DIGGELEN & DIGGELEN
[2012] FamCA 940
•9 November 2012
FAMILY COURT OF AUSTRALIA
| DIGGELEN & DIGGELEN | [2012] FamCA 940 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage – Where the matter proceeded on an undefended basis – Where the husband has a history of drug abuse– Where the parties’ contributions overall were 54 per cent by the wife and 46 per cent by the husband – Where it is appropriate for the wife to receive spouse maintenance – Where it is just and equitable for an adjustment of 10 per cent of property and superannuation in favour of the wife pursuant to s 75(2) of the Family Law Act 1975 (Cth). FAMILY LAW – CHILD SUPPORT – Where a child support departure order is sought by the wife – Orders made for the husband to pay for school fees, the cost of school camps, excursions and the gap for medical expenses. |
| Family Law Act 1975 (Cth) s 72(1); s 75(2); s 79; s 79(1); s 79(2); s 79(4) Child Support (Assessment) Act 1989 (Cth) s 124 |
| Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693 Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 Lee Steere and Lee Steere (1985) FLC 91-626 |
| APPLICANT: | Ms Diggelen |
| RESPONDENT: | Mr Diggelen |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
| FILE NUMBER: | SYC | 3222 | of | 2009 |
| DATE DELIVERED: | 9 November 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Johnston J |
| HEARING DATE: | 30 October & 1 November 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Batey |
| SOLICITOR FOR THE APPLICANT: | Broun Abrahams Burreket |
| SOLICITOR FOR THE RESPONDENT: | In person (morning of 1 November 2012 only) |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Karagiannis (in relation to parenting only) |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
Orders
That pursuant to s 79 of the Family Law Act 1975 and to effect final property settlement between the parties the husband cause to be paid to the wife within forty-two (42) days the sum of $1,016,635.00.
That upon receiving the above sum the wife shall forthwith do all things and sign all documents necessary to transfer to the husband her interest in their joint Macquarie Bank account no …985.
That in the event that the husband fails to comply with order 1 above, the following shall apply:
(a)The husband and wife shall forthwith do all things and sign all documents necessary to cause the funds currently held in their joint Macquarie Bank account no …985 to be paid to the wife;
(b)The husband forthwith execute the authorities identified as Annexures “B” and “C” of the wife’s Amended Application (as attached below);
(c)The husband forthwith do all things and sign all documents necessary to cause the exercise and sale of:
(i)The whole of the husband’s nil cost options being 111,935 shares in X PLC which vested on 31 August 2011 and to cause the whole of the proceeds to be disbursed in the following priority:
-in payment of any brokerage fees incurred on sale
-in payment of the balance to the wife
(ii)Sufficient of his shares in the X Private Equity Fund No 3 to produce a sum of $210,904.00 which the husband shall pay to the wife.
That a copy of these orders is to accompany each of the instructions and authorities given by the husband to X Bank Limited, X Bank PLC and X (Australia) Limited and any share broker and/or trader having the carriage of the sales referred to above.
That the wife’s solicitors be granted leave to serve a copy of these orders on:
(a) X PLC
(b) X Bank Limited
(c) X (Australia) Limited
(d) The trustees of the X Private Equity Fund No 3
(e) Macquarie Bank
(f)The share broker and/or trader having carriage of the sales referred to above.
That the husband indemnify and keep indemnified the wife in respect of any taxes, charges or imposts incurred as a result of the husband’s compliance with these orders.
That the husband and the wife are declared the sole owners respectively of all other property and superannuation in their possession and/or control.
That if either party refuses or neglects to sign any document as required by these orders the registrars of the Sydney Registry of the Court are appointed to sign such document in the name of that person and to do all things necessary to give validity and operation to the document.
Spousal Maintenance
That the husband shall pay directly to the wife for her maintenance the sum of $2,250.00 per week such payments to be made monthly in advance by way of direct deposit in the sum of $9750.00 to an account nominated by the wife in writing, the first payment to be made within seven (7) days and to continue until the husband pays the wife in full pursuant to the above property orders.
Child Support
That pursuant to s 124 of the Child Support (Assessment) Act 1989 the husband shall provide child support to the wife for the benefit of the child (in addition to the periodic amounts as assessed by the Child Support Agency from time to time) until the child attains the age of 18 years or completes secondary school whichever is the latter by way of payment of:
(a)The child J’s private school tuition fees and costs of all camps and excursions;
(b)As and when they fall due all gap medical, hospital, dental, optical and orthodontic fees for the child that are not covered by medical insurance or otherwise claimable pursuant to the private health insurance of the child; and
(c)All premiums necessary to maintain the children at the highest level of private health insurance.
That all exhibits be released.
That both parties have leave to re-list these proceedings on fourteen (14) days notice in relation to the implementation of the orders.
That the above orders not commence operation until thirty (30) days after personal service on the husband of a sealed copy of these orders.
That the husband have leave to re-list these proceedings by arrangement with Associate … at his risk in relation to costs for further order including orders to vary or set aside any of the substantive orders at any time until the expiration of the said thirty (30) day period. Any such application in the first instance shall be accompanied by an affidavit by the husband explaining his failure to return to court on 1 November 2012 and be supported by affidavits of qualified medical practitioners.
