Eckbert & Eckbert
[2023] FedCFamC2F 1596
•11 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Eckbert & Eckbert [2023] FedCFamC2F 1596
File number(s): ADC 4232 of 2021 Judgment of: JUDGE DICKSON Date of judgment: 11 December 2023 Catchwords: FAMILY LAW – PROPERTY – Relationship of approximately 26 years – where it is difficult to quantify husband’s income and financial contribution – consideration of add-backs – division of assets on a two-pool basis – superannuation splitting orders – where the Court makes final orders for property settlement to affect a 65 per centum division of the net non-superannuation assets of the parties in favour of the wife. Legislation: Evidence Act 1996 (Cth) s 140.
Family Law Act 1975 (Cth) ss 72, 75, 79.
Cases cited: Babette & Falconer [2015] FamCAFC 124
Bevan & Bevan (2013) FLC 93–545
Bolger & Headon [2014] FamCAFC 27
C & C (1998) FamCA 143
NHC & RCH (2004) FLC 93-204
Dickons & Dicksons (2012) 50 Fam LR 244
Dovgan & Dovgan [2021] FamCA 306
Fields & Smith [2015] FamCAFC 57
Fox & Percy (2003) 214 CLR 118
Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd (1983) 3 NSWLR 378
Jabour & Jabour [2019] FamCAFC 78
Jones & Dunkel (1959) 101 CLR 298
Mallet & Mallet (1984) 156 CLR 605
Mellone & Mellone [2023] FLC 94-160,
Perrin & Perrin (No. 2) [2018] FamCAFC 122
Rosati & Rosati (1998) FamCA 38
Russo & Wylie (2016) FLC 93-747
Stanford & Stanford [2012] HCA 52
Trevi & Trevi (2018) FLC 93-858
Whisprun Pty Ltd v Dixon (2003) ALR 447.
Division: Division 2 Family Law Number of paragraphs: 171 Date of hearing: 11, 12 and 13 September 2023 Place: Adelaide Counsel for the Applicant: Ms Tinning Solicitor for the Applicant: Lindbloms Lawyers Counsel for the Respondent: Ms Smith Solicitor for the Respondent: Daniel John Lawyers ORDERS
ADC 4232 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ECKBERT
Applicant
AND: MR ECKBERT
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
11 DECEMBER 2023
THE COURT ORDERS THAT:
By way of full and final property settlement the parties’ net non-superannuation assets be divided as to 65 per centum to the wife and 35 per centum to the husband and to effect same:
1.No later than sixty (60) days from the date of this Order, the husband do vacate the property situate at B Street, Suburb C in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume … Folio … (‘the Suburb C property’), and contemporaneously therewith do remove all of his items located in and around the Suburb C property including the shed together with his personal items and effects.
2.The husband shall advise the wife in writing of the date upon which he shall be vacating the Suburb C property in accordance with paragraph 1 herein.
3.Upon vacating the Suburb C property, the husband shall leave the property in a neat and tidy condition.
4.No later than thirty (30) days of the husband vacating the Suburb C property, the wife shall do all such acts and things and sign all such documents to cause the Suburb C property to be placed on the market for sale upon such terms and conditions and with such sales agent as determined by the wife PROVIDED THAT the sale price for the Suburb C property shall be not less than FOUR HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ($425,000) or such other sale price as may be agreed in writing between the parties as recommended by the sales agent.
5.In the event that the Suburb C property has not been sold within ninety (90) days of the listing date, then the said Suburb C property shall be listed for public auction upon terms and conditions as determined by the wife PROVIDED THAT the sale price for the Suburb C property shall be not less than FOUR HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ($425,000) or such other sale price as may be agreed in writing by the parties as recommended by the sales agent.
6.In the event that the Suburb C property is not sold at auction and further has not been sold within thirty (30) days of the auction date, then the Suburb C property shall be sold upon such terms and conditions as may be recommended by the Secretary of the Real Estate Institute of South Australia.
7.In the event that the Suburb C property requires any reasonable repairs or maintenance as recommended by the sales agent in writing, then:
(a)The wife shall provide the husband with written notice from the sales agent of such repairs and maintenance including an estimated cost; and
(b)The wife shall pay the costs of such repairs and maintenance in the first instance.
8.At settlement of the sale of the Suburb C property:
(a)The husband shall at his sole cost do all things necessary to withdraw his caveat being Caveat Number … secured over the Suburb C property;
(b)After adjustments between the wife and the purchaser the proceeds of sale shall be disbursed as follows:
(i)To discharge the D Bank mortgage secured by the Suburb C property being account ending #...01;
(ii)To discharge the D Bank personal loan in the sole name of the wife being account ending #...00;
(iii)To pay any outstanding costs of sale of the Suburb C property including but not limited to sales costs including any conveyancer’s fees; and
(iv)The sum of SIXTY-FIVE THOUSAND DOLLARS ($65,000) shall be invested in an interest-bearing account in the wife’s sole name for the payment of anticipated Capital Gains Tax upon the sale of the Suburb C property;
(c)The balance then remaining:
(i)Paid to a bank account nominated in writing by the wife, the following:
A.The sum of TWO THOUSAND TWO HUNDRED DOLLARS ($2,200) representing half of the Joint Valuation fees owing by the husband to the wife pursuant to paragraph 6 of the Orders dated 8 November 2021;
B.Such sum as may be required to reimburse the wife one half of any costs paid by the wife for the reasonable repairs and maintenance of the Suburb C property for sale pursuant to paragraph 7(b) herein;
(ii)Such sum representing 35 per centum of the net assets of the parties to the Daniel John Lawyer’s Trust Account for and on behalf of the husband (‘the settlement sum’); and
(iii)The balance then remaining to the Lindbloms Trust Account for and on behalf of the wife.
9.The wife is hereby authorised to provide a copy of these Orders to the sales agent and conveyancer appointed by her pursuant to these Orders in relation to the sale of the Suburb C property.
10.The husband is at liberty to liaise with the sales agent and the conveyancer to obtain information as to the sale and settlement of the Suburb C property and a sealed copy of these Orders shall serve as an Irrevocable Authority to enable him to do so.
11.The wife shall cause her personal tax return for the financial year that the Suburb C property is sold to be submitted by no later than thirty (30) days from the conclusion of that financial year and that the wife shall be solely responsible for her accounting costs in relation thereto.
12.The wife shall provide the husband with written confirmation of the Capital Gains Tax payable by her from the sale of the Suburb C property as soon as it becomes available.
13.Any surplus of funds held in the account pursuant to paragraph 8(b)(iv) herein after payment of the wife’s Capital Gains Tax liability arising from the sale of the Suburb C property shall be disbursed as follows:
(a)35 per centum to be paid to the bank account nominated in writing by the husband for and on behalf of the husband; and
(b)65 per centum to be paid to the bank account nominated by the wife in writing for and on behalf of the wife.
14.Pending the settlement of the sale of the Suburb C property:
(a)The wife is restrained and an injunction is hereby granted restraining her from further encumbering the Suburb C property and from increasing the D Bank mortgage and the D Bank personal loan as referred to in paragraphs 8(b)(i) and (ii) herein; and
(b)The wife shall meet all mortgage repayments and other outgoings associated with the Suburb C property as and when they fall due.
15.Within twenty-one (21) days of the date of these Orders, the husband shall at his sole expense do all things to withdraw Caveat Number … situate over the property at E Street, Suburb F in the State of South Australia being the whole of the property comprised and described in Certificate of Title Register Book Volume … Folio … (‘the Suburb F property’).
16.In relation to the wife’s Super Fund 1 account number …:
(a)A base amount of FORTY-SIX THOUSAND TWO HUNDRED AND SIXTY-SEVEN DOLLARS ($46,267) is allocated as required by section 90XT(1)(a) of the Family Law Act 1975 (Cth) (‘the Act’), to the husband non-member spouse out of the member wife’s interest in the Super Fund 1;
(b)In accordance with section 90XT(1)(a) of the Act:
(i)The husband non-member spouse is entitled to be paid the amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001; and
(ii)The wife member spouse’s entitlement shall be correspondingly reduced;
(c)The Trustee of the Super Fund 1 shall do all acts and things and sign all documents as may be necessary to:
(i)Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001, the entitlement for the husband non-member spouse created by paragraph 16(a); and
(ii)Pay the entitlement whenever the Trustee makes a splittable payment from the wife member spouse’s interest in the Super Fund 1.
