Eltham and York
[2009] FMCAfam 1077
•18 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ELTHAM & YORK | [2009] FMCAfam 1077 |
| FAMILY LAW – Property – marriage of approximately median duration – parties married in Argentina but lived in Australia. |
| Family Law Act 1975, ss.75(2) & 79 |
| Blanks & Blanks [2006] FamCA 354 Re NHC & RCH (2004) FLC 93-204 D v D (2006) FLC 93-300 GBT and BJT [2005] FamCA 683 Hickey & Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kennon & Kennon (1997) FLC 92-757 Kowaliw v Kowaliw (1981) FLC 91-092 Townsend & Townsend (1995) FLC 92-569 |
| Applicant: | MS ELTHAM |
| Respondent: | MR YORK |
| File Number: | BRC3983/2008 |
| Judgment of: | Howard FM |
| Hearing date: | 5, 6, 7 & 8 October 2009 |
| Date of Last Submission: | 8 October 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 18 December 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hamwood |
| Solicitors for the Applicant: | Christine Vachon Solicitor |
| Counsel for the Respondent: | Mr Kirk SC |
| Solicitors for the Respondent: | Hopgood Ganim |
ORDERS
The parties submit to the Court draft orders to reflect the Reasons for Judgment.
IT IS NOTED that publication of this judgment under the pseudonym Eltham & York is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC3983/2008
| MS ELTHAM |
Applicant
And
| MR YORK |
Respondent
REASONS FOR JUDGMENT
Background
The Applicant wife was born in Argentina [in] 1955.
The Respondent husband was born [in] 1951.
The parties married [in] 1998 in Argentina.
The parties separated on a final basis in December 2007. Nine years elapsed between the date of marriage and final separation. I accept the evidence of the wife that the parties were first separated for approximately a four month period leading up to April 2007. The parties were therefore together for approximately 8 years and 8 months.
The parties are unable to agree on how to divide their property.
When the parties met the wife was living in [B], Argentina. She was employed as a [omitted] in the [finance] industry. She holds degrees as a [omitted] and a post graduate qualification in [omitted]. Both of these qualifications were obtained through the University of [B]. Furthermore, the wife completed her doctorate at the [omitted], [B]. The wife was employed by [omitted]. That company had taken over [omitted] in [B]. In addition, the wife was working as a consultant for the Argentine Government in [omitted] and was also acting as a consultant to the [omitted].
The husband was a very experienced [in the Legal Industry] in Australia. He was a [occupation omitted].
Credibility
In the written submissions provided by Mr Kirk SC on behalf of the husband – he has included approximately five typed pages relating to the wife’s credibility. I had the opportunity to observe the wife give evidence for a considerable period of time. I reached the conclusion that the wife was a truthful witness. I do not accept that the wife attempted to mislead the Court. I will refer to some parts of Mr Kirk SC’s written submissions. In particular I note:-
(a)as to the wife’s savings - if there was any slip or error by the wife in relation to the amount of her savings in December 1998 – I do not accept that the wife was attempting to mislead the Court in relation to that issue;
(b)concerning the wife’s income earned post marriage - I accept her evidence in that regard. I also accept the explanation provided by the wife (concerning her taxation returns) that she was told by an accountant that the foreign income was not relevant. I infer from the evidence of the husband and the wife that the husband engaged the accountant and was (at least initially) the party who contacted the accountant. I see nothing sinister in the fact that the wife might not have “met” the accountant until some later date. I also note that the husband stated in cross examination that he did not include foreign income that he had earned (by way of rental from a property) in his relevant taxation return; and
(c)in relation to the additional issues specifically raised by counsel for the husband and referred to in paragraph 2.1(b) of his written submissions I have concluded that I accept the wife’s evidence in relation to those issues. I accept the wife’s explanations as to any discrepancies in her evidence which may have been queried in cross examination and I have concluded – having had the opportunity to observe her closely in the witness box – that she did not attempt to mislead the Court.
In relation to the husband I have concluded that the husband was also a credible witness but he did attempt, on occasions during the course of his evidence, to downplay the contributions made by the wife. I have specifically referred to those matters later in these Reasons for Judgment.
The four step approach
In property settlement proceedings brought pursuant to s.79 of the Family Law Act (1975) (“the Act”) the Court normally adopts the four step approach referred to in cases such as Hickey & Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143. Because of the findings I have made in these Reasons for Judgment (in particular concerning contributions) I have decided that a “global” approach is appropriate in this case. The four steps are:-
(a)ascertain the net property pool;
(b)assess the contributions made by the parties as required by s.79 of the Act;
(c)consider the matters contained in s.75(2) of the Act; and
(d)ensure the order proposed is just and equitable.
The pool
A number of issues arise in relation to the pool.
