Demas & Demas
[2023] FedCFamC2F 273
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Demas & Demas [2023] FedCFamC2F 273
File number(s): HBC 455 of 2021 Judgment of: JUDGE TAGLIERI Date of judgment: 16 March 2023 Catchwords: FAMILY LAW – property – long relationship – where both parties seek to retain the former matrimonial home – where parties consent to equalisation of superannuation interests – whether former matrimonial home retained by one party or sold – whether post-separation inheritance received by the wife included in the asset pool in whole or in part – whether wife ought to received adjustment under s 75(2)(o) for funds expended by husband post-separation – orders that husband retain former matrimonial home and wife receive adjustment for rehousing under s 75(2)(o) – no adjustment for post-separation expenditure by wither party Legislation: Family Law Act 1975 (Cth) ss 75, 75(2)(b), 75(2)(d), 75(2)(o), 79, 79(2) Cases cited: Bevan and Bevan (2013) FLC 93-545
NHC & RCH [2004] FamCA 633
Farnham & Farnham [2022] FedCFamC2F 83
Horrigan & Horrigan [2020] FamCAFC 25
In the Marriage of Myerthall (1977) 3 Fam LR 11324
Jabour & Jabour [2019] FamCAFC 78
Kouper & Kouper (No.3) [2009] FamCA 1080
Marriage of Hickey (2003) 30 Fam LR 355
Mayne & Mayne (No.2) [2012] FLC 93-510
AJO & GRO [2005] FamCA 195
Phillips & Phillips [2002] FLC 93-104
Stanford and Stanford [2012] HCA 52
Trevi & Trevi [2018] FamCAFC 173
Wagstaff and Wagstaff [2018] FCCA 927
Division: Division 2 Family Law Number of paragraphs: 91 Date of hearing: 23 January 2023 Place: Hobart Counsel for the Applicant: Mr Trezise Solicitor for the Applicant: Simmons Wolfhagen Counsel for the Respondent: Mr McKenna, solicitor Solicitor for the Respondent: Butler McIntyre & Butler ORDERS
HBC 455 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS DEMAS
Applicant
AND: MR DEMAS
Respondent
order made by:
JUDGE TAGLIERI
DATE OF ORDER:
16 March 2023
THE COURT ORDERS THAT:
1.Forthwith the Applicant Wife MS DEMAS (the Wife) and Respondent Husband MR DEMAS (the Husband) (jointly the Parties) must do all acts and things necessary to list for sale the property at B Street, Town C, more particularly described in Certificate of Title Volume … Folio … (B Street, Town C) with Mr D of Real Estate E, or such other agent as agreed between the parties, subject to the sale provisions attached herein as Annexure “A” (noting that the Parties agree the property be listed in early 2023 for $375,000) (the Sale).
2.At the completion of the Sale, the proceeds of the Sale be distributed as follows:
(a)to pay all costs, commissions and expenses of the Sale;
(b)in payment of any Council and water rates in respect of the property;
(c)in payment of $75,000.00 in an interest bearing account standing in the name of the Parties to be held for the purpose of paying the capital gains tax liability payable by the Husband in respect of the sale of the property at F Street, Town G in the State of Tasmania (F Street, Town G) in accordance with Order 5 of this Order.
(d)The balance sale proceeds will be paid to the Wife alone.
H Street, Suburb J
3.On condition that the Husband as soon as possible and no later than 45 days of these orders, is able to secure finance and pay to the Wife the sum calculated as follows, the Wife will do all things necessary to remove the caveat lodged on the Title to the property at H Street, Suburb J in the State of Tasmania (H Street, Suburb J property) registered in the name of the Husband and more particularly described in Certificate of Title Volume … Folio ….
Step 1 – 50% x $A = B
Step 2 – B less C = D
Where: A is the total net value of the non-superannuation assets derived from the joint agreed balance sheet and identified in the reasons for judgment at [44];
C is the total net value of the non-superannuation assets to be retained by the Wife pursuant to these orders; and
D is the sum to be paid by the Husband to the Wife.
4.In the alternative and in default of Order 3, the property at H Street, Suburb J property will be sold and the arrangements for the sale will be as follows:
(a)The Husband to list the H Street, Suburb J Property for sale by private treaty with such agent as the Husband and Wife agree to appoint and failing agreement as to the agent to be appointed within fourteen (14) days of the Default, then be listed for sale with such agent as the President of the Real Estate Institute of Tasmania (“The President”) shall nominate (“the Agent”) and the costs of and incidental to the request of the President and such appointment to be borne by Husband and the Wife in equal shares as and when they fall due;
(b)The appointment of the Agent shall be on a sole agency basis for a period of not less than six (6) months;
(c)The Agent is hereby authorised and the Husband is to sign any document requested by the Agent within 7 days of the request to:
(i)Authorise the agent to communicate with the Wife;
(ii)Direct the agent to obtain consent from the Wife as to the terms of the Sole Agency Agreement; listing price (and any variation in that listing price); proposed marketing of and the sale price of the H Street, Suburb J Property and to provide feedback to the Wife as to the progress with the sale as if she were a joint owner named on title of the H Street, Suburb J Property;
(iii)Direct the Agent to first obtain, in writing from the Wife or the Wife’s solicitors, the Wife’s agreement to accept any offer to purchase the H Street, Suburb J Property, which the Husband proposes to accept.
(d)In the event of disagreement between the Husband and Wife on any matter referred to in (c) above:-
(i)Either the Husband or Wife may request that the President or his nominee determine the matter in dispute.
(ii)The cost of the President’s determination shall be borne equally between the Husband and Wife.
(e)The Husband will co-operate in every way with the Agent including (without limiting the generality of the foregoing):
(i)making the key to the H Street, Suburb J Property available to the Agent.
(ii)allowing inspection of the H Street, Suburb J Property at all reasonable times requested by the Agent.
(iii)not doing or saying anything to hinder or prevent a sale being effected.
(iv)ensuring the H Street, Suburb J Property including the grounds are in a neat and clean condition at the time of inspection by the Agent and/or prospective purchasers; and
(v)upon completion of the sale, the net proceeds of sale distributed to achieve a 50/50% adjustment of the parties net non-superannuation assets, which assets are identified in the joint agreed balance sheet.
F Street, Town G Sale Proceeds
5.Within 14 days of these orders or as soon as practicable, the Parties will cause the proceeds of sale from F Street, Town G, and any interest accrued on the deposit of those funds with Company K, to be paid to the Wife.
B Street, Town C
6.Contemporaneously with compliance with Order 3 of these Orders, the Wife transfer to the Husband all her right, title and interest in the property at B Street, Town C in Tasmania, more particularly described in Certificate of Title Volume … Folio … and contemporaneous with that transfer, the following must occur:
(a)the Husband will discharge the mortgage in favour of the Commonwealth Bank of Australia, registration number …, … and … noting these mortgages are also secured against H Street, Suburb J; and
(b)the Wife will provide to the Husband a duly executed Withdrawal of Caveat registration number … and the relevant registration fee.