(d)Within fourteen (14) days of the date of these Orders, the wife member spouse shall serve a copy of these Orders upon the Trustee;
(e)This order shall have effect from the operative time and the operative time for paragraph 16(a) is the fourth business day after service of a certified copy of these Orders on the Trustee;
(f)Having been afforded procedural fairness, the Trustee shall be bound to observe the requirements pursuant to the Act and the Family Law (Superannuation) Regulations 2001;
(g)The parties shall each pay half of any fees charged by the Trustee in administering the payment split pursuant to these Orders; and
(h)Within fourteen (14) days of the date of these Orders, the husband do advise the wife in writing of the name and member details of his nominated superannuation fund for the purposes of implementing the superannuation splitting order as provided for in paragraph 16 herein.
17.Subject to the Orders set out herein, the wife shall retain as her sole property free from any right, title or claim by the husband the following:
(a)Her interest in the Suburb F property;
(b)Her Motor Vehicle 1;
(c)All furniture and effects and other chattels in her possession and control;
(d)Any cash at bank, savings, term deposits or shares in the wife’s name;
(e)The wife’s superannuation interest subject to paragraph 16 herein;
(f)Any life insurance, life assurance, superannuation and rollover entitlements or retirement payments in the wife’s sole name;
(g)All entitlements or benefits due or accruing to the wife arising out of her employment;
(h)Any interest in a commercial trust or partnership entity in which the wife has an interest either now or hereafter;
(i)The wife’s choses in action;
(j)Any entitlement due or hereafter due to the wife pursuant to any deceased estate or discretionary trust; and
(k)All other property or financial resources in the wife’s possession or control whether registered in her name or not, or not otherwise specified herein.
18.Subject to the Orders herein, the husband shall retain as his sole property free from any right title or claim by the wife the following:
(a)The settlement sum;
(b)All furniture, effects and other chattels in his possession or control;
(c)His motor vehicle(s);
(d)His collectibles and parts;
(e)His tools and equipment;
(f)Any cash at bank, savings, term deposits or shares in the husband’s name;
(g)His superannuation interest;
(h)Any life insurance, life assurance, superannuation and rollover entitlements or retirement payments in the husband’s sole name;
(i)Any interest in a commercial trust or partnership entity in which the husband has an interest either now or hereafter;
(j)The husband’s choses in action;
(k)Any entitlement due or hereafter due to the husband pursuant to any deceased estate or discretionary trust; and
(l)All other property or financial resources in the husband’s possession or control whether registered in her name or not, or not otherwise specified herein.
19.Subject to the Orders herein, the wife shall otherwise indemnify the husband and keep him forever indemnified with respect to all debts in her name whether jointly or solely.
20.Subject to the Orders herein, the husband shall otherwise indemnify the wife and keep her forever indemnified with respect to all debts in his name whether jointly or solely.
21.Subject to the Orders herein each party shall forthwith:
(a)Release the other party from any liability for any claim that either one may have against the other in respect of any property either now or hereafter owned by either of them;
(b)Be solely responsible for all debts in their sole name whether past present or future and shall pay such debts without calling upon the other to contribute thereto and shall indemnify the other and keep the other forever indemnified in respect thereof;
(c)Keep the other indemnified in relation to all actions, claims, proceedings, and demands howsoever arising in relation to any debts and liabilities incurred in their respective sole names;
(d)Discharge without calling upon the other to contribute thereto any debts contracted for or by them including but not limited to any personal debts entered into by them;
(e)Be restrained and an injunction is hereby granted restraining each of them from pledging the credit of the other; and
(f)Release the other party from any liability for any claim that either one may have against the other in respect of any property either now or hereafter owned by either of them including any Capital Gains Tax owing and payable by them now or in the future with respect to any assets they shall retain pursuant to these Orders.
22.The parties shall do all acts, deeds and things and sign and execute all documents necessary or desirable to give full force and effect to these Orders provided that if either the husband or the wife shall refuse or neglect to execute a document necessary to give full force and effect to these Orders within fourteen (14) days after the same shall have been tendered to him or her for the purpose of execution then and in such event pursuant to section 106A of the Act by a Judicial Registrar or Registrar of the Federal Circuit and Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.
23.All extant applications be dismissed.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON:
INTRODUCTION
These proceedings relate to the question of matrimonial property settlement arising out of a long marriage of approximately 26 years.
These are the Court’s Reasons for Judgment following Trial between the parties concerned on 11, 12 and 13 September 2023.
BACKGROUND AND AGREED CHRONOLOGICAL EVENTS
At the date of Trial, the wife is aged 63 years of age and the husband is aged 62 years of age.
The parties met in 1991 and commenced cohabitation 1992. They were married in 1993 and separated on a final basis under the one roof on 31 December 2018. Physical separation occurred in early 2022 when the husband vacated the property at Suburb F in the State of South Australia (‘the Suburb F property’).
There are no children of the marriage.
It is an agreed position that throughout the marriage, the parties retained separate finances and bank accounts and did not purchase any assets in their joint names.
In 1992, the parties commenced cohabitation in a rental property at Suburb G. At the date of cohabitation, each of the parties were employed with the husband working for H Company and the wife operating a business.
From 1992 to 2014, the parties lived in rental accommodation.
In 1994, the husband became self-employed and undertook work in the service industry using the business name “J Company” (‘the husband’s business’).
In late 1999, the parties purchased a property at B Street, Suburb C in the State of South Australia (‘the Suburb C property’). The Suburb C property was purchased for the sum of $105,000 in the wife’s sole name using a deposit of $25,000 and a mortgage secured for the balance with K Bank. The Suburb C property was rented throughout the entirety of the marriage and the rental payments applied to a reduction of the mortgage balance.
In 2000, the wife sold her business and commenced working as an employee for the purchaser of the business.
Thereafter, the wife was employed in a number of positions in the hospitality industry. In 2006, the wife completed training with the L Organisation and commenced working as a retail assistant. The wife remained working in this role at Trial.
In 2013, the wife’s mother, Ms M (‘the wife’s mother’), came to live with the parties in their rental property at Suburb G after suffering an injury at her home in Suburb N (‘the Suburb N property’).
In mid-2013, the Suburb N property was listed for sale. Prior to sale, the husband undertook renovations and repairs to the property, the extent and quality of which was in dispute at Trial. The Suburb N property was sold in late 2013 for the sum of $515,000.
In early 2014, the wife’s mother purchased the Suburb F property in her sole name for the sum of $503,000. It was agreed between the husband and the wife and the wife’s mother that they would live together in the Suburb F property. This arrangement was a mutual benefit to all parties. The husband and the wife would be provided with rent free accommodation and the wife’s mother would be cared for by family.
In early 2014, the wife borrowed the sum of $80,000 as a personal loan in her sole name to pay for renovations to the Suburb F property to assist caring for her mother. The husband also undertook repairs and renovations to the Suburb F property, the extent and quality of which was also in dispute between the parties at Trial.
In late 2014, the parties and the wife’s mother moved into and thereafter occupied the Suburb F property until the husband vacated the property early 2022 pursuant to a Court Order.
In 2014, the husband’s father died. The husband received an inheritance totalling approximately $160,000 in two separate instalments in late 2015 paid into the husband’s D Bank Account ending #...40.
From the husband’s inheritance, it is agreed that the husband paid to the wife the sum of $50,000 in order to reduce the personal loan in the name of the wife referred to in paragraph 16 herein. It is also agreed that the husband purchased a number of household items and furniture and effects. The disbursement of the balance of the husband’s inheritance and whether or not the husband retained any of those monies was an issue in dispute between the parties at Trial.
After moving into the Suburb F property (but on a date which is not agreed), the husband’s business was closed. The timing of the business closure coincided with an increase in the rent for the husband’s work premises and a mutual decision that the husband receive Centrelink entitlements as the wife’s mother’s carer. The husband vacated his business premises and rented a “space” at Suburb O where he stored his plant and equipment. He also stored equipment and tools at the Suburb F property.
It is agreed that by late 2015, the husband’s ABN for the business had been cancelled and he commenced receiving a Centrelink Carer’s Pension for the wife’s mother. The extent and quality of the husband’s care of the wife’s mother was in dispute between the parties at Trial.
In mid-2016, the parties and the wife’s mother executed a Memorandum of Transfer dated mid‑2016 (‘the first Transfer’) in relation to the Suburb F property. The first Transfer provided that the Suburb F property was to be registered in the name of the wife’s mother as an estate in freehold for her life and with the parties as an estate in fee simple in remainder expectant upon the determination of the life interest of the wife’s mother.[1]
[1] See the Affidavit of Ms Eckbert filed 26 October 2022 at ‘Annexure E27’.