ANNEXURE “B”
AUTHORITY AND DIRECTION TO PAY MONIES
TO: X plc
[postal address omitted]
X Bank Limited
[postal address omitted]
X (Australia) Limited
[postal address omitted]
RE: MR DIGGELEN
[postal address omitted]
You are hereby authorised and directed to pay any bonus and/or commissions payable to me or at my election by virtue of my employment directly to the bank account in the name of me and Ms Diggelen with the Macquarie Bank Account Number …85.
MR DIGGELEN
Dated: 2012
ANNEXURE “C”
AUTHORITY AND DIRECTION TO PROVIDE DOCUMENTS AND INFORMATION
TO: X plc
[postal address omitted]
X Bank Limited
[postal address omitted]
X (Australia) Limited
[postal address omitted]
RE: MR DIGGELEN
[postal address omitted]
You are hereby authorised and directed to pay provide to
BROUN ABRAHAMS BURREKET
Family Lawyers
Level 16, 338 Pitt Street
SYDNEY NSW 2000
AUSTRALIA
the following:
Originals or copies of all prospectus, constitution, rules, policy, or other document which records the employee, member and/or grantee rights and/or terms in relation to:
1.1The X PLC No 1 Trust; and
1.2SA LTIP Trust;
1.3IBAL …; and
1.4LTIP Trust,
including but not limited to the grant of options described as:
1.(a) UK LTIP …;
(b)UK EVA; and
(c)UK LTIP …;
(d)SA LTIPS March ….
Originals or copies of all current statements, summaries, notices recording the current holdings, entitlements and/or option I have in relation to:
2.1The X PLC No 1 Trust; and
2.2SA LTIP Trust;
2.3IBAL …; and
2.4LTIP Trust,
including but not limited to the grant of options described as:
2.(a) UK LTIP …;
(b)UK EVA; and
(c)UK LTIP …;
(d)SA LTIPS ….
Originals or copies of all correspondence, e-mail and other communications in the period 1 July 2010 to date passing between me and you in relation to:
3.1The X PLC No 1 Trust; and
3.2SA LTIP Trust;
3.3IBAL …; and
3.4LTIP Trust,
including but not limited to the grand of options described as:
3.(a) UK LTIP …;
(b)UK EVA; and
(c)UK LTIP …;
(d)SA LTIPS ….
Such other documents and/or information requested by Broun Abrahams Burreket that would otherwise be available to me personally (whether as an employee, customer and/or shareholder).
MR DIGGELEN
Dated:2012
IT IS NOTED that publication of this judgment by this Court under the pseudonym DIGGELEN & DIGGELEN has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3222 of 2009
| Ms Diggelen |
Applicant
And
| Mr Diggelen |
Respondent
REASONS FOR JUDGMENT
These are undefended property proceedings. The parties in these proceedings are Ms Digellen and Mr Digellen. For convenience I shall refer to them as “the wife” and “the husband” respectively.
I commenced hearing the proceedings together with final parenting proceedings on 30 October 2012. The husband failed to appear that day.
Adjournment Application
(given ex tempore on 1 November 2012)
The hearing dates, that is four days from Tuesday 30 October 2012 were set down many months previously in circumstances where the Court had a very limited capacity to list trials. So the husband had been aware of these trial dates now for many months. When the husband failed to appear at court on the first day of the trial, 30 October 2012, I asked both the counsel for the wife in the proceedings and also counsel for the Independent Child Lawyer (“ICL”) about whether either party had had contact with the husband. I was informed by learned counsel for the ICL that they had been endeavouring to contact him both by telephone and also by emails over approximately the previous week with no success.
Learned counsel for the wife informed me that the wife’s solicitors had been endeavouring to contact the husband both by telephone and by emails, none of which had been responded to. Counsel informed the Court that his client had indicated at approximately 7:55 am on the first day of the trial, that she had received a message from the husband asking her to convey to the parties’ son his apology for not having called around to collect the child to spend time with him.
In those circumstances I became extremely concerned about the welfare of the husband and I arranged through the Marshal of this Court for the State police to call on the husband. I understand they did this because the Marshal reported back to me and indicated that the police had called at the husband’s residence, and found that he had been in bed. They reported words to the effect that he appeared to be “full of beans” and appeared to be in good health which came as a relief to me and others in Court when I reported back to them.
In those circumstances, I then dealt with the parenting aspect of the proceedings as an undefended proceeding because I was satisfied that the husband knew that the matter was listed for trial, that he had not come to Court and the other matters, which I have referred to above.
So far as the parenting proceedings are concerned, that has been completed by final orders that I made on 30 October 2012.
I then made some directions for the property aspect of the proceedings to stand over to 1 November 2012. I anticipated that the matter would proceed as an undefended proceeding. I directed that a minute of the property orders sought by the wife be served on the husband together with a copy of the orders made, including the fact that I had adjourned the property aspect of the matter to 1 November 2012. I made directions that the husband be notified by email about those matters.
The husband appeared at Court at 10:00 am on 1 November 2012 and apologised for not appearing on the first day of the trial, 30 October 2012. He asked the Court to grant him an adjournment.
