] FCWA 20

Beklar & Beklar [2013] FamCA 327

C & C [1998] FamCA 143

C & C [2005] FamCA 429

Clauson & Clauson [1995] FamCA 10

Eliades & Eliades (1981) FLC 91-022

Gould & Gould (1995) FamCA 142

Harrison & Harrison (1996) FamCA 12

AJO & GRO (2005) FLC 93-218

Petrellis & Petrellis [2022] FedCFamC2F 1375

Stanford v Stanford (2012) 247 CLR 108

Trevi & Trevi (2018) FLC 93-858

Division: Division 2 Family Law

Number of paragraphs: 191

Date of last submission/s: 26 February 2024

Date of hearing: 7, 8 December 2023

Place: Melbourne

Counsel for the Applicant Ms Fisken

Solicitor for the Applicant Forte Family Lawyers

Counsel for the Respondent Ms Petrie

Solicitor for the Respondent Watts McCray

ORDERS

MLC 13287 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
MR DARVIS

Applicant

AND:
MS DARVIS

Respondent

ORDER MADE BY:

JUDGE HARLAND

DATE OF ORDER:

9 MAY 2024

THE COURT ORDERS THAT:
1.Within 28 days of the date of these orders, the net proceeds of sale of B Street, Suburb C, more particularly described in Certificate of Title, folio …, currently held on trust in the husband’s solicitor’s trust account be applied as follows:
(a)Firstly, $59,850.70 be retained in the husband’s solicitor’s trust account to pay any costs and expenses associated with any Capital Gains Taxation liability arising from the sale; and
(b)In the event the Capital Gains Taxation liability is in excess of $59,850.70, the husband pay 60% and the wife pay 40% of the outstanding amount;
(c)In the event the Capital Gains Taxation liability is less than $59,850.70, the husband receive 60% and the wife receive 40% of the remaining amount; and
(d)The balance to the husband.

2.Within 28 days of the date of these orders, both parties do all acts and things and sign all documents as may be required to sell all D Company (1,070) shares held jointly by the husband and the wife.
3.The proceeds of the sale of the D Company shares be applied as follows:
(a)Firstly, to pay all costs, commissions and expenses of the sale of the D Company shares;
(b)Secondly, to pay all Capital Gains Taxation liability arising from the sale of the D Company shares; and
(c)The balance to the husband.

4.Within 28 days of the date of these orders, at the wife’s sole expense, the wife do all acts and things and sign all documents as may be required to transfer all E Company (4,700) shares held in the wife's name to the husband.
5.All previous interim spousal maintenance orders be discharged.
6.Pursuant to s.77A of the Family Law Act 1975 (Cth) the amount of $100,000 is attributable to the provision of maintenance for the wife.
7.Within 28 days of the date of these orders, the wife do all acts and things necessary to transfer to the husband the sum of $158,528.02, less the $100,000 attributable to the provision of maintenance pursuant to order 6 above.
8.Having been accorded procedural fairness in relation to the making of these orders, orders 8 to 11 (inclusive) are binding upon Super Fund 1 (“the Trustee”) as the trustee of the Super Fund 1 (“the Fund”).
9.Pursuant to Section 90XT(1)(a) of the Act, whenever a splittable payment within the meaning of section 90XE of the Act becomes payable in respect of the Member's interest in the Fund (Member No. …) the Non-Member is 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 as at the operative date of $369,235.80 reflecting a 60%-40% division of the superannuation pool and there be a corresponding reduction in the entitlement the Member would have had in the Fund but for these orders.
10.The operative date referred to in order 9 is four business days after the date a certified copy of the sealed Orders is served on the Trustee of the Fund.
11.That until the happening of any of:
(a)The establishment of a separate account in the name of the Non-Member in the Fund; or
(b)The transfer or "rolling over" into another superannuation fund of the payment split created by order 9; or
(c)The Non-Member satisfying a condition of release and being paid the payment split created by order 9; or
(d)The Non-Member executing a waiver of rights within the meaning of section 90ZXA of the Act regarding the payment split created by order 9:

the Member be and is restrained by himself, his servants, or agents from executing a death benefit nomination in favour of any person and/or doing any other act or thing which would render any part or his interest in the Fund “a non-splittable payment” within the meaning of Regulation 12 or 13 of the Regulations or from doing any act or thing which would prevent the Non-Member Spouse or her legal personal representative, to the extent permitted by law. from receiving the benefit of the Fund to which she is entitled pursuant to these Orders.
12.The husband retain to the exclusion of the wife:
(a)The dining room table and chairs; and
(b)The framed painting.

13.The wife retain to the exclusion of the husband:
(a)The Painting from the Suburb F property; and
(b)The large, heavy wooden ornament.

14.Within 28 days of the date of these orders:
(a)At the husband’s sole expense, the wife return the tools located in the shed at the H Street property formerly owned by the husband's father; and
(b)At the wife’s sole expense, the husband make available, all items contained within ‘Annexure A’ of the wife’s Further Amended Response to Initiating Application filed on 23 November 2023 stored in the Melbourne storage unit that are not referred to in order 12.

15.The husband otherwise retain, to the exclusion of the wife:
(a)All monies standing to the credit in any bank accounts in their sole name;
(b)E Company Shares (4,600 vested);
(c)E Company shares (1,016 vested in late 2023);
(d)G Company shares (5,220 shares);
(e)Motor Vehicle 1;
(f)Motor Vehicle 2 and Motor Vehicle 3;
(g)Addback of $279,787.00 being the paid legal fees and disbursements up to 4 December 2023;
(h)Addback of $32,000.00 being the proceeds of sale of Motor Vehicle 4;
(i)Balance of the inheritance of $17,050.00; and
(j)E Company shares (4550 unvested) of $171,202.00.

16.The wife otherwise retain, to the exclusion of the husband:
(a)The real property situate at H Street, Suburb C, New South Wales, more particularly described in Certificate of Title folio …;
(b)All monies standing to the credit in any bank accounts in their sole name;
(c)G Company Shares (3,140 shares);
(d)Motor Vehicle 5; and
(e)Addback of $111,525.00, being the paid legal fees and disbursements up to 7 December 2023.

17.Within 28 days of the date of these orders, the husband be at liberty to remove the wife from the J Company private health insurance policy no. ….
18.Within 28 days of the date of these orders, the parties do all acts and things and sign all documents necessary to transfer to the wife (if required) or cancel (at the wife’s election) the K Company Insurance Policy no. ….
19.The wife be responsible for all payments due and payable in respect of the K Company Pet Insurance and indemnify the husband against all liabilities past, present and future in respect of the K Company Pet Insurance Policy.
20.Subject to the above orders, the parties shall be responsible for:
(a)All loans, debts, leases, hire purchase and other liabilities standing in their sole names;
(b)All credit cards in their sole names;
(c)Any and all taxation liabilities in their names;

AND the parties shall indemnify and keep indemnified the other party in respect of any and all such liabilities.
21.Any joint tenancy of the parties in any real or personal estate is expressly severed.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
REASONS FOR JUDGMENT
JUDGE HARLAND

The parties are in a heated dispute about the weight that should be accorded to their respective initial contributions. There is also a dispute about their respective future needs. The wife seeks periodic maintenance to continue indefinitely which the husband contests. The husband seeks to make a lump sum payment for maintenance as he wants to purchase a home in Sydney and needs to borrow to do so.
The parties were in a 22 year relationship. The husband is aged 55. The wife is aged 60. They have two adult children, Ms L aged 22 and Mr M aged 19. The wife has two adult children from a previous relationship, Mr N aged 34 and Ms O aged 30. The wife currently lives in the former matrimonial home situate at H Street, Suburb C in Sydney (“the H Street property”). The husband and the parties’ adult children currently live in a rental property in Melbourne.
The parties were married in 2000 and separated in February 2022 when the wife left the rental home in Suburb F in Melbourne. There is a minor dispute between the parties as to when they started living together. It is unnecessary to comment on this further as nothing turns on it.
EVIDENCE RELIED UPON
The husband relies on the following documents:
(a)Second Further Amended Initiating Application filed 16 November 2023;
(b)Trial Affidavit of Mr Darvis filed 16 November 2023;
(c)Outline of Case filed 4 December 2023;
(d)Affidavit in Reply of Mr Darvis filed 30 November 2023.
(e)Financial Statement filed 16 November 2023; and
(f)Affidavit of Mr Q, Chartered Accountant for the husband, filed 16 November 2023.
The wife relies on the following documents:
(a)Amended Response to Initiating Application filed 23 November 2023;
(b)Trial Affidavit of Ms Darvis filed 23 November 2023;
(c)Outline of Case filed 4 December 2023;
(d)Financial Statement filed 23 November 2023; and
(e)Affidavit of Dr P, the wife’s General Practitioner, filed 28 November 2023.
Both parties rely on affidavits of the valuers of the real properties and Motor Vehicle 1. The valuers were not required for cross-examination as the parties agreed to those values. During the second day of the trial, the husband no longer required Dr P to be called as a witness, as a result her evidence is unchallenged.
In addition to the documents listed above, the parties rely upon a joint asset table which was updated during the course of the trial, which I indicated on the last day of the trial that I would tender and mark as Exhibit 14. The parties also relied on and tendered various documents as exhibits.
ISSUES IN DISPUTE
The husband seeks that the net non-superannuation assets be distributed so that the wife receives 57.5% and that he receives 42.5%. The husband proposes that the contributions of the parties be viewed as equal, taking into account the various contributions made by each party over the duration of the marriage. With respect to s.75(2) factors, the husband submits that “the Court may make such order as it considers appropriate” and that the wife receive an additional $100,000 by way of lump sum maintenance.
The wife seeks an overall adjustment of the total asset pool of 70-75% in her favour, and 25-30% to the husband. The wife submits that the contributions should be assessed at 60% in her favour based on her significant initial contributions, as well as those made during the relationship, and a further 5% for post-separation contributions in her favour on the basis of the husband’s liquidation of assets. She seeks a further adjustment in her favour for s.75(2) factors of between 5-10%. In addition, she seeks ongoing spousal maintenance of $1,500 per week or in the alternative, $780,000 by way of lump sum payment (equivalent to ten years of payments).
The dispute between the parties is not only about the percentages, but about the makeup of the asset pool. Both parties complain about the other’s post separation expenditure and seek various addbacks.
The issues in dispute which I must determine are as follows:
(1)Whether there should be a negative credit finding against the husband;
(2)What are the parties’ respective initial and early contributions and what weight should be given to the parties’ respective initial and early contributions;
(3)What weight should be given to the husband’s contributions towards the care of the wife’s children from her previous relationship and their children;
(4)How inheritances are to be treated;
(5)Assessing the parties’ other contributions;
(6)Should the parties’ superannuation be treated as a separate pool;
(7)The treatment and characterisation of financial resources in the asset pool;
(8)Whether there should be an allowance for capital gains tax with respect to various shares and the B Street property;
(9)The treatment of the use of funds post-separation;
(10)Whether or not there should be various addbacks;
(11)The distribution of the disputed chattels;
(12)The appropriate s.75(2) adjustment for the disparity in the parties’ income earning capacities; and
(13)Whether or not an order for maintenance should be made and whether it should be made as a lump sum or periodic payment and if it is paid periodically, whether it should be limited in time or open-ended.
PROPERTY GENERAL PRINCIPLES
Part VIII of the Family Law Act 1975 (Cth) (“the Family Law Act”) governs property, spousal maintenance and maintenance agreement between married couples. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Family Law Act.
The High Court considered the operation of s.79 of the Family Law Act (which has almost identical terms to s 90SM) in the matter of Stanford v Stanford (2012) 247 CLR 108. In this case, the majority stated at [35]-[36] that:
It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. Both parties seek property adjustment orders. I am comfortably satisfied that it is just and equitable to make property adjustment orders.
The High Court also pointed out that what is just and equitable is different in every case.
It is important to have regard to the myriad of contributions the parties have made over the whole of their long relationship and take a holistic approach to the assessment of the parties’ contributions.
CREDIT
In written submissions the wife’s Counsel urged me to make negative credit findings against the husband with respect to inconsistencies about the date of when the parties started cohabitating. I reject these submissions that I should find the evidence unreliable and that I should prefer the wife’s evidence.
The wife’s Counsel was not able to identify how the difference of a few months would impact on my decision in this matter. The cross-examination on this issue was purely to try to establish a credit point.
The husband’s evidence was more detailed than the wife’s in some areas. In contrast, the wife was vague in her evidence. When being cross-examined it was clear that she was very fixed in her position in wanting to retain the home, that she has had for over 30 years, which has led her to exaggerate her contributions and minimise the husband’s. Her approach was quite hypocritical, particularly with respect to the husband’s post separation expenditure. She was reluctant to make concessions.
Both parties were keen to get their perspective across and had to be reminded to focus on the questions being asked of them. With respect to the early period of their marriage, I am satisfied that both parties have done their best to recollect what had occurred over 22 years ago. With respect to the length of time and lack of many documents, both parties found partial documents shortly before the trial, which is not ideal. I do not think that was done deliberately and I am not critical of the parties in this respect. I accept the husband’s explanation that it was only on reading the wife’s trial affidavit that prompted his memory with respect to some matters and caused him to look for further documents. I do not make credit findings against either party.
INITIAL CONTRIBUTIONS AND THE WEIGHT TO BE GIVEN TO THE PARTIES’ RESPECTIVE INITIAL CONTRIBUTIONS

