Elsner & Elsner
[2023] FedCFamC2F 1419
•3 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Elsner & Elsner [2023] FedCFamC2F 1419
File number(s): MLC 5215 of 2023 Judgment of: JUDGE A. HUMPHREYS Date of judgment: 3 November 2023 Catchwords: FAMILY LAW – PROPERTY – husband seeks orders in accordance with in-principle agreement previously reached between parties – consideration of exceptions to exclusion of evidence of settlement negotiations in sub-section 131(2) Evidence Act 1995 (Cth) – evidence of in-principle agreement admitted where parties each gave evidence of steps taken pursuant to that agreement, including the sale of their home – assessment of contributions – weight to be given to initial contributions including husband’s ownership of former family home at commencement of cohabitation in the context of all other contributions over a relationship of 28 years, with two (now adult) children Legislation: Evidence Act 1995 (Cth) ss. 131, 140
Family Law Act 1975 (Cth) ss. 75, 79
Cases cited: Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124
Bachman & Self [2023] FedCFamC1A 50
Barnell & Barnell (2020) FLC 93-961; (2020) FLC 93–961
Bevan v Bevan (2013) 49 Fam LR 387; [2013] FamCAFC 116
Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Fields & Smith (2015) FLC 93–638; [2015] FamCAFC 5
Horrigan & Horrigan [2020] FamCAFC 25
Hurst & Hurst (2018) FLC 93-851; [2018] FamCAFC 146
Jabour & Jabour (2019) FLC 93–898; [2019] FamCAFC 78
Lovine & Connor and Anor (2012) FLC 93–515; [2012] FamCAFC 168
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Perrin & Perrin (No 2) [2018] FamCAFC 122
Petrellis & Petrellis [2023] FedCFamC1A 104
Petruski & Balewa (2013) 49 FamLR 116; [2013] FamCAFC 15
Phe & Leng (2019) FLC 93–887; [2019] FamCAFC 17
Pierce v Pierce (1999) FLC 92–844; [1998] FamCA 74
Spalla & Spalla (2023) FLC 94–145; [2023] FedCFamC1A 87
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Wallis & Manning (2017) FLC 93–759; [2017] FamCAFC 14
Waters & Jurek (1995) FLC 92-635; [1995] FamCA 101
Whiton & Dagne (2019) FLC 93-923; [2019] FamCAFC 192
Woodcock v Woodcock (1997) FLC 92–739; [1997] FamCA 5
DW & GT (2005) FLC 93–217; [2005] FamCA 161
Division: Division 2 Family Law Number of paragraphs: 183 Date of hearing: 19 & 20 October 2023 Place: Melbourne Counsel for the Applicant: Ms McCreadie Solicitors for the Applicant: Accord Family Law Counsel for the Respondent: Mr Devries Solicitors for the Respondent: Gigliotti Lawyers ORDERS
MLC 5215 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ELSNER
Applicant
AND: MR ELSNER
Respondent
ORDER MADE BY:
JUDGE A. HUMPHREYS
DATE OF ORDER:
3 NOVEMBER 2023
THE COURT ORDERS THAT:
Suburb C proceeds
1.Within 7 days of the date of these orders (“the date”) the parties do all acts and things and sign all documents as may be required to authorise N Lawyers to forthwith release the residual proceeds from the sale of B Street, Suburb C, Victoria held in trust on behalf of the parties (including accrued interest) as follows:
(a)$760,836 to the wife;
(b)$748,495 to the husband; and
(c)of any balance then remaining IT BEING NOTED interest is continuing to accrue on the balance held in trust:
(i)50% to the wife; and
(ii)50% to the husband.
Share transfers
2.Within 30 days of the date of these orders, the husband do all such acts and things and sign all such documents as may be required to transfer to the wife:
(a)D Company shares; and
(b)E Company shares.
Retention of assets
3.The wife retain to the exclusion of the husband:
(a)The bank accounts in her name;
(b)Her F Company and G Company shareholding; and
(c)Her Motor Vehicle 1.
4.The husband retain to the exclusion of the wife:
(a)The bank accounts in his sole name;
(b)His F Company and G Company shareholding;
(c)His E Company and D Company shareholding (save for the shares transferred to the wife pursuant to order 2);
(d)The L Company policies in his name; and
(e)His Motor Vehicle 2.
Liabilities
5.The wife be solely liable for and indemnify the husband, against all payments and liability with respect to all debts and liabilities in her sole name and/or attaching to any item of property she is to receive pursuant to these orders (past, present or future).
6.The husband be solely liable for and indemnify the wife, against all payments and liability with respect to all debts and liabilities in his name and/or attaching to any item of property he is to receive pursuant to these orders (past, present or future).
Superannuation
7.These orders are binding on M Company, trustee of the Super Fund 1 (“the Fund”) (“the Trustee”) IT BEING NOTED the husband holds a superannuation entitlement in the Fund (account number …72).
8.A base amount of $46,399 is allocated, as required by section 90XT(4) of the Family Law Act 1975 (“the Act”), to the wife out of the husband’s interest in the Fund.
9.In accordance with section 90XT(1)(a) of the Act whenever a splittable payment becomes payable in respect of the interest of the Fund, the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Superannuation Regulations”) using a base amount of $46,399 and there be a corresponding reduction to the entitlement of the husband would have had but for these orders.
10.These orders have effect from the operative time.
11.The operative time for this order is four (4) business days from the date a sealed copy of these orders is served on the Trustee by the wife or her advisors.
12.The Trustee and the parties in accordance with the obligations set out under the Act, the Superannuation Regulations, the Superannuation Industry (Supervision) Act 1994 (Cth) and the Superannuation Industry (Supervision) Regulations 1994 (Cth) (“the SIS Regulations”), do all such acts and things and sign all such documents as may be necessary to calculate the entitlement and make the payment in accordance with these orders.
13.The wife do all things necessary, including but not limited to, exercising her request pursuant to regulation 7A.06 of the SIS Regulations for the payment of the transferrable benefits out of the husband’s interest in the Fund to the wife in accordance with regulation 7A.12 of the SIS Regulations.
14.Until the happening of any of:
(a)The establishment of a separate account in the name of the wife in the Fund; or
(b)The transfer or ‘rolling over’ into another superannuation fund of the superannuation account of the payment split created by order 9; or
(c)The wife satisfies a condition of release and is paid the payment split which was created by order 9; or
(d)The wife executing a waiver of rights within the meaning of section 90ZXA of the Act in relation to the payment split created by order 9 hereof;
the husband be and is hereby restrained by himself, his servants or agents from executing a Death Benefit Nomination in favour of any person or doing any other act or things which would render any part of his interest in the Fund a “not splittable payment” within the meaning of regulations 12 or 13 of the Superannuation Regulations.
15.Having been accorded procedural fairness in relation to the making of these orders, these orders bind the Trustee.
16.There be liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
Other
17.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of the making of these orders;
(b)Money standing to the credit of the parties in any joint bank account is to be divided equally between the parties and the account is to thereafter to be closed;
(c)Each party foregoes any claims they may have to any superannuation benefits belonging to or earned by the other, save for the superannuation splitting orders contained herein;
(d)Insurance policies remain the sole property of the owner named therein;
(e)Each party be solely liable for any credit card in their respective names as at the date of these orders; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Procedural orders
18.All extant applications be dismissed.
AND THE COURT NOTES:
A.Pursuant to section 81 of the Act, these orders are intended to finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
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 A. HUMPHREYS:
This is an application for an alteration of property interests under section 79 of the Family Law Act 1975 (Cth) (“the Act”). Both parties seek orders by way of property adjustment after the breakdown of their marriage. The period of their cohabitation was approximately 28 years. The period from the commencement of cohabitation until trial and the making of final orders is approximately 29 years.
BACKGROUND
The applicant wife is aged 60. She was born in New Zealand and has lived in Melbourne since the age of 24. Her family remains in New Zealand.
The respondent husband is aged 62. He has family in Melbourne.
The wife deposed that the parties commenced a relationship in 1990. The husband deposed they met in 1991.
The wife deposed the parties began living together in late 1993 but elsewhere in her trial affidavit deposed to moving into the home owned by the husband at B Street, Suburb C (“Suburb C”), to live with the husband, in 1994. The latter account is consistent with the husband’s evidence that the parties commenced living together at the commencement of 1994, so I take that as the date of cohabitation. They married in 1996.
The parties have two children: Ms H (now aged 25) and Mr J (aged 24).
The parties initially separated in 2001 and final parenting orders were made in early 2002. After approximately eight months, the wife returned to live with the husband and their marriage continued. Orders were made in 2010 discharging the parenting orders made in 2002.