The Husband’s Property
7.The Wife must do all acts and things including but not limited to signing all documents necessary to relinquish to Husband all the Wife’s right, title, estate and interest in the following:
(a)all chattels, including but not limited to furniture and contents, personal apparel, goods and documents in the Husband’s possession;
(b)the Husband’s bank accounts held with Bank Q and Commonwealth Bank;
(c)the Husband’s business;
(d)the Husband’s Work equipment;
(e)the Husband’s farm equipment;
(f)the Husband’s Motor Vehicle 1; and
(g)any entitlements of the Husband arising from his membership of any superannuation fund.
The Wife’s Property
8.The Husband must do all acts and things including but not limited to signing all documents necessary to relinquish to Wife all the Husband’s right, title, estate and interest in the following:
(a)all chattels, including but not limited to furniture and contents, personal apparel, goods and documents in the Wife’s possession;
(b)the Wife’s bank accounts held with Bank L, ANZ and Bank M;
(c)the Wife’s share portfolio comprising Company N shares and Company O shares;
(d)the Wife’s Motor Vehicle 2; and
(e)subject to this Order, any entitlements of the Wife arising from her membership of any superannuation fund.
9.Within 14 days of these orders, the Husband is to pay to the Wife a sum of $20,000.
Loan payable to the Parties by Ms P
10.Within 14 days of the date of this Order, the Parties must do all acts and things to cause to issue to Ms P (Ms P) notice in accordance with the terms of the Loan Agreement between Ms P and the Parties requiring Ms P to repay the loan owing to the Parties with such payment to be paid 50% to the Wife and 50% to the Husband.
Superannuation Splitting Order
11.The base amount allocated to the husband, out of the superannuation interest held by the wife in Super Fund 1 (the Fund), member number … is $102,536.00.
12.Pursuant to paragraph 90XT(1)(a) Family Law Act 1975, whenever the Trustee of the Fund makes a splittable payment from the interest held by the wife, the Trustee shall pay to the husband or his legal personal representatives an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 11, and there shall be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been but for this Order.
13.The previous order has effect from the operative time.
14.The operative time is four (4) business days from the date this Order is served upon the Trustee of the Fund.
15.Each party and the Trustee of the Fund have liberty to apply in relation to the implementation of this superannuation splitting Order.
16.The Trustee of the Fund, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment in accordance with Order 11 of these Orders.
Payment of F Street, Town G CGT Liability
17.Upon the Husband completing his 2022/23 tax return, the Husband will provide to the Wife the ATO calculation of the capital gains tax liability payable by him (estimated to be in the vicinity of $70,000) and thereafter:
(a)the Parties will authorise for the release of the funds held in accordance with Order 2(c) of these Orders necessary to discharge the Husband’s capital gains tax liability to be paid to the Husband and in the event there are insufficient funds to pay the capital gains tax liability, the funds held will be released to the Husband and the Wife will pay to the Husband within 3 business days her half share of the amount necessary to give effect to the final payment; and
(b)if the funds held in accordance with Order 2(c) of these Orders exceed the amount payable by the Husband for his capital gains tax liability, the balance remaining will be paid 50% to the Wife and 50% to the Husband.
B Street, Town C Capital Gains
18.For any capital gains tax liability payable by the parties following the Sale of B Street, Town C the following will occur:
(a)within 14 days of completion of the Sale, the Husband will provide to the Wife all information in his possession as to the purchase and maintenance of B Street, Town C;
(b)within 14 days of completion of the Sale, the Wife will provide to the Husband all information in her possession as to the purchase and maintenance of the B Street, Town C; and
(c)each party will thereafter be solely responsible for their respective capital gains tax liability incurred in respect of the sale.
Other Property and Financial Resources
19.Unless otherwise specified in this Order and except for the purposes of enforcing payment of any money due under these or any subsequent Orders, each party is solely entitled to all property and financial resources (and choses in action) in their possession on the date of this Order to the exclusion of the other. For the purposes of this paragraph:
(a)banking and other accounts are deemed to be in the possession of the person whose name appears on the records of the relevant financial institution;
(b)insurance policies are deemed to be in the possession of the beneficiary or beneficiaries named in the policy;
(c)superannuation entitlements are deemed to be in the possession of the person named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
(d)each party is solely liable for and indemnifies the other against any liability encumbering any item of property or financial resource to which that party is entitled under this Order.
Compliance with Order
20.Each Party must do all things necessary including, but not limited to, signing all documents and provide all consents necessary to give effect to this Order in the time periods prescribed in this Order.
Binding Nature of this Order
21.In the event of the death of a party to this Order, the terms of this Order will be binding on that party’s heirs, executors and assign.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Demas & Demas has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Taglieri
These are property proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). At the trial I conducted on 23 January 2023, the Applicant Wife Ms Demas (“the Wife”) and Respondent Husband Mr Demas (“the Husband”) had agreed that there ought to be orders adjusting property interests as between them in order to separate financially. I am satisfied that s 79(2) of the Act is satisfied and find that it is just and equitable to make Orders noting the findings and reasons that follow.
I was told at the commencement of the trial that the parties had reached agreement about a number of orders the Court should make.
I invited the parties to submit a memorandum of the orders that were sought by consent as it became apparent during closing addresses that further agreement had been reached due to evidence given by the parties during the trial.
A consent memorandum was provided to the Court on 7 February 2023 (“the Consent Memorandum”).
The case outlines filed by each of the parties on 19 January 2023 make it abundantly clear that the scope of dispute between the parties is relatively narrow. At the commencement of the trial, I was told that the property pool was largely agreed. I enquired as to whether a joint balance sheet could be provided to the Court. I was subsequently provided with the balance sheet on 7 February 2023, which I have marked for identification in Chambers as MFI-1.
The parties agreed that the superannuation assets should be equalised and that is reflected in paragraph 9 of the Consent Memorandum referred to at [4] of these reasons.
In opening submissions by the parties’ Counsel, disputes and issues for determination were said to be:
(a)What the percentage adjustment/division of the parties’ matrimonial assets should be;
(b)Whether the former matrimonial home situated at H Street, Suburb J (“the former matrimonial home”):
(i)Should be retained by one party or the other, as each party sought to retain it; or
(ii)Ought to be sold.
(c)Whether the post-separation inheritance received by the Wife of about $114,000 should be included in full in the asset pool or in the sum of $60,500, being the balance of the funds at trial as the Wife had solely expended the difference;
(d)Whether the Husband’s post-separation withdrawals from two bank accounts,[1] should be taken into account pursuant to s 75(2)(o) of the Act; and
(e)Whether the proceeds of sale of the jointly-owned camper, sold by the Husband post-separation, should be added back into the pool, also pursuant to s 75(2)(o) of the Act, as it was asserted the funds were retained solely by the Husband.
[1] Bank Q and Commonwealth Bank of Australia accounts.