The basis of his adjournment application was that he had been on holiday overseas, that he had left Australia for this holiday on 16 October 2012 and it had been a long time since he had taken a holiday. He said that he became aware while overseas that his solicitors were no longer representing him in the proceedings and that he then went into a depression feeling overwhelmed by those events, and the prospect of having to come and represent himself in the trial. He said that if given time he would arrange for other lawyers to represent him and that he would be prepared to agree to the sale of some further shares or share options to provide a fund to the wife so that she would not be prejudiced by the adjournment that he seeks.
On the other hand, the adjournment application was strenuously opposed. It was submitted on behalf of the wife that the matter had been set down for a long time, that there would be nothing to gain from the adjournment, that there have been longstanding and ongoing problems in terms of the husband getting his case ready, making a proper disclosure and retaining representatives in the proceedings. It was submitted that the wife would be highly prejudiced by an adjournment.
So far as the husband having gone on holidays and not having been in a position to prepare his case in circumstances where his solicitors had ceased to act and therefore saying that he required an adjournment to be able to seek representation is concerned, I must say I do not have much confidence that the husband would return to Court with a solicitor. He conceded that the reason his solicitors had ceased to represent him was because the money in their trust account had run out.
In my view there would have been an enormous prejudice to the wife if the proceedings were adjourned. The wife had been endeavouring to have her application heard now over many years, the application having been filed as long ago as 2009. There had been many interlocutory applications and many difficulties in terms of trying to get this matter ready for trial.
So far as the husband’s health situation was concerned, he had been endeavouring to manage a difficult health situation for a long time. In my view there was no guarantee that if the Court were to adjourn the matter, things would be any different on the next occasion.
In those circumstances, and particularly because of the very considerable prejudice that would result to the wife, in my view it would not have been in the interests of justice to adjourn the proceedings. Accordingly, the husband’s adjournment application was dismissed.
Leave to Proceed on an Undefended Basis
(given ex tempore on 1 November 2012)
After I dismissed the husband’s adjournment application I suggested that he take some time to discuss the matter with learned counsel for the wife. I also suggested that he take some time to arrange his thoughts on the basis that I would be continuing to proceed with the trial. After a short adjournment I came back into Court and was informed by the husband that he would not be able to continue until the following day, that the enormity of what he was facing and his personal situation were such that he did not think he could start to represent himself in the trial at that time.
I discussed with him what would be involved. He said that he had only just received some documents and, notwithstanding the fact that one of the documents he was referring to was the Amended Application which had been sent to him two days previously, he said that it would take him some time to digest the balance sheet. I indicated to him that I struggled to understand his difficulty in circumstances where he was a person who had a high level of qualifications and long professional experience in the financial world which obviously involved a great facility in figures. I pointed out to him that all of the items contained in the balance sheet were items of his property or that of the wife and that none of that would be unfamiliar to him.
After some discussion I suggested to the husband that I would be prepared to give him until 2:30 pm that day to prepare himself including preparation of some questions for the wife in cross-examination. I also indicated to him that it was unlikely that the trial would finish that day and that in addition to the time that I was making available to him, he would have a period overnight to be able to perhaps better determine what orders he would be seeking. He gave me the impression that he would be able to be ready by 2:30 pm and that he was going to go home to obtain some documents and to prepare himself for the trial.
At approximately 1:45 pm on 1 November 2012 I received a copy of an email letter from the husband sent primarily to the solicitor for the wife but with a copy to my Associate. Without reading the entirety of that document, because I marked it as Exhibit 3 in the proceedings, the first paragraph read as follows:
I shall be unable to re-appear in Court this afternoon. Upon returning home and reviewing the various documents I am required to do, I experienced the myoclonic seizures (or involuntary muscle jerks) which typically herald the onset of a grand mal seizure. These are typically brought on by lack of sleep and / or stress, both of which I have experienced over the last few days and, in particular, this morning. I have taken medication prescribed to me by my neurologist (Rivotril) which acts to dampen neural activity thereby preventing a full blown seizure. It also has significant sedative side-effects making it impossible for me to drive or to engage in any meaningful dialogue - certainly I would be unable to participate in any form of cross-examination or similar process this afternoon.
The letter went on to say that he considered that he expected to be able to attend Court the following morning and expected that he would be able to prepare himself later that afternoon and evening.
I must say in the absence of some medical evidence and confidence that the husband was consulting appropriate medical practitioners I had doubts about the veracity of what he was asserting. This was particularly because he had informed me that morning that he had been in a bad way on Tuesday, 30 October 2012 and that was the reason that he had not been able to come to Court. He said that he had been laid up ill in bed that morning. I am afraid that conflicted with what I had been told by the Marshal of this Court. He said that the police had informed him that when they called at the husband’s home on 30 October 2012, the husband had been in bed and that he had just got out of bed. But the police also said that they observed the husband to have been “full of beans” or “bright as a button” (I cannot recall which expression was used but it was one of these) and that apparently the husband was in good health. That was a very different picture from that given by the husband in Court on 1 November 2012.
The wife in these proceedings has been endeavouring to have the Court provide her with an outcome in the proceedings now over some years as I have said previously. In my view, to adjourn the Court further, as the husband was inviting the Court to do, on the unlikely chance that he would pay the Court and the wife the courtesy of appearing in Court the following day against the background of the Court’s recent experience of the husband’s behaviour, would be too prejudicial to the wife. In my view, the interests of justice fell in favour of giving the wife leave to have her application heard that day as an undefended proceedings. Accordingly, I gave the wife such leave and heard her application on 1 November 2012 in the absence of the husband.