The parties separated on a final basis in May 2022 when there was an incident of family violence and a family violence safety notice required the husband to vacate the home. A final intervention order was made by consent in mid-2022 without admissions. That order expired in late 2022. The husband pleaded guilty to offences (against the wife) and was placed on a six-month undertaking to be of good behaviour with no conviction.
They parties are not yet divorced.
The wife is employed as a carer. She works on average between approximately 20 and 25 hours per week, earning approximately $700 per week. The wife deposed she has had some health issues but did not adduce any medical evidence that those issues impacted her ability to work in paid employment. When cross-examined, the wife acknowledged she could work more hours if she chose to. The wife receives approximately $10 per week (gross) in dividends from shareholdings.
The husband is a transport worker. He is in good health. He works approximately 46 or 47 hours per week and earns approximately $1,700 (gross) per week from his employment, including overtime. He also receives approximately $160 per week (gross) in dividends from shareholdings.
In November 2022, the parties reached an in-principle agreement to finalise property matters between them.
In early 2023, Suburb C was sold at auction. The sale settled in mid-2023. The proceeds from the sale currently are held in trust for the parties in a controlled monies investment account.
The parties each live in rental accommodation.
The parties’ in-principle agreement was not formalised. The wife sought alternate legal advice and representation and commenced these proceedings by way of Initiating Application filed 16 May 2023.
PARTIES’ POSITIONS
The wife
The wife seeks an equal division of assets and superannuation between the parties. She acknowledges the greater initial financial contributions made by the husband, including by his ownership of Suburb C at the time they began living together. However, she contends those contributions must be considered in the context of all contributions made by the parties over 29 years, including their employment, physical work undertaken to renovations, parenting and homemaker contributions and an inheritance received by her in 2016. She submits that taking that approach, the parties’ contributions when viewed holistically should be considered equal. If the contribution-based assessment is one of equality, the wife does not seek any adjustment pursuant to section 75(2). She seeks a superannuation split to achieve equality in the parties’ superannuation interests.
The husband
The husband submits his ownership of assets, including Suburb C, at the date of cohabitation represents a significant contribution made by him, not only because of the value of Suburb C at that time but because of how that property was used during the parties’ relationship. In particular, the family home was retained by the parties, renovated by them and sold in 2023 realising more than $1.3 million.
Placing significant weight on his initial contribution and the work he personally undertook to renovate the home at Suburb C, the husband seeks orders providing him with a greater proportion of the parties’ non-superannuation assets than the wife.
In closing submissions, the husband’s counsel identified the husband’s primary position as seeking final orders reflecting the in-principle agreement reached between the parties in November 2022. He did so acknowledging the in-principle agreement is not binding. On the face of it, that agreement (which the husband asserted was reflected in an unsigned minute of proposed consent orders) provided for the net proceeds from the sale of Suburb C to be divided 44% to the wife and 56% to the husband, for the husband to transfer E Company and D Company shares to the wife to equalise their shareholdings and for the wife to receive $39,197.50 from his superannuation by way of a superannuation split, among other provisions. Counsel for the husband did not articulate what this represented in percentage terms across the non-superannuation and superannuation asset pool at that time.
In the alternative, that the husband seeks he receive 60% of the parties’ non-superannuation assets. This was a departure from the position contended in his case outline, in which he contended for a contribution-based adjustment of 65:35 in his favour with no adjustment pursuant to section 75(2). He agrees to the superannuation splitting order proposed by the wife, equalising the parties’ superannuation interests.
THE ISSUES
I identified the following issues requiring determination:
(a)Assessment of contributions, with particular consideration given to:
(i)The assets held by the husband at the commencement of cohabitation and the use of those assets during the parties’ relationship, in particular Suburb C; and
(ii)The inheritance received by the wife in 2016 and her application of those monies; and
(b)Assessment of relevant section 75(2) factors, including particularly the parties’ income and capacity to earn income.
THE EVIDENCE
The parties each set out in their case outlines the documents they sought to rely upon at the final hearing.
Some trial material was filed a short time later than required. Given there was no objection to that material being relied upon and where the parties were ready to proceed, I granted leave to rely on that material.
Objections to evidence
Objection was taken by the wife to aspects of the husband’s evidence relating to what I have referred to and she described in her trial affidavit as an “in-principle agreement” reached between the parties in November 2022.
In his Amended Response to Initiating Application filed on 1 September 2023, the final orders sought by the husband were expressed in the alternative. His primary position was that “[t]he agreement effected between the parties on or around 7 November 2022 be given full force and effect” and otherwise all applications of the wife be dismissed.
Notwithstanding the order sought by the husband as his primary position, the admissibility of evidence relating to the asserted agreement and the effect of any prior agreement did not seem to be an issue identified at the compliance and readiness hearing on 5 September 2023. The issues in dispute identified in a notation to the trial directions made at that court event were:
a.Overall distribution of the asset pool including the distribution of $1.[3] million following the sale of the former matrimonial home currently held on trust;
b. Treatment of initial contributions brought by the Applicant; and
c. Treatment of the Applicant’s receipt of an in inheritance in 2016.
The husband’s trial documents were filed on 6 October 2023. On 12 October 2023, correspondence was received by chambers indicating the wife objected to aspects of the husband’s evidence, which it was asserted referenced without prejudice communications and offers of settlement. By way of chambers orders made on 12 October 2023, the parties were directed to confer via their lawyers and file and serve a list of any objections to evidence requiring rulings, identifying the basis of each objection, by 4.00 pm on 17 October 2023.
A list of objections was filed by the applicant at 5.04 pm on 17 October 2023, so taken to be filed the next business day.
Prior to the hearing, I did not read those portions of the court documents subject to the objections. I did not read the affidavit of the husband’s solicitor given the objections made to a large proportion of it.
On the morning of the hearing, I heard submissions in relation to the objections to evidence. This involved not only submissions in relation to section 131(1) and 131(2) of the Evidence Act 1995 (Cth) (“the Evidence Act”) but also in respect of the husband’s application seeking final orders in the same terms as the asserted agreement reached between the parties in November 2022, to determine the relevance of the material the subject of the objections.
The in-principle agreement
In her trial affidavit, the wife gave the following evidence:
Between June 2022 and January 2023, my previous solicitors and [the husband’s] lawyers undertook negotiations regarding our property matter. As part of these negotiations we agreed to sell [Suburb C] as soon as possible.
She deposed to various without prejudice correspondence exchanged between the parties’ lawyers, by date but without referring to the content of the correspondence or documents. She then continued:
Around 9 November 2022, [the husband’s] lawyers and my previous solicitors reached what was an in-principle agreement regarding our property settlement based on our without prejudice communication.
Around 9 November 2022, my previous solicitor drafted and provided to [the husband’s] lawyers a draft Minute of Consent Orders.
Around 23 November 2022, my previous solicitor received a response from [the husband’s] lawyers regarding the draft proposed Minute of Consent Orders.
[…]
The wife deposed that in December 2022, a draft superannuation splitting order was provided to the trustee of the husband’s superannuation fund, Super Fund 1. She deposed to the drafting of an application for consent orders in November and December 2022 and correspondence between the parties’ lawyers regarding that application. She annexed copy correspondence to her trial affidavit from the husband’s lawyers dated 30 January 2023 in which it was proposed the draft application for consent orders form not be finalised until after the auction of the family home, so the proceeds of sale could be identified in the application rather than providing an estimate.
In relation to the sale of Suburb C she deposed:
In [late] 2022, after [the husband] and I had agreed to place [Suburb C] on the market for sale and for the sale to occur as soon as possible. I relocated and moved into rental accommodation. I wanted to remain in the property, however, I was under the impression that I needed to relocate before it was placed on the market and once the Intervention Order expired. Despite moving out of the property, I continued to pay for the outgoings and utilities of the property and continued to be responsible for the maintenance and upkeep. I prepared the house for the sale and maintained the gardens in preparing it for sale.
In relation to the in-principle agreement she had deposed to, the wife gave evidence:
The draft settlement documents prepared by [the husband’s] lawyers and my previous solicitors were draft versions only. They were never signed by [the husband] or I nor filed with this Honourable Court.
On 16 February 2023, I instructed my new lawyers […] to write to [the husband’s] lawyers to confirm that I withdrew all of the previous offers. I wanted to continue with negotiations after obtaining new legal advice.
In those parts of his trial affidavit which had not been objected to, the husband deposed:
Part Performance of the Agreement
In pursuance of the agreement:
a.The former home was formally placed on the market on or about [early] 2023 and subsequently sold. The agent was appointed by [the wife] and the sale was pretty much coordinated by her in conjunction with the agent.
b.On the advice of the agent, and in order to maximise the sale price of the former home, I painted the interior of the home and. I spent 14 days undertaking that work.