The joint balance sheet demonstrates that there is no longer a dispute in relation to what sums should be included in the asset pool for the Wife’s inheritance or the proceeds of sale of the camper. That is, it appears to be now conceded that:
(a)Only the remaining balance of the inheritance should to be included in the asset pool; and
(b)The proceeds of sale from the camper are not to be attributed any separate value. The latter is not surprising because the Husband’s un-challenged evidence during the hearing was that the proceeds of sale had been put into the Bank Q account.[2]
[2] Affidavit of the Husband filed 13 January 2023 at [114] and Exhibit R-1.
The Wife seeks orders for adjustment of the parties’ assets to achieve a final division of 55 per cent in her favour. On the other hand, the Husband seeks adjustments achieving 55 per cent in his favour.
THE WIFE’S CASE
The Wife relied upon her case outline filed 19 January 2023, her trial affidavit filed 9 December 2022 (“the Wife’s affidavit”) and her Financial Statement filed 10 January 2023.
The affidavit of the Wife was sought to be read into evidence in full, but there were certain objections taken. As a result of agreement and rulings by the Court, the following paragraphs or part paragraphs of the Wife’s affidavit have not been read or received as evidence:
·At [27] – struck out;
·At [30(b)(iii)] – the words ‘smoking marijuana’ struck out;
·At [35] – struck out;
·At [36] – first and last sentences struck out, along with Annexures F and G;
·At [37] – struck out, provided that the Husband’s affidavit at [149] to [152] are also stuck out;[3]
·At [38] – final sentence struck out; and
·At [56] – read as to costs implications only.
[3] See [18] of these reasons.
Counsel for the Wife was given leave to lead some additional evidence. The Wife stated that:
(a)She is a public servant and also works as a community worker. She currently resides in a rental property and the lease will expire in 2023;
(b)Prior to the commencement of her relationship with the Husband, when she was employed by Employer R, there were superannuation contributions made on her behalf. A transaction summary record dated 20 June 2015 evidences $40,261.44 as the value of the superannuation identified and the Wife stated that there were no further Employer R superannuation contributions after that date. The transaction record appears at page 89 of the Wife’s tender bundle filed on 19 January 2023 and was received into evidence as Exhibit A-1;
(c)A document had been obtained under subpoena from the Region S Council which purported to evidence the historical value of the former matrimonial home. That document appears at pages 77 and 78 of the Wife’s tender bundle and was received in evidence as Exhibit A-2. It states that, at 1 September 2003, the capital value of the former matrimonial home was $142,000;
(d)The parties had jointly lent money to the Wife’s daughter Ms P (“the daughter”). A written loan agreement between the daughter as borrower and the parties as lenders was contained at pages 3 to 12 of the Wife’s tender bundle and received in evidence as Exhibit A-3. It shows that the parties advanced the sum of $58,400 (“the loan amount”) to assist the daughter purchase a property, and that the value of the property at the time was $365,000. The repayment sum is expressed to be 16 per cent of the value of the real estate at the time of sale or at the time the parties demand repayment of the loan.
The Wife stated that no demand for repayment of the loan to her daughter had yet been made. Her position initially was that, if and when the loan became repayable when the daughter sold or a demand to repay was made, the daughter should simply make half of the repayment sum to each party.
Under cross-examination, the Wife agreed that the loan could be called in now and that would bring an end to the financial relationship between the parties. The Consent Memorandum demonstrates that the parties are now agreed that the loan should be called in within a period to be determined by the Court.[4]
[4] Consent Memorandum at [8].
Also under cross-examination, the Wife:
(a)Agreed she had stated in her Amended Initiating Application filed 30 May 2022 that the parties commenced living together in 2004 and that she had not sought to correct that to a different date. The significance of this is that she stated in her affidavit that the relationship had commenced in 2001;[5]
[5] The Wife’s affidavit at [3].
(b)Was shown the Bank Q account statements disclosed by the Husband and directed to the transaction for 3 May 2021.[6] It was then put to her that the entry shows a deposit to the account for the sale proceeds of the camper, such that it has been accounted for in the balance included for that account at $99,839. The joint balance sheet subsequently submitted by the parties reflects a “nil” amount for the camper and I infer that the Wife now concedes the proceeds of sale have been properly accounted for;
[6] Respondent’s tender bundle at pages 2 to 21, tendered into evidence at Exhibit R-1.
(c)Conceded that it would be far better if one party retained the former matrimonial home and that she had provided no evidence to the Court about the reasons she should retain it;
(d)Conceded that the Husband owned the former matrimonial home since 1990 and uses it for his work and business, but her explanatory evidence conveyed that she claimed the Husband could conduct the business and store equipment, freezers, work equipment, etc at his property at B Street, Town C in (“the B Street, Town C property”);
(e)Was uninclined to accept the suggestion that the former matrimonial home was an ideal and necessary property for use as the base for the Husband as a farmer conducting his business;
(f)Suggested that the Husband could use his property at Town T for his work equipment when based out of the Region U, and that the travel required with work equipment and gear to operate from Town T was not a consideration as he travelled with them already;
(g)Agreed, concerning the Husband’s spending during the relationship, that they each had their own incomes and bank accounts. Further, she agreed that she and her children moved into the former matrimonial home and made it their home, which was an indirect contribution by him to the children’s support. However, she said that she paid for the children’s regular expenses;
(h)Agreed that the Husband had paid the mortgage and rates on the former matrimonial home until 2010 and was solely responsible for the mortgage until 2013, but said she had paid into the Bank Q account prior to 2013;
(i)Agreed she had calculated that, in the period December 2019 to 5 April 2021, she contributed $14,000 to the Bank Q account. However, she had not calculated what the Husband contributed when it was suggested he contributed $51,000 in the same period;
(j)When it was suggested that the $13,000 which she seeks to be added back in the scheme of things is not a lot, she stated it all needed to be taken into account. Further, denied that the account was established for the Husband’s business purpose, instead saying it was for saving and enabling a deposit for another property;
(k)When it was suggested that the Husband was only using the account for legitimate business expenditure and was not wasting money away, she stated that she had “not reviewed the statement closely”, but appeared to agree that the Husband was not “whittling away funds” to outdo her in the property settlement;
(l)Provided fairly detailed evidence about how she had spent monies from the inheritance she received. Essentially, she purchased appliances and furniture to set up a new residence following separation, paid legal fees, and assisted her daughter;
(m)When cross-examined about the assertion that the Husband was not exercising his earning capacity fully, or “running dead” the business, agreed that weather was a factor affecting his work and that his income historically fluctuated. However, she did not agree that the income reduction since separation was simply a reflection of normal market conditions. She said that she knew the Husband was not doing as much as he could because her brother was his employee;
(n)Said she had not disputed the evidence of the joint expert valuer Mr V (“the joint expert”) in the affidavit filed 26 September 2022;
(o)Agreed that the Husband alone had bought a property at F Street, Town G (“the F Street, Town G property”), although they had first seen it together on a date in 2001. She agreed that the Husband had owned it before they commenced living together, but stated that she had contributed to the mortgage on the property and was unsure when she commenced doing so as the Husband managed the loans; and
(p)Agreed that after a period the Husband had started paying her for work as an employee, but the evidence was not clear about when. This is contrary to that stated in her affidavit, which stated 2015.
