Dawkins and Reece

FAMILY COURT OF AUSTRALIA

DAWKINS & REECE

[2015] FamCA 28

FAMILY LAW – PROPERTY – de facto relationship – where the de facto wife runs a successful business – where the de facto husband asserts he worked in that business – whether any order should be made under s 90SM of the Family Law Act 1975 (Cth) – Where there is significant dispute as to the date of cohabitation, the contributions made by the de facto husband to the de facto wife’s business and to renovations on the de facto wife’s property – assessment of contributions – Where it is found that no adjustment should be made in respect of s 90SF(3) considerations – Just and equitable outcome that no adjustive order be made

Family Law Act 1975 (Cth)

Bevan & Bevan (2013) FLC 93-545
Chorn & Hopkins (2004) FLC 93-204
Kennon & Kennon (1997) FLC 92 757
Omacini (2005) FLC 93-218

Stanford & Stanford (2012) 247 CLR 108

APPLICANT:

Ms Dawkins

RESPONDENT:

Mr Reece

FILE NUMBER:

CAC

559

2012

DATE DELIVERED:

27 January 2015

PLACE DELIVERED:

Sydney

PLACE HEARD:

Canberra / Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

20-22 May 2013 (Canberra);
6 June 2013 (Sydney)

Last written submissions received 19 January 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Miller

SOLICITOR FOR THE APPLICANT:

Farrar Gesini Dunn

COUNSEL FOR THE RESPONDENT:

Mr Hodgson

SOLICITOR FOR THE RESPONDENT:

Nicholl & Co

Orders

Pursuant to s 90SM Family Law Act 1975 (Cth) an order be made that:
1.1.Within a period of two (2) months from the date of these orders, the wife pay to the husband the sum of $132,429.
1.2.Each party be solely entitled to the exclusion of the other to all property, assets, chattels and superannuation in their respective names or possession as at the date of these orders and that each party indemnify the other in relation to any debt associated with any asset that is kept by each of them respectively.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dawkins & Reece has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: CAC 559 of 2012

Ms Dawkins

Applicant

And

Mr Reece

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

The parties lived in a de facto relationship for a period of about five years. Both parties had significant assets at the commencement of cohabitation. The de facto wife (“the wife”) owned and operated, and continues to own and operate a hospitality business. The de facto husband (“the husband”) was in full time employment with a government agency, and had substantial superannuation entitlements.
In December 2005 the husband provided the wife from his savings an amount of $47,959.41, which was used to reduce the wife’s debt to the Commonwealth Bank secured against her property at I Street, Suburb C (“the Suburb C property”).
At the date of cohabitation, the husband moved into the wife’s Suburb C property.
From 2006 the wife made contributions to the husband’s superannuation fund totalling an amount of approximately $305,113.
During the whole period of the relationship, the parties did not have joint assets, joint bank accounts, joint credit cards or joint loans. During the time the parties were together, the wife’s hospitality business expanded and increased substantially in value.
In 2006 the husband received the proceeds of a property settlement with his wife from a previous marriage and invested it in shares.
Renovations were carried out to the Suburb C property during the period of time the parties were together.
The wife also bought and sold a number of properties during the time the parties were together.
The parties substantially agree on the assets and liabilities that existed at the date of the hearing. Both parties seek that certain assets be “added back” onto the agreed balance sheet. The net assets are in the approximate sum of $3,826,000, with the wife holding 73.5 per cent of those assets and the husband holding 26.5 per cent of those assets.
An issue arises as to whether or not any order should be made under s 90SM of the Family LawAct 1975 (Cth) (“the Act”) (see Stanford & Stanford (2012) 247 CLR 108). Both parties seek that I make an adjustive order.
There is significant dispute between the parties in relation to the following matters:
11.1.The date of cohabitation;
11.2.The contributions that the husband made to the wife’s business;
11.3.The contributions that the husband made to the renovations on the wife’s property.

THE APPLICATIONS OF THE PARTIES

The wife seeks a splitting order in relation to the husband’s superannuation to recover the amount of $305,113. The wife otherwise seeks that each party retain the assets and liabilities in their current names and possession.
During the hearing the husband sought, on an overall basis, that the assets be divided 55 per cent to the wife and 45 per cent to himself, which would necessitate the wife raising funds to pay the husband a significant sum. In written submissions forwarded by counsel for the husband out of time on 2 January 2015, the husband seeks a 60/40 division in favour of the wife. The husband calculates that in order to achieve this division, the wife would have to pay him the sum of approximately $523,000.

DOCUMENTS RELIED UPON

The documents the parties relied upon are listed in Schedule 1.

SHORT HISTORY

The husband was born in 1949 and is now aged 65 years old.
The wife was born in 1967 and is now aged 47 years old.
The wife has two children from a previous relationship; Ms A born in 1985 and now aged 29 years old, and Mr A born in 1987 and now aged 27 years old.
The husband has five children from previous relationships.
The parties commenced cohabitation in 2005. The husband asserts cohabitation commenced in February 2005, the wife asserts it commenced December 2005. The parties did not marry.
The parties separated in May 2011. They cohabited for five and a half years on the wife’s version, and just over six years on the husband’s version.

CREDIT

The wife

Counsel for the wife submitted, and I accept, that the wife was a good credible witness who was endeavouring to, and did tell the truth in relation to the matters about which she was asked. She generally presented as a witness who had a good recollection of the matters which were the subject of her affidavit evidence and the matters raised with her in cross-examination.
The husband submits that the wife sought to demean and minimise contributions he made to EE Business (“the business”). The wife’s recollection of the husband’s contributions to the business goes to a central factual issue in the case. My findings in relation to that issue rely to some degree on my overall findings in respect of credit.
During the hearing, counsel for the husband drew attention as to the inadequacies of the original statement of financial circumstances that the wife swore on 30 March 2012. That document failed to properly account for the wife’s personal expenditure and did not contain (as the updated financial statement does), any amount in item 32, which is quoted as “nil”. It is clear that the wife did have personal expenditure in her own right. Part M of the 2012 document does not contain any detail in relation to the sale of any property. The wife sold two properties, D Street, Suburb F and Property 1, G Street, Suburb H, after the separation. There was also a sale and movement of shares after the separation. The wife agreed that those omissions were oversights but said that she had relied upon her accountant and her lawyer to get the document correct. It may be that her professional advisers have not been very diligent in assisting her in the preparation of her financial statement, but at the end of the day it is a matter for the wife to make sure the document is correct in its detail and it does not do her any credit that it is not. I do take into account however the fact that the wife was working extremely long hours in her core business and did have serious worries in relation to her daughter’s health around about the time she was swearing her document.
The wife agreed that in her original financial statement she did not disclose the existence of her interest in a time share in Bali, which she then said she went to the trouble of getting valued.
There is no overall suggestion that the wife has been reluctant in disclosing financial material. In fact, during her oral evidence she freely volunteered details of recent contractual arrangements that had her spending $870,000 on re-fitting J Shopping Centre.
As discussed below, I was unable to accept the wife’s memory as to the length of the period the husband delivered produce to the wife’s business.