[…]
d.The sale of the former home settled [in mid-] 2023 and the net proceeds of sale, now being $1,[300,000], after some jointly agreed withdrawals, are currently held in a controlled monies account…
He also deposed, in reply to the wife’s trial affidavit, without objection:
If it had not been for that agreement, I would not have expended as much time and energy preparing the property for sale or, indeed, agreed to it being then put up for sale.
In her reply affidavit filed on 12 October 2023, the wife deposed:
… I disagree that there was part performance of any agreement. We both agreed neither could afford to buy the other out and retain the property. Agreement was reached that the property be sold. I was living in the property at the time and paying the outgoings. I had to secure alternative rental accommodation as a consequence of selling the property.
Whilst the wife deposed the parties reached an “in-principle” agreement in November 2022 and her evidence indicated it was only the application for consent orders that was the subject of ongoing drafting, the minute of consent orders had not been signed. It was contended by wife that the draft minute of proposed consent orders and all without prejudice correspondence relating to the parties’ negotiations, the minute and the application for consent orders was therefore inadmissible pursuant to section 131 of the Evidence Act.
The husband contended the agreement reached in November 2022 was a concluded agreement. However:
(a)He acknowledged, as conveyed via his lawyers’ correspondence of 7 March 2023, the wife’s right to “walk away” before the agreement was “enshrined in court orders”;
(b)He acknowledged via his counsel, only a financial agreement made under the Act could be binding; and
(c)His counsel confirmed the husband sought an alteration of property interests between the parties and was not seeking to rely on the asserted agreement to contend that it was not just and equitable for there to be an alteration of property interests pursuant to section 79(2).
The extent to which the husband ultimately sought to rely on the asserted agreement was as evidence of what the parties intended in late 2022, as evidence of their financial position at that time, and of the arrangements put in place subsequently – including to prepare the family home for sale and to sell the home.
Counsel for the husband referred to principles from Woodcock v Woodcock,[1] DW & GT,[2] Bevan v Bevan[3] and relied on a summary of principles from those cases by Christie J in Spalla & Spalla,[4] who observed[5] that in broad terms those authorities provide:
It is only possible to oust the jurisdiction of the Court by final order or a qualifying financial agreement (and previously by approved maintenance agreement);
An agreement other than a financial agreement will be relevant as evidence of what the parties intended and of the financial arrangements in place at the time and subsequently;
In that sense any agreement is relevant but not in and of itself determinative.
[1] (1997) FLC 92–739; [1997] FamCA 5.
[2] (2005) FLC 93–217; [2005] FamCA 161.
[3] (2013) 49 Fam LR 387; [2013] FamCAFC 116.
[4] (2023) FLC 94–145; [2023] FedCFamC1A 87.
[5] at [32].
Counsel for the husband emphasised the following from DW & GT:[6]
In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However, and perhaps more significantly, it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.
[6] at [40].
It was not disputed that evidence of the in-principle agreement could be relied upon in support of an application for costs following a judicial determination, but that was a different issue to admitting the material objected to for the substantive proceedings.
Legal principles
Section 131(1) of the Evidence Act provides as follows:
Exclusion of evidence of settlement negotiations
(1) Evidence is not to be adduced of:
(a)a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b)a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
Section 131(2) sets out the circumstances in which sub-section (1) does not apply. Those provisions of section 131(2) which counsel for the husband raised as having bearing on this matter include if:
(c)the substance of the evidence has been partly disclosed with the express or implied consent of the persons in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been adduced; or
…
(f)the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue; or
(g)evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence; or
In relation to the application of section 131(2)(g), counsel for the husband relied on Phe & Leng[7] in which the Full Court considered divergent authority as to whether what had been described as a “narrower” or “broader” interpretation of sub-section (2)(g) is appropriate. In Phe & Leng the Full Court and determined a broader interpretation is to be preferred and consistent with the obligation of full and frank disclosure, including in settlement negotiations which exists in family law matters alongside the policy objective of supporting genuine negotiations.
[7] (2019) FLC 93–887; [2019] FamCAFC 17.
Counsel for the husband suggested that from the wife’s evidence alone I would have the impression that only the sale of the house was agreed, not that work was also to be undertaken to it prior to sale. He suggested the court would therefore be misled, in the sense envisaged by section 131(2)(g) if the terms of the in-principle agreement acknowledged by the wife were not in evidence. Counsel for the husband took care to emphasise that he was not suggesting the wife was attempting to mislead the court in a deliberate sense, but in that the court would be misled in the sense envisaged by section 131(2)(g), if only part of the in-principle agreement and steps take pursuant to that agreement were in evidence.
Counsel for the wife initially submitted in response, “the parties agreed that the property had to be sold” but withdrew that submission when counsel for the husband relied on that submission in support of his application to adduce evidence of the in-principle agreement pursuant to section 131(2)(g). Counsel for the husband submitted there was no agreement the property had to be sold independently from the parties’ in-principle agreement and if counsel for the wife maintained that submission, it further supported the husband’s contention that evidence of the terms of the in-principle agreement should be admitted.
When asked to address those provisions in section 131(2) raised by counsel for the husband, counsel for the wife:
(a)Emphasised the policy underpinning the protection of without prejudice negotiations and the importance of encouraging parties to explore settlements;
(b)Submitted different principles apply to family law matters than contract law;
(c)Submitted the parties had agreed the property was to be sold and submitted the wife had not misled the court; and
(d)Contended if the husband has “seller’s remorse on selling the home… that is frankly his problem”.
Determination
I determined to admit evidence of the minute of proposed consent orders which had been prepared in November 2022, relying on section 131(2)(c) and (g). In doing so I had particular regard to:
(a)The evidence given by the wife in her trial affidavit of an “in-principle agreement” reached between the parties in November 2022 and of their agreement to sell the house as soon as possible;
(b)The husband’s evidence which had not been objected to, that he had relied on the agreement to undertake work to the home and to sell the home;
(c)The submissions of counsel for the husband that it was necessary for the court to see the terms that had been agreed to provide a complete picture of what had been agreed in November 2022 and to put into context the parties’ contributions and financial circumstances from that point on; and
(d)The absence of any submission as to prejudice that would be suffered by the wife if the terms of the in-principle agreement were admitted into evidence.
I also contemplated sub-section 131(2)(f) may apply given the husband sought orders to give effect to the asserted agreement and the making of that agreement was in issue, in the sense the wife contended it was an in-principle agreement but not a concluded or binding agreement.
Following my determination and brief reasons provided in court I invited the parties’ counsel to confer in relation to the remaining objections to evidence. After a brief adjournment they informed me of an agreed position in respect of the material objected to by the wife.
I was asked to read:
(a)Paragraph 28(e) of the husband’s trial affidavit;
(b)The first two pages of Annexure E3 to the husband’s trial affidavit; and
(c)Annexure E6 of the husband’s trial affidavit.
I was asked to not read:
(a)Paragraphs 20 to 27 of the husband’s trial affidavit;
(b)Paragraphs 29 to 32 of the husband’s trial affidavit;
(c)Annexures E1 to E4 of the husband’s trial affidavit, save for the first two pages of E-3; and
(d)The affidavit of the husband’s lawyer Peter Gigliotti filed 6 October 2023 and the annexures to that affidavit.
Consideration of the evidence
Having read the material identified at paragraph [54] above, I noted the following:
(a)The first two pages of Annexure E3 to the husband’s trial affidavit sets out, in a letter from the wife’s former solicitors to the husband’s solicitors, an asserted summary of assets and liabilities as at August 2022. That summary included the assets identified by the parties in the joint balance sheet at the final hearing, albeit with different values. Counsel for the husband did not make any submissions at the conclusion of the hearing as to how this evidence had any bearing on my determination of the issues in dispute;
(b)Paragraph 28(e) of the husband’s trial affidavit deposed to procedural fairness being afforded to the trustee of the husband’s superannuation fund. That paragraph referred to Annexure E6 which consists of a letter dated 6 December 2022 sent to the trustee of the husband’s superannuation fund and an enclosed minute of proposed orders which the letter advised had been agreed between the parties;
(c)The minute of proposed orders annexed at E6 contemplated (among other things) the sale of Suburb C, the terms and conditions of sale and for the net proceeds of sale to be divided between the parties. The minute provided for the wife to have the sole right to occupy the home pending settlement, that she meet the expenses relating to the home and that she keep the home in a clean and tidy condition. The minute also provided for a transfer of shares and a superannuation split. When read in conjunction with the asserted summary of assets in E3, the transfer of shares and superannuation split would have achieved the equalisation of the parties’ shareholdings and superannuation; and
(d)There was nothing in the minute that was inconsistent with the wife’s evidence or which shed light on the conduct of the parties after separation beyond what had been deposed to by each of them. Notwithstanding the submissions made at the outset of the hearing, counsel for the husband did not make any submissions at the conclusion of the hearing as to precisely how the terms of the purported agreement had any bearing on the issues requiring determination.