THE HUSBAND’S CASE
The Husband relied upon:
·His case outline filed 19 January 2023;
·His trial affidavit (“the Husband’s affidavit”) and his Financial Statement all filed on 9 December 2022; and
·The affidavit of the joint expert affirmed 26 September 2022.
Counsel for the Husband led evidence to tender documents relied upon in his case. The Husband identified the following documents, which were received as exhibits and marked without objection:
·Exhibit R-1: bank statements from the Bank Q account dated 13 December 2019 to 31 December 2022, as contained at pages 2 to 21 of the Husband’s tender bundle. The Husband explained that the hand writing and highlighting on the statements were made by him for the purpose of calculating the parties’ respective contributions to the account;
·Exhibit R-2: bank statements from the Commonwealth Bank Smart Access account for the periods 1 September 2020 to 31 December 2021 and 1 March 2022 to 31 December 2022;
·Exhibit R-3: Australian Taxation Office notices of assessment for the Husband for the financial years ending 30 June 2016, 30 June 2017, 30 June 2020, and 30 June 2021; and
·Exhibit R-4: Australian Taxation Office notice of assessment for the Husband for the financial year ending 30 June 2022.
Before the Husband’s trial affidavit was read, certain objections were made. During submissions about them, concessions were made by Counsel for the Husband that the following should be struck out of the Husband’s affidavit:
·At [9] – second last sentence struck out;
·At [16] – the words ‘in mint condition’ and the last sentence struck out;
·At [17] – last sentence struck out;
·At [35] – the values in the last sentence struck out;
·At [53] – first sentence struck out;
·At [54] – last sentence struck out;
·At [56] – the values in the first sentence struck out;
·At [149] to [152] – struck out.[7]
[7] See [11] of these reasons.
The Husband was cross-examined by Counsel for the Wife. The effect of his evidence during cross-examination was in summary as follows:
(a)Generally he would work up to 150 days a year, but in the last year only worked 80 days;
(b)He agreed that in the last 12 months his income was in the region of $70,000 to $80,000;
(c)He agreed that sometimes during the relationship he would work for in excess of 200 days a year;
(d)When asked about the reduced days of work since separation, the Husband stated that in the last six months the weather had been worse than ever. He also indicated that he had four weeks holiday in Queensland and visited Region W. He conceded that during this period he had lost income and said the trip had cost about $2,000 to $3,000;
(e)It was suggested to the Husband that the parties had commenced sharing accommodation in 2002. He disagreed, stating that the Wife was very independent;
(f)He agreed that he had received grants from government entities through the Covid-19 pandemic in 2020 and received Job Keeper payments in the financial year ending in 2021. He also said that he received border closure grants. He attributed the sum of $20,000 to the border closure grants he received up until early 2022;
(g)Asked whether the payments were taxable, he said that they were treated as income and he was taxed on the Job Keeper payments;
(h)The Husband gave evidence about the work equipment he currently has and about the licenses and other related equipment for the business. It appears that the parties are now agreed as to the value of the same, given the agreed balance sheet;
(i)The Husband agreed that he had been in an exclusive relationship with the Wife before they married and that they were engaged in 2003. He stated that at that time there was no talk of moving in together for at least six months;
(j)He agreed that they had spent time at each other’s homes prior to the engagement, but that the discussion about the Wife selling her home and moving in with him at the former matrimonial home had not occurred until six months after the engagement;
(k)He agreed that he had assisted in building a deck and putting in a new vanity at the Wife’s property in Suburb X (“the Suburb X property”), but denied it was in preparation for its sale. He said he had done the work because he cared for the Wife and not because the property was being prepared for sale;
(l)About the work the Wife did on the farm as a worker, he stated that he had commenced paying her 2008 and he did so in cash;
(m)Regarding the purchase of the F Street, Town G property, the Husband agreed that it had been bought for $22,500, stating it was predominantly for work purposes. However, he agreed that it was vacant land at the time of purchase, and that the parties had to put a slab and shed on the property for work use. He said that they then used it for holidays and recreation also, and that they purchased a caravan to put on the property;
(n)He agreed that the sale proceeds of $151,000 from the Suburb X property went towards the loan which had been jointly taken out for renovations on the former matrimonial home. He gave extensive evidence about the extent of the renovations and the cost of them. It is unnecessary to detail this evidence, but it was clearly substantial work likely to have increased the value of the property;
(o)The Husband agreed that the Wife had worked first full-time and then four days a week from 2014 while continuing to assist the Husband as an employee. He also agreed that the Wife had commenced work as a community worker in 2015;
(p)The Husband was challenged about his attitude to the Wife’s children and whether they were regarded as part of his family. He disputed the challenge, stating that he treated the children as his own, assisted in their care and that they undertook activities together as a family;
(q)Asked whether the Wife was primarily financially responsible for her children’s expenses, he stated “yes, but we shared holiday expenses”. He agreed that one child moved out of the former matrimonial in 2006 and the other in 2010;
(r)Asked about the B Street, Town C property, he agreed that it had been purchased by him for $124,000 and stated that the Wife had not paid anything off that mortgage until 2014. He agreed that this property was perfect for his work when out on the Region Y of Tasmania, but that he spent a maximum of 100 nights a year there;
(s)The Husband disputed the suggestion that he could use the B Street, Town C property as a base for his business, but conceded that he had received a refund of land tax on the basis that the property has a business classification;
(t)The Husband maintained that the Wife commenced contributing to the mortgage on the B Street, Town C properties in 2014, and he stated that it had been his idea to change it to joint names. Asked why he was certain about it being in 2014, he stated that it was after the Wife had been on a cruise that year and that he had asked her to assist with contributions to the mortgage as he was having difficulty paying it;
(u)Regarding the loan to daughter, the husband stated that he thought the Wife should “take it over”, but he agreed that it was possible to demand repayment now;
(v)He agreed that the parties had intended a lifelong relationship and that they had pooled their resources. He also agreed that both had worked to the best of their ability during the relationship and made contributions accordingly. The Husband agreed that there were regular payments of $500 by the Wife to the Bank Q account and that some payments were made towards the loan on the B Street, Town C properties and a car. He stated that from 2014 to 2019 the Wife had been paying directly to the loan account and paying council rates and, after 2019, into the Bank Q account. He agreed that the Wife paid for car registration, but he stated that he serviced all the vehicles. He agreed that the Wife paid for health insurance for both parties, but that they each paid their own phone bills. He agreed that many expenses were shared. He denied that he had directed the wife to pay $500 to the Bank Q account and said that instead he had suggested it;
(w)He agreed that he had maintained control of shared assets;
(x)The Husband agreed that the Wife had been primarily responsible for domestic and household tasks, but added that he did the “outside jobs”;
(y)Asked about the Bank Q account withdrawals post separation, the Husband maintained that he needed the funds for work purposes and to cover his expenses, given his reduced work and income due to weather;
(z)About the circumstances in which the Wife left the former matrimonial home, he denied the inference from Counsel for the Wife that he had concocted imposition of a Police Family Violence Order. He explained that the Wife had been returning to the property after she had moved out, he had shown police text messages, and that they had thought a Police Family Violence Order was warranted. He agreed that he had subsequently changed the locks on the former matrimonial home; and
(aa)Asked where the Husband would live if unable to retain the former matrimonial home, he stated he would reside in the same Suburb Z or Suburb J area and no further than Town AB.