In mid-2016, the Transfer was amended to delete the name of the husband. It was an agreed fact at Trial that the husband only learnt that his name had been removed from the first Transfer following separation from the wife.
By late 2018, the parties commenced living separately and apart under the one roof with the wife’s mother.
In early 2019, the wife repaid the husband the sum of $50,000 as referred to in paragraph 19 herein.
On 15 October 2019, and after the wife had obtained legal advice, a second Memorandum of Transfer (‘the second Transfer’) was executed in relation to the Suburb F property. The effect of the second Transfer was that upon the death of the wife’s mother, the wife owned 70 per centum interest in the Suburb F property and with her two siblings owned equally 30 per centum of the remainder.
On 30 October 2019, the second Transfer was registered.[2]
[2] See the Affidavit of Ms Eckbert filed 26 October 2022 at ‘Annexure E28’.
There is no dispute that the husband was not advised of the second Transfer.
On 31 August 2021, the wife issued proceedings for property settlement. By way of interlocutory relief the wife sought a raft of orders including an order for sole use and occupation of the Suburb F property.
On 25 October 2021, the husband registered caveats over the Suburb F and Suburb C properties.
On 8 November 2021, Orders were made inter alia as follows by consent:
(1)For the wife to have access to the husband’s storage facility at Suburb O;
(2)For the parties to engage a single expert to value items located at the Suburb O storage facility and the Suburb F property with the wife to pay the costs of the valuations at first instance and the husband to reimburse the wife one half at settlement or at Trial;
(3)That the wife pay to the husband the sum of $1,000 to assist in his relocation costs;
(4)That no later early 2022, the husband vacate the Suburb F property including the removal of all of his items located in the shed and at the Suburb F property;
(5)That as and from early 2022, the husband have sole use and occupation of the Suburb C property and it be a condition thereof that the husband meet all mortgage repayments, all outgoings and utilities and all rates and taxes as and from that date;[3] and
(6)That as and from early 2022, the wife have sole use and occupation of the Suburb F property.
[3] See Orders made by a Senior Judicial Registrar on 8 November 2021 at paragraph 12.
In early 2022, the husband vacated the Suburb F property and moved into the Suburb C property. There is no dispute that upon occupation of the Suburb C property:
(1)The husband’s care of the wife’s mother ceased. Despite this, the husband continued to receive Centrelink Carer Payments for the wife’s mother until late 2022; and
(2)The husband made only two payments towards the mortgage in compliance with the terms of paragraph 12 of the Orders dated 8 November 2021 totalling $603. Nor did he pay any further outgoings for the Suburb C property as he was required to do under the terms of the Consent Order dated 8 November 2021.
On 22 November 2022, the parties’ competing applications for final property settlement were listed for Trial. The husband had failed to comply with orders for the filing of Trial material and appeared unrepresented. The husband sought an adjournment of the Trial in order to secure legal representation. The adjournment was granted but subject to Orders inter alia as follows:
(1)That the husband pay costs on behalf of the wife namely:
(a)The sum of $20,000 in relation to the adjournment of Trial;
(b)The sum of $10,000 from which the wife was at liberty to apply towards payment of expenses of the husband referred to in paragraph 12 of the Orders dated 8 November 2021 in the event of non-compliance by the husband; and
(c)The sum of $4,316 by way of reimbursement to the wife of monies paid on behalf of the husband pursuant to paragraph 12 of the orders dated 8 November 2021 where the husband had failed to comply with the said Order;
(2)That the husband was at liberty to sell any of the business parts and equipment in the P Company Valuation Reports early 2022 respectively, to meet payment of the costs on condition that:
(a)The husband not sell the property for an amount less than 80 per centum of the P Company Valuation of any such item; and
(b)The husband produce to the wife receipts or transfer documents regarding the sale of any equipment and machinery identifying the name of the purchaser and their contact details.
In early 2023, the husband paid $34,980 into the wife’s solicitor’s Trust Account in compliance with the costs Order made on 22 November 2022. The husband contends that the costs Order was met from the sale of equipment in his possession in accordance with the terms allowed by the Consent Order of 22 November 2022.
In 2023, the wife’s mother died. Probate was granted in 2023.
DOCUMENTS RELIED UPON
The wife filed an Outline of Case Document forwarded 4 September 2023 which sets out that she relies upon the following documents:
(1)Further Amended Initiating Application filed 3 August 2023;
(2)Trial Affidavits filed 26 October 2022, 3 August 2023 and 30 August 2023 respectively;
(3)Affidavit of Ms Q filed 25 October 2022;
(4)Affidavit of Ms R filed 25 October 2022;
(5)Financial Statement filed 3 August 2023; and
(6)Rule 12.06 Cost Notice filed 8 September 2023.
The husband filed an Outline of Case Document on 8 September 2023 which sets out that he relies upon the following documents:
(1)Amended Response to an Initiating Application filed 18 August 2023;
(2)Trial Affidavit filed 21 August 2023;
(3)Financial Statement filed 18 August 2023;
(4)List of Issues in Dispute Document forwarded 8 September 2023; and
(5)Rule 12.06 Cost Notice filed 11 September 2023.
The parties filed a Joint Schedule of Assets and Liabilities on 5 September 2023.
At closing submissions and by consent, the wife’s counsel provided an ‘Aide Memoir’ as to the calculations of the wife’s proposed orders and a Proof of Balance Report dated 13 September 2023 from D Bank as to the liabilities in the wife’s sole name. By consent those liabilities were then amended in the Joint Balance Sheet.
EXHIBITS TENDERED AT TRIAL
The wife tendered Exhibits W1 to W9 inclusive.
The husband tendered no exhibits.
ISSUES IN DISPUTE
At Trial, the parties were in dispute over the following:
(1)The composition of the asset pool and specifically the inclusion (or not) of the husband’s collection (in full or in part) and his inheritance;
(2)An assessment of the parties financial and non-financial contributions during the marriage;
(3)Whether the Suburb F property was a contribution on behalf of the wife alone or the parties jointly;
(4)The treatment of the husband’s inheritance;
(5)Whether or not there should be any adjustment pursuant to section 75(2) of the Family Law Act 1975 (Cth) (‘the Act’) on account of future needs;
(6)The extent to which the husband had complied with his obligations for disclosure;
(7)Whether it is just and equitable for the husband to retain the Suburb C property unencumbered or at all;
(8)Whether or not the husband has the financial capacity to retain the Suburb C property; and
(9)Whether the superannuation splitting order should be taken as at a figure proximate to the Trial or a figure from the 2022 financial year.
The standard of proof in this case is on the balance of probabilities.[4]
[4] Evidence Act 1996 (Cth) s 140.
In reaching a decision it is not necessary for a Trial Judge to refer to every piece of evidence or argument presented at Trial.[5] As far as possible, findings will be made on the basis of the available contemporaneous material, objectively established facts and the apparent logic of events.[6]
EVIDENCE
[5] Whisprun Pty Ltd v Dixon (2003) ALR 447,[62]; Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd (1983) 3 NSWLR 378,[385]-[386].
[6] Fox v Percy (2003) 214 CLR 118, [31].
The Parties
Each of the parties gave their evidence in a straightforward manner and made concessions where appropriate. Both parties impressed as hardworking and resourceful individuals. I formed the opinion that the wife is a prudent money manager and that in contrast, the husband is not. There were aspects of the husband’s evidence which were unsatisfactory and which did not reflect well in his case as detailed below.
Each of the parties referred at various times in their evidence to preferring to “use cash” when explaining the absence of receipts or in the husband’s case, his income and the sale of assets during these proceedings. The wife stated in evidence that she was raised to “pay cash” wherever possible for expenses and did not use Internet Banking. The husband agreed that he operated in a “cash economy.” The husband conceded that he had not filed a tax return since about 1994.
The husband agreed under cross-examination that at the commencement of cohabitation the wife had greater assets. He conceded that the wife had paid a debt on his behalf to the husband’s former girlfriend because “she did not want her near me.” The wife’s initial contribution must be seen against the backdrop of a very long relationship and what was a modest contribution even allowing for the effluxion of time.[7]
[7] See the Affidavit of Ms Eckbert filed 22 October 2022 at paragraphs 18 and 19.