In the above circumstances, I put little weight on this evidence, save to corroborate the parties’ evidence that they reached an in-principle agreement which included the sale of Suburb C, that the wife continued her occupation of Suburb C and to meet expenses relating to Suburb C pending it’s sale and that she liaised with the agent in respect of the sale.
Save to take it into account as an alternate proposal of the husband, I have disregarded the terms of the parties’ agreement in relation to the proportions in which the parties’ non-superannuation assets are to be divided when coming to my own determination of an order that is just and equitable. I do so given the husband agrees it is just and equitable for there to be an alteration of property interests between the parties and given the in-principle agreement of the parties’ agreement reached in November 2022 is not binding.
In addition to this evidence, I have read all material admitted into evidence carefully and had the benefit of hearing the evidence of the parties given in cross-examination and observing the demeanour of the parties over a final hearing of two days.
It has not been possible to include every aspect of each of the parties’ evidence. However, I have taken all the evidence into account. Just because I have not mentioned something in these reasons does not mean that I have not considered it.
Section 140 of the Evidence Act sets out that the standard of proof in these proceedings is to a balance of probabilities.
The witnesses
Each of the parties emphasised their own contributions in their affidavits filed with the court and when cross-examined. However, there was actually little in dispute between them in respect of the facts.
The wife
When cross-examined, the wife was often hesitant to unconditionally acknowledge contributions made by the husband. For example, when asked if he spent a great deal of time working on Suburb C, she answered “we both did.” She later acknowledged that after the parties had children she prioritised their care, but continued to assist with work on Suburb C as she was able. She also acknowledged there were some jobs she could not complete or provide support with, but she was supportive whenever she could.
The wife frequently did not answer questions directly and strayed beyond answering questions asked of her to provide her own point of view and to emphasise her own case. Nevertheless, I found her to be a generally credible witness in respect of her contributions, although at times downplaying the contributions made by the husband.
The husband
The husband’s trial affidavit included detailed descriptions of the financial and non-financial contributions made by him to renovations and other work undertaken at Suburb C. Extracts from “workbooks” kept by him were annexed to his affidavit, in which he had recorded in meticulous detail, the labour and expenses incurred in undertaking these works. As counsel for the wife put to him, this included entries for the purchase of an individual paint brush (for $1.50) and a tool (for $4.00), among many other items for small amounts. From 2019, the husband recorded in separate columns the days or hours of labour undertaken by each of him and the wife in addition to who had paid for each expense. Those records of the parties’ financial and non-financial contributions to the work at Suburb C were not challenged by the wife.
When cross-examined, the husband provided direct answers – yes or no where possible and otherwise answering very briefly.
I found the husband to be a credible witness. He acknowledged the wife’s contributions but it was apparent from his evidence that he considered the wife’s contributions to be of lesser value than his own. He admitted frankly in cross-examination that whilst he acknowledged the wife’s employment throughout their relationship, accepted she assisted with renovation work as she was able to, and readily agreed her role as homemaker and parent was a valuable contribution, he did not consider she had made any meaningful contribution to the asset pool of the relationship.
LEGAL PRINCIPLES
Before making any order altering the interests of the parties to a marriage in property, section 79(2) requires that I must be satisfied, in all the circumstances, it is just and equitable to do so.[8]
[8] Stanford v Stanford [2012] HCA 52 (“Stanford”).
If I am so satisfied, I then have power under the Act to make such order as I consider appropriate, after considering the matters set out in sections 79(4) and section 75(2), insofar as they are relevant.
In order to consider if it is just and equitable to make an order, I must first identify the existing legal and equitable interests of the parties in property according to common law and equitable principles.
PARTIES’ PROPERTY INTERESTS
Assets & liabilities
The parties agreed they had the following legal and equitable interests in property at the time of the final hearing:
Assets Ownership Value Proceeds from the sale of Suburb C held in trust Joint $1,300,000[9] Motor Vehicle 2 Husband $1,500 Motor Vehicle 1 Wife $15,000 Bank accounts (x4) Husband $69,969 Bank accounts (x2) Wife $342 F Company shares Husband $6,973 F Company shares Wife $6,973 G Company shares Husband $13,833 G Company shares Wife $13,833 E Company shares Husband $70,893 D Company shares Husband $101,776 L Company life policies (x2) Husband $29,822 Total $1,617,081 [9] Held in an investment account and with interest accruing.
The values of these assets were agreed in a joint balance sheet (Exhibit D), save for two items.
The wife’s bank accounts were listed in the joint balance sheet with individual balances of $298 and $44 as at 28 September 2023. The combined value of those accounts recorded in the wife’s column was $342. The husband’s column recorded a combined balance of $384. I accept the wife’s value given it reflects the combined total of the individual balances recorded, an explanation was not provided for the different value recorded by the husband, and the difference is negligible in the context of the total value of the parties’ assets.
In the joint balance sheet, the husband’s L Company life policy ending #... was attributed a value by the wife of $6,191 and by the husband of $6,920. I adopt the husband’s admitted value given it is his policy and no explanation was provided by the wife for the alternate value adopted by her in the joint balance sheet.
Updated values were provided for the Suburb C proceeds and share values on the second day of the final hearing.[10] An updated statement was tendered for the controlled monies account holding the balance of the Suburb C sale proceeds (Exhibit B). The invested sum is currently accruing interest between approximately $3,500 to $4,000 per month.
[10] As reflected in the handwritten amendments recorded in Exhibit D.
The parties do not have any liabilities at save for a small credit card balance of the wife and unpaid legal fees. It was agreed these items would not be included on the balance sheet and taken into account when altering the parties’ property interests.
The combined value of the parties’ non-superannuation assets is therefore $1,840,245.
Superannuation
The parties also have the following interest in superannuation:
Superannuation Member Value Super Fund 1 Husband $345,229 Super Fund 2 Wife $204,278 Super Fund 3 Wife $48,153 Total $597,660
The total value of the parties’ assets, including superannuation is therefore $2,437,905.
Financial resources
Neither party disclosed nor asserted financial resources.
IS IT JUST AND EQUITABLE TO MAKE AN ORDER?
In this case, the most valuable of the parties’ assets is the sum held in trust from the sale of the former family home. That property was jointly owned and used by the parties and their children as their family home during their relationship. The separation brought an end to the parties’ common use of property. Both parties ask the court to make orders to alter their interests in property.
On this basis, I find the requirements of section 79(2) are satisfied and it is just and equitable for there to be an alteration of property interests between the parties.
CONTRIBUTIONS
In exercising my discretion to make order that is in all the circumstances just and equitable, sub-section 79(4)(a), (b) and (c) of the Act, being the provisions relevant to this case, require me to consider the following matters:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage …, including any contribution made in the capacity of homemaker …
The Full Court has emphasised the nature of the task required by section 79 is “in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and which, effectively as a corollary, requires a "broad-brush approach".”[11]
[11] Babett & Falconer (2015) FLC 98-067 at [44]; cited with approval in Perrin & Perrin (No 2) [2018] FamCAFC 122 at [57]–[58] referring in turn to Dickons & Dickons (2012) 50 Fam LR 244.
The holistic approach to be taken to the assessment of contributions was highlighted by counsel for the husband referring to the Full Court in Petruski & Balewa:[12]
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship (Dickons & Dickons [2012] FamCAFC 154). As was also said by the Full Court in Lovine & Connor and Anor [2012] FamCAFC 168, at paragraphs 40 and 41 such an evaluation “inevitably involves value judgments and matters of impression”, and accordingly it cannot be treated as “a mathematical exercise”.
and by counsel for the wife referring to Full Court’s decision in Horrigan & Horrigan:[13]
It is well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment.
[12] (2013) 49 Fam LR 116 at [49].
[13] [2020] FamCAFC 25 and specifically paragraph [35].
The classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions” can be helpful when undertaking this task. However, in determining what orders are to be made, I am required to approach the assessment of contributions holistically, by analysing the nature, form and characteristics with reference to the particular circumstances of that particular relationship.[14] This should be done without “over-zealous attention to the ascertainment of contributions.”[15]
[14] Dickons & Dickons (2012) 50 Fam LR 244 at [21].