To offer the husband procedural fairness, I propose, upon making orders, to suspend the operation of such orders for a period to enable the husband to bring the matter back to Court, at his risk in relation to costs, in the event that he might wish to do so.
Application
The wife seeks orders to the following effect:
·That pursuant to s 79 of the Family Law Act 1975, and to effect final property settlement between the parties the husband cause to be paid to the wife within 30 days a sum of $1 468 626;
·Various orders in the event that the husband failed to comply with the above order which include transfer of funds in a joint bank account to the wife and sale of various parcels of shares in order to achieve payment to the wife of the appropriate sum;
·A spousal maintenance order to the effect that the husband pay the wife $2 500 per week at least for the period until the husband complied with the property orders;
·An order pursuant to s 124 of the Child Support (Assessment) Act 1989 that there be departure from the current child support assessment so that the husband would pay the child’s private school fees and associated costs as well as private health insurance and various medical fees in respect of the health of the child.
Background
The husband, 47 years, and the wife, 42 years, were born in South Africa. They commenced cohabitation in November 1994. They married in November 1996 and finally separated on 2 December 2008.
When the parties met in approximately 1991 the husband was working as a trainee business professional in South Africa and the wife was working as a waitress.
Between 1995 and 1999 the wife was employed as in the fashion industry.
In approximately January 1995 a home at M, South Africa was purchased in the husband’s name. The parties lived in this home until approximately 2002 and undertook renovations to it.
Since 1996 the husband has been an employee of X Bank Limited, initially in South Africa and later in Australia.
There is one child of the marriage namely J who was born in June 2001. He is currently 11 years of age.
In late 2001 a house and land redevelopment package was purchased in the husband’s name at P, South Africa. The construction of the home was completed in approximately September 2002 and the parties and the child moved in. They sold the M property.
The parties separated temporarily in approximately 2004 while still in South Africa. The wife moved out of the P property with the parties’ child. During this time the child spent one night a week with the husband. The husband sold the P property and purchased a property at E. The husband also purchased an apartment at D. At this time the wife returned to working in a senior position in the fashion industry, until April 2005.
The parties reconciled in April 2005. The husband purchased a property at K as a family residence. He sold the P and D properties.
In 2005 the husband began using cocaine.
The parties relocated to Australia in November 2005. The husband’s employer had offered him an attractive position of employment here. They sold the K property.
The parties resided initially at Suburb L for a short period in November 2005 before moving to Suburb B on January 2006. Both homes were rented.
In February 2007 the parties purchased the former matrimonial home at Suburb N for $2 600 000.
The wife said that the husband began to spend less time at the home from mid 2007. She suspected drug abuse.
In February 2008 the husband informed the wife that he was addicted to cocaine.
In approximately 2008 the parties achieved permanent resident status in Australia.
On 19 May 2008 the husband attended a two week rehabilitation program. The wife asserts that he relapsed in August 2008. There is no question that he renewed his use of cocaine. The husband also spent time in rehabilitation in November and December 2008.
As indicated above, on 2 December 2008 the parties separated.
On 26 January 2009 the husband left the home and moved to rented premises in Suburb C.
Between 26 January 2009 and June 2009 the husband spent time with the child subject to submitting to urinalysis testing.
On 1 March 2009 the husband reported to the wife that he could not see the child because he had suffered epileptic seizures. The following day the husband suffered two seizures in front of the wife.
In April 2009 the husband spent time at S Private Hospital for drug-related therapy.
On 2 June 2009 the wife commenced these proceedings.
On 22 June 2009 interim orders were made for the husband to spend supervised time with the child and to pay to the wife the weekly amount of $2500.
On 28 July 2009 further interim orders were made requiring the husband to undergo urinalysis testing and for him to spend supervised time with the child three times per week.
Interim property orders were made by consent on 19 October 2009. These included orders to the effect that the parties’ former matrimonial home at Suburb N be sold. From the proceeds of sale were to be paid, amongst other matters, $1 000 000 to the wife, $200 000 to the husband and a further $60 000 to the wife for payment of her legal costs. The orders also provided for the husband to transfer 30 784 X plc shares to the wife and for the husband to retain for his sole use 43 750 X Limited shares. All these transactions were expressed to be by way of partial property settlement. The weekly amount of $2500 payable by the husband to the wife pursuant to the 22 June 2009 order was reduced to $2250.
On 30 April 2010 the former matrimonial home was sold for $2 750 000. The wife and the husband received their respective shares of the proceeds of sale pursuant to the above orders. The wife and the child moved out of the former matrimonial home and moved into rental accommodation in Suburb N.
On 4 May 2010 the wife applied $95 693.37 from her share of the sale proceeds to pay her outstanding legal costs. The wife retained $925 880.65 from the sale proceeds.
The parties divorced on 26 December 2010.
In 2010 the wife organised a holiday with the child in Hawaii. She reluctantly permitted the husband to accompany them when he found out about the holiday.
In January 2011 the wife travelled to South Africa with the child.