RELEVANT PRINCIPLES
The relevant statutory provisions and legal principles which govern proceedings for property adjustment under the Act are not contentious and are well-established.
The ultimate objective and task of the Court is to make a determination if it should make orders adjusting property interests on the basis of what is just and equitable. Considerable guidance has been given by various authorities, but for present purposes it is sufficient to note the useful summary provided by Judge Reithmuller in Wagstaff and Wagstaff [2018] FCCA 927 (“Wagstaff”) from paragraphs 118 to 137, referring to Stanford and Stanford [2012] HCA 52 (“Stanford”) and in Marriage of Hickey (2003) 30 Fam LR 355 (“Hickey”).
In adopting the approach referred to in Stanford, I find that the parties were in a relationship from at least mid-2003 until they separated in January 2021. Each party seeks orders to adjust their joint and respective interests in property and as noted at [1] of these reasons, I am satisfied that it is in all the circumstances just and equitable to make orders pursuant to s 79 of the Act noting the findings below about the comparative value of the parties’ assets.
It is also necessary to take the well-known four step approach explained in the Marriage of Hickey and summarised in Wagstaff.
During closing submissions, I was referred to authorities by each counsel for various proposition. I will address those as relevant to the contentions below.
COMPETING CONTENTIONS
Husband
In support of the contention that the parties’ non-superannuation property ought to be adjusted 55 per cent in favour of the Husband, Counsel argued that this was justified because of the greater contributions by the husband and that no adjustments were warranted pursuant to s 75(2) of the Act.
Addressing the issue of contributions, it was submitted that the contributions by the Husband were greater as:
(a)The evidence established initial contributions by the Husband, namely bringing in the farming business, the former matrimonial home, and the F Street, Town G property;
(b)Although it was not disputed that the Wife contributed the sale proceeds from the Suburb X property to improvements to the former matrimonial home, overall the financial contributions by the Husband were greater;
(c)The Wife’s contribution of $60,546 from the inheritance she received post-separation was small in the scheme of things;
(d)Both parties had worked hard and earned income to the best of their ability, which was used for their benefit;
(e)In relation to any claim for adjustments pursuant to s 75(2)(o) of the Act for the so called “running dead” of the business, Counsel for the Husband contended that the evidence simply did not support such an adjustment. Counsel argued that the cross-examination of the Husband about reduction in business earnings in more recent years was unfruitful. Further, that no challenge was made to the evidence of the joint who valued the farming licences and business. The joint expert relevantly had stated in his report:
The [faming industry] is not as strong as it was due to a lack of Government controls of [product] volume.
Current value of [the business] is $38,000.
…
The [business] licence can generate up to $100,000 gross revenue but long hours must be put in. Such licences were selling in the $45,000 to $50,000 but with the Limited buying capacity of Tasmanian factories the market is limited.
An increase in air freight has negatively affected the economies of [farm products] [sic] .
Counsel for the Husband submitted that disagreement about whether the parties had cohabited for 16 or 20 years was of no material significance.
Finally, Counsel for the Husband submitted that the Husband had provided good reasons for why he ought to retain the former matrimonial home and the Wife had made significant concessions about those reasons. Namely that:
·It was better if one party retained the property to avoid costs of sale and related expenses; and
·The Husband had customarily used the property to conduct his business and stored his work equipment, trailer and other equipment there.
In contrast, it was submitted, the Wife had not advanced any clear reasons for retaining the property.
When I enquired about the capacity of the Husband to refinance the mortgage on the former matrimonial home and pay out the Wife, Counsel conceded that there was no evidence of such capacity. However, it was submitted that the Court ought to make an order that the Husband retain the property on condition he is able to refinance and pay out the Wife in a reasonable timeframe.
Counsel submitted that the nature and value of property in the matrimonial pool was such that the Court could still do justice to the Wife by orders providing sufficient funds/property to her from other items in the property pool, while the Husband retained the former matrimonial home.
Wife
Counsel for the Wife contended that a final determination of equality as between the parties was just and equitable. Like Counsel for the Husband, Counsel for the Wife contended that nothing turned on whether the parties commenced cohabiting in 2001 or 2004.
Concerning contributions, it was submitted that:
·The respective financial contributions of the parties were relatively equal;
·Non-financial contributions were somewhat more by the Wife as she had worked in employment and contributed with the business, as a homemaker, and in other ways;
·The contribution of the Wife’s inheritance could not be ignored, and warranted a two per cent adjustment in her favour;
·No adjustment should be made in favour of the Husband for bringing in the F Street, Town G property; and
·No adjustment is required for financial contributions on account of income disparity as each party earned similarly and contributed their income for mutual benefits.
In respect of the factors in s 75(2)(o) of the Act, it was argued that post-separation the Husband had failed to continue to earn income in accordance with his capacity. It was argued this was evident from both the trend of income in the tax assessments and increasing bank balance leading up to separation, but the cessation of that trend post-separation.[8] In addition, the sale of the camper and retention of the sale proceeds should be taken into account.
[8] Exhibit R-1.
Collectively, for the reasons submitted at [33] and [34] of these reasons, Counsel contended that a two and a half per cent adjustment to the Wife is required.
Finally, with respect to whether the Husband should be entitled to retain the former matrimonial home, it was submitted that he had “no greater claim” to it than the Wife. In the Marriage of Myerthall (1977) 3 Fam LR 11324 and Farnham & Farnham [2022] FedCFamC2F 83 were cited as authority for support of this contention.
Furthermore, it was submitted that there was no evidence before the Court that the Husband had borrowing capacity, which would enable him to retain the former matrimonial home and authorities state this is necessary evidence.
Reply submissions
Counsel for the Husband submitted that the property pool itself was such that the Court could craft orders to ensure that the outcome for the Wife was just and equitable.
When I made enquiry about the Wife’s contention that there ought to be no adjustment for the Husband bringing in the F Street, Town G property, Counsel for the Husband disagreed. He submitted that it warranted a three per cent adjustment in favour of the Husband. He also submitted no adjustments against the Husband were justified pursuant to s 75(2)(o), contrary to that argued by Counsel for the Wife.
EVALUATION AND FINDINGS
After the parties were subjected to cross-examination, there was little contention about the facts relevant to the determinations. I find that they were in a marriage-like relationship and then married for a total of about 18 or 20 years, but in any case it was a long relationship. The parties are now aged in their late 50s and separated in early 2021.
The Wife vacated the former matrimonial home in March 2021 following an incident and heated text exchange, which led to the Husband initiating contact with Police and a Police Family Violence order being made.[9] On any interpretation of the parties’ evidence, this incident was one off and uncharacteristic. I find that, objectively, the Wife did not pose any real threat of harm and the Husband’s actions were an over-reaction. However, the practical effect was that it became untenable for the Wife to remain in occupation of the home.