[15] Norbis v Norbis (1986) 161 CLR 513 at [524].
When the parties began living together in 1994, the husband was employed in his family’s business as a tradesperson and was studying . The wife was working full time as a carer.
The husband owned Suburb C. It was common ground he purchased Suburb C in 1987 for approximately $72,000, paying a deposit of $7,250, borrowing $50,000 from ANZ secured by mortgage and funding the balance of the purchase. Accordingly, Suburb C had equity of approximately $22,500 in 1987, being approximately seven years before cohabitation.
Between the time Suburb C was purchased (1987) and the commencement of cohabitation (1994), the husband had undertaken renovation work to the front of the home at Suburb C. He deposed that work included (among other things):
(a)Replacing all guttering;
(b)Replacing and cleaning fascia boards;
(c)Replacing six windows;
(d)Repointing the roof;
(e)Replacing damaged tiles;
(f)Gutting the hall, master bedroom, bathroom, second bedroom, living room and dining room;
(g)Adding three built-in cupboards;
(h)Shifting two doorways;
(i)Extending the bathroom;
(j)Rewiring and plumbing;
(k)Hanging of plaster board;
(l)Installing a new bath, shower and vanity;
(m)Tiling and painting;
(n)Making and installing new cupboard shelves;
(o)Brickwork for a new fireplace mantel;
(p)Installing a new wood heater and chimney;
(q)Painting the living room and dining room;
(r)Removing and making a new front veranda;
(s)Installing galvanised sheet roofing, plumbing, guttering and flashing; and
(t)Various work to the garage.
The husband deposed he had paid approximately $13,500 towards the cost of the initial renovations to the house and approximately $4,927 towards the cost of the work to the garage, paid from savings and undertaking a significant amount of labour himself.
The husband’s evidence in relation to those renovations, supported by extracts from a workbook setting out details and costs of the work he had undertaken, was in dispute only to a small extent. The wife maintained some tiling was yet to be undertaken to the veranda and while the garage had been demolished it had not been completed when she moved in. It was put to the wife in cross-examination that the garage was all but completed or nearly completed before the parties began living together and she answered twice, “I wouldn’t say complete”. I had the impression from the wife’s indirect and imprecise answer that the work to the garage was underway if not almost complete. The wife deposed she contributed towards the cost of completing the tiling of the veranda when she moved in and I accept that evidence given it was not challenged, including by reference to the workbooks relied on by the husband. It was not otherwise in dispute that the husband had finished renovations to the front of the house, two bedrooms, the bathroom, hall, living room, dining room, the veranda and painted the house before the wife moved in.
The mortgage against the title of Suburb C was discharged in 1995, approximately eight years after the purchase of Suburb C and within two years after cohabitation.
No evidence was adduced as to the value of Suburb C at the time the parties began living together or of the balance of the loan secured by mortgage at that time. The equity in Suburb C at the commenced of cohabitation is therefore unknown. The best I can do from the evidence before me is infer there was likely greater equity than at the time it was purchased due to the time that had passed since the purchase (approximately seven years), the renovations undertaken by the husband, and where the home loan was paid out approximately one or two years later.
At the time the parties began living together, the husband also had savings which he later applied to purchase 1,000 F Company and 1,000 G Company shares. Those shares form part of his current shareholding. He also had the two L Company life policies which he has maintained throughout the parties’ relationship. His financial statement discloses he currently makes payments of approximately $7 per week in respect of those policies.
The wife deposed she owned a car worth approximately $10,000 and had savings of $2,000. The husband acknowledged the wife owned a car and had savings from which she also purchased shares between the date of cohabitation and the date of the parties’ marriage. Those shares form part of her current shareholdings.
When the parties began living together, the husband continued to service the home loan and the wife paid for food, utilities, home insurance, social outings, entertainment and other expenses. The husband deposed the wife initially paid “board” of $50 for a few months. Prior to their marriage, they each contributed to a money jar from which they paid for food and utility costs. The husband deposed he paid for “everything else”.
The husband was continuing his work on the renovations to Suburb C and the wife began to assist. She deposed that she assisted with labour whenever they were home together. When cross-examined, the husband acknowledged that when the wife moved into Suburb C it became her home too and they had a joint goal to create their family home at Suburb C. He agreed that in the early days of their relationship, they spent lots of time doing things together, including things around the house.
Approximately 1.5 years after the parties began living together, the husband deferred his university studies, devoting his time to work in his parents’ business.
Ms H was born in 1998.
Mr J was born in 1999. The wife was hospitalised when pregnant with Mr J and remained in hospital until he was born. The husband cared for Ms H, who was then still a baby, assisted by his family and friends and work colleagues of the wife. He also undertook washing, cooking, cleaning and running of the family home.
The wife took maternity leave for Mr J’s birth and returned to employment when Mr J was months old, in or around early 2000. She worked close to full-time and began working evening shifts rather than night shifts, which suited the parties’ young family. The husband worked through the day while the wife cared for the children. He returned from work in the afternoon and took over the care of the children while the wife went to work, for an afternoon/evening shift. She returned home at approximately 9.00 pm or 10.00 pm each day.
The wife deposed to the various positions she has held with different organisations since that time, undertaking similar work and shifts. She deposed that she applied her income to the majority of family expenses including electricity, gas and telephone bills, food, family entertainment, family holidays, social outings and day to day living expenses. She deposed she met expenses for the children including school books, uniforms, education costs, activities, excursions, extra-curricular activities, furniture for their rooms, food and social outings and providing them with pocket money. The wife was not cross-examined in respect of this evidence.
The husband deposed he was the sole breadwinner and did not accept that statement was incorrect when cross-examined. I find it is incorrect, accepting the undisputed evidence that the wife worked in paid employment for the duration of the parties’ relationship save for when the children were born and the time she was hospitalised during her pregnancy with Mr J.
The husband deposed that after the parties married and had children, he paid “almost all of the household’s bills.” He acknowledged the wife contributed to the cost of food, social outings, entertainment, school fees, school books, school clothing and medical bills. He otherwise gave evidence she retained her earnings and used them “to her personal benefit”. He deposed:
As with much of the relationship… she only put a small portion of her earnings towards household expenses… I have no idea what she did with the rest, save for purchasing her [F Company] shares, frequent extravagant and unnecessary upgrades of her cars, at least 12 return trips to New Zealand and otherwise spending it on herself.
When cross-examined, the husband conceded the wife’s travel and expenditure on travel to visit her family in New Zealand over the course of their relationship was not excessive and her expenditure was not “extravagant”. He agreed the parties put what money that had towards their family and had very few luxuries for themselves because they had a joint goal of providing for themselves, their family and their children, as best they could.
The husband acknowledged the wife “was the principal home maker and parent throughout [their] relationship” and gave evidence he “assisted in home making and parenting particularly after work”.
In 1999, while the wife was in hospital, the parties engaged a builder to complete an extension to the rear of Suburb C. The husband gave unchallenged evidence the extension started in or around 2000 and comprised building a new kitchen, second bathroom, renovation of the laundry, family room and installation of a third bedroom and a rear veranda at a cost of approximately $85,000. The wife deposed the renovation took 3.5 years to complete. Re-stumping work was also undertaken. The husband took out a loan of $40,000 from ANZ secured by mortgage, which was applied to the renovation costs and $45,000 was funded from savings.
The parties both deposed to the renovations and improvements undertaken to Suburb C. Some of those works were undertaken by tradesmen and some by the parties themselves. The husband deposed he undertook most of the work and listed the labour he had personally undertaken to the extension, running over more than a page of his affidavit. He estimated the total time spent on that work amounted to between approximately 125 to 150 eight-hour days. The wife did not dispute this evidence but her counsel pointed to her own non-financial contributions made during this time, assisting with labour for the renovation work as she was able to, caring for the parties’ children and undertaking homemaker contributions. The parties had two small children at this point in their relationship and the husband acknowledged the time he spent on renovation work was time he was not available to assist with the care of the children and homemaker responsibilities, which were undertaken primarily by the wife.
The wife acknowledged in cross-examination that she prioritised the care of the children but assisted with the renovation work as much as she could. She gave evidence the parties painted the house twice over the course of their relationship and that she helped with the preparation for that work, including sanding, and the painting itself. The husband deposed the house was painted three times but this likely includes the painting work he undertook shortly before Suburb C was sold, after separation. He denied the wife helped with painting and said this was because “she had significant issues with paint fumes”. She helped to hang plaster. She supported the tradespeople working on the home, including by cooking and providing morning tea, afternoon tea and refreshments.