Property M apartment
The wife owns an apartment referred to in the evidence as “Property M”. Property M is a street in a fashionable suburb of [B]. Construction of the apartment has not been completed. In my view the correct approach is to include the value of the apartment in its incomplete state. The evidence of the wife’s valuer as to the value of the Property M apartment in its incomplete state has been stated (or agreed between the parties) in the amount of A$48,555.00. It is to be noted that the valuer retained by the husband had provided a valuation in the completed state. The approach suggested by Mr Hamwood of counsel (who appeared on behalf of the wife) in relation to this issue is, in my view, the correct approach. The value of that apartment, in its incomplete state, at the date of the hearing, is the correct value to be included in the pool. It follows then that under the heading of “liabilities” there should also be included as a debt of the wife US$16,000.00 which represents the amount required to complete the construction of the apartment.[1]
[1] I will take judicial notice of the fact that as at the fourth day of the hearing (8 October 2009) $1 Australian was worth 89 US cents. It was approximately the same rate as at the date the Judgment was delivered (18 December 2009).
The husband’s 1998 Jaguar
In relation to this motor vehicle I accept the submission made by
Mr Kirk SC who appeared on behalf of the husband. The 1998 Jaguar should be included in the pool in the amount as valued at the date of the hearing, namely $45,000.00. That approach is consistent with the approach I have adopted in respect of the wife’s Property M apartment.
The VW motor vehicle
This vehicle, owned by the husband, will be included in the pool in the agreed value of $11,000.00.
The wife’s jewellery
No valuation evidence was led in respect of the wife’s jewellery. Therefore no value can be ascribed to that jewellery in the pool.
Liabilities
(a) The husband has sought to include as a liability a land tax amount of $33,321.00 owing in respect of the Property N and Property A properties. Furthermore he has sought to include liabilities which he owes to the Australian Taxation Office. The first is noted as, “ATO (tax and GST) $47,181.00”. The second amount is noted as, “ATO (Sept. 09 instalment) $17,000.00”.
The husband has paid a substantial amount in respect of legal fees and valuation fees. Those fees total $129,632.00. I accept the evidence of the husband that he has paid those legal fees from post separation earnings. Those amounts will therefore not be added back into the pool. However, I do agree with the submission made by Mr Hamwood on behalf of the wife so far as it concerns the husband’s taxation debts. Whilst it was appropriate for the husband to pay his legal fees from post separation earnings it is to be noted that he has failed to pay liabilities in respect of his business/investments. They are the land tax amount and the two ATO amounts. Those liabilities of the husband ought not, in the circumstances of this case, be included in the pool.
(b)The wife did not press to have the loan from her mother included as a liability in the pool.
Add backs
(a) I have already noted that legal fees paid by the husband from post separation earnings will not be added back into the pool as a notional asset. This is consistent with the view of the Full Court of the Family Court in Re: NHC & RCH (2004) FLC 93-204. In Re: NHC & RCH the Full Court stated at pages 79,322 and 79,323:-
“56.In summary, we consider that the abovementioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58.If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59.Outstanding legal fees themselves are generally not taken into account as a liability.
60.If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.”
(b)Pursuant to orders made on 17 June 2008, 15 December 2008 and 19 March 2009 the wife received (as partial property settlement) payments from the husband totalling $135,000.00. Those amounts should now be added back into the pool as assets of the wife.
(c)Having added back those amounts into the pool I now turn my mind to the question of the wife’s legal fees. I accept the submission made by Mr Hamwood of counsel in this regard. In my view the amount paid by the wife in respect of legal fees should not be added back into the pool as a notional asset. I infer from the available evidence that the wife had no other source of income to pay her legal fees and it is highly likely that such legal fees were paid from the partial property settlements that she received. Accordingly, the wife’s legal fees should not be added back into the pool as the same would amount to a double counting.
(d)The husband did not press the argument in relation to adding back into the pool excessive expenditure by the wife post separation. Nor did the husband press in relation to the wife’s tax refund. It was conceded by Mr Kirk SC on behalf of the husband that there was insufficient evidence to demonstrate deliberate waste as required by cases such as Kowaliw v Kowaliw (1981) FLC 91-092 and Townsend & Townsend (1995) FLC 92‑569.
(e)The wife did not press any argument in relation to the increase in the husband’s liabilities post separation.