[9] Affidavit of the Husband at [149] to [154]; affidavit of Wife’s at [36].
Importantly, for good reasons the parties agreed that there ought to be a two pool approach and agreed that the Wife’s superannuation interest should be subject of a superannuation split order sought by consent to equalise the interest.
The Court received in evidence an exchange of correspondence with the superannuation fund Super Fund 1 dated 11 January 2023 and 18 January 2023 about the proposed consent order.[10] Super Fund 1 have advised they did not wish to be heard about the proposed consent order and that they did not envisage difficulty giving effect to it.
[10] Exhibit A-5.
Accordingly, the superannuation split orders ought by consent will be made and are in my view just and equitable for the following brief reasons:
·The likelihood is that a large part of the superannuation accrued during the parties’ relationship;
·the length of the marriage and the size and character of the non-superannuation assets;
·The parties’ ages and inferred length of time until retirement are similar; and
·The parties’ future respective future needs are comparable.[11]
[11] Which are addressed further below in these reasons.
The non-superannuation assets of the parties at trial were agreed and are the subject of the joint balance sheet.[12] Relevantly, there is no dispute about the value of any item or what should be included in the asset pool for the purpose of orders pursuant to s 79 of the Act. I therefore find that the parties’ non-superannuation assets and liabilities are as follows:
[12] MFI-1.
ASSET OWNERSHIP Agreed Value B Street, Town C (“the additional B Street, Town C property”) Joint To be sold
Market $380,000The B Street, Town C property Joint $400,000 The former matrimonial home Husband $770,000 Proceeds of sale from the F Street, Town G property Joint $402,836[13] Benefit of loan receivable from daughter Joint $105,600 Bank L …66 Wife $3,695 Bank L …67 Wife $60,546 ANZ Progress Saver account …29 Wife $89 ANZ Cash Investment …65 Wife Nil ANZ Online Saver …87 Wife $294 ANZ Online Saver …53 Wife $2,767 ANZ Access Advantage …41 Wife $3,487 ANZ Cash Saver …65 Wife Nil
Bank M …60 (savings for grandchildren) Wife Nil Share portfolio
(Company N; Company O)Wife $15,218 Bank Q …60 Husband $99,839 CBA account …94 Husband $21,119.64 Motor Vehicle 2 Wife $8,000 Motor Vehicle 1 Husband $20,000 Farming business Husband $131,000 Farming equipment and homemade trailer Husband $15,000 Farming equipment and homemade trailer Husband $5,000 Farming Equipment Husband $4,000 Box Trailer Wife $300 Camper, sold and funds retained by Husband in Bank Q account Joint Nil Rings and coins Wife Nil Stamp Collection Husband Nil Total Assets $2,448,790.64[14] + the additional B Street, Town C property sale (E$380,000) [13] I note however that this sum has been in an interest bearing account.
[14] This figure differs slightly from the sum included in the joint agreed asset pool provided on 7 March and marked as MFI-1, due to a calculation error.
LIABILITIES OWNERSHIP Agreed Value Tax Liabilities
- Husband income tax 21/22
- CGT on sale of F Street, Town G
- CGT on sale of B Street, Town CHusband
JointUnknown
E$69,000
Unknown
Total Liabilities
E$69,000 + B Street, Town C CGT
As the findings at [45] of these reasons reveal, some non-superannuation assets and liabilities are solely owned/held and others jointly. If those jointly held are shared equally and those in either parties name retained, the value of total net assets the Husband would receive $1,518,676 while that which the Wife would receive is $861,032, in round numbers.[15] This would represent the Husband receiving nearly 70 percent of the net non-superannuation pool, while the Wife would retain only close to 29 per cent.
[15] These figures assume there is no CGT liability upon sale of the B Street, Town C property, and so may vary
As submitted by both Counsel, I find that the marriage can be regarded as a long marriage. Although there is some contest about when the parties began to cohabit, the contest is not material to the judgment in this case as the small difference dilutes in importance over the long agreed period of cohabitation.[16]
[16] Jabour & Jabour [2019] FamCAFC 78; Horrigan & Horrigan [2020] FamCAFC 25 at [48].
Given the long length of the relationship and the findings and reasons below, I consider it is just and equitable to make orders pursuant to s 79 of the Act as foreshadowed at [1] and [22] above, as the disparity described at [45] is unjustified.
Contributions
Concerning contributions to the non-superannuation assets, the parties both gave evidence and either conceded or did not challenge the following, and I find accordingly that:
·Both parties worked throughout the relationship and contributed their income in different ways, but to their mutual benefit;
·The income they each contributed was relatively similar when the historical earnings are compared;[17]
[17] Financial Statement of the Wife filed 10 January 2023; Affidavit of the Wife filed 9 December 2022; Exhibit R-3; Exhibit R4.
·Both parties made non-financial and homemaking contributions, although the Wife did so mainly within the home and the Husband outside the home in maintenance of gardens and the property;
·The initial, or at least relatively early, contributions were:
(i)By the Husband, the equity in the former matrimonial home which he already owned and which had a Council-assigned capital value around cohabitation of $142,000;[18]
(ii)By the Husband, the equity in the F Street, Town G property which was bought for about $22,000 solely by him with a small deposit and borrowed money;[19]
(iii)By the Husband, the farming business. However, there is no evidence about the value of the same at the commencement of the relationship; and
(iv)By the Wife, the sale proceeds of the Suburb X property of around $151,000.[20]
·The Wife received an inheritance of $114,000 post-separation, the balance of which is to be included in the joint asset pool and is $60,546.[21]
[18] Exhibit A-2.
[19] Affidavit of the Wife filed 19 December 2022 at [12]; Affidavit of the Husband filed 13 January 2023 at [54].
[20] Affidavit of the Wife filed 19 December 2022 at [13]; Affidavit of the Husband filed 13 January 2023 at [51].
[21] Affidavit of the Wife filed 19 December 2022 at [38]; Affidavit of the Husband filed 13 January 2023 at [121].
I reject that submission that the Husband’s contribution of the F Street, Town G property warrants an adjustment of three per in his favour. The value of the initial contribution was very modest in the overall circumstances of the relationship, noting the purchase price and that money was borrowed to make the purchase. I infer that there was likely little equity at the outset. Further, the sale price it achieved was a product of the passage of a long period of time during most of which the parties were together.[22]
[22] Jabour & Jabour [2019] FamCAFC 78 at [43].
No evidence was led about the value of the business at the commencement of the relationship. I infer from the parties’ evidence generally that it was built up over the years of the relationship, as corroborated by the general upward trend in earnings.[23] In these circumstances, there is no warrant for a specific adjustment in favour of the Husband for bringing it in.
[23] Primary production average figures, see Exhibit R-4.
The result of the parties’ cross-examination was that they were in general consensus that while each brought assets to the relationship, they subsequently collectively discussed what property should be jointly acquired during their relationship. I find accordingly. I am not persuaded on the balance of probabilities and I consider it unnecessary to make a finding about whether the Husband sought to control acquisition of property or finances.