Overall, the parties’ evidence in respect of the work undertaken on the Suburb C extension is not inconsistent, save for in respect of the wife undertaking painting. The wife agreed she did not undertake as much physical work on the renovations as the husband. The husband conceded the wife did some work on Suburb C and that she did the best she could.
I find they each worked hard and contributed to their best of their abilities – the husband to a greater extent to the renovations and the wife to a greater extent to parenting and homemaker responsibilities – each assisting as best they could with the work primarily shouldered by the other.
The husband gave evidence of the cost he estimated the parties saved from him undertaking labour for various renovations undertaken at Suburb C. I do not give any weight to that evidence in the absence of quotes or expert evidence.
When asked by the wife’s counsel in cross-examination if he had thought about the dollar value to be attributed to the wife’s contributions as parent and homemaker, he acknowledged he had not. I mention this because it highlighted the greater emphasis and value placed by the husband on the work undertaken to improvements at Suburb C than on work undertaken in the role of parent and homemaker.
The husband deposed the wife applied $20,000 of the parties’ savings to purchase a car which he said delayed completion of the renovations. However, he did not contend the wife had wasted money by this purchase or in any other way.
The parties separated in 2001, the wife moving out of Suburb C with the children. She returned approximately eight months later and the parties resumed their relationship.
In late 2003, the rear extension at Suburb C was completed and the wife’s name was registered on the title of Suburb C, as joint proprietor with the husband. The wife deposed that a mortgage of $12,000 was secured on the title and she did not understand that had occurred. The husband’s evidence was that this was simply a refinance of the balance owing on the existing mortgage, to reflect the change in title. The wife acknowledged in cross-examination that she now understood this could have been the case. The husband continued to make all loan repayments and the loan was paid out in late 2004.
The parties kept separate bank accounts throughout their relationship into which their income was paid. The wife deposed she transferred funds to the husband’s account when required.
The parties each purchased the same amount of F Company and G Company shares with their own savings (including savings they had at cohabitation), in separate names. Those shares are reflected in the parties’ current shareholdings. A few years later the husband purchased E Company and D Company shares. The wife deposed she could not afford to make a like purchase as she did not have sufficient savings. When cross-examined, the husband acknowledged these shares were purchased for the benefit of the parties’ family. He deposed the earnings from the parties’ investments paid for private school fees for their daughter and for the family’s health insurance.
In or around 2016, the wife’s mother died. It was not disputed the wife received approximately AUD $90,000 by way of inheritance from her late mother’s estate. Those monies were applied as follows:
(a)She gifted $11,000 to each of the parties’ children ($22,000 in total);
(b)She applied $17,000 towards the purchase of the Motor Vehicle 1 she continues to drive, trading in her previous motor vehicle;
(c)Approximately $17,000 was applied towards the new fence and driveway installed at Suburb C in 2020 and 2021;
(d)The wife deposed some monies were applied to family expenses. In response, the husband deposed that “little or nothing found its way into household expenses.” However, the husband also gave evidence he did not know the details of the wife’s inheritance or how it was applied and the wife was not cross-examined in respect of her evidence that she applied it in part to family expenses. Accordingly, I accept the wife’s evidence it was in part applied to family expenses; and
(e)The balance was retained as savings in her bank account.
When cross-examined, the husband was not critical of the wife’s decision to gift money to the parties’ children from the inheritance she received. The children would then have been around 18 and 17 years old. When cross-examined, the wife gave evidence the money was gifted to the children with the intention they apply it as they wish, whether on the purchase of a car or in some other way. Given the money was not spent on the children’s care or immediate financial needs, I do not treat the $22,000 gifted by the wife to the children as a financial contribution to be taken into account. This brings the value of the financial contribution made by the wife by virtue of the inheritance received by the wife in 2016, to approximately $60,000.
The husband deposed that from 2019 until May 2022 (when the parties separated), further work was carried out to Suburb C “to make the home more respectable and presentable.” That work included (amongst other things):
(a)Replacing canvas awnings;
(b)Removing trees;
(c)Pressure cleaning the roof;
(d)Installing a water tank;
(e)Repairs to a wood heater, fly wire doors, wood rot on the front veranda and a roof leak in the garage;
(f)Replacing 30 weatherboards;
(g)Exterior painting and preparation work for the painting;
(h)Straightening fenceposts;
(i)A new front fence, gate frames and gates; and
(j)Moving a front tap.
The husband deposed the cost of these works totalled $42,000, the wife contributed approximately $16,600 towards those costs from the inheritance received by her in 2016 and the balance was paid from his savings. The husband had given evidence elsewhere in his affidavit, “I dispute any of the $42,000 allegedly remaining from her inheritance went into the property” but when cross-examined admitted this was an error and the wife had indeed contributed $16,600 to the cost of renovations in 2019 from monies inherited by her.
The husband recorded that he spent approximately 314 days undertaking labour towards these works and the wife approximately 22 days. He again relied on records kept in a workbook to support this evidence.
The wife deposed she maintained the garden. The husband claimed the garden was “not started until 2022.” He identified in his list of work undertaken to Suburb C, removing some trees and in 2022 “helping” plant a new front garden, installing plant climbing guides and planting grass in the back yard. He listed other outdoor work undertaken by him including paving, borders and fencing. This evidence was not challenged by the wife. Accordingly, I find both parties contributed to the gardening at Suburb C.
The husband’s family provided assistance to the parties including with some aspects of the renovations. The husband gave evidence in his affidavit and when cross-examined that his father and brother were paid through his parents’ company to undertake some labouring for them. Materials were paid for, although may have been provided on a discounted basis. The wife’s cousin, Mr K, undertook some electrical work at the Suburb C at discounted rates.
In late 2021, the husband parents retired and closed their business. From early 2022, the husband was unemployed. He deposed he received a redundancy payment of $39,000 some of which was applied to meet living expenses during a period of six months he was unemployed and approximately $20,000 remains in his bank account. The wife deposed that whilst unemployed the husband “was on a mission to finish the property as quickly as he could” and “was focused on fixing the final repairs that were needed to complete the property.” The husband deposed he used the time to undertake landscaping at Suburb C. Accordingly, I find he continued to make contributions to the maintenance and/or improvement of Suburb C during the period of his unemployment.
The wife deposed the husband was “secretive” with his money. She also gave evidence that whilst she pushed to have open discussion about money, she “accepted [the husband’s] attitude for the way that it was”, she did not push him as it caused fights, and she accepted they “were not a team in relation to [their] finances and [they] had to do things separately.” However, the wife acknowledged she had no reason to dispute the accuracy of the husband’s evidence, including about monies spent on work undertaken at Suburb C. She admitted she was not suggesting the husband spent money other than on the family or their property and that she was not saying the husband had hidden or wasted money. When cross-examined, the wife admitted she didn’t inform the husband about the details of her inheritance received in 2016 “he never asked me”. I find it is likely that neither party kept the other informed about the details of their personal finances given the way in which they conducted their finances, operating separate accounts and meeting different expenses. I confirm neither party alleged the other has wasted or hidden funds available to them.
The wife gave evidence the parties reached an in-principle agreement in November 2022.
In late 2022, after the parties had agreed to sell Suburb C, the wife moved into rental accommodation. She had the benefit of occupying Suburb C until then. The wife gave unchallenged evidence that she continued to pay the outgoings and utilities of Suburb C pending its sale.
Whilst the husband deposed that if it had not been for the parties’ in principle-agreement reached in November 2022 he “would not have expended as much time and energy preparing the property for sale”, he did not give evidence of the work undertaken by him preparing the property for sale save for 14 days of work painting the interior of the home. He did not challenge the wife’s evidence that she continued to be responsible for maintenance and upkeep of the home after separation and that she prepared the house and maintained the gardens for sale. He deposed that the sale was “pretty much coordinated by [the wife] in conjunction with the agent”, which I find was another non-financial contribution made by the wife after separation.
In early 2023, Suburb C sold at auction for $1.3 million. Settlement of the sale occurred in mid-2023. From the proceeds of sale, $1,300,000 (rounded) plus accrued interest is held in trust by the conveyancer engaged by the parties. The husband deposed this sum represents the net sale proceeds “after some jointly agreed withdrawals” but did not give evidence as to the sum withdrawn or how those monies were applied.
When the parties began living together, the home at Suburb C consisted of two bedrooms, one bathroom and a small lounge area. By the time it was sold, it was a three bedroom home, with two bathrooms and two living areas, owing to the renovations undertaken during their relationship.
Assessment of contributions
Whilst I have set out my consideration of the parties’ evidence in respect of their contributions in categories for convenience, referring to initial contributions and post-separation contributions for example, I have weighed and assessed the contributions of all kinds and from all sources made by each of the parties throughout the period of cohabitation, as the Full Court in Wallis & Manning[16] made clear, is the task of a trial judge. My holistic assessment of the parties’ contributions has extended to the period after separation.