Between March and September 2011 the husband attended Dr T, psychiatrist.
On 1 April 2011 the wife and the child moved to rental accommodation in Suburb W which was closer to the child’s school
In August 2011 the husband’s position of employment with X Bank Limited was made redundant. The husband received a redundancy payment of $469 199 which included payment for accrued leave, severance payment and other remuneration.
Upon the husband’s redundancy, various long term share options which he had received in 2007 and 2010 vested.
In October 2011 the husband commenced employment with X Bank Limited on a contractual basis. I shall refer to this again below.
On 15 May 2012 consent orders were made to the effect that the husband pay to the wife $51 750 in satisfaction of arrears of the periodic payments under the orders of 22 June and 19 October 2009. The husband was also required to sell sufficient shares and options to produce a fund of $100 000. From such fund was to be released an amount of $50 000 to each parties’ solicitors to be used for legal fees, disbursements and valuations.
The Applicable Law
Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.
Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
There is a long-standing preferred approach to the determination of property applications. This involves four inter-related steps. Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of s 79(4) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should consider the effect of any proposed order upon the earning capacity of either party, the relevant matters in s 75(2), any other order made under the Act affecting a party or child and any child support that a party has provided or for which a party might be liable. The Court is to determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of its findings and determination and resolve what order is just and equitable in all the circumstances of the case.
This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.
Property available for division
As indicated above the parties’ home at Suburb N was sold pursuant to the orders of 19 October 2009.
The parties’ property includes various shares and share options in the corporation X Limited and related entities.
On 16 March 2005 the husband was granted a nil cost option over 15 000 ordinary shares in the corporation X Limited.
The options were subject to a share split under which the initial 15 000 options became 75 000 options.
Under the X Limited share incentive plan 56 250 of these options vested in March 2009. The Staff Share Scheme Department at X Limited sold 12 500 of the shares to pay the South African tax which they attracted upon vesting (in March 2009). The remaining 43 750 options converted into X Limited shares. This was the parcel of shares which the husband was permitted to retain under the order of 19 October 2009.
In March 2010 the remaining 18 750 of the 75 000 options vested. These also attracted tax upon vesting and 1000 were sold to pay the tax. This left 17 750 which converted to X Limited shares. These are being held in trust by the X Staff Share Scheme Department awaiting lodgement by the husband of his relevant South African Tax Return.
As indicated above, the orders of 15 May 2012 required the husband to sell EVA shares and X options to produce a fund to enable payment of $50 000 to each of the parties’ solicitors. This he did.
It is not clear to me how much has been paid to the solicitors for each of the parties and neither party provided me with costs letters. In these circumstances I have decided to leave the costs as things stand in relation to each party’s legal costs. Accordingly, I do not propose to include in the assets, $19 980 in the Broun Abrahams Burreket trust account, nor the $77 896 in the Armstrong Legal Trust account, nor the $50 000 balance of proceeds of EVA shares against the husband. I do propose to take into account the wife’s unbilled legal costs of $12 621 as a liability.
It is clear that the husband will have to pay tax in respect of the shares. I have not had the benefit of perusing his income tax returns.
Mr R was appointed as single expert to calculate the potential Australian taxation liability on the relevant shares and options. I have considered his report dated 30 October 2012. When the husband did appear briefly at Court on 1 November 2012 he asserted that he considered there to be some problems with Mr R’s report. If the husband had chosen to participate in the hearing, it would have been open to him to cross-examine Mr R. But the husband did not participate in the hearing. In these circumstances I accept Mr R’s report which was tendered as Exhibit 1.
Although the husband, when he did appear at Court, did not seek to have his affidavit sworn on 21 September 2012 or his financial statement sworn on 14 May 202 admitted into evidence, the wife has relied on material in these documents to support her case on the basis of admissions by the husband.
I have also had the benefit of considering various documents which appear to be business records of X Limited and various documents of its related entities as well as relevant statements of account, relating to various shares and share options of the husband. These documents became exhibits in the proceedings.
Because there have been numerous distributions of shares or money to each of the parties by way of partial property settlement, it is necessary to include in the pool of assets the various add backs. Amongst these, it was submitted on behalf of the wife that there should be added back against the husband of the $469 199 which he received as his redundancy payment. I do not, however, propose to bring this back into the property pool at $469 199. To do so would ignore taxation implications. It must be the case that some of this payment was on account of leave. There was no suggestion that the money paid was tax free. This is a most unsatisfactory aspect of the case. Doing the best I can in difficult circumstances I propose to allow $300 000 of this payment to be added back to the pool of property.