There is no dispute that between the period 1992 to 1994 the parties jointly paid for their household expenses. The parties are also in agreement that during their relationship they maintained separate bank accounts and kept their finances separate from each other.
I find that from 1994 when the husband commenced self-employment in his business, the wife took over and paid for the majority of the parties’ joint expenses. The husband conceded in his oral evidence that from 1994 to 1996, any income generated by him was spent “investing in tools to make more money.”
The parties agree that after the husband’s business commenced, they had implemented a “moratorium” for a period of 12 months, excusing the husband from contributing to household expenses while the business was in its infancy. I accept the wife’s evidence that even after the moratorium had expired, she continued to meet the majority of the parties’ living expenses while the husband directed his income to running his business. The wife contends that she agreed to do this because she believed the husband’s business to be successful and his representations to her that his income was being reinvested back into the business for their “retirement nest egg.”[8]
[8] See the Affidavit of Ms Eckbert filed 26 October 2022 at paragraphs 82 and 90.
There is no dispute on the evidence that, at all times during the relationship, the wife has been engaged in employment including a period of time when she contemporaneously worked and trained to become a retail assistant. Save for an unparticularised allegation that the wife purchased designer shoes and handbags, the husband makes no complaint about the wife’s proper application of her income towards the party’s expenses and outgoings.[9] The wife was not cross-examined about her penchant for designer accessories and I therefore make no finding on the topic.
[9] See the Affidavit of Mr Eckbert filed 21 August 2023 at paragraph 60.
The parties are also in agreement that the husband worked long hours in his business (“up to 100 hours per week”) before its closure. However, the evidence supports a finding that the hours worked did not equate to actual income in. The husband gave evidence that he had not filed a tax return since he started the business and that he had not been registered for GST since 2000. He denied earning less than the tax free threshold but conceded under cross-examination that he had not declared any income over the threshold to the Australian Taxation Office. The husband’s oral evidence is at odds with his Trial Affidavit wherein the husband deposed as follows:
I have not filed a tax return in years. I have not earnt enough money to lodge a taxation return.[10]
[10] See the Affidavit of Mr Eckbert filed 21 August 2023 at paragraph 33.
Under cross-examination, the husband agreed that he had “very little” by way of documents to prove his income for the period of the relationship. I accept the wife’s evidence that she had scant idea as to what income the husband received other than the period when he was in receipt of the Centrelink Carer’s Payment for her mother.
Given the lack of evidence on the topic, the husband’s actual income and financial contribution to the marriage is therefore difficult to quantify. From his income the husband was required to meet rent for his workshop and other business expenses, including the purchase of stock, plant and equipment. Save for the 12-month period after the husband received his inheritance, I accept that the majority of the parties’ household expenses were met by the wife and later supplemented by cash contributions from the wife’s mother. I find that the majority of the husband’s income was directed back into the running the husband’s business and his personal expenditure.
I accept the evidence of each of the parties that they made nonfinancial contributions in differing ways during the marriage.
The parties agree that they undertook renovations and repairs to the wife’s mother’s homes at Suburb N and Suburb F. The Suburb N property was prepared by the parties for sale. The Suburb F property was renovated by the parties to make it suitable for the wife’s elderly mother to live in.
The wife agreed that prior to the sale of the Suburb N property, the husband had undertaken renovations and improvements which included painting and plastering both inside and on the external features of the property, and in particular, a verandah. The wife stated that her mother had paid for the materials and the paint. The wife gave evidence that her mother had provided $1,000 cash in an envelope to pay to the husband as a “thank you” for his assistance and labour. I accept her evidence.
As to the Suburb F property, the wife agreed that the husband removed walls and undertook other improvements such as painting whilst the parties were renting at Suburb G. The parties employed specialist tradespersons such as electricians, plumbers and carpenters to undertake any specialist work as required. The wife agreed that the husband installed a ramp at the front of the Suburb F property. The wife conceded that the renovations had been paid for using the $80,000 personal loan taken out in her sole name for the purchase of materials and payment of any labour. The wife described giving the husband cash money if he asked for payment for the tradesmen. The wife stated that there was no formal agreement for the husband to be paid for his time and labour. This is not surprising given that the wife’s mother provided the parties with rent-free accommodation once they all moved into the Suburb F property and also gave the husband cash “top ups” from time to time.
The wife argues that the work undertaken by the husband at the Suburb N and Suburb F properties was substandard. The husband argues that his contributions added value to the Suburb N and Suburb F properties and saved the parties money by undertaking some of the work himself.
In the absence of an independent report as to the remedial work undertaken by the husband to the properties at Suburb N and at Suburb F, the Court is not in a position to accept the versions offered by each of the parties to support their respective positions. I can no more accept the husband’s evidence that his remedial works increased the value of the Suburb N and Suburb F properties any more than I can accept the wife’s evidence that the husband’s efforts were so substandard that the reverse is true. I, therefore, make no finding as to the quality of the husband’s work on the two subject properties.
The wife conceded that the husband had commenced caring for her mother in approximately 2015 before the parties had moved into the Suburb F property. The husband’s care was later complimented by the use of paid carers to assist in caring for the wife’s mother as she became more frail and dependent on others. The wife agreed that the husband’s care of her mother in the mornings was a “help” and that it had resulted in less paid care being required.
I accept the wife’s evidence that the husband did not “give up” his business to remain at home caring for her mother. I prefer her evidence that the husband continued to work in his workshop until the rent was increased, at which time the husband then decided to vacate the premises and move his business tools and equipment into a storage facility and into a shed at the Suburb F property. In addition to receiving the Centrelink Carer’s Payment for the wife’s mother, I also accept the wife’s evidence that the husband would do “cash jobs” from home and from late 2015 began to live off the proceeds of his inheritance.
A great deal of time was taken up at Trial on the topic of the Transfers made by the wife’s mother of the Suburb F property in 2016 and 2019 respectively. In respect of this:
(1)There was no dispute between the parties that in 2016 the husband was not informed of the wife’s mother’s decision to amend the Memorandum of Transfer which resulted in the deletion of his name from the Transfer which was ultimately registered. Self‑evidently, the husband would not have likely paid the stamp duty at first instance had he been aware of the fact that he no longer had his name on the Certificate of Title;
(2)There was also no dispute between the parties that the husband was not informed of the wife’s mother’s decision in 2019 to again amend the Certificate of Title to include the wife and her two other children; and
(3)The husband first became aware of the fact that his name was not registered on the title for the Suburb F property following separation, at which time he promptly registered caveats over Suburb F and the Suburb C properties to protect his interests.
There were aspects of the evidence given at Trial by the wife in relation to the Suburb F Transfers which are difficult to reconcile. For example, how it was that the wife thought she was witnessing her mother’s Will in 2016 when the document clearly states “MEMORANDUM OF TRANSFER” in bold at the top of the document. Further, the wife was asked very little in cross-examination about the second Transfer in 2019. In late 2019, the wife’s mother executed a new Will.[11] The signature on the Will executed in late 2019 is in marked contrast to the signature of the wife’s mother on the first Transfer executed in mid‑2016.[12] The wife was not questioned about these obvious discrepancies.
[11] See the Affidavit of Ms Eckbert filed 3 August 2023 at ‘Annexure ‘E1’.
[12] See the Affidavit of Ms Eckbert filed 26 October 2022 at ‘Annexure “E27’.
I have come to the conclusion, however, that specific findings as to the circumstances surrounding the 2016 and 2019 Transfers are unnecessary on the facts of this case because:
(1)The husband has sought no relief at Trial by way of an equitable claim for the remainder interest of the wife’s two siblings of the Suburb F property. The wife’s siblings were not sought to be joined to the proceedings, nor did the husband seek to set the 2019 transfer aside; and
(2)The wife’s 70 per centum interest in the Suburb F property is included in the Balance Sheet as an asset to be retained by her. The husband’s own application is for the wife to retain that interest without further adjustment.[13]
[13] See the Amended Response filed by Mr Eckbert on 18 August 2023 at paragraph 1 of the ‘Final Orders Sought’.
In the absence of any form of relief sought by the husband at Trial, the Court is not required to make findings as identified by the husband in paragraphs 10 to 12 of the husband’s List of Issues in Dispute document.
As to the Suburb C property, it is agreed between the parties that the property was purchased in the wife’s sole name and that one of the reasons for this was because the husband was unable to secure credit. I accept the wife’s evidence that she had told the husband of wanting to buy an investment property for her future. I accept that the husband informed the wife that he was investing in expensive items for his financial future. The wife agreed in her oral evidence that at purchase, the Suburb C property was considered an asset “for both of us in retirement.”