One of the major sources of controversy between the parties is the assessment of their respective initial contributions. Unfortunately, the evidence presented on this topic is somewhat confusing, contradictory and incomplete.
The wife’s case is that she made the significantly greater initial financial contribution through the unencumbered H Street property, her business, and various shares. The parties lived at the H Street property for most of their marriage.
It is the husband’s case that whilst the wife owned the H Street property at the commencement of cohabitation, the wife only had nominal savings, and that her shares in R Pty Ltd she acquired were as a result of funds being advanced from the husband. The husband contends that the monies from the sale of the shares was put towards the joint use of the parties.
At the commencement of the relationship the wife was working in her own business as a tradesperson. The wife claims she had significant savings at the commencement of the relationship. There is no supporting evidence of this. The wife did not give any details as to how much she worked in her business. The tax returns tendered and marked as Exhibit 13 show her taxable income in 2001 as being very modest. Given the tax returns she produced and the fact that she also worked part time as an office worker, I infer her income was modest.
The wife owned the H Street property prior to the commencement of cohabitation having received it in her property settlement with her former husband, Mr T in 1996. Pursuant to that property settlement, the wife was obliged to pay Mr T the sum of $65,000 by mid-2014. This was secured with a charge over the H Street property. The wife’s claim that she had $35,000 in savings is difficult to comprehend with the fact that she was not obliged to pay her former husband until 2014.
The husband’s contribution – R Pty Ltd Shares
The husband deposes that he had a 36.7% interest in R Pty Ltd, supposedly valued at approximately $8,428,714 at the date of marriage. He provides no basis for this figure which appears fanciful. The reality is that on the evidence before me he did not receive anything like such a sum. R Pty Ltd was Trustee for R Pty Ltd Unit Trust. The husband held his interest via two companies: S Pty Ltd and U Pty Ltd.
Established in 1993, the husband held his interest in S Pty Ltd as co-director and equal shareholders with his two brothers. U Pty Ltd was established in 1997 with the husband as the sole director and shareholder. U Pty Ltd is trustee for the Darvis Family Trust.
In 2000, R Pty Ltd merged with V Ltd and adopted the V Ltd name. The husband deposes that due to issues arising amongst the directors as a result of merger problems, he ceased being a director in 2001.
The husband deposes that in mid-2002 he sold R Pty Ltd shares held by S Pty Ltd and U Pty Ltd, which were valued at approximately $250,000. His evidence around this is somewhat confusing.
In his trial affidavit he refers to receiving $185,000 for the sale of the shares which were sold “off market” and were deposited into his bank account in three tranches in mid-2002, and in late 2002. His trial affidavit is silent as to the exact values of the three tranches he received resulting from the sale of the shares. Exhibit 1 contains bank statements from this period indicating that the following deposits were made to a W Bank account in the husband’s sole name ending in #...32: $90,000 in mid-2002, $50,000 in late 2002, and $45,000 in late 2002 totalling $185,000. The source of these deposits are unclear.
In his affidavit in reply, he attempts to correct his earlier statement and that he received $154,000 in mid-2002, $45,000 in mid-2002 and $56,000 in late 2002 totalling to $255,000 into the W Bank joint account held by the parties ending in #...81. These cheque deposits are also reflected in Exhibit 1 and are labelled as “cheque deposit” in the bank statement. The husband says that a cheque butt dated mid-2002 (#...88) in the amount of $45,000 and a cheque butt dated late 2002 (#...44) in the amount of $56,000 likely came from the sale of the R Pty Ltd shares which are also contained in Exhibit 1.
Cheque butt #...88 lists the payee as “Loan to Mr Darvis” with no detail being completed and the amount of $45,000. The cheque butt #...44 lists the payee as the husband and it is clear that the amount is for $56,000, however, the majority of the detail filled out is illegible.
The wife claims that she used $35,000 in savings to purchase some R Pty Ltd shares in 2000 and says she had approximately $60,000 worth of shares in R Pty Ltd that she purchased in 1999. She does not say where the funds came from to fund those purchases. She refers to operating her business from home for the past 16 years and does not give any indication whatsoever of the income that she had but says she mostly received payments in cash and claims she was able to pay for all of her expenses and was also receiving child support. The husband disputes this and deposes that the wife’s R Pty Ltd shares were acquired after they were living together, and that the purchase of the shares were funded by monies advanced to her by the husband via U Pty Ltd.
If she had sufficient savings to make these significant purchases, one has to wonder why she was not obliged to pay her former husband the $65,000 until 2014, which is a significant period of time for him to wait for a property settlement. By this time her youngest daughter would have been 21. This is suggestive of the wife and Mr T reaching an agreement enabling her to stay in the home with the children with Mr T agreeing to defer payment. This is not the type of order a Court generally makes after a contested hearing, noting s.81 of the Family Law Act and the preferences to finalise financial relationships between people. It is not consistent with the wife having significant savings.
In cross-examination, the wife was taken to Exhibit 13, where she accepted that the shares were purchased in 2000 for $54,265 and sold for $60,282 in mid-2000. The wife insisted that she funded these shares. She appears to base this on the fact of the shares being in her name.
The husband acknowledged in cross-examination that it appeared that the wife was financially self-sufficient. Her bank statements and tax returns show a very modest income supplemented by social security payments at the beginning of their relationship. I accept that the wife was supporting herself and the children. She did not have to pay rent or a mortgage. I do not accept that she had significant savings in addition to this. This does not make sense, particularly given the deferred payment to Mr T.
Application of the sale of shares
It is the wife’s case that the monies received from the sale of the shares were used to discharge the mortgage over the husband’s father’s property. She says that the husband was able to sell his shares for approximately $250,000 and that she does not recall the husband receiving any further or subsequent payment for R Pty Ltd shares being deposited into any bank accounts to which she had access. In her written submissions, the wife says that the majority, if not all of the share proceeds after tax were applied to discharge the mortgage. The timings however of the documents exhibited in the proceedings does not coincide with that. The amount owing on the mortgage was also significantly less than $250,000.
The husband’s trial affidavit is silent with respect to the mortgage over his father’s property. The husband was criticised for failing to disclose that the property his father owned had a mortgage. In cross-examination he said that the wife’s trial affidavit raised many issues, and he had forgotten about that loan and recently found some documents with respect to his early contributions. The wife’s Counsel was also critical of the husband’s late disclosure of documents relating to this from 2000 to 2002, which included some bank accounts and cheque butts. With respect to his tax returns, the husband said he only had access to the 2000, 2002 and 2003 returns and had checked with his accountant. This is understandable given the considerable passage of time and there not being an obligation to retain tax documents beyond five years. I note too that the wife also produced documents late, for example, producing 2001 tax returns in late 2023. It is clear that the parties have tried to reconstruct what occurred over 20 years ago as best they could. It is also my impression from reading each other’s trial affidavits, it has prompted some memories which has resulted in both of the parties searching for further documents.
In the husband’s affidavit in reply, he concedes that there was a mortgage secured over his father’s property at the date of commencement of cohabitation and that the balance of the mortgage in 1999 was $146,552. He says that the loan was repaid across three separate payments prior to receiving the proceeds of sale of R Pty Ltd shares with the first payment of $48,942 being paid in early 2000 from savings held in his personal name, the second payment of $47,430 being paid in mid-2002 from funds held in U Pty Ltd, and the third payment of $50,701 made in mid-2002 from funds held in S Pty Ltd.
Exhibit 6 is a National Australian Bank (“NAB”) mortgage statement in the names of Mr Darvis and Mr X which shows that as at late 1999, the mortgage account was $146,552.60 in debt. It also shows the mortgage being paid out by way of a cheque deposit of $98,131 in mid-2002. Exhibit 6 does not contain any transactions from mid-1999 to mid-2002.
Contained in Exhibit 1 are two cheque butts numbered #...62 and #...34. Cheque butt #...62 indicates that in mid-2002, a payment of $47,430 was paid to “NAB” for the “Repayment of loan Dad’s House used to pay R Pty Ltd Debt”. Cheque butt #...34 indicates that in mid-2002, a payment of $50,701 was paid to “NAB Re Pay Loan 4 Dads House”.
When looking at these two cheque butts and considering the NAB mortgage statement found in Exhibit 6, it is clear that the husband made two payments in mid-2002 totalling $98,131 effectively discharging the mortgage on this date.
The bank account statement on page 51 of Exhibit 1 shows a deposit from R Pty Ltd in late 2001 of $56,201.06 into the parties’ joint account following the husband ceasing from his role as director of V Ltd. Prior to this date there were regular deposits from R Pty Ltd into this account for the husband’s salary.
Salary payments from Y Pty Ltd commenced in late 2002. In between these periods there were no salary deposits. This aligns with the husband’s evidence of ceasing working with V Ltd and operating a small business on a part-time basis, before taking on a consultant role with Y Pty Ltd. There is no evidence about what the husband earned from the small business.
In closing submissions, the husband stated that in mid-2002, the net proceeds of sale of the R Pty Ltd shares were $255,000 which were received into the entities S Pty Ltd, and U Pty Ltd, and subsequently paid into the parties’ joint account. Relevantly, the loan secured against the husband’s father’s mortgage was repaid in full in mid-2002.
I set out the chronology of the relevant transactions as summarised below:
(1)Late 1999: the husband’s father’s mortgage is at $146,552;
(2)Early 2000: the husband pays $48,942 towards his father’s mortgage;
(3)Late 2001: the husband receives $56,201.06 and is deposited into the joint account ending in #...81 following ceasing from his role as director of V Ltd;
(4)Mid-2002: the husband pays $98,131 towards his father’s mortgage reducing the mortgage to nil;
(5)Mid-2002: $154,000 is deposited into the joint account ending in #...81;
(6)Mid-2002: $90,000 is deposited into the husband’s sole account ending in #...32;
(7)Mid-2002: $45,000 is deposited into the joint account ending in #...81;
(8)Late 2002: $50,000 is deposited into the husband’s sole account ending in #...32;
(9)Late 2002: $56,000 is deposited into the joint account ending in #...81; and
(10)Late 2002: $45,000 is deposited into the husband’s sole account ending in #...32.
With respect to initial contributions, I am satisfied that the husband had paid off the mortgage on his father’s property that was evidenced in the documents. The evidence shows that there were further significant lump sums deposited into the joint account which must have come from the sale of the husband’s shares. The only lump sum I am satisfied the wife received was the $110,000 inheritance. I do not accept that she had $35,000 in savings. I am also satisfied on the balance of probabilities that the husband contributed the lump sum deposits into the joint account for the benefit of the family. I am not satisfied that the lump sums deposited in the husband’s sole account were used for the benefit of the family. The $56,201 deposited into the joint account referred to above is consistent with the husband’s evidence that he received a lump sum representing six months wages when he ceased working at V Ltd.
I do not accept the wife’s evidence that she financially supported the husband for 18 months. He was not out of work for that period of time. It is clear from the bank statements that the husband started employment with Y Pty Ltd a year after leaving R Pty Ltd. In addition to receiving the $56,000, he also had some money, no doubt modest, from his small business. The wife’s income was modest. The wife does not make any attempt to estimate her income at that time and does not provide any detail as to the hours she worked. I accept that the wife was able to cover expenses for herself and her children particularly as there was no mortgage on the H Street property.
Although I understand the wife’s frustration with the late production of documents, I accept the husband’s evidence that he did not recall the loan he paid for his father until reading her trial affidavit.
The wife’s contribution –H Street, Suburb C
Prior to the commencement of the relationship, the wife owned the H Street property, having received it in her property settlement with her former husband Mr T in 1996. There was nothing owing on the property.
A retrospective valuation of the H Street property was completed by Mr Z filed in late 2023. The property at cohabitation was valued at $370,000 as at mid-1999, and $380,000 as at early 2000. I will adopt the figure of $380,000 as I find it is more likely that the parties started living together in 2000, not 1999. The wife refers to improvements made to the H Street property before the relationship. Those have been factored into the historical valuations.
The wife received an inheritance from her late uncle in 2001 of approximately $110,000 and obtained a mortgage of approximately $100,000 in the event she did not receive her inheritance in time to make the required payments for the renovations. Unsurprisingly, given the passage of time, there are few supporting documents. Whilst the husband gives estimates of various costs of materials and labour for particularly parts of the renovations, he does not make any attempt to explain what he bases those estimates on.
The husband says that the renovations were funded from a joint account, together with a redraw of approximately $100,000 from the mortgage secured over the H Street property. He says the inheritance the wife received was used to pay off the mortgage redraw of approximately $52,000, with the balance applied to the payment of the builder or various other tradesmen in conjunction with his income. The wife says that the payment of the renovations was from the inheritance of $110,000 which she initially invested in an interest-bearing deposit account before withdrawing the funds and paying the remaining building and renovation costs directly.
The parties undertook significant renovations to the H Street property in 2000. The development application was made in the wife’s sole name as the sole registered proprietor, with works being completed around late 2001. The parties disagree about how much the renovations cost. The husband estimates that the total cost of the renovations was between $250,000 and $265,000 while the wife estimates the total cost at approximately $165,000. It may have been somewhere in between. Neither party has documents to support their figures, understandably given the passage of time. The husband was more detailed in his evidence. I cannot make a finding as to which is correct. In the circumstances, it is not necessary as it is clear that the parties carried out significant renovations which I am satisfied both contributed towards financially and non-financially.
Following the completion of the renovations in 2001, the parties undertook further works over the years. In his trial affidavit, the husband states the following renovations took place:
(1)Replacement of existing fittings and a gate estimated at $15,000;
(2)Construction of outdoor area estimated at $4,000;
(3)New roof on a portion of the property estimated at $20,000;
(4)Installation of solar panels estimated at $5,500; and
(5)Removal of existing fittings and replacement estimated at $5,000.
The wife disputes the values attributed by the husband but does not provide evidence or alternative figures. In cross-examination, the wife agreed that the above renovations had taken place post 2001 but was not cross-examined about the specific values of those renovations. The husband says that these costs were paid from the joint account as the wife’s inheritance had previously been used for the initial renovations. He does not provide any evidence to support his estimates. I do not accept that the figures provided above are accurate. The wife maintained that she funded the renovations. I do not accept that the wife solely funded the renovations.
The wife agrees that the parties attended to further work on the property post the 2001 main renovations but disagrees with the way in which the payments for the renovations were paid, asserting they were paid for by the wife from her income. The wife maintained that the husband did not pay for any of the renovations. As I am not satisfied that the wife had significant savings at the commencement of the relationship, the inheritance she received was not enough to cover the costs of the initial renovations and further renovations based on her own figures. The wife’s evidence lacks credibility on this point. She was unwilling to make any concession that the husband made any financial contributions to the H Street property.
Other than the financial contributions to the improvement of the H Street property, the husband says that he personally attended to the following:
(1)Constructing a large ramp in order for a Bobcat to reach the backyard as the H Street property was on a slope during the initial renovations;
(2)Undertaking physical labour with the installation of the outdoor entertainment areas and landscaping of the front yard;
(3)Construction of a retaining wall in the back yard;
(4)General labouring work for the extension of the property;
(5)Completing a majority of the plumbing work;
(6)Digging and installing a drainage retention pit; and
(7)Completing a majority of the painting to the interior of the property.
The husband says that he worked on the H Street property for a period of about six months, with his father also assisting with the renovations at least three or four days per week over the six-month period. This evidence was not challenged in cross-examination.
The wife accepts in her trial affidavit that the husband attended to various manual work associated with the renovations.
The husband says that shortly after the parties married, they established a joint bank account. It is his evidence that living expenses including council rates for the H Street property were paid from the joint account. The wife disputes this and says that she was solely responsible for maintaining the property and for paying all expenses associated with it, including but not limited to rates and charges, insurances and utilities, meeting all of these expenses from her income. There is no documentary evidence to support this. I do not accept her evidence about this.