The husband

Counsel for the husband submits that the husband readily made concessions but I am unable to accept that submission.
The husband, during cross-examination, evinced a poor recollection of issues about which he was asked and often answered “don’t recall” or “unsure”. Counsel for the husband in written submissions conceded that the husband was vague and at times confused during the course of his oral evidence.
On some occasions during cross-examination, the husband gave inconsistent evidence. For example, when asked whether he had said to the wife that “[Mr K] is jealous that you pay for things and buy everything for me”. The husband twice denied that he had said words to that effect, but said, “You’ve got to know the man [Mr K]. He is full of stirring and banter… And he wouldn’t – that would be banter between [Mr K] and myself.” The husband later said “Sorry, I take that back. I can’t remember saying that actually.”
During his oral evidence, the husband in response to a question said, “My memory’s ...”. His sentence then trailed off and I was unable to hear what the husband said. The husband was unable to inform me as to what he had said. I got the clear impression that he was about to indicate that his memory was poor but pulled himself up when he realised the import of what he was saying.
In paragraph 16 of his affidavit filed 14 May 2013, the husband denies that when travelling, the wife paid for accommodation and provided all spending money and he went on to say in paragraph 16 that, “when we travel domestically I contributed to the cost of food, accommodation, spending money and entertainment’. The husband agreed during cross-examination that that statement was not true.
The husband gave inconsistent evidence in relation to the date of cohabitation, originally asserting it was in 2004, when as I find below, it was at the end of 2005.
The husband originally incorrectly estimated that he received $300,000 by way of the proceeds of a property settlement with his former wife.
Counsel for the husband was critical of evidence given by Mr L in his affidavit sworn 14 May 2013, saying that the evidence in his affidavit that he “partially rewired and installed” new electrical fittings throughout the Suburb C property, was very carefully phrased. The submission was made that Mr L’s evidence did not contradict that of the husband’s as to the husband having “some involvement” in the electrical work carried out at the Suburb C property. I am unable to accept that submission. The husband’s statement that “I performed all the electrical wiring” at the Suburb C property proved not to be accurate having regard to the evidence of Mr L, electrician, which I accepted.
During the hearing, when documents were called upon, the husband said words to the effect “my filing system isn’t great”.
Unless I indicate otherwise, where the evidence of the wife and the husband directly conflicts, I prefer the evidence of the wife.

Other witnesses

The husband’s sister, Ms B, gave evidence in the re-opened case. It is submitted by counsel for the wife that evidence given by Ms B in respect of accounts she and the husband hold in their names, holding funds belonging to their mother, should not be accepted. It is submitted by counsel for the wife, that Ms B’s use of some of the funds in the account which she says has funds held for her mother (although now repaid) is inconsistent with her assertion that the funds are those of her mother’s. I do not accept this submission. I found Ms B to be a straightforward witness.
Counsel for the husband submitted that the evidence of the wife’s witnesses was general and that it is not surprising that these witnesses supported the wife’s case. Counsel for the husband particularly points to the evidence of Mr M (paragraph 7 of his affidavit sworn 10 April 2013) which suggests that for 90 per cent of the time the husband would return to the business and consume morning tea, lunch, afternoon tea or had coffee. That evidence is given in circumstances where the wife does not suggest that the husband attended the business so frequently, particularly in the afternoons.
I deal below, in more particular detail, with the evidence of the wife’s witnesses. I have generally accepted that most of the witnesses called by the wife were credible and their evidence should be accepted. Unless I specifically find otherwise, their evidence was consistent with that of the wife. Each witness, I accept, was doing the best that they could to provide a truthful recollection of events some time ago.

DATE OF COHABITATION

The evidence about the date of cohabitation is murky.
The wife says the parties commenced cohabitation in December 2005. She connected her recollection as to the date of cohabitation to arguments the parties had on an overseas trip to the USA in September or October 2005, about the wife’s son moving back into the Suburb C property. The wife denied that the parties had been living together for six or seven months before that trip. The wife also said that her mortgage was paid out one or two weeks after the parties commenced cohabitation.
The wife did agree that the date of cohabitation was connected to the date of the demolition of the property the husband had been residing in, that was owned by Mr N. She said the husband intended to move in with her for a long time, but the date kept getting pushed back because the demolition date got pushed back.
The husband conceded he was not good on dates, including months and years.
Counsel for the wife showed the husband his response filed 22 May 2012. In that document, the husband indicated that cohabitation commenced in 2004. The husband said that was an error. He said Mr N had initially said to him the demolition occurred in 2004, and he had relied on that information.
At the date of the trial, the husband set the date of cohabitation at February or March 2005. This was not because the husband himself remembered that but because his friend Mr N told him that that was the time at which he demolished his house. Mr N’s evidence is that the house the husband was living in was demolished in March 2005. Mr N said he moved in the reconstruction in September 2005 and it was a six month reconstruction. That evidence was not effectively challenged.
That however is not necessarily conclusive in relation to when the husband moved in with the wife.
The husband said he moved straight from Mr N’s house to the wife’s home, and did not stay anywhere else in between. The wife initially agreed that the husband moved from the house that was to be demolished, into the Suburb C property, however she also said that it was “possible that he moved in with his parents for a while but I don’t think so. I know he did move back in with them on a couple of occasions.”
The most telling evidence about this issue came when the husband was asked about a letter from his solicitor dated 15 December 2011 concerning a payment of $52,000 by him to the wife. The husband asserted that he had instructed his solicitor that those monies were paid to the wife “shortly after cohabitation”. The money was paid to the wife on 30 December 2005.
The evidence given by the witnesses called by the husband, Mr K and Mr N, must be considered erroneous as it conflicts with acknowledgments made by the husband in respect of the proximity of the payment made to the wife at the commencement of cohabitation. Further, despite in his written evidence asserting that the husband moved into the Suburb C property in February 2005, in oral evidence Mr K was simply unable to remember the date upon which the husband moved into the wife’s property and so no reliance can be put on the absolute statement he makes in his affidavit.
I find that cohabitation must have commenced in December 2005 and not any time near February 2005.