I accept the wife’s evidence that she was responsible for the financial outgoings and costs of maintaining Suburb C. The rent from the tenant was paid in cash and applied by the wife to the mortgage. The wife conceded that she and the husband had painted the inside of the Suburb C property after a tenant had vacated the property. I accept that the husband would from time to time undertake handyman type work to the Suburb C property as required.
As stated above, it is an agreed position that in 2015 the husband received an inheritance from his father totalling approximately $160,000. The funds were paid into a D Bank account in the husband’s sole name. From this amount the parties agree that the husband:
(1)Advanced the wife the sum of $50,000 to pay down the personal loan taken out by her to fund renovations to the Suburb F property. This amount was later repaid to the husband by the wife in full;
(2)Bought various items of furniture and household items, the value of which is in dispute;[14]
(3)Paid for some takeout meals for the family; and
(4)Paid for a deposit to S Company for the construction of a shed at the Suburb F property which was not ever erected.
[14] In the wife’s Affidavit filed 26 October 2023 at paragraph 235, she deposes to a value of $7,000 or less. The husband’s oral evidence ascribed a value of $15,000.00. The wife also conceded further items bought by the husband in her oral evidence including a computer desk.
In addition, the husband gave oral evidence that he had repaid the sum of $20,000 to Mr T and arrears owing on his storage/lock-up facility where he stored his plant and equipment. The husband agreed under cross-examination that he likely had not told the wife about the alleged debt to Mr T.
By reference to the husband’s disclosure documents, the wife learnt that the inherited funds were regularly withdrawn by the husband in cash such that by mid-2019 the balance remaining in his account was $67.85.
The controversy arises because the wife seeks to ‘add back’ into the asset pool at Trial, the full amount of the inheritance as an asset to be retained by the husband. The wife argues that the husband could have withdrawn money and hidden it in cash which is still available to him. The husband contends that the inheritance is now gone and opposes any suggestion that those funds be brought to account in the Joint Balance sheet as an asset to be retained by him.
Ms Q
Ms Q was a Home Support Carer for the wife’s mother. She commenced working for the wife’s mother when she resided at Suburb N and continued in this role until 2019.
It was Ms Q’s evidence that whilst residing in the Suburb F property, she observed that, for the most part, the husband would spend his time in the garage rather than inside helping to care for the wife’s mother. Further, Ms Q deposed that upon the husband receiving his inheritance, he would regularly be away from the home.
Ms Q’s evidence was that the arrangements for the care of the wife’s mother and any instructions arising therefrom for the most part were provided by the wife. All members of the household spoke U Language, save and except for the husband.
Ms Q was critical of the husband stating in her Affidavit that she “often” arrived at the wife’s mother’s home to commence her shift at 12:30pm and would discover that the wife’s mother was still in bed. Ms Q’s evidence was that it was the responsibility of the husband to ensure that the wife’s mother was taken out of bed in the morning and that she should have been showered, fed breakfast and given medications by the time Ms Q arrived at 12:30pm.
From 2017 onwards, Ms Q’s evidence was that these tasks were rarely completed by the time that she would arrive at the home.
Ms Q was cross-examined as to whether or not the husband had, based on her observations, undertaken the showering and toileting of the wife’s mother by the time that she had arrived for her shift when the parties were residing at Suburb F.
Ms Q stated that for a “short while” the husband had undertaken these tasks. However, the husband had said to her that caring for the wife’s mother was “shit for the money” and that he was “going back to work.” It was Ms Q’s evidence that thereafter she observed the husband undertaking what she considered to be “work” in his business. Further, she gave evidence that the wife’s mother would then complain to her in U Language that the husband would leave her alone.
In response to questions by the husband’s counsel, Ms Q stated that she observed the husband to be “working and selling plant and equipment.”
I accept Ms Q’s evidence which accords with my findings that after closing his business, the husband continued to work whilst also assisting in the care of the wife’s mother as required.
Ms R
Ms R is a solicitor admitted to practice in South Australia. She has acted as a solicitor for the parties and also the wife’s mother.
Ms R was the solicitor instructed to prepare the Transfer documents in 2016 and 2019 in relation to the Suburb F property and had also prepared and witnessed the wife’s mother’s Will.
There was limited cross-examination of Ms R in relation to the 2016 and 2019 Transfers. Such cross-examination did not challenge her affidavit evidence.
LEGAL PRINCIPLES
The jurisdiction of the Court to make Orders with respect to the financial matters arising out of a marriage is set out in Part VIII of the Act.
The legal principles relevant to adjusting property interests on the breakdown of a marriage were considered by the High Court in Stanford & Stanford (‘Stanford’).[15]
[15] Stanford & Stanford [2012] HCA 52.
In particular, the High Court identified:
(a)Firstly, that the Court must identify the existing legal and equitable interests of the parties in the property, liabilities and financial resources of the parties at the time of the hearing; and
(b)Secondly, and importantly, that in the application of section 79(2) of the Act the Court must not make any order adjusting the parties’ legal and equitable interests in property unless the Court is satisfied that “in all of the circumstances, it is just and equitable” to do so.
(c)If the Court determines that it would be just and equitable to make orders adjusting the parties’ interests in property, then section 79(4) of the Act requires:
(i)The consideration of the contributions made by the parties to the acquisition, conservation and improvement of any property, both of a financial nature but also of non-financial nature;
(ii)The effect of any proposed orders on the earning capacity of each of the parties;
(iii)Those relevant factors set out in section 75(2) of the Act;
(iv)Any other order affecting each of the parties;
(v)Any child support either party has or is liable to provide, or might be liable to provide in the future for a child of the relationship; and
(vi)Finally, the Court must consider the “justice and equity” of the actual orders to be made.
Prior to the decision in Stanford, the appropriate approach in a property settlement case was well settled and had been distilled into the ‘four step process’ as identified by the Full Court in Hickey & Attorney-General (Intervener)[16]as follows:
(a)Identification of the value of the property of the parties;
(b)Identification and evaluation of the contributions of the parties to the acquisition, conservation and improvement of the property;
(c)Identification and assessment of the relevant future needs factors of the parties; and
(d)Considerations of justice and equity.
[16] Hickey & Attorney-General (Intervener) (2003) FLC 93-143.
The significance of the decision in Stanford, with reference to the four-step process, was discussed by the Full Court in Bevan & Bevan.[17] In that decision, the Full Court identified that the four-step process “merely illuminates the path to the ultimate approach,”[18] but that the overarching obligation of the Court is not to make an order unless it is just and equitable to do so.
[17] Bevan & Bevan (2013) FLC 93–545.
[18] Bevan & Bevan (2013) FLC 93–545, [71].
Both parties have competing applications for property adjustment before the Court. It is a relevant consideration that the parties are not agreed as to how the property should be apportioned between them and that they each seek an alteration of their property interests to finally determine their financial relationship. Implicit in the joint request for the Court to make an order is an acceptance that the making of an order would be just and equitable.[19]
[19] Russo & Wylie (2016) FLC 93-747, [54]
In circumstances where the parties were married in 1996 and separated in 2014, I am satisfied that it is just and equitable to make an order adjusting property between the parties following the course of a long marriage.
THE PARTIES’ LEGAL AND EQUITABLE INTEREST IN PROPERTY
The parties agree to approach the division of their assets on a ‘two-pool’ basis. I propose to adopt the approach sought by the parties. At the conclusion of the Trial, the parties’ Joint Schedule of Assets and Liabilities (‘the Joint Schedule’) which identified their respective legal and equitable interests in property and superannuation had been agreed as follows:
ASSET OWNERSHIP WIFE’S VALUE HUSBAND’S VALUE 1. B Street, Suburb C SA Wife $425,000 $425,000 2. 70% interest in E Street, Suburb F SA Wife $612,500 $612,500 3. Motor Vehicle 1 Wife $8,000 $8,000 4. Collectibles and Other Items
• P Company Valuation Report … dated early 2023 - $69,970.00
• P Company Valuation Report … dated early 2023 - $25,500.00
Husband $95,470[20] $26,709 5. Husband’s Inheritance Husband $159,000 Nil Assets Subtotal $1,299,970 $1,072,209 LIABILITIES 6. D Bank Mortgage over Suburb C Wife $14,725[21] $14,725 7. D Bank Personal Loan Wife $46,166[22] $46,166 8. Estimated CGT related to Sale of the Suburb C Property Wife E $65,000 Not applicable 9. Anticipated Sale Costs for Suburb C Property Wife E $20,000 Not applicable Liabilities Subtotal E$145,891 $60,891. SUPERANNUATION 10. Super Fund 1 as at June 2022 (Accumulation Interest) Wife $85,706[23] $92,535[24] 11. Husband Not known Not applicable[25] Superannuation subtotal $85,706 $92,535 TOTAL NET NON-SUPERANNUATION ASSET POOL E$1,154,079 $1,011,318 TOTAL NET ASSET POOL (INC. SUPERANNUATION) E$1,239,785 $1,103,853 [20] Value taken as per P Company Valuation Reports dated early 2022 respectively.