The valuation completed by Mr AA in early 2023, and filed 9 June 2023, indicates that the land is valued at $1,725,000, with the improvements valued as $625,000. The report notes the significant ancillary improvements of the inground swimming pool, glazed pool fencing, retaining walls, outbuildings and fixtures, and notes the secondary ancillary improvements of the established gardens, boundary fencing, and brick driveway. This is consistent with the significant nature of the renovations that the parties carried out.
Conclusion with respect to initial and early contributions
I am satisfied that the husband funded the wife’s purchase of her R Pty Ltd shares of $53,265 and that he deposited lump sums into the joint account of $255,000 for the benefit of the family. He also received $56,205.06 when leaving his employment which was deposited into the parties’ joint account. The wife had the H Street property worth $380,000 mortgage free as well as her inheritance of $110,000 that was applied towards the costs of renovations. It is not only the initial value of the H Street property that is relevant, but also the use the parties made of it. The historical and current valuation of the H Street property supports the husband’s contention that the renovations the parties undertook after they commenced their relationship significantly improved the value of the property. Furthermore, I am satisfied that the husband made financial contributions towards the renovations given the lump sums he received. I am not satisfied that the wife had additional sources to cover the renovations which even on the wife’s case cost $165,000.
THE HUSBAND’S CONTRIBUTIONS TOWARDS THE CARE OF THE WIFE’S CHILDREN FROM HER PREVIOUS RELATIONSHIP AND THEIR CHILDREN
The wife has two children from a prior relationship, Mr N, born in 1990, aged 34, and Ms O, born in 1993, aged 30.
It is the wife’s evidence that after the parties married, she maintained a separate account from which she paid Mr N and Ms O’s expenses from her own salary and from child support from her former husband. She says that she was responsible for the day-to-day care of Mr N and Ms O as she had been prior to the husband moving into the H Street property and that she was very protective of Mr N and Ms O and did not seek the husband’s assistance with their care. She says as she was protective of them, the husband would often refer to them as “protected species” and therefore left her to parent them and had little involvement with their lives. She states that whilst the husband was in the home and communicated with them, he had little involvement in their actual care. She later conceded in cross-examination that Mr N and Ms O loved him. Following the birth of the parties’ children, the wife says that she continued to be primarily responsible for providing for the day-to-day care of all of the children.
In his trial affidavit, the husband refers to the wife providing disclosure that showed Mr T in 2005 was $25,760 in arrears of child support and that he had only paid small amounts in previous years. The husband says that the amount of child support the wife received was insufficient to cover expenses for Mr N and Ms O and that their day to day living costs and other expenses were paid predominantly from the joint account. The girl’s various education expenses were also paid from the joint account. He says that the parties shared parenting responsibilities to the extent possible, in circumstances where he was working full-time and the wife was working part-time from home. He says that the parties financially assisted Ms O by providing her with $5,000 for the purchase of a car when she was about 17.
In written submissions, the husband says that he made significant contributions, financial and otherwise, to Mr N and Ms O’s care in circumstances where Mr T paid irregular and inadequate child support. The wife says in written submissions that the husband’s contributions were not of a nature that would warrant the making of any adjustment, as the parties had the benefit of living in a mortgage free home and the inheritance she received contributed towards the accommodation of the four children.
The wife was unwilling to make concessions about the husband’s contributions. In contrast, the husband readily acknowledged that the wife primarily looked after all four children. The wife seeks to downplay the husband’s contributions to Mr N and Ms O. There is a real inconsistency in the wife’s evidence about the child support she received. The husband provides a more detailed account of the court proceedings in 2011 between Mr T and the wife. He says Mr T commenced proceedings against the wife seeking the lump sum payment early on the basis that the renovations on the H Street property should not have been done without his consent, and that the wife counterclaimed for arrears of child support. On the one hand she says she received enough child support to support her children, yet because her former partner was unreliable with child support payments, they varied their agreement so that according to the wife she only had to pay between $7,000 to $8,000 while the husband claims it was $25,000. He also gave evidence that whilst the wife represented herself, she went to solicitors he recommended and the legal fees of $10,000 were paid from the parties’ joint account. Again, the husband’s evidence was more detailed and credible. In either case, it is a significant reduction which reflects the wife receiving little child support. Given this, it is likely that the husband’s income was used to help support the family including the wife’s children from a previous relationship.
I think there are difficulties with both parties’ positions. The difficulty with the wife’s submissions is that she effectively seeks to emphasise her contributions at every point and minimise any of the husband’s. This is a real danger of double counting in her approach. I do not accept that the husband did not make any contribution towards the wife’s children. His income would have been used for the benefit of everyone in the household. Before moving to Queensland, Mr T saw Mr N and Ms O on alternate weekends. After he moved to Queensland, he saw them during school holidays. This means the girls were living with the parties most of the time.
The wife's evidence is that as the husband’s career progressed, he would begin to work longer hours regularly working up to and sometimes more than 12 hours a day, including weekends. She further deposed that in addition for being primarily responsible for caring and providing for the children, she was predominantly responsible for household tasks including cooking, cleaning, washing, and general housekeeping.
The husband rejected the wife’s assertions in cross-examination that the wife was primarily responsible for her children from her first relationship and their children. The husband deposed that he was engaged with the day-to-day care of Mr N and Ms O during the time they lived with the parties, and that they shared parenting responsibilities. The husband in cross-examination said that his hours would fluctuate and that it was flexible and that he would usually work more than eight hours, but it would depend on the week and that his work hours were flexible in that he was able to attend school functions. He further submitted that he would still take Mr M to various sporting activities on the weekend and that he was involved with the children’s various school projects and homework. He accepted that he would travel interstate as well as internationally and accepted that the wife was responsible for the care of the four children during these times. With respect to household tasks, the husband stated that their relationship catered around him bringing the income to support the family whilst the wife assisted with the appropriate household chores. He acknowledged in his trial affidavit that the wife was the children’s primary caregiver particularly when they were young and as his workload and responsibilities increased. However, the husband said that he was responsible for the maintenance and ongoing improvements of the H Street property which as a result is worth its current value.
I certainly accept that the wife was more available at home and was caring more for the four children as she was working from home and not working long hours. However, the reality is that the wife’s children from her first relationship remained living with the parties and that the husband was providing financial support for them.
TREATMENT OF INHERITANCES
As discussed earlier in these reasons, the wife received approximately $110,000 from her late uncle in 2001. Both parties agree that the funds received from her inheritance were primarily put towards the renovation of the H Street property with the husband also agreeing that the wife’s inheritance was used to pay the mortgage redraw balance of approximately $50,000. I am satisfied that the wife applied her inheritance of $110,000 for the benefit of the family.
In 2019, the husband received approximately $300,000 as a partial inheritance from his late father’s estate. The husband’s partial inheritance was paid into the joint account and transferred into the term deposit. The husband says that the wife requested that he apply the partial inheritance of $300,000 to pay out the mortgages secured over the property situate at B Street, Suburb C (“the B Street property”), rather than refinance. The mortgages secured over the B Street property were paid out in full in early 2020 in the amount of $373,135.39 using the inheritance and additional funds from the parties’ joint savings. The husband is due to receive the remaining third of the estate of approximately $17,050 pending any tax liabilities remaining to be paid.
The wife’s trial affidavit is silent on the treatment of the husband’s inheritance. I accept that the husband contributed his inheritance for the benefit of the family. This is a significant contribution.
CONCLUSION WITH RESPECT TO CONTRIBUTIONS
Both parties made significant contributions throughout the relationship to the best of their ability. I have found that the wife’s initial contributions were somewhat overstated, which conversely understated the husband’s. In many respects, the wife is effectively inviting the Court to double count matters in her favour, particularly with respect to the H Street property, which I accept was unencumbered and was the former matrimonial home for the majority of the marriage. However, the parties engaged in significant renovations early in the relationship and further renovations later.
Clearly the wife’s initial contribution of the H Street property must be given significant weight, noting that it was the parties’ primary residence for most of their relationship. When the parties moved to Melbourne in or around early 2018, the H Street property was rented out for approximately $59,800 and later up to $70,000. However, the husband’s contributions as discussed above also need to be given real weight.
I find that contrary to the wife’s submissions, the husband made significant financial contributions and non-financial contributions to the H Street property. Whilst I cannot be certain as to the cost of those initial renovations, I find it is more likely on the balance of probabilities that the renovations were more than $165,000, which is consistent with the husband’s evidence and was more detailed than the wife’s in this regard. The husband received an inheritance late in the relationship of $300,000 which the parties applied to the mortgage on the B Street property. I am also satisfied that, again, contrary to the wife’s submissions, the husband made financial and non-financial contributions to the wife’s two children from a previous relationship. Having weighed up all of the myriad of contributions of various types both direct and indirect, financial and non-financial over the course of the parties’ long relationship, I find that the parties’ contributions were equal.
THE JOINT BALANCE SHEET
The parties submitted the following balance sheet at the trial tendered and marked as Exhibit 14:

ASSETS

Ownership Description Wife's value Husband's value

Joint B Street, Suburb C $650,000 $650,000

W H Street, Suburb C $2,350,000 $2,350,000

H BB Bank Acct #...92 $6,043 $6,043

W W Bank Acct # …17 $248,696 $248,696

H E Company Shares (4,640 vested) $246,138 $246,138

H E Company shares (1,010 vested (late 23) $53,716 $53,716

H G Company Shares (5,220 shares) $80,203 $80,203

W E Company Limited (4,720 shares) $249,324 $249,324

W G Company Shares (3,155 shares) $48,195 $48,195

Joint D Company Shares (1,082 shares) $4,276 $4,276

W Motor Vehicle 5 $80,000 $110,995

H Motor Vehicle 1 $141,900 $141,900

H Motor Vehicle 2 plus Motor Vehicle 3 $22,500 $22,500

H S Pty Ltd NK Nominal

H U Pty Ltd, (D Company share ownership - 600 shares) $2,376 $2,376

Total $4,183,367 $4,214,362

ADDBACKS

Ownership Description Wife's value Husband's value

H Bonuses received and retained by Husband (net of tax) $174,629 $0

W Difference in the sale of the Motor Vehicle 1 $0 $19,000

H Sale of shares retained by Husband $140,509 $0

H Assets unilaterally disposed of since separation - Motor Vehicle 4 - $32,000, furniture - $2,100, $34,100 $0

H Interim property settlement $37,000 $0

W Funds withdrawn from #...17 $0 $37,000

H Paid legal fees and disbursements to 4.12.23 $279,787 $279,787

H Tax refunds received and retained $53,434 $0

H Anticipated health fund rebate from dental work NK $0

H Fund retained on purchase of new Motor Vehicle 1 $5,313

W Paid legal fees to 7.12.23 $111,525 $111,525

Total $836,297 $447,312

LIABILITIES

Ownership Description Wife's value Husband's value

H Estimated Capital Gains Tax on E Company 4,650 NA $29,330

H Estimated Capital Gains Tax on G Company Shares NA $18,946

H Estimated Capital Gains Tax E Company 1,015 NA $25,204

H Estimated Capital Gains Tax on B Street NK $53,537

H Estimated Capital Gains Tax on D Company Shares NA $93

H Loan to CC Company $51,572 $51,572

H Anticipated tax liability on S Pty Ltd NA nominal

Total $51,572 $178,682

SUPERANNUATION

Ownership Name of Fund Type of Interest Wife's value Husband's value

H Super Fund 1 Trust Accumulation $633,295 $633,295

W Super Fund 2 Accumulation $26,853 $26,853

Total $660,148 $660,148

TOTAL NET NON-SUPERANNUATION PROPERTY $4,968,092 $4,482,992

TOTAL SUPERANNUATION PROPERTY $660,148 $660,148

TOTAL NET ASSETS (including Superannuation) $5,628,240 $5,143,140

As discussed with Counsel at the trial, I will remove the accounts with small balances from the asset pool.
The wife seeks to have the parties’ superannuation interests included in the asset pool and further seeks that her adjustment come from the non-superannuation pool. As can be seen above, the husband has the overwhelming amount of superannuation and it is a significant sum. The husband seeks that the superannuation be considered separately as is the usual approach referring to C & C [2005] FamCA 429. I do not think it would be just and equitable to require the husband to keep all of his superannuation and receive less of the realisable assets. The very purpose behind the superannuation splitting provisions was to enable the Court to balance the tension between parties needing to have access to current realisable assets so that they can rehouse themselves, but also, have provision for future retirement. It is appropriate in my view to consider the superannuation in a separate pool which gives proper recognition to the nature of the superannuation interests. Whilst the wife is unlikely to engage in paid employment in the future, the husband still has several years of future employment.
The husband seeks an equalisation of the parties’ superannuation. Whilst this appears to be a common default position, I am not bound by that position. In this case, particularly given the wife’s age and evidence as to her inability to obtain employment, she will likely be able to access her superannuation earlier than the husband.
Separate to the asset pool, Exhibit 14 contains the following figures of financial resources available to the husband as jointly provided by the parties:

FINANCIAL RESOURCES

Ownership Description Wife's value Husband's value

H Unvested E Company shares (4550 shares) 238,668 $171,202

H Balance of inheritance $17,050 $17,050

H Long service leave 130,906 $27,517

H Annual leave 28,005 $11,166

Total $414,629 $226,935

The husband has consistently received unvested E Company shares as part of his employment benefits with DD Pty Ltd. They do not vest for three years. They will only vest if he remains employed by DD Pty Ltd. He receives dividend payments twice a year whilst they remain unvested. The husband’s circumstance is similar to that discussed in Beklar & Beklar [2013] FamCA 327.[1] Unless and until it is vested, it is not money that the husband can spend. I will not include this in the amended balance sheet as an asset. It is a financial resource which I will take into account when considering the s.75(2) factors. The parties give different estimates for the unvested shares. The wife does not provide any evidence as to her estimated value of the unvested E Company shares. I will use the husband’s value. The husband refers to a net value for some of them and a gross value for others. The reason for this is unclear. It does not greatly matter as considering it as a financial resource relevant to the consideration of s.75(2) factors, it reflects the uncertainty as to whether they will vest and what their value will be at the time of vesting. The husband will have capital gains tax (“CGT”) to pay when he sells the shares.
[1] See also Beaton & Ballam [2014] FCWA 20.
The balance that the husband expects to receive from his inheritance is a modest amount and it is appropriate to consider that as a financial resource which I will include. There is some uncertainty as to whether there is any tax owing with respect to his late father’s estate.
The husband’s long service leave and annual leave is in a different category. The wife raised a similar argument to that which was argued before Her Honour Judge Jenkins in Petrellis & Petrellis [2022] FedCFamC2F 1375 which the husband included in his list of authorities. In this matter, the wife argued that the Court should take into account the husband’s leave entitlements including sick leave, recreational leave, and long service leave as a financial resource. The husband argued that leave entitlements are only income substitutes and should only be considered as a financial resource if there is evidence that it will be used for another purpose such as studying, establishing a business, or otherwise working.[2]
[2] See Gould& Gould (1995) FamCA 142 and Harrison& Harrison (1996) FamCA 12.
The husband gave evidence that he is taking long service leave this year for three months from early to mid-2024. There is no evidence that the husband has any intention of seeking his annual or long service leave be paid out. In the absence of such evidence, it is not something that should be included in the balance sheet. I accept the husband’s submissions that any payout of the husband’s work-related entitlements upon him either being made redundant or resigning from his position would be treated as part of his taxable income. There is no evidence to support the husband’s leave in the amended balance sheet as a financial resource. It is not necessary to resolve the different values the parties provided.
WHETHER THERE SHOULD BE AN ALLOWANCE FOR CAPITAL GAINS TAX WITH RESPECT TO VARIOUS SHARES AND THE B STREET PROPERTY
Shares