I find the property available for division between the parties to be as follows:
Assets
$
1. Husband’s St George cheque account …179
0
2. Husband’s HSBC Australia account …118
N/K
3. Husband’s Rabo Bank Premium account …10
0
4. Husband’s Rabo Bank Master account …00
0
5. Husband’s X Bank (South Africa) account …598
N/K
6. Husband’s HSBC GBP Serious Saver account …550
N/K
7. Husband’s St George Retirement account
0
8. Husband’s IWPE Fund No 3
250,000
9. Husband’s 111 935 shares in X Share Incentive Scheme 2007 (UK) LPT1’s
643,62610. Husband’s 17 750 shares in X INL Shares (SA) March 2010
101,56711. Husband’s household contents
14,205
12. Husband’s BMW motor vehicle
34,000
13. Husband’s pens and watches
9,900
14. Joint Macquarie account …985
162,105
15. Joint artworks
5,200
16. Wife’s CBA account …018
2,414
17. Wife’s CBA Netbank account …951
61,072
18. Wife’s CBA Term Deposit account …765
0
19. Wife’s household contents
11,745
20. Wife’s VW motor vehicle
8,900
21. Wife’s jewellery
5,390
_____________
$1,310,124
Liabilities
$
1. Husband’s BMW Finance / X car funding
20,500
2. Husband’s X PE Fund 3 loan facility
53,116
3. Husband’s tax liability for 2007 X options
138,517
4. Husband’s tax liability for sale of Eva options
7,084
5. Wife’s unbilled legal costs
12,621
___________
$231,838
Add Backs
There should be added back to the pool of assets the following
$
1. Husband’s X 2006 LTIP (sold by husband after separation
117,0002. Husband’s 43 750 X INL shares (SA)
250,114
3. Husband’s payment from proceeds of sale of former matrimonial home
210,0004. Husband’s proceeds of sale of ASX shares after separation
48,036
5. Husband’s X redundancy payment (part thereof)
300,000
6. Wife’s payment from proceeds of sale of former matrimonial home
1,039,5747. Wife’s 30 784 X PLC shares (SA)
175,843
Total
$2,140,567
Superannuation
There was a difference in the husband’s estimates of the value of his superannuation interests between his financial statement affirmed on 14 May 2012 and his affidavit affirmed on 21 September 2012. These differences related to his interests in Colonial First State and in Investment Solutions Retirement Annuity Fund. The affidavit was the more recent document so I shall prefer the estimates therein.
Accordingly, the husband has the following superannuation:
$
1. Colonial First State
35,000
2. IS Retirement Annuity Fund
5,730
3. IS Preservation Fund
269,644
4. X Endowment Policy
26,562
5. Metropolitan Life Retirement Annuity
56,011
___________
$392,947
Accordingly, there is property and superannuation with a value of $3 843 638 ($1 310 124 + $2 140 567 + $392 947 = $3 843 638). But there are liabilities of $231 838. Therefore the net property and superannuation has a value of $3 611 800 ($3 843 638 - $231 838 = $3 611 800).
Contributions
At the commencement of cohabitation the husband was working full time. Shortly thereafter so was the wife. The wife’s property at the time consisted of a motor vehicle of limited value, some modest savings and her personal possessions. It is not clear to me what the husband’s property consisted of at this time.
The husband has made the overwhelming financial contributions. Apart from working with Z Bank Limited in the very early part of the parties’ cohabitation, for most of the marriage the husband has worked for X Bank.
On the other hand the parties arranged their affairs so that the wife remained at home and was primarily responsible for providing the care required by the parties’ child. The wife however worked early in the cohabitation period as a sales assistant. Then between 1995 and 1997 and subsequently between early 2004 and April 2005 the wife worked in the fashion industry.
As I said, the wife has been primarily responsible for the parties’ child and for the household. Clearly she has made the overwhelming contribution to the welfare of the family.
Both parties contributed to renovations on several of their properties although I accept that the major part of the work involved was undertaken by tradespersons. These properties consisted of four homes in South Africa, an apartment in South Africa and a home at Suburb N, New South Wales.
It was submitted on behalf of the wife that the parties’ contributions overall up to the time of separation should be assessed as having been equal. I note that when the husband appeared at Court learned counsel for the wife endeavoured to obtain a concession to this effect from the husband. But the husband said that in the absence of receiving legal advice about this he was not prepared to make the concession. One can understand this.
In my view, however, there is force in the submission on behalf of the wife. Clearly each of the parties has made considerable contributions and over quite a long period, their cohabitation and marriage having continued over some 14 years.
There was a strong submission on behalf of the wife to the effect that the level of contributions by the wife since separation has been much higher than the contributions by the husband. This was largely on the basis that such was the frequency of the husband using drugs that he was rarely in an appropriate state to be able to accept the responsibility of parenting the parties’ son J. The consequence was that the wife was rarely relieved of having to provide the care for the child.
I agree with this submission. There is no question that the husband has been able to spend only very short periods with the child and that frequently he has not availed himself of the times available. His time with the child has been subject to quite an onerous regime of the husband undertaking urinalysis testing and often he has been unavailable to the child.
I accept that the consequence for the wife has been that since separation she has had to provide for close to the entirety of the care for the parties’ child. In my view, this has been a very significant contribution and well beyond the contributions of the husband by continuing to earn income.
In my view the parties’ contributions overall have been 54 per cent by the wife and 46 per cent by the husband.
s 75(2) matters
The husband is 47 years of age. He has serious health issues. On the wife’s material he has suffered from epileptic seizures, depression and a long history of abuse of alcohol and non-prescription drugs. As indicated above, he has attended a rehabilitation facility on at least two occasions, on the wife’s evidence, without success.
Learned counsel for the wife indicated that he would not be making a submission that the husband has wasted a very considerable amount of his income which would otherwise have been available for the enjoyment of the family, because of his purchase of drugs over more than six years. The wife said that the husband informed her that in 2007 he developed a serious cocaine addiction. She said that this addiction has persisted to the present time. I accept her evidence in this regard. It is supported by the reports of Mr G and Dr A.