MORE DETAILED CHRONOLOGY

The husband was born in 1949 and is now aged 65 years old.
The wife was born in 1967 and is now aged 47 years old.
The wife has two children from a previous relationship, Ms A born in 1985 and now aged 29 years old, and Mr A born in 1987 and now aged 27 years old.
The husband has five children from previous relationships, all of whom are adults.
The wife says that the parties’ first met in the early 1990s. The husband says that it was 1995.
The wife separated from Mr A Snr in 1997 and they divorced in the following year.
In 1999, the wife purchased a property at Suburb C. The property was purchased for $385,000, financed by a mortgage in the sum of $315,000.
In November 2000 the wife moved the business of O Business to P Street, Suburb QQ, changed the name to EE Business and arranged for a fit-out of the store.
In 2000 the husband’s marriage to Ms Reece (now …) broke down.
In November 2000, the wife started Dawkins Pty Ltd. She is the sole director and shareholder. The company owns EE Business.
In 2001 the parties travelled to the Sunshine Coast for two weeks and shared the expenses of the trip equally.
In 2002 the parties holidayed in Cairns for two weeks, staying with the wife’s brother.
In 2005 Ms A commenced to live with the wife and remained in the Suburb C property until Easter 2008.
In September/October 2005 the parties holidayed in the United States of America.
In November 2005 Mr A returned from Europe. Mr A moved into the Suburb C property and lived there until the date of separation.
The wife asserts the parties commenced cohabitation in December 2005. At that time the husband was working for a government agency and was earning approximately $80,000 - $90,000 per annum.
On 30 December 2005 the husband paid $47,959.41 to the Commonwealth Bank to pay off the debt secured on the Suburb C property.
In 2006 and over the following two years, the wife paid a total $305,113 to the husband’s superannuation fund.
In August 2006 the husband resigned from the government agency. The husband received a payout that was invested in shares. The husband started receiving one half of the R Super pension (a sum of $321 per week).
In 2007 the parties became engaged and the husband gave the wife a ring that he bought for $1,000.
Around 2007, the business purchased a Land Cruiser. The husband says this was to “enable [him] to do the deliveries and pick up the requirements for the [business].”
The parties separated for a few weeks in November 2007. The husband moved out of the Suburb C property during their brief separation.
In 2008 the husband resumed his job.
The parties separated in April 2009 for five months. The husband moved out of the Suburb C property during their separation.
On 21 July 2009 the wife purchased a property situated at Q Street, Suburb S for an amount of $405,000. The wife paid the deposit and stamp duty in the amounts of $40,500 and $15,275 respectively. This property was sold on 4 June 2010 for an amount of $437,500.
On 31 July 2009 the wife purchased a property situated at D Street, Suburb F for an amount of $395,000. The wife paid a deposit of $19,750 and stamp duty of $14,725. This property was sold on 27 July 2011 for an amount of $450,000 and the Commonwealth Bank received an amount of $425,450.09 to discharge the mortgage over the property.

On 20 August 2009 the wife purchased a property situated at T Street, Suburb U for an amount of $585,000. She paid stamp duty of $25,387.50, contributed the sum of $118,450 towards the purchase price and took out a loan of $468,000 from the Commonwealth Bank to complete the purchase.
Around 2009 or 2010, the husband’s daughter Ms V moved into the Suburb C property with the parties. Ms V lived there for approximately 12 – 18 months.
In 2010 the parties attended the husband’s niece’s wedding in Hawaii and spent approximately three weeks overseas which also included visiting America. The husband paid for the parties’ accommodation on the trip whilst the wife paid for their plane tickets with frequent flyer points.
In 2010 the husband purchased diamonds from his own funds on a trip to South Africa for approximately US$11,000, which he had set in Australia. The husband gave this ring to the wife. The husband also purchased other gifts of jewellery for the wife including a Type W bracelet and attachments, earrings and a diamond tennis bracelet. The husband says that he also gave the wife a gold bracelet, but the wife does not remember him doing so. These items of jewellery have not been included by the parties on the agreed balance sheet.
On 9 April 2010 the wife purchased a property situated at Property 1, G Street, Suburb H for an amount of $392,900.
On 30 April 2010 the wife sold the property situated at Q Street, Suburb S for an amount of $437,500.
On 22 June 2010 the wife purchased a property situated at Property 1, X Street, Suburb Y for an amount of $450,000.
On 22 June 2010 Dawkins Investments Pty Limited purchased a property situated at Property 2, X Street, Suburb Y for an amount of $480,000.
On 20 December 2010 the wife purchased a property at Z Street, Suburb AA for an amount of $427,900. A deposit of $42,790 and stamp duty of $16,534.50 were paid.
The parties separated for a final time on 29 May 2011.
On 1 July 2011 the wife purchased a property situated at Property 1, BB Street, Suburb Y for an amount of $399,900.
On 27 July 2011 the wife sold the property situated at D Street, Suburb F for an amount of $405,000.
On 25 November 2011 the wife sold the property situated at Property 2, G Street, Suburb H for an amount of $417,500.
On 23 December 2011 the wife sold the property situated at Property 1, G Street, Suburb H for an amount of $417,500.
The husband retired from full time employment on 20 April 2012.
On 4 May 2012 the wife sold the property situated at Property 2, X Street, Suburb Y for an amount of $499,000.
On 7 June 2012 the wife purchased a property situated at Property 2, BB Street, Suburb Y for an amount of $439,900.

NON-DISCLOSURE

The wife’s financial statements do not clearly set out her tax liability. The same tax liability is disclosed in two financial statements that are dated over a year apart. Exactly the same weekly dollar figure of $1,121 per week is used in both statements.
The wife had $20,000 in a personal savings account on the first financial statement. Counsel for the husband questioned the wife about this but given the amount of money that had been moving between her personal account and the company account, the wife’s inability to be precise about its movement is of little relevance.
The husband agreed that he had frequent flyer points and that he had been asked for statements and had not produced them. The husband agreed that he had also been asked for various documents and had not been able to fully comply with the request for provision of information.
I acknowledge that the financial affairs of both parties are somewhat complex. There have been complaints on both sides for lack of full and frank disclosure. The basic complaint against the wife is that she failed in her original financial statement to make reference to assets that were disposed of. The same complaint can be made against the husband. As set out above, the husband was specifically requested to produce various documents. His general response was that his filing system was not great.
This, however, is not a case where I would be reasonably satisfied that either party had failed to make significant material disclosure.

APPROACH

In this matter my task is to:
99.1.Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
99.2.Determine whether it is just and equitable to make an order altering those interests and if so;
99.2.1.Identify relevant contributions and assess them;
99.2.2.Consider relevant matters referred to in Section 90SM(4)(d) – (g) of the Act;
99.3.Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.

BALANCE SHEET

Apart from asserted “add backs”, only items 13 and 14 on the balance sheet are not agreed between the parties. The settled balance sheet is set out below. No value is given to items 13 and 14 for the reasons that follow. I also do not intend to add any sums back onto the balance sheet for reasons also set out below.