In his trial affidavit, the husband refers to his share entitlements pursuant to the E Company Employee Share Acquisition Plan. He has received shares as part of this plan each year he has been employed by DD Pty Ltd. The shares do not vest until three years after they are allocated. During this three-year period, the husband receives dividend payments twice a year but is not able to deal with the shares in any way. Once the shares have vested, the husband can sell or transfer them as he chooses. If he retains the shares for more than 30 days, he is liable for the CGT. In his trial affidavit he refers to the shares he received and sold from 2018 to 2022. He uses part of the share sale proceeds to pay the PAYG he owes each quarter which is in addition to the income tax deducted from his income by his employer. He says the proceeds of sale of the shares were applied to the benefit of the family including purchasing E Company shares in the wife’s name.
I accept that consistent with his actions in previous years that he sold these shares once vested so as to not incur a CGT liability which is financially prudent.
The husband relies on a report dated late 2023 prepared by EE Company with respect to the income and CGT implications relating to E Company, G Company and D Company shares held by the husband.
The report states that the husband has an unvested share entitlement in E Company of 3,820 shares, and of these 3,824 shares, 1,012 will vest on in late 2023. If the shares are held for more than 30 days after vesting, the shares become subject to CGT.
As the husband’s entitlement of the E Company shares is related to his employment, the assessable employee share scheme (“ESS”) amount will be attributable to the husband regardless of the shares being held by the wife on the day of vesting. As stated by Mr Q of EE Company in his letter dated late 2023, if these shares are transferred to the wife, the husband will lose his entitlement to the dividend amounts and the husband will not personally incur CGT on the transfer to the wife. The husband’s CGT cost base will be transferred to the wife and any liability for any future capital gains tax on the eventual sale under the roll-over relief in s. 126.5 of the Income Tax Assessment Act 1997 (Cth).
In addition, the husband owns 5,220 G Company Shares and 700 D Company Shares and controls 700 D Company Shares as the sole director and shareholder through U Pty Ltd as the trustee for The Darvis Family Trust. The transfer of the D Company shares held by the Darvis Family Trust will trigger CGT for the trust and/or the husband as capital beneficiary, while the wife will acquire the shares for CGT purposes at the market value on the date of the transfer and will be liable for CGT on any future gains made.
The husband seeks to have various other estimated CGT included in the asset pool based on his assertion that he will need to sell these shares in order to fund a three-bedroom property in Sydney which he says will cost an estimated $1,900,000. This is simply the husband’s assertion. He does not provide any evidence. This is roughly $450,000 less than the value of the H Street property. Both parties may need to adjust their expectations. I accept that the husband would like to have a three-bedroom house so that the adult children of the relationship can stay with him just as they could in the wife’s six-bedroom house. I will not make the allowance for the CGT with respect to the sale of shares. It is too uncertain as to whether or not it will be necessary for the husband to liquidate all of his shares.
B Street, Suburb C
There is no dispute that the parties jointly purchased the B Street property in early 2010 for $379,000 as an investment property. Two loans were obtained to complete the purchase. The wife deposes that she obtained a loan of $100,000 in her sole name secured over the H Street property, and a further loan of $302,000 in joint names secured over the title to the B Street property. As the H Street property is in her sole name, it is not surprising that the mortgage using the H Street property as security was also in her sole name. The husband’s trial affidavit is silent as to whom the loans are attributed to. The unit was purchased as tenants in common with 99% to the husband and 1% to the wife.
The parties agree that the B Street property was tenanted until mid-2021. The husband says that during the Covid-19 lockdowns, both parties used the B Street property when they travelled to Sydney.
The husband seeks for the B Street property to be sold with the monies to be attributed firstly towards the expenses with respect to the sale, secondly the payment of all CGT liabilities arising from the sale, and the balance to be paid to himself. The wife seeks that the B Street property be transferred solely into the husband’s name and that he be liable for all liabilities that arise from the sale. The husband gave evidence that he does not want to keep the property as it is close to the wife’s home.
Orders were made by consent on 6 April 2023 for the B Street property to be put on the market for sale within 30 days. The property was not listed for sale until the latter half of 2023.
The husband deposes in his trial affidavit that the B Street property was listed on the market for sale on or around late 2023. The parties received an offer of $655,000 in late 2023. He further says that he was content to accept the offer, however, was advised that the wife would not accept an offer of less than $660,000. The wife does not address this in her trial affidavit but acknowledges that the property has been listed for sale in accordance with advice from the estate agent for $644,000 - $680,000.
In his trial affidavit, the husband deposes that he used an online CGT calculator to obtain an estimate of $53,537 of the CGT on the B Street property in the event that it sells for $650,000. The wife has not attributed a value.
Exhibit 8 was tendered containing an estimate of CGT payable prepared by Mr Q of EE Company in late 2023. The evidence in Exhibit 8 is that in the event the B Street property sells for $650,000, the estimated CGT payable is $59,850.70. Mr Q affirmed an affidavit on 15 November 2023 and was required for cross-examination.
Mr Q confirmed in cross-examination his engagement to provide advice regarding any potential CGT resulting from the sale of the B Street property. He confirmed that he was aware that the property was untenanted since mid-2021 as no income was declared.
He was asked that assuming the property remained untenanted from mid-2021 to the date of the trial, what owner occupier exemptions may apply to any CGT. He stated that he would need further details around the circumstances as the law does not provide a stipulated period where an individual must reside in the property to obtain an exemption that could apply, and that the facts would need to be considered as to whether an exemption would apply. When questioned about a hypothetical scenario where the husband may have been staying at the property periodically since mid-2021 for work as well as staying on a recent fortnightly basis and whether there would be an exemption, he stated that it is a case by case basis reviewed by the Australian Tax Office and that they would review the intention, time spent, address on the electoral roll, and mailing address, and was unable to provide specifics unless this was further clarified.
In written submissions, the husband states that the subsequent sale of the B Street property would result in CGT payable and relies on the advice provided by Mr Q in Exhibit 8. Conversely the wife in written submissions states that given the uncertainty of the evidence in that the husband had failed to make any enquiries with Mr Q prior to trial, and that when cross-examined he was uncertain as to the impact this would have on the amount payable, the evidence of the estimated CGT payable should be rejected and that a lesser amount is likely. The wife knew there would be CGT payable on its sale. It was not only the husband’s responsibility to make those enquiries. Based on the evidence, it appears unlikely that either party will be able to claim the B Street property as their primary residence from 2021.
I am not satisfied that the husband deliberately obstructed the sale of the B Street property by not wanting to put up a sign and undertake work that the agent recommended. It is clear that as with many issues between them, the parties could not agree on whether or not to carry out works on the property to improve the sale price before placing it on the market. The husband says that he had to start travelling to New South Wales regularly for work and stayed at the B Street property. The wife is critical of the husband choosing this instead of staying with family. This is somewhat hypocritical as she unilaterally decided to move back into the H Street property when she could have moved into the B Street property and continued to receive the significant rental income from the H Street property pending the proceedings being finalised. It is appropriate to allow for the CGT on the sale of the B Street property as this is in process.
The simple way of addressing this is to set aside funds to cover the payment, with the excess being distributed to the parties in accordance with the percentages of the property adjusted orders.
On 23 April 2024, I instructed Chambers to write to the parties with respect to the sale of the B Street property. The parties jointly wrote to Chambers on 23 April 2024 confirming that the B Street property had been sold in early 2024, with the settlement of sale occurring in early 2024. The parties received $645,262.69 net which is currently held in the husband’s solicitor’s trust account. I will factor this amount into the amended asset pool. Given this net value, it appears the property sold for more than $650,000 and the CGT may also be higher than estimated. It is therefore appropriate to use the higher figure in Exhibit 8 of $59,850.70.
ADDBACKS
In the joint balance sheet tendered and marked as Exhibit 14, the husband values the addbacks at $447,312 whilst the wife values the addbacks at $836,297.
Both parties agree that the husband’s legal fees and disbursements to 4 December 2023 for the value of $279,787 and the wife’s legal fees to 7 December 2023 for the value of $111,525 be added back to the asset pool. I will order that the paid legal fees be added back of $279,787 and $111,525 totalling $391,312.
Excluding the legal fees to be added back into the asset pool, the wife seeks to be added back $174,629 from the bonuses received and retained by the husband, $140,509 from the husband’s sale of shares, $34,100 from the husband’s sale of Motor Vehicle 4 and furniture, $53,434 from the husband’s tax refunds, $37,000 by way of partial property settlement, and $5,313 retained by the husband from the purchase of the husband’s new Motor Vehicle 1, totalling $444,985.
The husband seeks $37,000 be added back as a result of the wife’s withdrawal of funds, and $19,000 as the difference in the sale of the wife’s Motor Vehicle 1 to her daughter.
Should $37,000 be added back?
The husband seeks $37,000 as a result of the wife’s withdrawal of funds that were held in the wife’s account ending #...17. He seeks this be added back as notionally being in the wife’s possession as she breached order 6 of the Orders made on 6 April 2023.
The wife contends that the funds that were transferred constitutes another example of additional funds being made available to the husband post separation. In the alternative, she submits that the interim property settlement of $37,000 that was owed to the husband is offset by the payment that she had already made in accordance with order 6 of the Interim Orders made on 6 April 2023.
Order 10(a) of the Interim Orders on 6 April 2023 restrains the wife from dissipating funds held in her W Bank account ending in #...17, except to withdraw the interest accruing on the account each month. Further, order 6 was made by consent for the wife to pay the husband $37,000. It is silent as to the mechanics of how this is to be paid.
In the husband’s trial affidavit, he says that on 2 May 2023, the wife’s solicitors provided bank statements indicating that the wife had transferred the amount of $37,000 into the husband’s solicitor’s trust account from her account ending in #...17. The husband’s solicitors received a letter from the wife’s solicitors on 10 May 2023 stating that in the wife’s view, it was always the intention of the wife to make the payment of $37,000 from the account ending in #...17 and that she would not have consented to the order if the funds were to be transferred from a different account.
In the husband’s written submissions, he contends that the wife held funds totalling $397,443 in various accounts and that these funds represented the balance of the savings held by the parties at separation, with $287,051 being held in the account ending #...17, and the remaining $110,392 being held across other bank accounts. The husband contends that the injunction was to restrain the further dissipation of funds held in the account ending in #...17 which was the bank account that contained the largest balance, and that the funds have been completely exhausted, notwithstanding that he has been paying the wife $1,250 per week in interim spousal maintenance.
The husband says that the majority of the payment was applied to his legal fees and therefore has already been taken into account and should not be double counted and yet seeks it to be added back but as against the wife rather than him. His submission with respect to this was quite difficult to follow.
The wife submits that order 6 of the Interim Orders made on 6 April 2023 are not explicit as to the sequence of the transaction and the injunction, and that the orders intended to “even up” the parties’ bank account balances at the time, and that she did not have access to any earnings to fund the interim property settlement. The wife does not provide any evidence to support this contention.
I reject the wife’s submission. I do not find it is appropriate to include the interim property settlement of $37,000 as an addback. The difficulty with the wife’s position that she intended to make the payment of $37,000 from the account ending in #...17 and that she would not have consented to the order if the funds were to be transferred from a different account, is that the Orders the parties consented to do not reflect this. If it was agreed that the wife would pay the $37,000, the order would explicitly state this. This is particularly so given the parties are represented by specialist family law firms. Although the husband seeks that $37,000 be added back as a breach of the interim orders, he concedes in written submissions that these funds were in part applied to meet legal fees which are to be added back. Given this, I do not accept either party’s contention that the $37,000 should be added back.
Should $19,000 from the sale of the wife’s Motor Vehicle 5 and the $5,313 retained by the husband from the purchase of his Motor Vehicle 1 be added back?
The husband seeks $19,000 be added back, which he alleges is the difference in the sale of the wife’s Motor Vehicle 5 to her daughter. The husband deposes that at separation, the wife owned Motor Vehicle 5 registered in her name and that she subsequently purchased a Motor Vehicle in early 2023 for $100,990. The husband contends that a Redbook valuation estimates the Motor Vehicle 5 being valued between $22,500 and $32,100, and that a higher value of $31,000 should be adopted due to the various luxury add-ons and that this was included in a letter from his solicitors to the wife’s solicitors. This Redbook valuation is not in evidence. On 23 April 2023, the husband’s solicitors received a bundle of disclosure documents from the wife’s solicitors indicating that the wife and her daughter Ms O had entered into a car sale agreement dated early 2023 for the sale of the Motor Vehicle 5 at $12,000, resulting in a sale of $19,000 less than the perceived market value. The wife’s financial statement filed on 23 November 2023 indicates that she had disposed of the Motor Vehicle 5 to her daughter to the amount of $12,000. Her trial affidavit is silent as to why the Motor Vehicle 5 was sold for $12,000.
In the wife’s written submissions, she states that the husband’s assertion of the shortfall of $19,000 should be rejected in the absence of any admissible expert evidence. Her trial affidavit is silent with respect to this.
I will not add back the difference of the sale of the wife’s Motor Vehicle 5. Although I am not satisfied that the wife sold the Motor Vehicle 5 for market value, I am unable to make a finding as to the market value. I will not add back the funds sought by the wife of $5,313 with respect to the husband’s purchase of his Motor Vehicle 1.
Should the $174,629 from husband’s bonuses, $140,509 from the husband’s sale of shares, and $53,434 from the husband’s tax refund be added back?
It is the wife’s case that the husband’s expenditure post separation has been excessive and he has deliberately attempted to diminish the matrimonial asset pool available for division between the parties, resulting in a significant disparity between the parties’ respective financial positions post-separation. The wife relies on the principles in AJO & GRO (2005) FLC 93-218 and Trevi & Trevi (2018) FLC 93-858. The wife submits that this is a case where justice and equity requires the exercise of discretionary exercise of power and the adding back of the amounts. Whilst the funds no longer exist, the husband has had access to significantly more funds than the wife and that alternatively, the husband’s expenditure should be taken into account.
The husband opposes the proposition of the wife’s addbacks. The husband prepared a summary pursuant to s.50 of the Evidence Act 1995 (Cth) which was tendered and marked as Exhibit 4 evidencing all deposits into his accounts (including income, bonuses, proceeds of sale of shares) and all expenditure from his accounts for the period from early 2022 to late 2023. The summary breaks down his expenditure in detail. The parties’ children remained living with the husband. Whilst both children worked casually, the husband has also provided some financial support to the children.
Relying on the principle in C & C [1998] FamCA 143, it is the husband’s position that the s.50 summary demonstrates that the monies the wife seeks to be added back were applied by the husband towards day to day living expenses, as well as expenses related to the B Street property and the parties’ adult children which were reasonable in the circumstances. It is common for parents to provide financial assistance to adult children if they are in a position to do so. The husband submits that the evidence as produced in the s.50 summary demonstrates that both parties have used monies and assets that existed at separation to fund their living expenses and should not be added back to the pool, and that the wife could not seek an inclusion of addbacks and an adjustment as it would constitute the effect of double dipping. In written submissions, the husband also pointed out that the wife was seeking a 5% adjustment on the basis of the husband’s alleged “significant liquidation of assets”.
The husband outlines the bonuses he received in his trial affidavit between 2018 and separation and says that the bonuses are not guaranteed and are subject to both individual and company performance. The bonuses received in the last two years are significantly less than the previous years. In cross-examination, it was put to the husband that he received a net bonus of $60,032 in mid-2023. He conceded during cross-examination that he did not comply with order 9 of the Orders made on 6 April 2023 in disclosing this to the wife, and that he had spent the funds for his weekly and daily expenditure and legal fees. I am satisfied that both parties breached orders. This does not have any bearing on the outcome.