As indicated above, in mid 2008 the husband was admitted to a rehabilitation facility. Within weeks of the husband’s discharge from this facility he resumed his use of cocaine.
In April 2009 the husband was admitted to S Private Hospital for intensive rehabilitation and detoxification. It is clear that these programs have had little effect on the husband’s addiction to drugs. Some months ago the husband failed to appear at a directions hearing. His counsel at the time informed the Court that the husband suffered from a serious drug problem.
On the other hand the wife is 42 years of age. She has been out of the paid workforce for many years. As I have said, she was employed only for a short period early in the parties’ marriage and then worked only for a short time after the child’s birth.
The wife has some serious health problems. After the child’s birth she was diagnosed with post natal depression and was prescribed anti-depressant medication. For years she has been consulting Ms V, counselling psychologist, to assist her to manage depression and anxiety. Her therapy has included supportive counselling, cognitive behavioural therapy, psycho education, crisis counselling, stress management, assertiveness training and interpersonal psychotherapy. Ms V said that sometimes the wife’s depression and possible mood disorder paralyse her to the extent that she misses appointments with Ms V and her psychiatrist, and fails to obtain mental health care plan renewals from her general medical practitioner.
Having made these observations, I also note that there was no evidence before the Court which would persuade me that the wife would not be able to work in paid employment. As indicated above, there have been periods during her life when she has been able to undertake work. Ms V referred to pressures and stresses on the wife brought on by the husband lapsing into drugs and not acting responsibly towards her and the child as well as the stress of this litigation. But these stressors should be behind the wife in the not too distant future. I am not persuaded that she would be incapable of working.
The husband’s employment with X Limited was terminated on 31 August 2011, as I have said.
The husband has been employed by X (Australia) Limited in a non-executive contractual position for two years from 1 October 2011 until 30 September 2013 at a salary of $250 000 gross. The position does not attract any bonus or share options. If not renewed the husband will not receive any payment. This work involves the husband in working between three and three and a half days per week.
What the husband’s weekly expenditure amounts to is not clear to me because he does not have appropriate evidence before the Court.
The wife’s income consists of $432 per week interest on her savings as well as the $2250 paid to her by the husband under the current court orders. She also receives child support of $300 per month under a recent child support assessment.
The wife estimated her weekly expenditure including that in respect of the child as being $5455. This included her rent of $1504 and her personal expenditure of $3951.
As indicated above the wife is almost completely responsible for the child’s care, there having been little assistance given to her by the husband since separation and particularly in recent times. On all present indications this is likely to continue until the child attains adulthood.
As indicated above, the husband has superannuation, the wife does not.
Clearly by assuming the role of primary parent for the child throughout the marriage, the wife has contributed significantly to the husband’s income, earning capacity, property and financial resources because this has freed the husband from having to attend to the demands of the child’s care. This has permitted him to be able to concentrate on working. The husband has worked long hours during most of the marriage and well beyond the work force average.
As indicated above, the marriage continued for approximately 14 years. This must have affected the wife’s earning capacity.
It was submitted on behalf of the wife that taking account of relevant s 75(2) matters a set-off of available property in favour of the wife of up to 10 per cent thereof would be appropriate.
In my view, the significant s 75(2) matters in favour of the wife are firstly that she has, and is likely to continue to have, almost the entirety of the responsibility for caring for the child with little support from the husband other than in a financial sense. Secondly, notwithstanding the husband’s addiction to drugs, which appears to diminish his capacity to earn income, in my view, he still has a higher income-earning capacity than the wife.
The s 75(2) matter which tends to favour the husband is the fact that the wife has a more substantial entitlement to property based on contributions than does the husband.
In all these circumstances, and to achieve a just and equitable order as required by s 79(2) of the Act, in my view there should be an adjustment of 10 per cent of property and superannuation in favour of the wife.
Conclusion and fourth step
The wife is to have 64 per cent of the available property and superannuation. This would have a value of $2 311 552 (64 per cent of $3 611 800 = $2 311 552).
The wife has, or has had the benefit of the following property:
$
1. 50 per cent of joint artworks
2,600
2. CBA account …18
2,414
3. CBA Netbank account …951
61,072
4. Household contents
11,745
5. VW motor vehicle
8,900
6. Jewellery
5,390
7. Payment from proceeds of sale of former matrimonial home (add back)
1,039,5748. 30,784 X PLC shares (SA) (add back)
175,843
_____________
$1,307,538
But the wife also has her liability of $12 621 for her unbilled legal costs. Accordingly, she has net property with a value of $1 294 917 ($1 307 538 - $12 621 = $1 294 917).
On the other hand the husband is to have 36 per cent of the available property and superannuation. This would have a value of $1 300 248 (36 per cent of $3 611 800 = $1 300 248).
To achieve property with a value of $2 311 552 the wife would need additional property with a value of $1 016 635 ($2 311 552 - $1 294 917 = $1 016 635).
This could be achieved in the following manner. The husband would be required to transfer to the wife his interest in the joint Macquarie Bank account …985 which would be $162 105.