Assets
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
1	W	EE Business (trading as Dawkins Pty Ltd)	$1,150,000.00	$1,150,000.00	Agreed	$1,150,000.00
2	W	Dawkins Pty Ltd ABN …	$37,735.00	$37,735.00	Agreed	$37,735.00
3	W	Dawkins Family Trust	$279,539.00	$279,539.00	Agreed	$279,539.00
4	W	I Street, Suburb C	$830,000.00	$830,000.00	Agreed	$830,000.00
5	W	T Street, Suburb U	$655,000.00	$655,000.00	Agreed	$655,000.00
6	W	Z Street, Suburb AA	$370,000.00	$370,000.00	Agreed	$370,000.00
7	W	Property 1, X Street, Suburb Y	$415,000.00	$415,000.00	Agreed	$415,000.00
8	W	Property 2, BB Street, Suburb Y	$21,995.00	$21,995.00	Agreed	$21,995.00
9	H	Honda Motor Vehicle	$35,000.00	$35,000.00	Agreed	$35,000.00
10	W	Volkswagen Motor Vehicle	$6,500.00	$6,500.00	Agreed	$6,500.00
11	H	St George Bank Account No. 4 as at 8 May 2013	$31,478.06	$31,478.06	Agreed	$31,478.06
12	H	St George Bank Account No. 5 as at 8 May 2013	$1.76	$1.76	Agreed	$1.76
13	H	St George Bank Account No. 1 as at 8 May 2013	$2.82	$2.82	Determined	$0.00
14	H	St George Bank Account No. 2 as at 8 May 2013	$126,712.17	$126,712.17	Determined	$0.00
15	W	BCA MasterCard and Visa Card Credit Balance	$26,427.00	$26,427.00	Agreed	$26,427.00
16	W	Bali Property	$41,562.00	$41,562.00	Agreed	$41,562.00
17	W	Share Portfolio - DJ Carmichael	$116,152.00	$116,152.00	Agreed	$116,152.00
18	W	Share Portfolio - Patersons	$56,846.42	$56,846.42	Agreed	$56,846.42
19	W	Cash in Farrar Gesini Dunn Trust Account	$48,302.50	$48,302.50	Agreed	$48,302.50
20	H	BT Investments/Super Wrap	$914,172.61	$914,172.61	Agreed	$914,172.61
21	H	Super Wrap Pension Plan	$34,826.91	$34,826.91	Agreed	$34,826.91
Total assets						$5,070,538.26
Liabilities
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
22	W	Mortgage over T Street, Suburb U	$434,371.00	$434,371.00	Agreed	$434,371.00
23	W	Mortgage over Z Street, Suburb AA	$402,392.00	$402,392.00	Agreed	$402,392.00
24	W	Mortgage over Property 1, X Street, Suburb Y	$406,789.00	$406,789.00	Agreed	$406,789.00
25	W	Debt from CBA bank account	$626.00	$626.00	Agreed	$626.00
Total liabilities						$1,244,178.00
Total net assets						$3,826,360.26

DISPUTED ITEMS (ITEMS 13 AND 14)

Items 13 and 14 on the balance sheet

The issue arose as to whether or not the amount of $126,712.17 in St George Bank, Account No. 2, was the husband’s money or money held by the husband on behalf of his mother.
There is a small amount of $2.82 in item 13 which is in the same category.
As I indicated at paragraph 20 of the reasons for judgment dated 22 August 2013, it was a result of the husband being cross-examined about not properly accounting for a figure of $114,172.84, that the husband realised that that money was deposited into his St George Bank term deposit Account No. 2 and that it was his mother’s money. Accordingly the husband asserted that he recognised that there had been an error and he was given leave to reopen his case.
The undisputed facts are that:
104.1.The husband’s mother suffers from dementia and has suffered from dementia since 1998.
104.2.The husband’s mother was cared for by her husband up until his death in May 2007.
104.3.On or about 17 January 2008 the husband and his sister caused the husband’s mother’s property at Suburb E to be sold, and the net proceeds of sale were about $620,000.
104.4.In or around January 2008 the husband and his sister arranged for the husband’s mother to move into an aged care facility.
104.5.Part of the proceeds of sale were used to secure accommodation in that aged care facility (approximately $400,000).
104.6.The net proceeds of sale of the Suburb E property, after payment of usual taxes and commissions was approximately $207,101.73. The husband provided evidence of two cheques payable to his mother in the amount of $192,539.73 (balance settlement monies) and $14,562 (balance deposit). These cheques were deposited on 30 June 2008 into an account that was opened in the joint names of the husband and his sister, (St George Bank, Account No. 1). Those monies remained in that account and earned interest in that account until January 2011. That is, between June 2008 and January 2011, a period of two and a half years, the monies remained untouched by either the husband or his sister.
104.7.In January 2011 the husband and his sister decided that they would place the funds into two separate accounts each in their separate names. The husband did this by moving one half of the proceeds of Account No. 1 into Account No. 2 in his own name and shortly after that time placing them in a term deposit where they have remained untouched by the husband since that time. During the reopening of the hearing it was said that the husband had not touched these funds for two years and eight months. In fact, it is far longer than that that the husband has not touched the funds. It has been since June 2008.
The wife wishes to have the court find that the husband and his sister appropriated one half of their mother’s money to themselves in January 2011.
In support of that contention, the wife refers to the following matters:
106.1.The husband’s financial statement of 22 May 2012 (exhibit 22) has the husband recording his ownership of the monies in Account No. 2 without recording in any way that those funds were held by him on behalf of his mother.
106.2.The husband’s financial statement upon which he relied at the trial filed 14 May 2013 records term deposit Account No. 2 now with a balance of $126,712.17 as his own funds. However in the same financial statement, the husband also records as his own funds, monies in St George, Account No. 3, which he records had a balance of $118,626.69. A concession was made by the wife at the commencement of the trial that that was an error in the husband’s sworn statement and that those funds were in fact funds of the husband’s mother. That concession was reaffirmed prior to the conclusion of final submissions. Notwithstanding the wife conceding one error in the husband’s financial statement, she did not concede the other.
106.3.In his trial affidavit sworn 8 April 2013 the husband says that he and his sister both held an account in trust for his mother. The husband referred to Account No. 3 but did not in that statement refer to the monies in Account No. 2.
106.4.The husband filed tax returns in the 2012 and 2013 financial year where he included in his tax returns the interest on Account No. 2 as interest earned by himself. Although a more correct accounting would have had him file an individual tax return as trustee for his mother, the fact that he chose to declare the income from the capital as his own for taxation purposes and pay the tax is not decisive proof the capital is his, when his other written and oral evidence is taken into account. The husband took a fairly pragmatic approach to accounting to the ATO for the tax on the interest earned on the account.
106.5.The husband’s sister on two occasions, used her half share of the funds (which she says are her mother’s funds) to pay her personal credit card. She says, and I accept, that those two payments that she made from that account have been refunded to that account.
106.6.The husband’s sister, who was the person primarily responsible for carrying out the duties of guardian and manager, prepared a statutory declaration for the husband’s mother’s financial affairs in June 2013, May 2012 and January 2011. None of those declarations record the husband’s account or the husband’s sister’s account as part of the assets of the husband’s mother. The fact that the husband’s sister completed statutory declarations (I accept without the husband being involved in that process) cannot be evidence relevant to what the husband says he has done in respect of the one half of his mother’s money which he controls.
Both the husband and his sister gave evidence about this issue and were tested in cross-examination.
Notwithstanding other comments I have made about the husband’s memory, I was favourably impressed by the evidence that the husband gave about this topic.
The husband indicated that the reason why he and his sister originally put their mother’s money into accounts in their respective joint names was in case it might affect his mother’s pension.
I formed the strong impression that neither the husband nor his sister had appropriated these monies as their own. The husband indicated that this money may be needed if the mother requires at some future time to have higher care. That evidence, which I accept, is consistent with the fact that since 2008 the husband has not accessed these monies in any way whatsoever.
I find the husband holds these monies on behalf of his mother. Items 13 and 14 should be removed from the balance sheet.

TREATMENT OF “ADDBACKS”

In Bevan & Bevan (2013) FLC 93-545 . The plurality say at [79]:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Justice Finn suggested by way of obiter that:
160. These reminders that the jurisdiction under s 79 is a jurisdiction to alter individual interests in title to property and that there is no community of property in this country, might also call into some question the current practices in relation to the treatment of property which is no longer in existence but which one party has had the use of (the so called “addbacks”), and perhaps also of the unsecured liabilities of one or both parties. It may well be that these matters should more strictly be considered in making findings under s 79(4)(e) (i.e. s 75(2)), or in an extreme case, when considering the question under s 79(2) as to whether it is just and equitable to make any order under s 79. But these questions do not arise in the present case, and are thus for another day.
The husband seeks that a number of amounts be taken into account.