In his trial affidavit, the husband states that the sale of his E Company shares valued at approximately $140,510 was put towards the payment of a quarterly PAYG bill, outstanding dental expenses, a car lease, legal fees, and a credit card.
The bonuses the husband has received given that these are clearly included in his taxable income, noting his 2023 return which is part of Exhibit 11, shows his taxable income as $705,895. There are errors in Part N of his financial statement as there are inconsistencies in the same figures. These are minor. Given this together with the husband’s evidence about his expenditure, it is not appropriate to add back his bonuses.
I have considered the husband’s expenditure in his s.50 summary. His expenditure needs to be seen in the context of the parties’ lifestyle and income. His expenditure included considerable financial support for the parties’ adult children. The wife has not made out her case that the husband wasted funds and deliberately reduced the pool. That is a serious allegation, and the evidence falls well short of establishing this. I am not satisfied that the husband’s bonuses, the tax refund and proceeds from the sale of shares should be added back.
Should $34,100 from the sale of Motor Vehicle 4 and furniture be added back?
The husband says that he purchased Motor Vehicle 4 in or around late 2006 which was registered solely in his name which was used by the family and that he was responsible for the insurance costs in addition to the general maintenance costs. The husband states that prior to separation, the parties had agreed for Motor Vehicle 4 to be sold. Motor Vehicle 4 was subsequently sold for $32,000 with the proceeds of sale being deposited into his personal account in late 2022.
As there is no evidence as to how the husband applied the proceeds of sale of Motor Vehicle 4 other than the funds being deposited into his account, I find that the $32,000 should be added back.
In addition, the proceeds from the sale of furniture that the wife seeks to be added back was a result of the husband selling household items when moving out of the FF Street rental in mid-2022 to the value of $2,100, of which $600 from the sale of the chairs was given to Ms L, and $1,500 was applied towards the living expenses and the purchase of replacement furniture. These amounts are minimal. I will not add back the amounts for the sale of furniture, particularly given the wife’s sale of her car to her daughter.
Conclusion with respect to addbacks and the balance sheet
Both parties took unilateral actions post-separation with respect to assets. Both parties have felt free to continue to spend post-separation whilst being critical of the other.
An example of this is the wife selling her car to their daughter and buying Motor Vehicle 5 worth over $100,000. The husband traded in his Motor Vehicle 1 for $95,500 and bought a new Motor Vehicle for $141,900 and took out a loan with CC Company for $52,213.25. The purchase price of the husband’s Motor Vehicle 1 is included in the balance sheet, yet the wife who also bought a car post separation seeks to have her Motor Vehicle included at $80,000 rather than the purchase price. The wife is silent as to why she has valued the vehicle at $80,000 in both her trial affidavit and in written submissions. A bare assertion is not evidence. The wife does not provide any basis for this. Whilst it is well-known that cars depreciate in value as soon as they are driven off the car lot, given the state of the evidence, I will use the purchase price for both parties’ Motor Vehicles.
The wife was very critical of the husband buying a car for $20,000 and spending another $22,000 on it including monthly membership fees. It is his hobby. Given his income, it is not outrageous. In the same vein nor is the wife spending $7,000 on a week’s holiday retreat.
The wife is extremely critical of the husband in her trial affidavit, but she was also very selective in her evidence. For example, the wife complains about the lack of financial support she received after separation from the husband before the interim spousal maintenance orders, but she does not refer to the significant lump sums she had in her control. She also does not address the fact that the husband raised his difficulties in accessing the joint account where his wage was being paid into. She also does not refer to the $1,250 in interim spousal maintenance she received from the husband in Part N of her financial statement sworn on 23 February 2023, creating the impression she has a significant shortfall each week.
The reality is that both parties engaged in expenditure post-separation that reflected the fact they were used to a comfortable standard of living given the husband’s high income and not having a mortgage or rent expenses until they moved to Melbourne in 2018.
I find that both parties have expended funds post separation that are reflective of being used to a comfortable lifestyle. The wife has repeatedly ignored the fact that she had control of significant savings at separation of approximately $670,000 and she has expended a significant portion of those funds, whilst receiving interim spousal maintenance and mostly living in the unencumbered H Street, property.
I find the asset pool to be as follows:

ASSETS

Ownership Description Value

Joint Proceeds of sale of B Street, Suburb C $644,263

Joint D Company Shares (1,088 shares) $4,276

Total $648,539

W H Street, Suburb C $2,350,000

W W Bank Acct # …17 $248,696

W E Company (4,720 shares) $249,324

W G Company Shares (3,152 shares) $48,195

W Motor Vehicle 1 $110,995

W Addback – paid legal fees and disbursements $111,525

Total $3,118,735

H BB Bank Acct #...92 $6,043

H E Company Shares (4,655 vested) $246,138

H E Company shares (1,010 vested (2023) $53,716

H G Company Shares (5,220 shares) $80,203

H Motor Vehicle 2 plus Motor Vehicle 3 $22,500

H Motor Vehicle 1 $141,900

H Addback- Motor Vehicle 4 $32,000

H Addback – paid legal fees and disbursements $279,787

Total $862,287

LIABILITIES

H Capital Gains Tax on B Street $59,850.70

H Loan to CC Company $51,572

Total $111,422.70

TOTAL NET NON-SUPERANNUATION $4,518,138.30

SUPERANNUATION

W Superannuation $26,853

H Superannuation $633,295

Total $660,148

TOTAL ASSET POOL INCLUDING SUPERANNUATION $5,178,286.30

FINANCIAL RESOURCES

H Balance of inheritance $17,050

H Unvested shares $171,202

Total $188,252
CHATTELS

The parties sought to argue about particular personal chattels. The cross-examination of the husband on this point was extensive. It was necessary to place limits on it as the case was only listed for two days which required the parties to file written submissions. Each party refers to items of sentimental value being in the other’s possession.
At the conclusion of the second day of the trial, the parties jointly agreed for the wife to retain the painting and the large heavy wooden ornament, and for the husband to retain the dining table and chairs, and the framed painting. I will make this an order by consent.
The husband further seeks tools which are in the shed at the H Street property. The husband states there are various tools which belonged to his father which he wishes to retain for sentimental reasons, as well as power tools. The wife does not object to providing the tools, provided that the husband does not enter the H Street property. I will order the wife make the tools available to the husband for collection and that the husband collect them at his sole expense.
The husband deposes to a storage unit in Melbourne that he has continued to pay for since 2022. He estimates that 80% of the contents of the storage unit belong to the wife. The wife says that she does not know, nor recall the items in the storage unit. In her amended response filed 23 November 2023, she annexes a list of items of which she can recall and that she wishes to retain including a dining room table and chairs, furnishings and various personal sentimental items. To the extent that these items are not the subject of the agreement referred to above, I will order that the husband make these available at the wife’s sole expense.
I will order that within 28 days, the parties arrange for the other items in the storage unit to be collected.
S.75(2) ADJUSTMENTS
There is a dispute between the parties as to the size of the s.75(2) adjustment in favour of the wife, with the wife seeking an additional 5-10% in her favour.
The parties’ ages and health
The wife is aged 60. Before moving to Melbourne, she previously operated a business from home. The husband accepts that she cannot work as a tradesperson due to various health conditions. The husband says that the wife has not attempted to find work and that she has not provided evidence that she is unable to work at all. The husband conceded that the wife only has a modest earning capacity. He also conceded that she has various chronic health conditions but says these have not prevented her from engaging in various activities.
The wife says she has not been able to work since 2018 due to her health conditions. The wife relies on the affidavit of Dr P filed 28 November 2023. Dr P has been the wife’s General Practitioner since she returned to Sydney. In the letter annexed to her affidavit dated 19 November 2023, she refers to the wife having various health conditions. She has had several surgeries and has attended and been referred to specialists. Dr P says that these various conditions detrimentally affect her quality of life, and her ability to work given the number of appointments she needs to attend and the symptoms she experiences.
The wife submits that the evidence provided from Dr P which was not challenged through cross-examination, demonstrates that the wife has suffered from chronic and significant health issues post-separation that have required ongoing medical treatment from multiple medical practitioners. Dr P concludes in her letter that:
She will never be able to work as a [tradesperson] ever again. Furthermore, the likelihood of her succeeding in alternative employment is also low as the demands of her illness and the commitment required by [Ms Darvis] to manage her symptoms and engage in the healthcare system is all consuming and extremely demanding.
I accept that moving to Melbourne meant the wife had to close her business. It is clear from both parties’ evidence that the parties’ marriage significantly deteriorated after they moved to Melbourne in 2018. They were living in a new city, the wife had moved away from her older two children, and the husband was working in a senior position.
The husband did not cross-examine Dr P. Given this and the wife’s age, I am not satisfied that the wife will be able to secure employment in the future.
The parties’ employment
The husband is employed full time by DD Pty Ltd as a professional. He commenced employment at DD Pty Ltd as a professional in 2003 and was promoted in 2017 with the family moving to Melbourne in 2018.
He deposes that he is currently earning a fixed annual remuneration of $402,388.85, including superannuation of $27,398.36 for the year ending 30 June 2024. In the previous year of 2023 his gross package was $588,192 which included a bonus payment of $114,594.81 net in addition to the base salary, $110,887 from employee shares, $23,331 in dividends from E Company shares and $5,217 in dividends from shares held in his name. The husband has received shares in E Company since 2004 due to an Employee Share Plan and says that the bonuses are dependent on both individual performance and company performance. In cross-examination, the husband confirmed that there are short-term incentives of the bonus, and long-term incentives of the shares.
The husband is keen to convey an impression of his future job prospects being uncertain and that if he loses his employment with DD Pty Ltd, he does not think that he would be able to obtain employment with a similar income due to lack of qualifications. This is speculation not evidence. The husband described his future at DD Pty Ltd as being uncertain and referred to having a review meeting in early 2024 about his performance. The husband’s performance reviews were tendered for the years 2021-2023 forming part of Exhibit 5 which were largely positive. The main criticism was in the most recent review which was referring to the husband considering the tone of his language. Whilst the husband expressed concerns about being made redundant and referring to there being frequent restructures at DD Pty Ltd, the reality is that the husband has been employed with DD Pty Ltd in various roles for some 20 years. There has been no application to reopen in respect of the husband’s employment. I assume there has not been a significant change to the husband’s employment.
As mentioned above, at the time of cohabitation, the wife owned and operated her own business however since separation, she has been unable to return to work due to various health issues, as well as having no employment skills in any other area. It is the wife’s position that she had sacrificed her career for the purpose of the husband furthering his career.
The wife deposes that her only source of income is the access to funds from her account ending in #...30, the monthly interest from her account ending in #...17 pursuant to order 10 of the Interim Orders made on 6 April 2023, interim spousal maintenance, and dividend payments from her E Company and G Company shares.
Obligation to support other people
The husband refers to the two adult children of the relationship living with him since separation and the support he provides them. He refers to his intention to assist them with rental expenses. Ms L is now 22 and has completed tertiary education and has commenced full time employment. Both parties acknowledge that Mr M has had some mental health difficulties and has been engaging in psychological support. Mr M’s health has improved and is he is currently enrolled to commence further studies and has secured some part-time work. Any obligation that the husband feels he has to provide financial support to the parties’ two adult children is a moral one and not a legal obligation. This applies equally to the wife. The reality is, that both the parties may need to temper their expectations about the lifestyle they are able to maintain in light of their changed financial circumstances post separation.
Conclusion with respect to s.75(2) factors
The reality is that the husband has a significant earning capacity whereas the wife does not. Given his age, it is reasonable to assume that he will continue in employment for several years. He also has financial resources that the wife does not particularly with respect to the unvested E Company shares. I also acknowledge that if he sells his shares, he will incur CGT and the exact amount is unknown. The timing of this will be a matter for him. The husband will also have a significant amount of cash from the sale of the B Street property. It is by no means certain that he will have to liquidate his various shareholdings in order to purchase a property.
I find there should be an adjustment of 10% pursuant to s.75(2) factors in the wife’s favour.
CONCLUSION WITH RESPECT TO PROPERTY
Both parties were largely unsuccessful with respect to their arguments for addbacks. Both parties were somewhat hypocritical in their criticisms of the other in this regard. The wife’s argument that the husband’s expenditure has been excessive and a deliberate attempt to diminish the pool must be rejected. The wife conceded in cross-examination the fact that at separation she had a term deposit of $600,000 as well as $78,000 in a savings account. She does not make any reference to these sums or accounts in her financial statement. The wife is not assisted by the fact that she failed to include the interim spousal maintenance she received each week. In addition to other accounts in her sole name and for the most part during the period of post separation, the wife was receiving interim spousal maintenance from the husband and living in an unencumbered property. She also expended significant sums which in part I accept were for legal fees and purchasing a car, but it is not only explained by that. Even allowing for the costs of moving back to Sydney, the evidence falls well short of establishing the wife’s case for addbacks. This is particularly so, where the wife clearly had access to and used significant funds in addition to the interim spousal maintenance received. With respect to the $37,000, there is no evidence to support the wife’s assertion that this was meant to “even up” their accounts. The wife’s figures, with respect to the funds that she has had access to post separation, as referred to in her written submissions, simply do not add up, particularly given that she also includes the interim spousal maintenance payments made. I do not accept the wife’s assertion in cross-examination that she has been careful with money post separation.
The wife’s submissions stressing that she is solely reliant on maintenance or depleting her capital, whereas the husband can meet his expenses and to continue to accumulate superannuation without depleting his capital resources, ignores the differences in their positions. The wife is living in an unencumbered six-bedroom house, whereas the husband will need to purchase a home. There is no evidence to support the wife’s submissions that if she were to rent out the H Street property, there would be limited financial benefit as she would have to rent elsewhere. It is clear that the wife is attached to the H Street property, stating in her written submissions that: “… a house which she has owned for approximately 33 years, and which has been her home, since well prior to the parties’ relationship”. The wife must face the reality that she may need to sell the H Street property.
The wife’s written submissions are consistent with the tenor of the extensive cross-examination of the husband. It is hypercritical of the husband and ignores omissions and the lack of supporting documents in her own case. I decline to make adverse credit findings about either party. Both parties’ evidence was clearly coloured by their own perspectives with some bitterness as to the breakdown of the marriage, but the parties otherwise did the best they could to recollect information that in some instances, dates back decades, and the fact that either party was able to find documents dating back to the early 2000s is fortunate as in many instances, parties do not have the benefit of documents and do their best to recall from their memory.
I also reject the wife’s submissions, (which again are over-stated) that the husband is not able to access his superannuation in contrast to the wife is not a relevant consideration. The wife has not explored her eligibility to accommodate super given her age and unemployment. It is necessary to look at not only the parties’ incomes, but also the asset position. This is something that the wife repeatedly seeks that the Court ignore. This is compounded by the fact that the wife has failed to make enquiries of a financial advisor as to the best way to manage her assets to provide for the future. This is also somewhat inconsistent with her view that she managed the parties household finances. It is reflective of the wife’s fixed and unrealistic position throughout the trial. I find the adjustment that the wife seeks of 70-75% overall is outside the range.
I am satisfied that it is just and equitable to make property orders adjusting the parties’ currently existing legal and equitable interests as to 60% to the wife and 40% to the husband. This includes the 10% adjustment to the wife pursuant to s.75(2). I find it is just and equitable for the same percentage split to apply to the parties’ superannuation entitlements.

The wife currently has in her possession:

H Street, Suburb C $2,350,000

W Bank Acct # …17 $248,696

E Company (4,735 shares) $249,324

G Company Shares (3,155 shares) $48,195

Motor Vehicle 1 $110,995

Addback - paid legal fees and disbursements $111,525

Total: $3,118,735

60% of the non-superannuation interest is $2,710,882.98 and 40% of the non-superannuation interest is $1,807,255.32.
The wife currently has $3,118,735 of the parties’ non-superannuation interests in her possession. The husband has $750,864.30 of the net non-superannuation assets which includes the CGT on the sale of the B Street property and his car finance.
In order to receive 40% of the asset pool, the husband requires $1,056,391.02 more. To achieve this, I will order that he will receive the proceeds of sale of the B Street property and the joint D Company shares owned by the parties totalling $648,539. The wife will need to transfer a further $407,852.02 worth of assets to the husband.
The husband’s proposed orders seek that he transfers his shares to the wife and that she transfers her cash to him. Presumably he seeks these orders to reduce CGT as CGT forms part of a person’s taxable income. The wife would incur less of a CGT liability than the husband. This would be convoluted and does not work on the current pool. I will order the wife transfer to the husband her E Company shares worth $249,324 and a further $158,528.02 in cash. On the figures, this leaves the wife with some cash of approximately $90,167.98 in her bank account.
To reflect a 60% split of the superannuation pool, the wife will receive $396,088.80 in superannuation with the husband to retain $264,459. With his income, the husband will be able to quickly increase his superannuation balance. He will not be able to access his superannuation for several years whilst he is still working. He is 55 and in good health.
Both parties walk away with a mix of cash, superannuation, and other assets. I am satisfied that the outcome is just and equitable.
MAINTENANCE
Now that I have determined the property adjustment, I turn to the wife’s application for maintenance. It is necessary to determine the property adjustment orders first as depending on the outcome this may result in there no longer being a need for maintenance.[3] The husband’s written submissions correctly summarise the relevant principles applicable to maintenance applications.
[3] See Clauson & Clauson [1995] FamCA 10.
The wife must establish that she meets the threshold in s.72 of the Family Law Act. I accept that given her age and health the wife is unlikely to return to paid employment.
It is then necessary for me to consider the relevant provisions in s.74 and s.75(2) of the Family Law Act. In determining whether or not the wife has the means to support herself from her own resources, I am not fettered by the pre-separation standard of living the parties enjoyed. I must consider what is reasonable in the circumstances.
The husband currently pays interim spousal maintenance of $1,250 a week. In addition, he continues to pay private health insurance for the wife as well as the parties’ children, pet insurance for the wife’s dog and storage fees for the storage unit in Melbourne, which the husband estimates most of those items are the wife’s.
In considering whether or not the wife can adequately support herself, it is not simply a matter of looking at her income but also her property and financial resources. I have outlined these above.
The wife’s submissions, particularly with respect to the discounting of the lump sum payment of $780,000, do not make sense. I have not made a number of findings sought by the wife including with respect to initial contributions, post separation expenditure of the parties and issues of credit.
Both parties are significantly apart with respect to what the sum of spousal maintenance should be. The husband says that the wife should receive $100,000 by way of lump sum maintenance, whereas the wife says she should receive $1,500 per week indefinitely or in the alternative, $780,000 by way of lump sum maintenance (equivalent to 10 years of payments). The husband would prefer to pay a lump sum rather than continue to pay periodic maintenance as he wants to borrow to purchase another property. Generally, it is preferable for maintenance to be paid periodically reflecting the fact that it is a provision of income when a person is asset rich but income poor, or where there is concern that there will be difficulties with enforcement with respect to periodic payments a lump sum is preferable. There are also circumstances where in a property settlement, part of a person’s entitlement is characterised as lump sum maintenance rather than periodic maintenance in order for that person to keep the family home on that basis.
The husband’s position
In written submissions, the husband submits that the wife has the ability to adequately support herself from her own resources and relies on the principles in Eliades & Eliades (1981) FLC 91-022. In summary the husband submits that:
·The medical evidence filed on behalf of the wife that she is unable to return to work does not support a finding that she is unable to find alternative employment;
·Her proposition of her mental health as a barrier to employment is unsupported by evidence;
·While the wife’s age may mean that employment opportunities are limited, there is no evidence to support a finding that the wife has no capacity for any form of employment;
·Despite either party’s case, the wife will retain an unencumbered home, an unencumbered car, and a cash payment of $100,000;
·The wife has not sought financial advice with respect of her financial options moving forward;
·Despite having a rental income from the H Street property of $70,000, the wife elected to live at the property and forego this source of income; and
·The wife has the ability to invest and access her superannuation entitlements to meet her expenses. If she is unable to access her superannuation immediately, she still has significant assets in her control.
With respect to the husband’s assertion of the wife deriving rental income from the H Street property, she would of course incur rental expenses which would reduce the income of $70,000. The wife could also sell the H Street property and buy a smaller property which would give her more funds to derive an income from.
In being able to reasonably support the wife, the husband relies on his financial statement filed on 16 November 2023 to reflect his current financial circumstances. It is the husband’s position that his personal expenses will change in the future as he intends to return to Sydney and purchase a home, and that periodic spousal maintenance will affect the prospects of securing borrowings. He also relies on the uncertainty of his ongoing employment as a factor against an order for periodic spousal maintenance.
The wife’s position
The wife submits that the husband’s intention to financially assist the parties’ two adult children and contribute towards the payment of their housing should be taken into account in relation to the appropriateness of the wife’s claim and the husband’s capacity to provide ongoing spousal maintenance. The husband is in receipt of a very significant income that has increased since separation. She submits that she is wholly reliant on spousal maintenance, or the depletion of capital, to pay for her day-to-day expenses, whilst the husband is able to meet all of his expenses from his earnings whilst accumulating superannuation, and without the need to deplete his capital resources. The wife’s submissions ignore the fact that the husband needs to rehouse himself and that she seeks maintenance, whilst also seeking to retain a six-bedroom home. Her submission that her children are arguably better able to financially support themselves than she can, is also disingenuous, as again, it ignores the significant capital that she has because she wants to retain a six-bedroom home.
Further, the wife’s submission that she draws on assets to financially support herself whilst the husband continues to earn a significant income and accumulate superannuation should be rejected. The wife submits that she has been unemployed since 2018 due to her age and health issues, and that she is unlikely to return to work in the future. Again, this is not entirely accurate. The wife closed her business to move to Melbourne. There is no evidence to suggest that the wife would not have continued her business if they stayed in Sydney.
The wife submits that the husband’s intention to utilise any property settlement to purchase a home in Sydney is irrelevant and that there is no expert evidence to support this. This position is also contrary to the husband’s position on financially assisting the parties’ two adult children in securing rental accommodation in Melbourne and negating the need for him to have a three-bedroom home in Sydney. I accept the lack of evidence as to the cost and need for a three-bedroom home but observe it is reasonable for the husband to wish to buy a property for himself. Indeed, given the parties’ ages and positions it is reasonable for each of them to want to own a home. Both may have to temper their expectations as to what they can reasonably afford in the circumstances.
Conclusion with respect to maintenance
The H Street property is a six-bedroom house valued at $2,355,000. The wife is living in the property and is keen to remain there. The property was initially rented for approximately $59,800 and later up to approximately $70,000 per year whilst the parties lived in Melbourne. I accept that the wife is sentimentally attached to the home. It is hard to justify the wife retaining a six-bedroom home which generated a significant rental income when the wife is seeking significant maintenance.
The wife conceded that she has not obtained any financial advice. In cross-examination, the wife conceded that she had not considered either downsizing or renting out the H Street property. This would have been prudent given her age and health complications. I accept the husband's submission that of course the wife is entitled to live where she likes, but the nature of the assets, liabilities, and financial resources she has is relevant for the consideration of maintenance.
The wife seeks to increase the maintenance she receives from $1,250 a week to $1,500 a week, being $78,000 a year. I am not satisfied that the maintenance figure should be increased. This was barely addressed at trial.
The wife’s position with respect to lump sum maintenance is unreasonable and unrealistic. The husband accurately points out that she makes no discount for the benefit of her receiving 10 years’ worth of maintenance upfront in a lump sum.
I am obliged to consider the parties’ respective financial positions as a result of the property adjustment orders. As a result of those orders, the wife will receive $903,627.66 more than the husband of the non-superannuation pool, and $131,629.80 more than the husband in superannuation which she likely will be able to access earlier than the husband. With appropriate financial planning and advice, she will be able to provide an income stream for herself.
I consider it appropriate to adopt the husband’s position and order that the wife receive $100,000 characterised as lump sum maintenance. This represents well over a year’s worth of maintenance which will enable her to obtain financial advice and organise her finances. The practical effect is that it will reduce the cash payment she needs to make to the husband. I am satisfied that this is proper in all of the circumstances. The effect of this is that the payment the wife needs to make to the husband will be reduced by $100,000, making the value of the cash payment to the husband $58,528.02.
I make the orders at the beginning of these reasons.

I certify that the preceding one hundred and ninety-one (191) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Harland.
Associate:
Dated: 9 May 2024

File number(s):	MLC 13287 of 2022
Judgment of:	JUDGE HARLAND
Date of judgment:	9 May 2024
Catchwords:	FAMILY LAW – property - long marriage – addbacks – consideration to be given to initial contributions - whether there should be an adjustment pursuant to s.75(2) - wife seeking periodic spousal maintenance - whether or not there should be an order for lump sum or periodic spousal maintenance
Legislation:	Evidence Act 1995 (Cth) s.50 Family Law Act 1975 (Cth) ss. 72, 75(2), 77A, 79(1), 79(2), 79(4), 90XE, 90ZXA , 90XT(1)(a) Family Law (Superannuation) Regulations 2001 Part VI Income Tax Assessment Act 1997 (Cth) s. 126.5
Cases cited:	Beaton & Ballam [2014] FCWA 20 Beklar & Beklar [2013] FamCA 327 C & C [1998] FamCA 143 C & C [2005] FamCA 429 Clauson & Clauson [1995] FamCA 10 Eliades & Eliades (1981) FLC 91-022 Gould & Gould (1995) FamCA 142 Harrison & Harrison (1996) FamCA 12 AJO & GRO (2005) FLC 93-218 Petrellis & Petrellis [2022] FedCFamC2F 1375 Stanford v Stanford (2012) 247 CLR 108 Trevi & Trevi (2018) FLC 93-858
Division:	Division 2 Family Law
Number of paragraphs:	191
Date of last submission/s:	26 February 2024
Date of hearing:	7, 8 December 2023
Place:	Melbourne
Counsel for the Applicant	Ms Fisken
Solicitor for the Applicant	Forte Family Lawyers
Counsel for the Respondent	Ms Petrie
Solicitor for the Respondent	Watts McCray

MLC 13287 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	MR DARVIS Applicant
AND:	MS DARVIS Respondent

ORDER MADE BY:	JUDGE HARLAND
DATE OF ORDER:	9 MAY 2024

ASSETS
Ownership	Description			Wife's value	Husband's value
Joint	B Street, Suburb C			$650,000	$650,000
W	H Street, Suburb C			$2,350,000	$2,350,000
H	BB Bank Acct #...92			$6,043	$6,043
W	W Bank Acct # …17			$248,696	$248,696
H	E Company Shares (4,640 vested)			$246,138	$246,138
H	E Company shares (1,010 vested (late 23)			$53,716	$53,716
H	G Company Shares (5,220 shares)			$80,203	$80,203
W	E Company Limited (4,720 shares)			$249,324	$249,324
W	G Company Shares (3,155 shares)			$48,195	$48,195
Joint	D Company Shares (1,082 shares)			$4,276	$4,276
W	Motor Vehicle 5			$80,000	$110,995
H	Motor Vehicle 1			$141,900	$141,900
H	Motor Vehicle 2 plus Motor Vehicle 3			$22,500	$22,500
H	S Pty Ltd			NK	Nominal
H	U Pty Ltd, (D Company share ownership - 600 shares)			$2,376	$2,376
Total	$4,183,367	$4,214,362
ADDBACKS
Ownership	Description			Wife's value	Husband's value
H	Bonuses received and retained by Husband (net of tax)			$174,629	$0
W	Difference in the sale of the Motor Vehicle 1			$0	$19,000
H	Sale of shares retained by Husband			$140,509	$0
H	Assets unilaterally disposed of since separation - Motor Vehicle 4 - $32,000, furniture - $2,100,			$34,100	$0
H	Interim property settlement			$37,000	$0
W	Funds withdrawn from #...17			$0	$37,000
H	Paid legal fees and disbursements to 4.12.23			$279,787	$279,787
H	Tax refunds received and retained			$53,434	$0
H	Anticipated health fund rebate from dental work			NK	$0
H	Fund retained on purchase of new Motor Vehicle 1			$5,313
W	Paid legal fees to 7.12.23			$111,525	$111,525
Total	$836,297	$447,312
LIABILITIES
Ownership	Description			Wife's value	Husband's value
H	Estimated Capital Gains Tax on E Company 4,650			NA	$29,330
H	Estimated Capital Gains Tax on G Company Shares			NA	$18,946
H	Estimated Capital Gains Tax E Company 1,015			NA	$25,204
H	Estimated Capital Gains Tax on B Street			NK	$53,537
H	Estimated Capital Gains Tax on D Company Shares			NA	$93
H	Loan to CC Company			$51,572	$51,572
H	Anticipated tax liability on S Pty Ltd			NA	nominal
Total	$51,572	$178,682
SUPERANNUATION
Ownership	Name of Fund		Type of Interest	Wife's value	Husband's value
H	Super Fund 1 Trust	Accumulation		$633,295	$633,295
W	Super Fund 2	Accumulation		$26,853	$26,853
Total	$660,148	$660,148
TOTAL NET NON-SUPERANNUATION PROPERTY				$4,968,092	$4,482,992
TOTAL SUPERANNUATION PROPERTY				$660,148	$660,148
TOTAL NET ASSETS (including Superannuation)				$5,628,240	$5,143,140

FINANCIAL RESOURCES
Ownership	Description	Wife's value	Husband's value
H	Unvested E Company shares (4550 shares)	238,668	$171,202
H	Balance of inheritance	$17,050	$17,050
H	Long service leave	130,906	$27,517
H	Annual leave	28,005	$11,166
Total	$414,629	$226,935

ASSETS
Ownership	Description	Value
Joint	Proceeds of sale of B Street, Suburb C	$644,263
Joint	D Company Shares (1,088 shares)	$4,276
Total	$648,539
W	H Street, Suburb C	$2,350,000
W	W Bank Acct # …17	$248,696
W	E Company (4,720 shares)	$249,324
W	G Company Shares (3,152 shares)	$48,195
W	Motor Vehicle 1	$110,995
W	Addback – paid legal fees and disbursements	$111,525
Total	$3,118,735
H	BB Bank Acct #...92	$6,043
H	E Company Shares (4,655 vested)	$246,138
H	E Company shares (1,010 vested (2023)	$53,716
H	G Company Shares (5,220 shares)	$80,203
H	Motor Vehicle 2 plus Motor Vehicle 3	$22,500
H	Motor Vehicle 1	$141,900
H	Addback- Motor Vehicle 4	$32,000
H	Addback – paid legal fees and disbursements	$279,787
Total	$862,287
LIABILITIES
H	Capital Gains Tax on B Street	$59,850.70
H	Loan to CC Company	$51,572
Total	$111,422.70
TOTAL NET NON-SUPERANNUATION		$4,518,138.30
SUPERANNUATION
W	Superannuation	$26,853
H	Superannuation	$633,295
Total	$660,148
TOTAL ASSET POOL INCLUDING SUPERANNUATION		$5,178,286.30
FINANCIAL RESOURCES
H	Balance of inheritance	$17,050
H	Unvested shares	$171,202
Total	$188,252