[21] Updated figure as at 13 September 2023 provided by Counsel for the Applicant Wife in Closing Submissions and rounded down.
[22] Updated figure as at 13 September 2023 provided by Counsel for the Applicant Wife in Closing Submissions and rounded down.
[23] Superannuation taken as at 1 November 2022 per the Statement dated 3 July 2023.
[24] Superannuation Balance as at 30 June 2023.
[25] The husband’s unchallenged evidence is that he has no superannuation interests.
Items in the Joint Schedule Subject of Dispute
In addition to those items of property that tangibly exist, the wife asserts that certain funds distributed throughout these proceedings are to be added back, despite the fact that those funds have largely been dissipated by Trial.
Specifically, the wife seeks to ‘add back’ the full amount of the husband’s inheritance in the sum of $159,000 and the full amount of the husband’s collection and other items totalling $95,470.[26]
[26] Value of the P Company Valuation Reports dated early 2022 respectively.
The husband opposes the add-backs and argues that:
(1)The collection should be ascribed an adjusted figure of $26,709 for the reasons identified below; and
(2)The inheritance has been spent and nothing can be added back for this item.
It is well established that adding back notional property is the exception rather than the rule and that the Court retains discretion whether or not to add back notional property and/or to treat any dissipated funds when considering the relevant section 75(2) factors, and in particular section 75(2)(o) of the Act.[27]
[27] NHC & RCH (2004) FLC 93-204; Trevi & Trevi (2018) FLC 93-858.
However, as discussed by Murphy J in Trevi & Trevi at [31],[28] if funds that existed at separation have been applied to the payment of legal fees, then such amounts are likely to be favourably treated as notional property.
[28] Trevi & Trevi (2018) FLC 93-858
I now turn to each of the items sought to be “added back” by the wife.
Item 4: Collectibles and Other Items
The wife asserts a total value of the husband’s collectibles and other items at $95,470.[29] The first Valuation Report dated early 2022 (‘the first Valuation Report’) records assets in the husband’s possession totalling $69,970. The second Valuation Report dated early 2022 (‘the second Valuation Report’) records further assets in the husband’s possession totalling $25,500. It is the wife’s position that the husband did not present all of his collection and items to the valuer.[30] Regardless, the wife relies on the total combined values of the two Valuation Reports prepared by the joint expert P Company at Trial.
[29] As per P Company Valuations early 2022 which is ‘Annexure E48’ and ‘Annexure E49’ to the Trial Affidavit of Ms Eckbert filed 26 October 2022.
[30] See the Affidavit of Ms Eckbert filed 26 October 2022 at paragraph 377.
The husband asserts a value at Trial of $26,709 for his collectibles and other items.
The difference of $68,761 between the parties’ positions as to this item number in the Joint Balance Sheet can be summarised as follows:
(1)In early 2023 the husband says he sold plant and machinery for the sum of $34,980 to Mr V in accordance with the Orders made by the Court on 22 November 2022. This sum was then paid into the Lindbloms Lawyers Trust Account in early 2023 as required by the Court Orders;[31]
(2)In addition, the husband contends that he has sold further items which had been identified in the first Valuation Report leaving him now with the balance of the collectibles totalling $26,790 or thereabouts;[32]
(3)As to the items identified in the second Valuation Report, the husband alleges that “all of the items in the second Valuation Report dated early 2022 have now been sold”;[33] and
(4)Further, he alleges that two of the items valued for the second Valuation Report were not owned by him at the date of inspection and should be excluded. These items are said to be Item 1 sold to Mr T for the sum of $5,000 in late 2017 and Item 2 sold to Mr W in late 2018 for $8,000.[34]
[31] See the Affidavit of Mr Eckbert filed 21 August 2023 paragraph 54.
[32] See the Affidavit of Mr Eckbert filed 21 August 2023 paragraphs 54 and 56.
[33] See the Affidavit of Mr Eckbert filed 21 August 2023 paragraph 59.
[34] The second Valuation Report refers to Item 2 on page 7. The husband refers to Item 2 in paragraph 58 of his Affidavit filed 21 August 2023. As it is the only Item in the second Valuation Report the Court will assume it is the same.
The wife argues that the husband’s assets to be retained by him at Trial should not be reduced when such assets were sold to enable the husband to satisfy paragraph 1 of the Court Orders made on 22 November 2022. The terms of paragraph 1 of the said Orders make it clear that the husband was to pay to the wife:
(1)Costs fixed in the sum of $20,000 in relation to the adjournment of the Trial;
(2)A further sum of $10,000 from which the wife was at liberty to apply towards the payment of expenses of the husband arising from paragraph 12 of the consent order made on 8 November 2021, which gave the husband occupation of the Suburb C property on condition that he paid certain costs and outgoings including the mortgage. This sum is on account of future and contingent costs pending Trial. The wife’s unchallenged evidence is that those funds are almost depleted;[35] and
(3)The sum of $4,316 by way of reimbursement to the wife for monies already paid by her on behalf of the husband arising from paragraph 12 of the Consent Order made 8 November 2021. This sum is on account of past costs paid by the wife on the husband’s behalf.
[35] See the Affidavit of Ms Eckbert filed 3 August 2023 paragraphs 29 to 38.
In my view, any situation which would see the husband benefit at Trial from a reduction in the value of assets to be retained by him because of his failure to comply with Orders of the Court would neither be just nor equitable. It would be an affront to justice if the wife’s costs were paid from marital assets and there be a corresponding benefit to the husband in the Joint Balance Sheet by reducing the value of the assets to be retained by him. The same argument applies to the sale of assets to meet the husband’s costs and outgoings for his occupation of the Suburb C property which he should be paying from his own resources in accordance with the Orders dated 8 November 2021.
The wife was highly critical of the husband in not calling either Mr T nor Mr W to give evidence at Trial regarding the transactions set out paragraph 101(4) above. The wife contends that Mr T and Mr T are associates of the husband. She disputes that any sale occurred at all or if it did, the sale was a sham. The wife invites the Court to draw an adverse inference of the husband’s failure to call these witnesses at Trial.[36]
[36] Jones v Dunkel (1959) 101 CLR 298.
The husband’s conflicting evidence regarding the sale of the items to Mr T and Mr W is rejected by the Court. The husband’s evidence that he drove to Suburb X where Mr W had stored Item 2 in order to return it to Adelaide to be valued before recanting entirely on the evidence just given was unimpressive and unconvincing. The husband has not explained to the Court’s satisfaction why he continued to store the items for Mr T and Mr W sold in 2017 and 2018 respectively nor any proof for the storage fees he alleged have been paid to him since sale. The husband’s evidence that he had been storing Item 3 for Mr Y for the past eight years while Mr Y waited for him to complete the repairs is also rejected. These witnesses could have been called by the husband but were not.
Based on the evidence and for the abovementioned Reasons, I therefore find that the husband’s collection should be ascribed a value of $95,470 in the Joint Balance Sheet as sought by the wife.
Item 5: Husband’s Inheritance
As already recorded in these Reasons, the husband received upon the death of his father, the total sum of $159,279.76 which was deposited into the husband’s D Bank account ending #...40 in the following manner:
(1)A bank transfer of $7,104.86 in late 2015; and
(2)A cheque deposit of approximately $155,000 in 2015.
The dispute as between the parties relates to what (if any) of the said inheritance should be added back as a notional asset in favour of the husband in the Joint Balance Sheet.
The agreed “ins and outs” from the inheritance are identified in paragraph 69 of these Reasons.
The wife alleges that aside from the agreed transactions, she has no knowledge as to how the husband dispersed the balance of his inheritance.