$400,000 cash in the safe

The husband contends that the wife held $400,000 in her safe at home at the date of separation.
In November 2010, approximately six months prior to separation, the husband says the wife informed him, “We now have over $400,000 in cash in the safe”. The safe had been acquired by the wife in about 2007 to store cash takings from the business.
The wife conceded that between April and June 2011 there were four large deposits of cash totalling $562,000. Her evidence was that she brought home the day’s cash takings from the business and placed them in the safe on a daily basis. She spent long days as a cook; had to cook when she got home; and really did not look forward at all to the work of preparing the cash for banking. The wife more or less said she was lazy in terms of doing regular banking. She had a weighing machine that she asserts the husband never used. The wife does agree that the husband helped her on a few occasions with the counting of cash.
The husband seeks that $400,000 be added back onto the balance sheet for an estimate that he makes as to cash in the safe at date of separation. There is no evidence to support that figure and nothing really indicates that the wife has taken large or significant amounts of cash out of the business and diverted them.
The wife was asked whether or not she had used cash for renovations to pay sub-contractors and she denied that she did so (it was unclear to me as to whether or not that was home renovations or renovations of the business).
No cash amounts will be added back against the wife.

$51,590 from D Street

The husband originally wanted an amount of $51,590 in relation to D Street, Suburb F, taken into account. In the balance sheet submitted by the husband with written final submissions on 2 January 2015, this amount seems to have been amended to the sum of $22,500. It was unclear as to how the original figure of $51,590.48 had been calculated. I can only speculate that the husband had done some calculation of the equity in the property at the time of sale.
The wife was asked questions in relation to exhibit C to her affidavit of 14 May 2013. That is a settlement statement in relation to the sale of D Street, Suburb F. The settlement statement shows no cheque coming to the wife as a result of that settlement. The settlement statement shows that there was a deposit paid of $22,500 and it was suggested to the wife that she would have received the balance of that deposit once agent’s commission had been extracted from it. She agreed with that. It is therefore not a matter of controversy that the statement that she made in paragraph 36 of her affidavit of 14 May 2013, “I received no proceeds of the sale when I sold that property (referring to [D] Street)” was inaccurate.
At paragraph 149 of her affidavit of 10 April 2013 the wife makes the following statement:
Any ‘proceeds’ that I have received after I have paid the amounts required to discharge the mortgage at the sale of any of the above properties, I have paid into my personal savings account. This is represented in the joint balance sheet my lawyers are preparing. As required I transfer money between accounts and the transfers are accounted for by my account, [Mr CC], when I do my tax each year.
The wife was not challenged about that general statement. Consequently even though the wife received the balance of the deposit in relation to the sale of D Street, it has not been established that the wife hid or wasted this money.

$25,268 from Property 1, G Street

The next amount is $25,268.16 that the wife received from the proceeds of the sale of Property 1, G Street, Suburb H, and that is clear from annexure D to the affidavit of 14 May 2013. The wife did however demonstrate that that amount of money had been deposited back into her account and for this reason any assertion by the husband that this money had been hidden or lost was unable to be maintained.

$53,071.50 from Property 2, G Street

The next amount is $53,071.50 and this was an amount of money the wife did receive on settlement as a result of the sale of the unit at Property 2, G Street, Suburb H (see annexure F to the wife’s affidavit of 14 May 2013). The wife’s evidence about that amount of money was that she had searched her accounts, personal, business and credit card statements and could not find the deposit of that money. It was received by her at a time her daughter Ms A was in hospital seriously ill. Close to the hearing she asked her bank to carry out a search for the bank cheque. The results of that search were not known at the date of the hearing. Consequently what she said in paragraph 149 does not apply to this transaction. Given these funds came to the wife in May 2013 by bank cheque, where that cheque was deposited should be discoverable by the wife. I find the wife has not adequately explained what happened to these funds and I will take them into account when assessing contributions. This however, is not a matter of any great weight because there is no indication that the husband made any contribution to the unit at Property 2, G Street.

$25,000 from Property 2, X Street

The next amount is the sum of $25,000 and relates to Property 2, X Street, Suburb Y. It was conceded during submissions that that amount was meant to be $23,618; there was a rounding up to $25,000 for some unknown reason.
This amount is balance settlement monies as to $13,406.60 and balance deposit monies in the sum of $10,221.75. The wife was able to identify an account into which the amount of $10,221.75 was paid. She was unable to identify the account into which the balance settlement monies of $13,406.60 was paid. Given that this amount was received by the wife on 18 January 2013, the wife should have been able to discover where that money had been deposited. I find that the wife has not adequately explained what happened to these funds and I will take them into account when assessing contributions. Again, the weight to be given to this amount of $13,406.60 is slight given that there is no evidence that the husband made any contribution to the acquisition, conservation or improvement of Property 2, X Street, Suburb Y.

Legal fees as “addbacks”

One leading authority on the adding back of legal fees is Chorn & Hopkins (2004) FLC 93-204 where the Full Court said the following:
56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
…
58. If funds used to pay legal fees have been generated by a party post separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post- separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
The other authority on adding back legal fees is the Full Court decision in Omacini (2005) FLC 93-218. Subsequent Full Courts have referred to the following passage from Omacini with approval:
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC ¶ 92-816 the Full Court said at 85,262:
``11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.''
As a trial judge, it is sometimes difficult to reconcile these statements made by the Full Court in Chorn & Hopkins and Omacini. The first authority opines that legal fees paid from post separation endeavours should not normally be added back. The second opines legal fees would normally be added back.
Chorn & Hopkins tells me to have regard to the source of the funds prior to adding legal fees back. Omacini would tell me that legal fees should be totally added back unless this is a case where that approach is inappropriate.
The two add backs which relate to legal fees are contentious. The husband conceded that he would be content to take legal fees off the balance sheet entirely. The wife however contends that they should not be. The wife’s contention is that her legal fees should not be there because exhibit 3 contains the words “we confirm your advice that you have paid your legal costs to date from post separation earnings received in 2012 and 2013”. The husband’s cost notice however on the other hand contains the endorsement, “we confirm your advice that you have paid your legal costs from personal savings”.
Counsel for the wife argues that Chorn & Hopkins clearly indicates that if legal fees are paid from post separation earnings, then they are not to be added back (no attempt was made to reconcile this submission with what was said in Omacini). The wife asserts that the husband’s legal fees should be added back because the husband has not established that the savings that he paid his legal fees from did not exist at the date of separation. Counsel for the husband makes the more general point that adding back legal fees or not is a discretionary matter and it would be very unfair, given that legal fees are approximately the same and a significant amount, that they should be added back for one party but not added back for the other. I accept the force of that submission. I find that in this case neither parties’ legal costs should be placed upon the balance sheet.