The husband would also be required to sell his 111 935 shares in X Share Incentive Scheme 2007 (UK) LPTI’s which would be $643 626.
This would be a total of $805 731 ($162 105 + $643 626 = $805 731). To achieve payment to the wife of $1 016 635 a further $210 904 ($1 016 635 - $805 731 = $210 904) would be required.
The husband would also be required to sell a sufficient number of his shares in the X PE Fund No 3 to produce an amount of $210 904 which he would be required to pay to the wife. This would be a total of $1 016 635 ($162 105 + $643 626 + $210 904 = $1 016 635).
On the other hand the husband is to have 36 per cent of the available property and superannuation. This would have a value of $1 300 248 (36 percent of $3 611 800 = $1 300 248).
The husband has the following:
$
1. X PE Fund No 3
250,000
2. 111 935 shares in X Share Incentive Scheme 2007 (UK) LPT1’s
643,6263. 17 750 shares in X INL Shares (SA) March 2010
101,567
4. Household contents
14,205
5. BMW motor vehicle
34,000
6. Pens and watches
9,900
7. 50 per cent of joint artworks
2,600
8. X 2006 LTIP (add back)
117,000
9. 43 750 X INL shares (SA) (add back)
250,114
10. Payment from proceeds of sale of former matrimonial home (add back)
210,00011. Proceeds of sale of ASX shares (add back)
48,036
12. X redundancy payment (add back)
300,000
_____________
$1,981,048
The husband also has his superannuation interests with a total value of $392 947. Accordingly, the husband has property and superannuation with a gross value of $2 373 995 ($1 981 048 + $392 947 = $2 373 995).
But the husband also has the following liabilities:
$
1. BMW Finance / X car funding
20,500
2. X PE Fund 3 loan facility
53,116
3. Tax liability for 2007 X options
138,517
4. Tax liability for sale of Eva options
7,084
___________
$219,217
Accordingly, the husband has property and superannuation with a net value of $2 154 778 ($2 373 995 - $219 217 = $2 154 778). But the husband would also have to sell shares as indicated above and to pay the wife $854 530 ($643 626 + $210 904) = $854 530). This would leave him with property and superannuation with a value of $1 300 248 ($2 154 778 - $854 530 = $1 300 248).
Spousal Maintenance
As indicated above, the wife also seeks an order to the effect that the husband pay for her maintenance, the sum of $2500 per week to continue until such time as she had received her payment in the substantive property proceedings.
I propose to grant this application.
Sub-section 72(1) of the Act provides in effect that a party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if the other party is unable to support herself or himself for one of the reasons prescribed in the section. These include by reason of having the care and control of a child of the marriage who has not attained the age of 18 years and by reason of age or physical or mental incapacity for appropriate gainful employment, having regard to the relevant matters referred to in s 75(2) of the Act.
I have referred above to the relevant matters in s 75(2) of the Act. As indicated above, the marriage continued for in excess of 14 years and the arrangement between the parties was that the wife would remain out of the paid workforce and concentrate on undertaking primary responsibility for the parties’ child. I have referred above to the husband’s income. In my view, he must be regarded as having the capacity to pay spousal maintenance at least during the period until he complies with the property orders.
The wife has set out her weekly needs and I have referred to these above.
In my view, it would be unreasonable to expect, given the financial circumstances of the husband, that the wife would use her own property to fund the totality of her weekly expenditure at least until such time as she achieves payment of her substantive entitlement pursuant to the property orders.
Child Support Departure
As also indicated above, the wife seeks an order pursuant to s 124 of the Child Support (Assessment) Act 1989 for provision of child support for the child J otherwise than in the form of the periodic amount assessed. In effect the wife seeks that the husband pay the child’s private school costs, gap medical, hospital, dental, optical and orthodontic fees not covered by medical insurance and premiums necessary to maintain the child at the highest level of private health insurance.
Although learned counsel for the wife did not tender a copy of the current child support assessment, I was assured that an assessment issued recently which required the husband to pay periodic child support at the rate of $300 per month. I must say this seems a somewhat low amount given the husband’s level of income and property.
In her financial statement the wife estimated that the weekly educational expenses for the child including fees and levies was $413 per week. This would be in excess of $21 000 per annum.
In determining such an application the Court must be satisfied that it would be just and equitable as regards the child, the carer entitled to child support and the liable parent and otherwise proper to make an order. The Court is to consider the matters in s 117(4). I note that I have considered these matters in my consideration of the property application. I note that the parents have a primary duty to maintain the child. I note that the parents agreed that the child would attend the Steiner School at Suburb Y. In my view, given the level of the husband’s income and property, he can afford to pay the tuition fees and some other costs.
Bearing in mind that each parent has a duty to maintain the child, I propose to make an order in accordance with part of what the wife seeks. This would be to require the husband to pay the child’s school fees and the costs of his camps and excursions. In my view it would also be reasonable to require the husband to pay the gap for medical treatment not covered by medical insurance or otherwise claimable, as well as requiring the husband to maintain the child at the highest level of private health insurance.
So far as the other matters such as uniforms, text books and footwear are concerned, in my view these can be provided by the wife.
I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Johnston delivered on 9 November 2012.
Associate:
Date: 9 November 2012
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Jurisdiction
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Costs
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