The husband was challenged as to whether or not he had withdrawn the funds in cash and hidden those funds in an alternate location. The husband denied this allegation save for admitting that he had put aside about $7,000 to pay for his storage costs. It is the husband’s position at Trial that there are no funds remaining from his inheritance which were spent by him during the period from 2016 to 2019 on general living and business expenses and as otherwise identified herein.
I am not satisfied on the available evidence that any of the husband’s inheritance can be added back into the asset pool.
The evidence supports findings that the husband is a poor money manager bordering on financially reckless. By way of example, or the period of 2019 to 2023 inclusive, the husband agreed that he had paid storage fees in the sum of $62,400 for his plant and equipment and for a business which is non-operational. His financial statement relied upon at Trial suggests that his entire weekly Centrelink benefit is paid towards storage fees in the sum of $235 per week.[37] I accept the husband’s evidence that he utilized a large portion of his inheritance on meeting ongoing storage costs for his collection.[38] I do not accept that he applied funds on joint living expenses but rather on his own personal expenditure.
[37] See the Financial Statement of Mr Eckbert filed on 18 August 2023 at paragraph 28.
[38] See the Affidavit of Mr Eckbert filed on 21 August 2023 at paragraph 173.
The party with a firm eye on the household budget and expenditure was the wife. The parties were not separated at the time the inheritance was received. I find that the husband simply did what he had always done during the marriage, namely to spend his money as he saw fit leaving the wife to pay for the parties outgoings and household expenses.
Add-backs are exceptional rather than the rule.[39] Add-backs do not necessarily occur simply because a party has expended money realised from the disposition of assets.
[39] C & C (1998) FamCA 143, [46].
I, therefore, decline to notionally addback any amount for the husband’s inheritance.
Item 7: Estimated CGT and Anticipated Sale Costs for Suburb C Property
In the Joint Schedule, the wife estimates in Item 12, estimated Capital Gains Tax owing in the event that the Suburb C property is to be sold by the Court at an estimated $65,000.
The wife also estimates anticipated sale costs for the said Suburb C property at $20,000.
The husband does not provide any evidence on anticipated Capital Gains Tax or sale costs. It is the husband’s position that he should retain the Suburb C property in his own right and hence, these liabilities do not arise.
At the conclusion of the Trial, the husband’s counsel conceded that if the Suburb C property is to be sold, and in the absence of any evidence from the husband, the wife’s figures could be relied upon.
For the Reasons set out herein, the Court proposes to sell the said Suburb C property and accordingly, I will ascribe a value to Items 12 and 13 as provided by the wife.
Item 9: Balance of the Wife’s Superannuation
In the Joint Schedule, the wife ascribes a value for her Super Fund 1 as at November 2022 in the sum of $85,706. The husband ascribes a value for the wife’s superannuation as at 30 June 2023 in the sum of $92,535.
The husband has no superannuation entitlements.
The dispute between the parties is whether or not a superannuation splitting order should be made using the balance as 2022 or 2023.
The parties were married for 26 years. I see no reason why the Court should do anything other than use the superannuation balance provided as close as possible to Trial.
The Court proposes to provide for a superannuation splitting order as at the date proximate to Trial being the wife’s member balance of $92,535.
REVISED JOINT BALANCE SHEET
In light of the Court’s findings as set out above, the revised Joint Balance Sheet is as follows:
ASSET OWNERSHIP VALUE 1. B Street, Suburb C SA Wife To be sold[40] 2. 70% interest in E Street, Suburb F SA Wife $612,500 3. Motor Vehicle 1 Wife $8,000 4. Collectibles and Other Items as per P Company Valuations Husband $95,470[41] 5. Husband’s Inheritance Husband Nil Assets Subtotal E $715,970 LIABILITIES 6. D Bank Mortgage over Suburb C Wife $14,725[42] 7. D Bank Personal Loan Wife $46,166[43] 8. Estimated CGT related to Sale of the Suburb C Property Wife E $65,000 9. Anticipated Sale Costs for Suburb C Property Wife E $20,000 Liabilities Subtotal E$145,891 SUPERANNUATION 10. Super Fund 1 as at June 2022 (Accumulation Interest) Wife $92,535[44] 11. Husband Nil Superannuation subtotal $92,535 TOTAL NET NON-SUPERANNUATION ASSET POOL E$ 570,079 TOTAL NET ASSET POOL (INC. SUPERANNUATION) E$662,614[45] [40] The agreed value of Suburb C in the Joint Balance sheet is $425,000 but the true price will be determined at sale.
[41] Value taken as per P Company Valuation Reports early 2022 respectively.
[42] Updated figure as at 13 September 2023 provided by Counsel for the Applicant Wife in Closing Submissions but rounded down.
[43] Updated figure as at 13 September 2023 provided by Counsel for the Applicant Wife in Closing Submissions but rounded down.
[44] Superannuation taken as at 1 November 2022 per the Statement dated 3 July 2023.
[45] This figure does not include the net proceeds of the sale of the Suburb C property.
THE CONTRIBUTIONS OF THE PARTIES
In considering an evaluation of the parties’ contributions the Court must be careful to assess the totality of the parties’ contributions throughout their relationship together with contributions in the period post-separation.[46] The Court must assess the contributions of the parties at the date of Trial not at the date of separation. The Court is not required to undertake a mathematical exercise in assessing the parties’ contributions. Nor does the Court need to dissect each individual contribution and ascribe a percentage figure to it.[47]
[46] Dickons& Dicksons (2012) 50 Fam LR 244.
[47] Bolger & Headon [2014] FamCAFC 27; Fields & Smith [2015] FamCAFC 57; Jabour & Jabour [2019] FamCAFC 78.
In Mallet & Mallet, Wilson J said as follows:
15.… . However, equality will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in every way or she may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree. …[48]
[48] Mallet & Mallet (1984) 156 CLR 605.
The weight to be attached to an initial contribution must be assessed against the rubric of all contributions, however made, over the course of their relationship.[49] All contributions must be weighed collectively. The Court would fall into error to segment the various contributions and weigh one against the remainder.[50] It has been observed that focusing on a direct financial contribution made at a point in time and measuring it as a percentage of the current pool is irrelevant to an assessment of contributions. To do so is the antithesis of a holistic assessment, contrary to long standing authority and is incapable of equitable application to other equally important non-financial contributions such as home making and parenting.[51]
[49] Jabour & Jabour [2019] FamCAFC 78.
[50] Dovgan & Dovgan [2021] FamCA 306.
[51] Mellone & Mellone [2023] FLC 94-160, [59].
The approach to be taken in assessing contributions has been described as a broad discretionary assessment which is “neither an accounting nor mathematical exercise” and which requires a “broad brush approach.”[52]
[52] Perrin & Perrin (No 2) [2018] FamCAFC 122; Babette & Falconer [2015] FamCAFC 124.
I now turn to considering the parties’ contributions holistically.
I accept the wife’s evidence that at the commencement of the marriage she had savings and a motor vehicle. The parties agree that the wife paid a debt on behalf of the husband to a former girlfriend for a motor vehicle.
The wife’s modest initial contributions must be seen against the backdrop of a very long relationship of approximately 26 years.
Each of the parties worked during the course of their relationship. As mentioned in these Reasons, the husband’s labour did not equate to income in. The husband conceded that he operated in a “cash economy” at his workplace. This enabled him to retain money which on his own admission was not declared to the Australian Taxation Office. He also gave evidence that his income received from the business was so low that he did not have to file a tax return.
The parties did not appear to be living beyond their means. The parties were still renting in 2014 when they moved into the wife’s mother’s home at Suburb F and with the rent from the Suburb C property paying the mortgage.
I accept the wife’s evidence that she was solely responsible for meeting costs for the Suburb C property and for reducing the loan for the Suburb F property renovations.
The parties each made financial and non-financial contributions during the course of a very long marriage including the care of the wife’s mother and the provision of rent free accommodation by her at the Suburb F property. Each party received an inheritance albeit in differing quantums and in differing ways. The wife received her inheritance in real property, the husband in cash. Reflecting the fiscal patterns from the marriage, the wife still retains her inheritance which is reflected in the Joint Balance Sheet at a value of $612,500. The husband’s inheritance of approximately $160,000 has been spent by him. The Suburb F property is a significant contribution made by the wife upon the death of her mother.
During their long marriage, each party made many contributions, all of which must be assessed through the lens of what is just and equitable. I am cautioned against focusing on any direct financial contributions made at some historical point in time and measuring them as a percentage of the current pool.[53]
[53] Mellone & Mellone [2023] FLC 94-160, [59].