WHETHER AN ORDER ALTERING INTERESTS SHOULD BE MADE

The parties have separated and their partnership has ended. After the separation, there was no longer a continuing commitment to the mutual use of assets and a shared responsibility for liabilities. As the balance sheet set out above demonstrates, the assets and liabilities remaining with each party are $2,810,880.92 (73.5 per cent) held by the wife and $1,015,479.34 (26.5 per cent) held by the husband.
Both parties seek an adjustive order pursuant to s 90SM of the Act.
The wife seeks a splitting order so that an amount of $305,113 is returned to her from the husband’s superannuation interests. If that order is made then the parties would hold assets as to 81.4 per cent to the wife ($2,810,881 + $305,113/$3,826,360) and the husband would receive 18.6 per cent of the assets.
The husband’s application that he receive 45 per cent of the overall pool of assets would require an order to be made that the wife pay to the husband an amount of $706,383 ($1,015,479 + $706,383 = $1,721,862 (45 per cent)).
Although invited to do so, neither party made a submission in this case that no adjustive order be made and accordingly I find that in all the circumstances it is appropriate to consider making an order altering the property of the parties, which is just and equitable.

CONTRIBUTIONS

The effect of the wife’s application is that the court make contribution findings as to about 81 per cent to the wife and 19 per cent to the husband.
In final written submissions, the husband contended that overall contributions should be assessed to be in the proportions as to 65 per cent to the wife and 35 per cent to the husband.

Initial contributions

The parties commenced cohabitation in December 2005.
At the commencement of the cohabitation the wife had an unencumbered property at Suburb C (subject to the $47,959 mortgage that was paid off by the husband). That property now has an agreed value of $830,000.
The wife had an interest in the business. The current value of that business is represented on the balance sheet as worth $1,467,274 ($1,150,000 (item 1); $37,735 (item 2) and $279,539 (item 3)). The wife accepted in her oral evidence that the business only increased significantly in value when she had the opportunity to expand it into J Shopping Centre and even then it struggled for a year or two. The business really she took off in 2008 and thereafter progressively grew into the valuable business it is today. This business represents 38 per cent of the net asset pool.
The wife also had a motor vehicle and furniture at the date of cohabitation. She also had significant savings which she subsequently used, after the cohabitation in 2006, for the renovations to the Suburb C property totalling about $170,000. She asserts that those savings were held in the business. Whatever value those renovations added to the Suburb C property is included in its current value at $830,000.
The husband said in his affidavit that he had approximately $250,000 in superannuation at the date of cohabitation. However, during oral evidence it became clear that the husband was unsure whether he was referring to 2000 or 2005, and he could not verify the $250,000 figure. No documents were supplied by the husband from his superannuation trustee. The current value of the husband’s superannuation interests is $949,000 ($914,173 + $34,827). Included in this amount is the $305,113 contributed between 2006 and 2008 by the wife’s business.
The parties had discussions throughout 2005 about living together and about the husband paying off the wife’s mortgage on the Suburb C property. The wife said she did not want that to happen but the husband insisted. As set out above, the husband made a payment of $47,959.41 on 30 December 2005 to the wife, which was the amount required to discharge the mortgage on the Suburb C property in full. The wife says in her affidavit filed 14 May 2013 that the husband said to her he would move in to her house “…on one condition, that [he] pay[s] off [her] mortgage as rent in advance” and she agreed to call it rent in advance. When pressed in cross-examination, the wife insisted that the agreement was that this amount be rent in advance. The husband denies that the payment was “board in advance”. Counsel for the husband in written submissions suggests that “... it is inconceivable that the payment of $47,000 would be categorised by the parties as ‘board in advance’”. The submission goes on to say “this is particularly so in circumstances where no calculation was provided and the length of the future period that such ‘board’ related to was obviously uncertain”. Whilst the husband’s version is more inherently likely, nothing turns upon the difference in the evidence of the parties about this amount because it is not contested that the amount which was provided by the husband was used to discharge the mortgage on the wife’s property.
The husband referred to the money as “rent in advance”. I accept that part of the husband’s motivation for paying off the wife’s mortgage was so that the wife would “always have a roof over her head” should the wife’s business venture fail.
In paragraph 8 of his affidavit, the husband claims that he received around $300,000 cash from the sale of a property (owned with his former wife) and a termination payment. This claim is repeated by counsel for the husband in his written submissions. However Exhibit 15 established that the husband received just under $200,000 from the sale of the property and his tax returns reveal his termination payment to be approximately $4,800 gross, upon which tax would have been paid.
The husband’s written submissions ignore the fact that during the hearing, the husband revised down his estimate as to what he got out of the property settlement and termination payment to about $250,000. That revised estimate is a possibility given that there were other monies which the husband said he received that came in as a result of the distribution from the trust that was in existence during the husband’s former marriage. He said that the trust had in it a licence that was sold and divided amongst the beneficiaries of the trust which included the children of his first marriage.

Separations

The parties separated on numerous occasions; for a few weeks in November 2007; for 5 months between April and September 2009; for a few weeks also in 2009 and for a few weeks in June 2010.
In relation to the major separation of five months, it was put to the wife in cross-examination that that was only two months. The wife said that she remembered telling the family about this separation at her son’s birthday party which was in April, and the husband and she had separated a couple of weeks before that party. The wife remembers that they reconciled when they went to Hawaii for the husband’s niece’s wedding. The husband was not prepared to concede that they separated for five months between April and September 2009. The husband however conceded that he did not have a great grasp or memory for dates and times. The wife’s evidence in relation to the separation between the start date of April 2009 and end date of September 2009 is linked to two specific events and I accept her evidence about that.
The husband conceded that the parties separated for a few weeks in November 2007. The husband denied that the parties separated for a few weeks in a different part of 2009, and for a few weeks in June 2010 (but even if he was correct, not a great deal turns on these two short separations).
Overall, I accept the wife’s memory in relation to times and dates and I accept that there were separations as asserted by the wife in 2009 and 2010.

Financial contributions

The parties kept their finances separate, although the husband was a secondary cardholder on the wife’s account.
As indicated above, the parties commenced cohabitation at the end of 2005. At that time, the husband was in employment working for a government agency. He was earning approximately $80,000 - $90,000 per annum. He resigned from this employment in 2006. From 2006 the respondent was receiving one half of a R Super Fund pension which was approximately $321 per week.
The husband for a very short time had income from his employment at the commencement of the cohabitation and thereafter received his part pension. I infer this income lessened the need for the husband to be supported through the income of the business. The business owned by the wife provided the substantial financial support for the household. The business provided the source of income from which the wife paid all household and other expenses. The wife worked about 90 hours per week in her business. The wife was also at all times responsible for all aspects of management of the business, including attending to all legal and financial matters. Those responsibilities have continued after the separation.
After 2008 the husband resumed his employment and retired in about April 2012.
The wife paid for all the household bills and living expenses while the parties were living at the Suburb C property. The husband agrees the wife “solely paid rates, utilities and all bills associated with the property”.
The wife paid for most of the parties’ travel expenses.
The husband asserts that much of their travel was purchased with frequent flyer points earned through spending on the business’s credit card. The wife denies that, and asserts she paid cash for their airfares and used frequent flyer points to upgrade the parties to business class. I accept the wife’s version.
The husband asserts that he contributed to the cost of accommodation, food, spending money and entertainment when the parties travelled domestically. In cross-examination, the husband conceded that the wife paid for flights, food, accommodation and entertainment for domestic travel. This is to be contrasted to the husband’s written evidence where he said in relation to a trip to the Sunshine Coast, “I can remember we shared the expenses equally”.
I find that the wife paid for the majority of the parties’ overseas travel.
The wife has also traded shares and real estate which, apart from one property, was held in her own name. It was clear from answers given by the husband during cross-examination, that he had no knowledge about a number of these real property transactions.
In relation to the wife’s share trading, it is wholly controlled by a Western Australian broker without any apparent reference to the wife in terms of the decision making process.
The wife says the husband said he was, ‘living the easy life. A kept man’. When asked about that in cross-examination, the husband said, “it would have been said in jest, I can’t remember if I said it”.