[16] (2017) FLC 93–759; [2017] FamCAFC 14.
I accept that the husband’s ownership of Suburb C, including the renovations undertaken by him and repayments towards the mortgage by the time the parties began living together in 1994, was a valuable financial contribution to the acquisition of the property they now hold.
In respect of that contribution, in Pierce v Pierce (“Pierce”), the Full Court stated at [28]:[17]
…It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
[17] (1999) FLC 92–844; [1998] FamCA 74.
In the present case, Suburb C was retained by the parties, used as their family home and sold after separation. The net sale proceeds represent the most valuable of the parties’ non-superannuation assets. The husband’s counsel asked me to take into account that the property had increased in value from $72,500 when it was purchased by the husband in 1987 to the $1.3 million it sold for in 2023.
However, in relation to the above extract from Pierce, the Full Court in Jabour & Jabour ("Jabour") emphasised the importance of that decision is that the “the weight to be attached to an initial contribution must be assessed against the rubric of all of the contributions, both financial and non-financial, made by the parties over the course of their relationship.”[18]
[18] (2019) FLC 93–898; [2019] FamFAFC 78 at [55] (“Jabour”).
It is significant that the parties lived together for some 28 years and raised two children to adulthood during their relationship. The length of the marriage can be seen to be of considerable importance in the assessment of contributions along with the mutuality of the marital relationship and the nature and extent of the sharing of the roles, duties and responsibilities that inform that mutuality of a particular marriage relationship.[19]
[19] Wallis & Manning (2017) FLC 93–759; [2017] FamCAFC 14 at [106] (“Wallis & Manning”) referring to Fogarty J in Waters & Jurek(1995) FLC 92-635, at [82,379] and at[107] referring to the High Court of Australia’s analysis in Stanford.
The Full Court explained in Wallis & Manning:[20]
[20] at [116]
In our view, talk of “erosion” of the early capital contribution obscures the issue rather than illuminates it. However, it can be taken as well settled that the length of the relationship has a significant impact on how early significant capital contributions should be viewed in assessing the totality of the parties’ contributions. For example, the Full Court has said:
The longer the duration of the marriage, depending on the quality and extent of her contribution, the more the proportionality of the original contribution is reduced.
and
The longer the marriage the more likely it is that there will be later factors of significance, and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
[references omitted]
The parties each made a miscellany of financial contributions to Suburb C during the 28 years it was their home and after their separation, and to their other property throughout their long relationship. Their contributions were made directly and indirectly. For example, by the wife meeting various expenses relating to the household and the parties’ children, the husband was able to apply his income to service the loans secured against Suburb C at times and to fund the bulk of the cost of renovations. The wife also made direct financial contributions to the Suburb C renovations, including in 2019 from monies inherited by her in 2016.
The wife made non-financial contributions by assisting in the renovations as she was able. Whilst her physical work on the renovations was conceded to be less than that of the husband, it was acknowledged by the husband that her ability to contribute to the renovations was impacted by her role as being primarily responsible for the care of the parties’ children and homemaker responsibilities. Those contributions made by the wife enabled the husband to undertake the work he did to Suburb C and to engage in employment.
Taking the holistic approach required, I find both parties worked very hard over many years and they both contributed to the full extent of their capacity within the roles they each took within their marriage, with the joint goal of providing for their family.
I also take into account the financial and non-financial contributions made by the parties after separation including the painting work undertaken by the husband and the wife’s payment of outgoings and utilities, maintenance and upkeep of the home, preparation of the house and garden for sale and liaising with the agent in respect of the sale.
The husband’s counsel acknowledged the increase in value of Suburb C due to market forces and the effluxion of time. As observed by McClelland J in Petrellis & Petrellis,[21] where there is a substantial increase in the value of real property that arises other than from the efforts of the parties, including external market forces, authorities point to the increase being categorised as a contribution by both parties and not necessarily the party who contributed the greater proportion of funds to acquire that property.
[21] [2023] FedCFamC1A 104 at [92], citing and referring to Bachman & Self [2023] FedCFamC1A 50 at [125]–[127], Hurst & Hurst (2018) FLC 93-851 at [26]; Whiton & Dagne (2019) FLC 93-923 at [34]; Jabour at [44]–[47] and [84]; Barnell & Barnell (2020) FLC 93-961 at [41]–[42]
Accordingly, whilst I consider it appropriate to give some weight to the husband’s contribution of Suburb C at the commencement of the parties’ cohabitation and take into account the use made by the parties of Suburb C, I also take into account that Suburb C has been conserved by the direct and indirect contributions of both parties, significantly improved by them during their relationship and has increased in value due to those improvements and market forces.
The husband’s counsel asked me to take into account that it was the husband’s dedication to the task of renovations and his particular skills that saved them money they would have otherwise had to spend on renovations and added significantly to the value of the property. It was conceded the husband was not a qualified tradesman (although he had worked as a tradesperson) but acknowledged by the wife that he was good with his hands.
One of the authorities relied upon by the husband’s counsel in relation to the approach to be taken towards the assessment of contributions was Fields & Smith.[22] In that case the Full Court made the following comments which are relevant to the submission made about the husband’s “particular skills”:[23]
It will be clear from the passages that we have referred to that his Honour rejected an argument that there was a particular type of contribution that related to “special skills” or “special talents”, with the result that such a finding “is productive of a particular finding, or range of findings in respect of contribution”. Full Court decisions have supported that view (see Kane & Kane [2013] FamCAFC 205, Hoffman & Hoffman [2014] FamCAFC 92) and the jurisprudence can be fairly said to be settled.
[22] (2015) FLC 93–638; [2015] FamCAFC 57.
[23] at [42].
In this case, as was acknowledged by the husband in cross-examination, the greater contributions made by the wife as parent and homemaker allowed him to make the greater contributions he did towards Suburb C. I find both contributions to be important and valuable. The approach submitted by the husband in my view undervalues the contributions made by the wife as primary parent and homemaker
The husband’s counsel also pointed out the shares purchased by the husband with the savings he held at the time the parties began living together equates to about two thirds of his current shareholding in F Company and about 20% of his current shareholding in E Company. Whilst I take into account that contribution and the wife’s contribution to her initial acquisition of shares from the savings she had at the commencement of cohabitation, I also do not take a mathematical approach to my assessment of these or any other contributions made by the parties. I find the husband’s initial contribution made by his modest savings towards the acquisition of shares which have increased in value due to market forces is to be given little weight given the duration of the parties’ relationship and their very many other contributions made subsequently.
I put even less weight on the husband’s ownership of the L Company policies at the commencement of cohabitation given the modest value of those policies and the premiums paid to maintain those policies throughout the parties’ relationship.
I asked counsel for the husband during closing submissions what, if anything, assists me from the in-principle agreement reached between the parties which I had admitted into evidence. He said it would allow me to assess changes in the pool since then but did not point me to any particular changes submitted to be of relevance. He submitted the agreement led to Suburb C being sold but conceded it would have been sold anyway, although maybe not at that time. Counsel for the husband otherwise pointed only to the work undertaken by the husband to prepare the property for sale, being 14 days of painting.. I note this was not a requirement of the minute of proposed orders annexed to the husband’s trial affidavit (E6) which he said reflected the parties’ in-principle agreement. Submissions were not made in relation to the effect of the minute of proposed orders relied on by the husband as his alternate proposal, or the asserted justice and equity of that outcome applied to the current asset pool. After hearing closing submissions, I was left in doubt as to the husband’s bona fides in seeking to adduce evidence of the in-principle agreement reached between the parties in November 2022.
Counsel for the wife submitted the parties’ contributions should be considered as equal and that the husband’s initial contributions were “offset” by the wife’s inheritance in 2016. This approach would in my view be contrary to the requirement to consider and weigh the parties’ contributions collectively, not compartmentalised with some contributions weighed against others.[24] I accept however that each of these contributions should be given weight and assessed within the context of 28-year relationship, more than 12 months of separation and the myriad of other contributions made by the parties over that time.
[24] Jabour at [73]–[87]; Benson & Drury [2020] FamFAFC 303 at [35].
The wife’s submission that I should find the parties’ contributions were equal, putting particular emphasis on the parties’ long relationship does not in my view adequately take into account the husband’s initial contribution of Suburb C. At the time the parties began living together, Suburb C had been renovated by the husband over six or seven years before cohabitation and the mortgage was one or two years away from being repaid. The property was retained by the parties, used as their home, renovated by them and maintained as their most valuable asset.