I am satisfied that a holistic assessment of the parties’ relevant contributions over 26 years results in an assessment in favour of the wife in the proportion of 70 per centum.
RELEVANT SECTION 75(2) FACTORS
The wife is aged 63 years and the husband is aged 62 years.
Neither party raised any health issues which would impact on their capacity to work into the future. I am satisfied that each party is able to financially support themselves from the income that they may generate into the future.
The wife works part-time as a retail assistant and earns approximately $55,000 per annum.
The wife will retain her interest in the Suburb F property which will be freehold and there will be an equal division of the wife’s superannuation entitlements in favour of the husband.
At Trial, the husband asserted that he was unemployed and in receipt of Centrelink entitlements. The husband conceded in evidence that he had made no effort to apply for any work since he commenced receiving unemployment benefits. Why this is so remains a mystery. He is currently undertaking voluntary work as a transport worker at Z Company for 15 hours per week. This is a compulsory requirement required by Centrelink. The husband did not explain why he could not have worked as a transport worker in some other capacity and get paid for doing so.
I reject entirely the husband’s assertion that he has not been engaged in “any form of employment since 2014” and that he “sacrificed” his business in 2014 to care full-time for the wife’s mother.[54] The husband cared for the wife’s mother but in conjunction with paid carers and the wife.
[54] See the Affidavit of Mr Eckbert filed on 21 August 2023 at paragraph 78.
I accept the wife’s evidence that whilst living at the Suburb F property, the husband was working for “AA Company” because she observed the husband wearing a shirt branded with the company name and because she found a company credit card in his name. In addition, I find that the husband did some handyman work for Mr V. The wife’s evidence is that she knew Mr V “fairly well” and that he would come to the Suburb F property asking to speak with the husband. The husband also continued to buy and sell his collectibles as he admitted in his Trial Affidavit.[55] The totality of the evidence supports a finding that the husband can source paid work when he wants to.
[55] See the Affidavit of Mr Eckbert filed on 21 August 2023 at paragraph 121.
The husband’s evidence is that he would like to return to his former industry where had “50 years of experience” in the service industry. Given the breadth of the husband’s experience, the Court is satisfied that at the conclusion of this litigation, the husband will be able to engage in gainful employment in an industry where he has worked previously for many decades should he elect to do so.
Based on the parties income during the marriage, it is likely that the wife’s future income will exceed that of the husband. The wife will also have her interest in the freehold Suburb F property. When and if the wife will be required to pay out her siblings 30 per centum interest in the property was not the subject of cross-examination at Trial.
The husband owes the sum of approximately $18,000 to his former solicitors BB Lawyers.[56] The husband gave evidence that he had paid no monies to BB Lawyers and that they were awaiting the finalisation of these proceedings before receiving payment for their legal costs and disbursements.
[56] See the Rule 12.06 Costs Notice filed by Mr Eckbert on 11 September 2023.
No application has been filed by BB Lawyers in relation to recovery of their fees.
The wife’s total legal fees from savings, the costs order and income is $88,379.40.[57]
[57] See the Joint Balance Sheet filed on 5 September 2023.
Aside from the outstanding legal costs, there are no other creditors for either party other than the agreed monies owing to D Bank identified in the Joint Balance Sheet in the wife’s sole name. The D Bank loans will be discharged upon sale of the Suburb C property.
I am not prepared to find that the husband’s failure to provide disclosure of his business records, and taxation returns to be deliberate. I accept that the husband never had them. He ran his business like an expensive hobby supplemented by the financial support of the wife for most of the marriage. Indeed, the husband refers to his collection at his home “as a hobby” when he first formed a relationship with the wife and whilst he was employed at H Company.[58] Post‑marriage, the husband continued his “hobby” but was supported in doing so by the wife who met most of the parties’ outgoings and expenses from her own income.
[58] See the Affidavit of Mr Eckbert filed on 21 August 2023 at paragraph 85.
On account of the wife’s superior income and her retention of the Suburb F property, I consider that an adjustment in favour of the husband of five per centum is appropriate in the circumstances.
CONCLUSION
Having assessed contributions and other relevant matters, the Court is required to consider whether, in light of those assessments and the actual property to be divided, the proposed exercise of discretion is just and equitable.
Having regard to the facts of the case and my findings therein, the Court is satisfied that it is just and equitable to make the orders set out in this Judgment.
The husband sought a final order that he retain the Suburb C property but that the wife discharge the D Bank loan in the sum of $14,725.49 on his behalf. No submission was made as to why she should do so if the husband was successful in his application.
If the husband’s proposal was accepted this would see him retain net non-superannuation assets with a total value of $520,470. This sum would equate to almost 50 per centum of the net non‑superannuation assets at Trial (after removing the sales costs and potential Capital Gains Tax from the Joint Balance Sheet). For the reasons set out herein, I consider that such an adjustment would neither be just nor equitable on the facts of this case.
The husband was not able to obtain finance in 1999 when the Suburb C property was purchased in the wife’s sole name.[59] The husband’s borrowing capacity has not improved in the intervening years. He is unable to demonstrate any evidence of income for the entire marriage. Under cross-examination, the husband conceded that it was unlikely that he would be able to secure finance to retain the Suburb C property in his name. In those circumstances, I will order that the Suburb C property be sold.
[59] See the Affidavit of Mr Eckbert filed on 21 August 2023 at paragraph 143.
The Court will extend the time for the husband to provide the wife with vacant possession of the Suburb C property to 60 days given the time of year and the need for him to make alternate arrangements for his accommodation within the time frame specified. No submissions were made on his behalf in relation to the arrangements for sale or vacant possession if his ultimate application was not successful. I am satisfied that it is appropriate for the wife to have vacant possession of the Suburb C property in order to prepare it for sale. The Court is alert to the possibility of further applications and delay in the event that the husband is permitted to remain in the property pending its ultimate sale.
Highly relevant to the question of vacant possession is the fact that the husband has largely failed to comply with the Orders made by consent on 22 November 2021 to pay the outgoings for the Suburb C property since he commenced occupation in early 2022. The Suburb C property outgoings have, for the most part, continued to be met by the wife or from the sale of assets permitted by Court Order. I see no reason why the wife should continue to supplement the husband’s accommodation for any longer than is necessary.
The wife is to continue to meet the outgoings for the Suburb C property pending sale to maintain its equity and to ensure that the sale process does not become prolonged. It is in the wife’s interests to see a prompt sale of the Suburb C property, but it is the husband who would seek payment of the settlement sum as soon as possible.
The sale price for the Suburb C property should be no less than the valuation amount as at early 2022, being $425,000. There was no evidence at Trial to suggest that in the past almost two years, the value of the Suburb C property would have reduced.
I propose to adopt the figures proposed by the wife for sales costs and potential Capital Gains Tax. In this case and with the sale of the asset in question, capital gains tax will accrue. The Capital Gains Tax arises because of the sale of a property rented during the marriage. It is appropriate that the tax debt be paid by the parties and not by the wife alone. [60]
[60] Rosati& Rosati (1998) FamCA 38.
The anticipated Capital Gains Tax figures were conceded by the husband’s counsel in closing submissions in the event that the Court determined that the Suburb C property should be sold and I will therefore adopt them in the Orders.
I have abridged the time for the filing of the wife’s personal taxation returns following the sale of the Suburb C property so that the husband is paid what is owing to him under the terms of this order as soon as possible. I do not assess that the wife’s taxation returns as being overly complicated given that she is a PAYG tax payer and understanding as I do, the nature of their financial affairs.
The husband will retain his personal assets totalling $95,470 and receive a superannuation adjustment in his favour of 50 per centum of the wife’s 2023 balance, being a superannuation split of $46,267. Procedural fairness has been confirmed albeit that the precise amount is absent from the letter dated 3 August 2023.[61] I consider it unlikely that the Trustee would object to the amount I propose to adjust in the husband’s favour given that the wife has $92,535 in entitlements standing to her credit. I received no submissions from the wife’s counsel to the contrary.
[61] See ‘Exhibit W9’.
In addition, the husband will receive an amount equivalent to 35 per centum of the combined net non-superannuation asset pool upon sale of the Suburb C property.
It is not possible to quantify the exact settlement sum to be received by the husband given that the sale price for the Suburb C property is yet to be realised.
For all of the above Reasons, the Court makes the orders as set out at the commencement of this Judgment.
I certify that the preceding one hundred and seventy-one (171) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 11 December 2023
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