Despite the above, I find that the Husband more likely was hands-on in implementing decisions mutually taken. This is evident from what each party said about the establishment of the Bank Q account, how the B Street, Town C properties were held initially then transferred to be held jointly, and that management of the business was clearly in the Husband’s domain.
The parties also managed their own bank accounts and separate expenditure to a degree. I do not accept the suggestion that the Wife solely met all the expenses of her children. She most likely paid the day-to-day, clothing and education costs, but the Husband provided indirect contribution by payment of the mortgages and outgoings for the home they lived in and contributed to holidays and presents. Another example of the Husband’s contribution to the children is the joint advance of loan funds to the daughter.
I accept that the Wife began to make contributions to mortgage and outgoings later in the relationship, but I found the evidence of the parties vague and unsatisfactory about the precise date. More importantly, the parties engaged collectively for mutual benefit during the relationship, in the ways they could.
The Wife was likely more hands-on in parenting responsibilities, but I accept that Husband also made some contributions by assisting the Wife to a degree. However, his work probably meant that he was absent for periods.
Section 75(2) Adjustments
Having heard the parties’ evidence about the use to which they respectively put money post-separation, I am not persuaded that any adjustment should be made for or against either party.
The claim that there should be an adverse adjustment against the Husband for the retention of funds from the camper sale is rejected. The evidence before the Court shows that the $15,000 is traced to have been deposited to the Bank Q account and so it is accounted for in the property pool. Although the Husband has expended money in that account post-separation, I am not persuaded it was wasted, exorbitant or put to unreasonable or unjustified expenditure.
Instead, I find, largely accepting the Husband’s evidence, that it has been used to meet usual living expenses and business-related expenses. I agree with Counsel for the Husband that the cross-examination of the Husband about this topic was not particularly fruitful. No particular debit from the account has been demonstrated to be unreasonable, exorbitant or wasteful.[24]
[24]Kouper & Kouper (No.3) [2009] Fam CA 108; Mayne & Mayne (No.2) [2012] FLC 93-510; Bevan and Bevan (2013) FLC 93-545.
Further, I am not persuaded that the Husband’s reduced income post-separation is solely because he has not exercised capacity to earn, although it likely is in some part. The reduction in income shown by the downward trend in the Notices of Assessments in the last few years is more likely explained by a combination of factors being:
(a)In part, due to poorer conditions in the farming supply industry as opined by the joint expert;
(b)In part, due to unfavourable weather conditions for farming, as was the subject of the Husband’s evidence and somewhat conceded by the Wife in cross-examination; and
(c)In part, I infer from the Husband’s evidence and, in particular, his very defensive response under cross-examination that he was “entitled to take four weeks leave and go to City AC” that he chose to work less hard, at least for a time.
The Wife’s Counsel contended that the reduced income corresponded to a cessation of increased trajectory in savings,[25] and that this therefore demonstrated the Husband had consciously decided to reduce his efforts in the business. I consider the contention speculative and unproven on the balance of probabilities. As I have found at [59], the business has been influenced by a number of factors, most of which are not in the Husband’s control. In addition, the Wife stopped making contributions to the Bank Q account after separation and this too would have impacted on the growth trajectory of that account.
[25] An erosion of funds in the Bank Q account.
The Husband contended that the Wife had wasted or unreasonably spent the inheritance money she received post-separation. I reject the contention as the Wife’s evidence under cross-examination adequately explained the purpose for which the spent funds were expended. They were largely all necessary and reasonable for re-establishing a home or, to the extent they were used to assist her mother and daughter, were not excessive or unreasonable or capable of being described as exorbitant or wasted.[26] Mostly, the expenditure has allowed the Wife to move forward in her life and establish a home in the property she is renting.
[26] AJO & GRO [2005] FamCA 195 at [30]; NHC & RCH [2004] FamCA 633 at [32] to [55] cited with approval in Trevi [2018] FamCAFC 173 at [31] to [42].
Turning to the evidence given about the future, there was no challenge to the evidence about each party having capacity to continue work and provide for themselves. I infer, on the basis of the evidence before the Court referred to elsewhere, that the parties are able to earn similar to that which they have done in the past, noting the reasons below.
I do not accept that the Husband will continue to have a distinct reduction in earnings, as he has had in the last few years. The historical record of earnings suggests peaks and troughs,[27] but over the median term around $80,000 gross per annum. The lean years are likely to be balanced by the good years.
[27] Exhibit R-4.
To the extent that I have accepted that the business has likely in part been affected by weather or market challenges as opined by the joint expert, there is no reason why the Husband cannot exercise earning capacity in other ways.
He plainly has skills associated with farming and farm equipment, and the like. He is healthy and physically able. His evidence about work around the home and properties also suggests capacity to earn income from endeavours other than farming. I find accordingly and make no adjustments pursuant to s 75(2)(b) or (d)(i) of the Act.
Neither party contended adjustment pursuant to s 75(2) for reason other than those advanced concerning s 75(2)(o) of the Act. Although I have rejected those contentions, in my view there ought to be an adjustment in favour of the Wife pursuant to s 75(2)(o) of the Act for the following reasons.
The Husband has had the comfort and convenience of continued residence in a permanent home and practical ability to continue his work without any interruption or inconvenience. In contrast, the Wife has had her stability, comfort and occupation of her home disrupted.[28] Until receipt of the inheritance she was reliant on others for accommodation.[29] Further, if not for the inheritance received post-separation, I infer she would likely have experienced financial hardship and likely have had difficulty securing more stable and suitable rental accommodation. Her unchallenged evidence is that her current lease on the rental property she occupies will soon expire. She will need to secure ongoing accommodation but the effect of this judgment will not yet be implemented. She will incur ongoing rental costs and/or additional costs in due course when she is able to acquire another property.[30]
[28] Noting the findings at [41] of these reasons.
[29] Affidavit of the Wife filed 19 December 2022 at [38], [41], and [42].
[30] Eg. Stamp duty and conveyancing costs.
An adjustment in favour of the Wife, approaching one per cent of the net non-superannuation assets is warranted because of the considerations at [67] of these reasons. Noting the estimated total net non-superannuation assets of $2,759,790, I will allow $20,000.
Retention of former matrimonial home
Both parties conceded that it was preferable that the former matrimonial home not be sold as this would involve expenses and so reduce the value of the net pool of non-superannuation assets available for distribution.
I agree with the contention that the Wife did not offer particular reasons as to why she ought to retain the former matrimonial home. Despite this, I acknowledge that the uncontentious evidence is that it was her home for many years. Further, the Husband conceded the net sale proceeds of her Suburb X property were used to undertake improvements and renovations to it.
Accordingly, while the Husband brought the former matrimonial home into the relationship with equity, the Wife has made a substantial contribution to its ultimate value at separation. In my view, given the state of the evidence, it is not possible to be persuaded on the balance of probabilities that either party has a greater claim to retention of the home based solely on their respective early financial contributions and mere occupation in the home.