The contribution-based assessment of 60:40 proposed by the husband (60% in favour of the husband) would result in a 20% differential between the parties across their non-superannuation assets (equating to approximately $370,000 in round terms). Such an adjustment would in my view give inadequate weight to the myriad of other contributions made by both parties throughout the course of their long relationship, including in particular (but not limited to) the wife’s contributions as parent and homemaker, and does not accord with the approach required to be taken by this court outlined above, including as set out by the Full Court in Hurst & Hurst,[25] Jabour, and Barnell & Barnell.[26]
[25] (2018) FLC 93–851; [2018] FamCAFC 146.
[26] (2020) FLC 93–961; [2020] FamCAFC 102.
Having considered the totality of the parties’ evidence as to the financial and non-financial contributions they each made during a long marriage of 28 years and separation of more than a year, I assess the contributions of the parties to their non-superannuation assets to be 52% to the husband and 48% to the wife. That reflects a differential of 4% between the parties in respect of contributions, equating to approximately $73,600 in round dollar terms when applied to the non-superannuation asset pool, which I consider appropriate.
SECTION 79(4)(d)
Section 79(4)(d) of the Act requires me to consider the effect of any proposed order upon the earning capacity of either party to the marriage. The orders sought by both parties will see the transfer of some income producing shares, so that both parties hold equivalent shareholdings producing equivalent income by way of dividends should they retain those shares. The husband estimated that upon the agreed transfer of shares, the wife would receive approximately $75 per week in additional dividend income and he approximately $75 per week less (that estimate based on current figures). The proposed orders do not otherwise have any effect on the earning capacity of either party.
MATTERS RELEVANT PURSUANT TO SECTION 75(2)
In considering what order should be made under section 79, subsection 79(4)(e) requires me to take into account the matters referred to in section 75(2) so far as they are relevant.
I refer to the background set out earlier in my reasons regarding the parties’ ages, health, employment and income.
The wife deposed to some health issues but did not adduce medical evidence they affected her ability to work and earn income from employment. She did not give evidence of significant medical expenses. The parties are otherwise of a similar age and both in relatively good health.
It was submitted on behalf of the wife that the husband earns a significantly higher income than she does – $1,700 per week compared to her income of $700 per week. However, she gave evidence when cross-examined that whilst she currently works approximately 20 to 25 hours per week on average, she could take on more work hours if she elected to. The wife worked in employment throughout most of the parties’ relationship save for periods of parental leave and has maintained her income earning capacity. The husband has been working overtime to earn a higher income. Acknowledging both parties are nearing the end of their working lives (a concession made by both parties’ counsel), the wife did not seek any adjustment pursuant to section 75(2) on this ground.
Neither party gave evidence they had re-partnered. The parties’ adult son, Mr J, is living with the husband. The husband deposed in his financial statement Mr J is contributing $300 per week to shared household expenses. The wife did not submit this warranted an adjustment pursuant to section 75(2)(m).
If the husband was successful with his application for a significant contribution-based assessment in his favour, counsel for the wife submitted there should be an adjustment in favour of the wife pursuant to section 75(2)(b) and (n) taking into account the property the husband would retain.
I do not consider an adjustment is warranted in favour of the wife pursuant to section 75(2)(b) based on the difference in the parties’ income from employment. Given my contribution-based assessment seeks a relatively modest differential in the property the parties will each retain, I am not satisfied an adjustment to that assessment is warranted pursuant to section 75(2)(b) and/or (n).
Accordingly, I make no adjustment to my contribution-based assessment pursuant to section 75(2).
SUPERANNUATION
Given a two pool approach is to be taken, it is necessary for me to consider the direct and indirect contributions of the parties to their superannuation interests and those matters in section 75(2) of the Act as are relevant to their superannuation.
The husband gave unchallenged evidence he had a superannuation balance of approximately $4,000 as at early 1991, some three years prior to cohabitation. The wife did not adduce evidence she had superannuation at the time the parties’ began living together.
The parties each made contributions to their superannuation via their employment and indirect contributions to the superannuation of the other through the support they provided to one another and their family during their marriage. The wife took periods of parental leave when the parties’ children were born. The husband was unemployed for a brief period. The wife’s care of the parties’ children and shift work enabled the husband to work in paid employment and to contribute to a greater extent to his superannuation.
In all of the circumstances, I find their contributions in respect of their superannuation to be equal.
Whilst the wife earns less than the husband and her employer will therefore contribute less to her superannuation moving forward, they will each continue to contribute to their superannuation. The parties are of a similar age, towards the end of their working lives as submitted by each of their counsel. Having regard to these matters, I find no adjustment is warranted to the contribution-based assessment made in respect of the parties’ superannuation pursuant to section 75(2).
Copy correspondence was annexed to the husband’s trial affidavit, demonstrating the trustees of both parties’ superannuation funds have been afforded procedural fairness in respect of the agreed superannuation splitting orders.
At the conclusion of the final hearing, the parties were invited to again correspond with the trustee of the husband’s superannuation fund in relation to the proposed superannuation splitting order given the time that had passed since the trustee had been afforded procedural fairness, to ensure there had been no change in trustee or change in the trustee’s requirements. This was attended to by the solicitors for the wife, with confirmation provided to chambers. Proof of the husband’s superannuation balance was also requested at the conclusion of the trial, to support the agreed superannuation splitting order and to ensure the proposed base amount did not exceed the husband’s member balance as required by the trustee. A portfolio snapshot was provided by the husband’s solicitors providing that confirmation.
Having considered all of the above, I am satisfied the orders agreed by the parties to equalise their superannuation using the values and base amount agreed at trial are appropriate and may be made binding the trustee of the husband’s superannuation fund.
CONCLUSION
Pursuant to the above assessment, I consider it just and equitable for the parties’ interests in property to be altered such that non-superannuation assets are divided in the proportions of approximately 52% to the husband and 48% to the husband.
The parties agree on the configuration of the property orders I am to make.
They agree the wife will retain and receive:
(a)Motor Vehicle 1 registered in her name: $15,000
(b)F Company shares held in her name: $6,973
(c)G Company shares held in her name: $13,833
(d)50% of the D Company shares held in the husband’s name: $50,888
(e)50% of the E Company shares held in the husband’s name: $35,446
(f)Monies held in her bank accounts: $342
Total: $122,482
They agree the husband will retain:
(a)Motor Vehicle 2 registered in her name: $1,500
(b)F Company shares held in his name: $6,973
(c)G Company shares held in his name: $13,833
(d)50% of the D Company shares held in his name: $50,888
(e)50% of the E Company shares held in his name: $35,447
(f)Monies held in his bank accounts: $69,969
(g)Two L Company whole life policies: $29,822
Total: $208,432
They seek the net proceeds from the sale of Suburb C held in trust (currently $1,509,331)[27] be distributed to achieve the outcome determined by the court to be just and equitable.
[27] Being the updated figure provided in the amended joint balance sheet at the conclusion of the final hearing.
The total net value of the parties’ non-superannuation assets is $1,840,245 including the net proceeds from the sale of Suburb C, plus accruing interest. To achieve the percentage outcome I have determined appropriate (52% in favour of the husband), the husband needs to retain assets valued at $956,927. He will retain assets valued at $208,432 as identified above. Accordingly, he should receive $748,495 from the Suburb C proceeds to make up his non-superannuation entitlement. Receiving $760,836 from the net sale proceeds in addition to those assets the wife will retain as identified above will result her receive assets with a total value of $888,318, being 48% of the parties’ non-superannuation assets as I have determined is just and equitable.
I will make an order for any interest accrued since the date of the final hearing on the Suburb C proceeds (being any monies held in trust above the balance of $1,300,000), if any, to be divided equally between the parties.
I have been satisfied the superannuation splitting order proposed by the parties is just and equitable.
Considered globally, the orders I propose making equates to the husband receiving assets and superannuation equivalent to approximately 52% of the combined value of the parties’ assets including superannuation and the wife receiving 48%.
I consider this to be a just and equitable outcome, in percentage and actual terms, consistent with my holistic assessment and weighing of the parties’ respective contributions and those maters relevant pursuant to section 75(2) in the context of a marriage of 28 years, raising two children, and a separation of approximately one year. I am satisfied the configuration of the proposed settlement, in terms of the particular assets and superannuation each party is to retain (as agreed by them), is appropriate.
Order
I therefore make the final order as set out, considering it to be just and equitable in the circumstances.
I certify that the preceding one hundred and eighty-three (183) numbered paragraphs are a true copy of the Reasons for Judgment of Judge A. Humphreys. Associate:
Dated: 3 November 2023
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