Wife’s contributions to husband’s superannuation

Between 2006 and 2008, $305,113 was contributed to the husband’s superannuation from the profits of the wife’s business. The wife was looking for business tax deductions. Her accountant suggested that the wife put money into superannuation as a way of creating a deduction against the profit made by the company or the associated trust. The wife had a conversation with the husband. The husband was then about 57. Both the parties knew the husband would be retiring or he would be the age where superannuation could be withdrawn for personal use. The parties agreed that superannuation would be put into the husband’s name.
Mr CC, accountant, confirmed how it was that $305,113 was placed in superannuation for the husband. He said that the trust was looking for tax deductions and they received about 100 per cent deduction for these superannuation contributions. There was a discussion between the husband and wife and the accountant as to the best way of moving that money. The accountant asked the wife whether she thought her relationship with the husband was secure. She said she thought it was. The accountant then advised the most effective way of moving the money was to place it in the husband’s hands because he would shortly retire and be in a position to access it.

Husband’s contributions to the wife’s business

A good deal of time in the hearing focussed upon what it was the husband did by way of contribution to the wife’s business.
The husband asserted he “worked for [the business] for a period of approximately two and a half years, finishing in or around 2008.”
In written submissions, the husband asserts that for a period of some two and a half years between 2006 and 2008, he worked for the business in a position he described as a ‘jack of all trades’. He asserts that he undertook the following tasks and duties:
171.1.Carrying out deliveries and pickup requirements including picking up fruit and vegetables (approximately three times a week) as well as picking up meat (approximately twice a week);
171.2.Removing replaced machinery from the business;
171.3.Carrying out general maintenance, including all electrical work;
171.4.Replacing the electrical switchboard;
171.5.Installing a sound system throughout the business;
171.6.Providing customer service;
171.7.Assisting with the management of the business;
171.8.Engaging in public relations;
171.9.Assisting with back of house jobs, including washing up manually and stacking the dishwasher;
171.10.Meeting with trades people;
171.11.Clearing tables;
171.12.Stacking tables at the end of the day.

The parties currently hold their assets as to 73.5 per cent to the wife and 26.5 per cent to the husband (which includes the $305,113 which has been contributed to the husband’s superannuation fund from the wife’s business). When all contributions by each of the parties to the acquisition, conservation and improvement of the assets of each of the parties are taken into account, I find that the net division of assets should be as to 70 per cent to the wife and 30 per cent to the husband (this is a 40 per cent differential in the net assets of the parties at the end of the cohabitation).

SECTION 90SF(3) CONSIDERATIONS

It is the wife’s position that there should be no adjustment for s 90SF(3) considerations. The husband in his written submissions contends that an adjustment of 5 per cent should be made in favour of the husband to reflect s 90SF(3) factors, contingent upon the determination as to contribution entitlements. The husband submits that if contribution entitlements are more favourable to the wife than submitted on behalf of the husband (he submitted a 65/35 division on contributions), the husband asserts that the adjustment for s 90SF(3) factors should be up to 10 per cent in favour of the husband to reflect the greater disparity between the parties’ assets.
The wife is 47 years of age and the husband is now 65 years of age. The age difference between the parties is some 18 years. The wife will be able to continue to engage in employment for a considerable period of time into the future. On the other hand, the wife’s current life expectancy is greater than the husband’s.
The wife’s financial statement indicates that her income from the business is $3,461 per week. That figure was not challenged. There is no doubt that the wife has a significant income as a result of working long hours in her business. The valuation of the wife’s business was an agreed figure. I do not have evidence as to the basis of the valuation. I assume the valuation was based upon net maintainable earning. I do not know what wage was factored in for the wife before net maintainable earnings were capitalised. Given the role the wife plays in the business, it is safe to assume that any allowance for the wife’s personal exertion would be substantial, commensurate with the $3,461 per week as stated by the wife.
The wife was unable to be very specific about what benefits the business gave to her and she has written on her most recent financial statement that the value of the benefits she receives are not know to her. It seems that she gets a motor vehicle and her mobile phone through the business and she does take some food home with her, although there is other evidence that she did normal grocery shopping as well. The wife runs business credit cards and pays for a small amount of entertainment from those cards (the answer that she gave indicated that she did not have much personal time to herself outside business activities, but it seemed that entertainment would be paid on business cards). The accountant however at the end of the year would do a reconciliation as to what percentage of business expenditure should be attributed to personal use.
The wife gave evidence that the company had expended $870,000 in the cost of a refit out in March 2013, which took about five weeks. The business was thus shut down for five weeks. That was funded by way of borrowings of $500,000 from the Commonwealth Bank. Of the remaining $370,000, half of it was contributed by J Shopping Centre and the other half came out of the business. The wife had not finished paying the $870,000 and at the time of the initial hearing there was still about $170,000 owing to contractors.
The husband claims that he was a retiree as at 20 April 2012. The wife asserts that the husband has an earning capacity which he does not exercise. He gave evidence that he has worked at an educational institution and could continue to work there if he wished. The husband also worked for a football club and was paid $10,000 per annum (although it is submitted that figure does not represent the true figure he was paid).
The husband is also in receipt of a pension from BT Super and R Super Fund ($2,982.50 + $1,393.16) per month. It is submitted that the husband’s R Super Fund interest, which provides a pension to him indexed for life, will provide well over $300,000 if the husband lives for 20 years.
The wife has no such secure retirement income available to her, apart from those which her asset base will generate.
I accept that the wife’s capacity for gainful employment exceeds that of the husband’s and that she will have greater assets and financial resources consequent upon contribution findings that have been made.
The husband has over 900,000 Frequent Flyer points. No evidence was provided to quantify their value to the husband.
The wife provides support for her parents and provides her property at Suburb AA for them to reside in.
It is submitted that the husband has the benefit of an expectation of inheritance from his mother. Counsel for the wife asserted that the $126,712.17 the husband has in Account No. 2 is at least a financial resource for the husband. The basis of that submission was that the husband’s mother is an 85 year old woman with dementia. It seemed an agreed fact that the husband and his sister would equally share the benefit of her estate. It was submitted that I would take judicial notice of the fact that an 85 year old woman with dementia is more than likely to predecease the 64 year old husband who does not have any significant health problems. Even if I was prepared to adopt that approach, I am not prepared to speculate as to what the mother’s costs of care might be between now and when she passes away. I am not prepared to take into account monies that are the husband’s mother’s monies when making an assessment as to what financial resources are held by the husband. Needless to say I have no evidence as to what assets are held by the wife’s parents or what might be their state of health.
Neither party has re-partnered at the date of the hearing.
No financial agreement is in place.
The husband receives $321 per week by way of indexed life pension (this is half of what he otherwise would have got had he not split that income stream equally with his former wife under the previous property orders).
The wife is responsible for the care of her granddaughter, RR, for whom she pays all living expenses. It appears from the evidence that neither of RR’s parents make financial contributions to the wife for her. RR is minded by a combination of her father on most weekends (Friday through to Monday morning), and her mother for some period during the week when she comes from Sydney to Canberra. The primary responsibility however falls with the wife who has employed a nanny to assist her in this purpose. Her mother also is of assistance. RR’s mother lives in Sydney with her new partner and she works in the hospitality industry in a restaurant over weekend periods. I accept that in the foreseeable future RR’s mother’s medical condition is such that it would make it unfeasible for her to have RR herself. Any suggestion that RR not live with the wife would also create severe tensions with RR’s father who made it clear that at this point in time he would not be comfortable with RR’s mother looking after RR by herself.
The wife’s daughter Ms A set up a small business known as JJ Business. Some evidence was given about the assistance that the husband gave Ms A in setting up the business by “cutting the concrete floor, [g]eneral maintenance and installing all electrical wiring.” The wife says the husband “used a jackhammer to smash up the concrete” but did not do any general maintenance or wiring. The difference between the parties in this evidence is of no great importance, given that it is unlikely that this assistance the husband gave can be taken into account pursuant to s 90SF(3) of the Act, and even if it could be, it would be of very little weight.