However, contributions are just one of many potentially relevant considerations for the Court as discussed non-exhaustively in the authorities to which I was referred. In my view, having regard to the authorities, especially Phillips & Phillips [2002] FLC 93-104, the issue of whether a party ought to retain a particular matrimonial asset, falls for determination in the fourth step of the determinative process. That is, when the Court stands back to assess what assets each party should ultimately hold for the purpose of giving effect to what is just and equitable.
DETERMINATION AND CONCLUSION
I conclude that the parties’ contributions overall should effectively be treated as equal. To the extent that the Husband argued that he contributed more financially at the commencement of the relationship by bringing in the former matrimonial home, the F Street, Town G property and the business, I consider this is counter-balanced by the Wife contributing the proceeds of sale of the Suburb X property and the resulting significant improvements it facilitated to the former matrimonial home, and later the Wife’s balance inheritance.
On the state of the evidence it is not possible to find what equity there may have been in the F Street, Town G property at the commencement of the relationship, but the timing of its purchase and the evidence about how it was paid for suggests it was a relatively small contribution. Similarly, there is no evidence about the initial value of the business and the trajectory of income from the business show that it built during the relationship.[31]
[31] Exhibit R-4.
Further, as found above, the Husband’s initial financial contributions eroded over time because of both financial and non-financial contributions made by the Wife and the long marriage.[32]
[32] Jabour & Jabour [2019] FamCAFC 78.
I have found that the parties non-financial contributions overall were also relatively equal.[33]
[33] At [49] of these reasons.
I have found that the evidence establishes, on the balance of probabilities, a basis for adjustment pursuant to s 75(o) of the Act only for the reasons referred to at [67] of these reasons. No other adjustments are warranted, including for future needs generally despite the Husband being two years older than the Wife. I note no particular emphasis was placed on age disparity as a basis for adjustment and the parties each stated they are in good health.[34]
[34] At [56] to [65] of these reasons; affidavit of the Wife filed 19 December 2022 at [50]; Affidavit of the Husband filed 13 January 2023 at [135].
At the end of the hearing, I invited submissions about how the property adjustment determination by the Court should be implemented. The result of that enquiry led to the Consent Memorandum being provided.
The orders sought require a cash payment to be made by the party retaining the former matrimonial home; this needs to also be subject of court order.
I conclude that the Husband ought to retain the former matrimonial home because:
·it is in the Husband’s sole name and ownership presently;
·he has advanced a compelling reason for retaining it given the lengthy history of his use of the property for his business and livelihood; and
·the Wife conceded that it would be preferable to avoid it being sold.
In contrast, the Wife has no need to live there particularly in order to earn income and support herself. Practically, she has not been in the home since March 2021 and I have taken into account the circumstances since she no longer lived there, as stated at [69] of these reasons..
The Husband did not adduce specific evidence about his capacity to pay out the Wife, but I do not consider this to be automatically fatal to his claim to retain it in this case. The former matrimonial home has an agreed valued at $770,000 and is not subject to mortgage. I am able to infer from the evidence about the Husband’s income, that he is likely to have capacity to borrow the funds required to achieve a 50%/50% adjustment of net non-superannuation interests and pay the required $20,000 to the Wife described at [69] above because:
(a)the net sale proceeds from the additional B Street, Town C property are all to be paid to the Wife;
(b)the only liability relates to estimated capital gains tax liabilities on sale of real estate, which will be paid in full from the proceeds of sale of the additional B Street, Town C property; and
(c)the Husband is capable of earning in the vicinity of $80,000 per annum; and
(d)the Husband has significant savings which he will retain pursuant to the agreed orders.
I will afford the Husband, 45 days to secure the necessary borrowings required and, in that event, he will be entitled to retain the former matrimonial home. In the event that he does not do so, there will be an alternate default order that it be sold.
If:
·the Husband is to retain the former matrimonial home; and
·the Wife and Husband retain the other assets according to the orders in the Consent Memorandum, the distribution of assets is demonstrated as follows:
To the Husband Asset Agreed Value Former matrimonial home $770,000 The B Street, Town C property $400,000 Half of benefit of loan receivable from the daughter $52,800 Bank Q account …60 $99,839 CBA account …94 $21,119 Motor Vehicle 1 $20,000 Business $131,000 Farming equipment and homemade trailer $15,000 Farming equipment and homemade trailer $5,000 Work Equipment $4,000 Total(A) $1,518,758.00
To the Wife Asset Agreed Value The F Street, Town G property $402,836 Estimated Net sale proceeds of the additional B Street, Town C property $311,000[35] Half of benefit of loan receivable from the daughter $52,800 Bank L …66 $3,695 Bank L …67 $60,546 ANZ Progress Saver account …29 $89 ANZ Online Saver …87 $294 ANZ Online Saver …53 $2,767 ANZ Access Advantage …41 $3,487 Share portfolio
(Company N; Company O)$15,218 Motor Vehicle 2 $8,000 Box Trailer $300 Total(B) $861,032 [35] $380,000 less $69,000 (estimated CGT liability)
To demonstrate what estimated payment the Husband is required to make to the Wife to achieve adjustment of the parties non-superannuation assets according to these reasons, I provide the illustrative calculation below of the net non-superannuation assets and assuming the net proceeds of sale from the additional B Street, Town C property are $311,000.[36] The Husband will be required to pay a cash sum to the Wife calculated as follows within 45 days.
50 per cent x $2,379,790 being the estimated total net non-superannuation assets (A plus B[37] above)
Sub-total: $1,189,895
Less: $861,032 being the value of assets retained by Wife (B above)
Equals amount payable to Wife = $328,863
[36] Estimated sale value less estimated CGT for F Street, Town G but not the B Street, Town C property
[37] B will vary depending on sale price for the additional B Street, Town C property and ultimate CGT liability.
Noting the above reasons and the foreshadowed orders, the net sale proceeds of the additional B Street, Town C property will be applied as the parties have agreed and then paid solely to the Wife, providing the Husband is able to make the required cash payment arrived at according to the formula described at [86] of these reasons.
The final orders to be made ensure that each party has close to or over $1,000,000 in non-superannuation assets,[38] and equal superannuation interests. In all the circumstances of this case, that will be a just and equitable outcome, including that both parties will have suitable housing which each had at the commencement of their relationship.
[38] Dependant on the final CGT liabilities.
Should the Husband not be able to do so, then in default the H Street, Suburb J property will be sold and required 50/50 adjustment achieved in stages as and when the properties are sold and the net proceeds of sale known.
Whether the Husband retains the former matrimonial home or it needs to be sold, the Husband will be required to make the cash payment of $20,000 to the Wife to account for what is just and equitable noting the findings and reasons at [68].
It is necessary to note that the parties’ joint agreed balance sheet[39] did not acknowledge that interest is likely to have accrued on the net sale proceeds of the F Street, Town G property which are currently held in the interest bearing account with Company K. I have provided for this by ordering that any interest accrued be paid out to the Wife as the court’s orders will ensure that my determination of a 50/50 final adjustment is achieved.
[39] MFI-1.
I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 16 March 2023
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