Conclusions about s 90SF(3) considerations

The husband seeks a 5 per cent adjustment for s 90SF(3) matters.
The wife submits that there should be no further adjustment pursuant to s 90SF(3) considerations.
Section 90SM “is not a source of social engineering or as a means of evening up the financial positions of the parties...” (Kennon & Kennon (1997) FLC 92 757 (Fogarty & Lindenmayer JJ) at page 84,303 (citing Clauson & Clauson (1995) FLC 92 545; Waters & Durek (1995) FLC 92 635)).
Taking into account all s 90SF(3) considerations, and in particular the assets with which both parties are left as a result of my findings in respect of contributions, no further adjustment should be made in respect of those considerations.

JUST AND EQUITABLE

The wife submitted that if the court determined that the net property of the parties included the funds in Account No. 2, then the contributions of the parties to the net property and superannuation interests should be assessed at approximately 80 per cent to the wife and 20 per cent to the husband. As set out above, I have not included the funds in Account No. 2. Presumably it is the wife’s position therefore that there should have been a greater split than 80 per cent in the wife’s favour, based on contributions.
The husband asserts that there should be a division of assets on an overall basis of 60 per cent to the wife and 40 per cent to the husband.
Taking into account my findings in relation to contributions and s 90SF(3) considerations, the distribution of net assets should be as to 70 per cent to the wife and 30 per cent to the husband.
That distribution can be achieved in the following manner:

Husband gets 30.0%
Assets
Item No.	Description		Percentage	Value
9	Honda Motor Vehicle		100%	$35,000
11	St George Bank Account No. 4 as at 8 May 2013		100%	$31,478
12	St George Bank Account No. 5 as at 8 May 2013		100%	$2
13	St George Bank Account No. 1 as at 8 May 2013		100%	$0
14	St George Bank Account No. 2 as at 8 May 2013		100%	$0
20	BT Investments/Super Wrap		100%	$914,173
21	Super Wrap Pension Plan		100%	$34,827
Husband receives				$132,429
Net Assets to Husband				$1,147,908
Wife gets 70.0%
Assets
Item No.		Description	Percentage	Value
1		EE Business (trading as Dawkins Pty Ltd)	100%	$1,150,000
2		Dawkins Pty Ltd ABN …	100%	$37,735
3		Dawkins Family Trust	100%	$279,539
4		I Street, Suburb C	100%	$830,000
5		T Street, Suburb U	100%	$655,000
6		Z Street, Suburb AA	100%	$370,000
7		Property 1, X Street, Suburb Y	100%	$415,000
8		Property 2, BB Street, Suburb Y	100%	$21,995
10		Volkswagen Motor Vehicle	100%	$6,500
15		BCA MasterCard and Visa Card Credit Balance	100%	$26,427
16		Bali Property	100%	$41,562
17		Share Portfolio - DJ Carmichael	100%	$116,152
18		Share Portfolio - Patersons	100%	$56,846
19		Cash in Farrar Gesini Dunn Trust Account	100%	$48,303
Liabilities
Item No.		Description	Percentage	Value
22		Mortgage over T Street, Suburb U	100%	$434,371
23		Mortgage over Z Street, Suburb AA	100%	$402,392
24		Mortgage over Property 1, X Street, Suburb Y	100%	$406,789
25		Debt from CBA bank account	100%	$626
Wife pays Husband				$132,429
Net Assets to Wife				$2,678,452

Standing back, I consider an adjustment of assets and liabilities in that manner to be one that is just and equitable between the parties.

I certify that the preceding two hundred and forty-seven (247) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 27 January 2015.

Associate:

Date: 27.1.2015

SCHEDULE 1

The wife relied on the following:
1.1.Initiating Application filed 13 April 2012
1.2.Wife’s affidavit sworn 14 May 2013
1.3.Wife’s affidavit sworn 10 April 2013
1.4.Wife’s financial statement 16 May 2013
1.5.Affidavit of Ms PP Dawkins sworn 10 April 2013
1.6.Affidavit of Ms A sworn 10 April 2013
1.7.Affidavit of Mr MM sworn 10 April 2013
1.8.Affidavit of Mr M sworn 10 April 2013
1.9.Affidavit of Ms MM sworn 10 April 2013
1.10.Affidavit of Ms LL sworn 10 April 2013
1.11.Affidavit of Mr KK sworn 11 April 2013
1.12.Affidavit of Mr CC sworn 11 April 2013
1.13.Affidavit of Mr L sworn 14 May 2013
1.14.Affidavit of Mr HH sworn 2 May 2013
1.15.Applicant’s submissions dated 28 October 2014
1.16.Applicant’s submissions dated 19 January 2015 (although these submissions were filed without direction and out of time, they were in response to out of time submissions that I have allowed from the respondent dated 2 January 2015 and accordingly I have read them)
The husband relied on the following:
2.1.Response to Initiating Application filed 22 May 2012
2.2.Husband’s affidavit sworn 12 September 2013
2.3.Husband’s affidavit sworn 12 September 2013
2.4.Husband’s affidavit sworn 3 July 2013
2.5.Husband’s affidavit sworn 13 May 2013
2.6.Husband’s affidavit sworn 8 April 2013
2.7.Affidavit of Ms B (husband’s sister) sworn 12 September 2013
2.8.Affidavit of Mr K sworn 10 April 2013
2.9.Affidavit of Mr N sworn 10 April 2013
2.10.Husband’s financial statement filed 14 May 2013
2.11.Respondent’s submissions dated 2 January 2015 (although these submissions were filed out of time given that I had not published my reasons and the applicant has responded to them in writing, I extend time for them to be filed)

[2015] FamCA 28

27 January 2015

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Civil Procedure

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