Apart from the issues outlined above concerning the pool the parties are otherwise essentially in agreement in respect of the pool. I find that the net asset pool of the parties is therefore as follows:-
ASSETS
Ownership
Value
1. Realty
(a) Property C
Husband
$1,200,000.00
(b) Property N
Husband
$2,700,000.00
(c) Property A
Husband
$400,000.00
(d) One quarter share in Property L Argentina
Wife
$32,507.00
(e) Property U, Argentina
Wife
$90,730.00
(f) Property M, Argentina
Wife
$48,555.00
(g) Property N, Argentina
Joint
$135,806.00
2. Shares
AMP (386 shares)
Husband
$2,397.00
LIHR (3,000 shares)
Husband
$9,120.00
Suncorp (600 shares)
Husband
$4,800.00
3. Motor vehicles and number plates
1995 Jaguar
- 1998 Jaguar
- 1925 Brough MC (bike)
- 1928 Brough MC (bike)
- 1932 Norton
- 1948 Norton
- 1933 Dodge
- 1939 Alvis
- 1955 Jaguar XK140
- 1956 Jaguar
- 1958 Bentley
- 1964 Jaguar
- 1964 Aston Martiin
- 1967 Jag (parts only)
- 1993 Yamaha
- VW motor vehicle
- Number Plates
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
Husband
$12,500.00
$45,000.00
$90,000.00
$82,500.00
$9,000.00
$13,000.00
$8,000.00
$82,000.00
$55,000.00
$9,000.00
$32,500.00
$21,000.00
$145,000.00
$350.00
$4,000.00
$11,000.00
$170,000.00
Superannuation (By agreement the parties have included superannuation and non superannuation assets in the one pool)
Macquarie Bank approved Deposit Fund
Husband
$1,463,456.00
Other Assets
- Furniture
Husband
$24,405.00
- Boats
Husband
$300.00
- Stationary engines
Husband
$200.00
- Tools
Husband
$1,000.00
Add Back
Partial property settlements
Wife
$135,000.00
SUBTOTAL
$7,038,126.00
LIABILITIES
(a) Westpac investment loan
Husband
$428,804.00
(b) Mr H (debt owed by husband)
Husband
$45,000.00
(c) Capital Gains Tax liabilities in respect of the sale of the Property N property
Husband
$460,165.00
(d) Cost of sale of the Property N property
Husband
$67,950.00
(e) Property M debt representing the cost to the wife to complete construction of the apartment (US $16,000.00
Wife
$17,977.00[2]
SUBTOTAL
$1,019,896.00
NET ASSET POOL
$6,018,230.00
[2] Note earlier footnote currency exchange rate taken as at 8 October 2009 when $1 Australian equalled 89 US cents.
I will consider the question of notional tax and sale costs under the s.75(2) heading.
Contributions
The husband has made substantial financial contributions to the pool and to the marriage. Those contributions include the properties at Property C, Property N and Property A. In addition there are the valuable motor vehicles and number plates as well as the substantial superannuation amount.
Furthermore, throughout the marriage the husband received income as a [occupation omitted]. For most of the time he received income as a [occupation omitted] at [D]. The husband received a substantial payout (in excess of $800,000.00) upon leaving the [D] partnership. The husband applied his income for the benefit of the parties throughout the course of the relationship. The husband’s net income throughout the course of the relationship totalled approximately $2.9 million.
There can be no question that the husband provided substantial financial contributions to the pool and to the marriage.
In terms of financial contributions made by the wife - the wife made financial contributions in respect of the Property U apartment, the Property L apartment (one quarter share) and an apartment at Property B. The wife also had cash totalling approximately US$146,000.00 at the commencement of the relationship. The wife spent a substantial amount of money (approximately US$56,000.00) on the parties’ wedding which took place in Argentina.
The wife had no debt at the commencement of the relationship. Furthermore, the wife had a good job in the [finance] industry in [B] and she was well regarded in her profession in Argentina.
I accept the wife’s evidence that she continued to do some consulting work for companies in Argentina even after she arrived in Australia and earned some further income after arriving in Australia. In particular the wife received approximately $90,000.00 by way of income in 2000 – after her arrival in Australia.
It could not have been easy for the wife migrating to Australia and giving up her [finance] career. Her family and friends were in Argentina as was her career. She clearly enjoyed returning to Argentina and did so on many occasions. The husband accompanied her on most of those occasions and the parties greatly enjoyed those trips.
The husband gave evidence (under cross examination) that he and the wife had stayed in apartments owned by the wife on some of their visits to Argentina. I find that the wife made available to the parties for their use properties in Argentina which she owned.
It is to be noted that the parties travelled to Argentina for practically every year of their marriage. The parties would spend some time in [B] and then holiday in other parts of Argentina or other parts of South America. I find that the wife substantially paid for these holidays every year to South America. The wife paid for both parties in respect of these holidays from her own funds. It is to be noted that the wife used those funds in circumstances where she had substantially foregone her career in [finance] upon moving to Australia. I accept that the husband paid for some (relatively minor) amounts in respect of those overseas holidays.
After living in Australia for approximately one year the wife was no longer in receipt of any income from Argentina. The money which she therefore used to pay for the holidays in Argentina must have come from her own savings.
I have reached the conclusion that the wife did indeed contribute financially to the relationship and to the marriage. The wife did make available, for the use of the parties, her property and resources during the course of the marriage.
By agreement, the parties came to live in Australia once married. Implicit in this arrangement were the following facts, namely:-
(a)the husband would continue his career as a partner at [D] and continue to earn substantial income; and
(b)the wife would have to forego her career [in the Finance Industry] in [B] and hence forego her ability to earn substantial income in that country.
Spanish is the wife’s first language. The wife can speak English. The wife gave evidence at the trial with the assistance of a Spanish interpreter. I formed the view that the wife needed the assistance of the Spanish interpreter in order to ensure that she (the wife) was clearly understood by the Court.
With an insufficient command of English the wife could not (in my view) be expected to have pursued a [finance] career in Australia.
The wife did, however, prepare the necessary information for the parties each year to enable preparation of their taxation returns. Furthermore, I accept the wife’s evidence that she was primarily responsible for organising the family’s finances. With her accounting background the wife was able to manage the parties’ income and resources.
I had the opportunity to observe the husband in the witness box for some considerable time. I formed the view that the husband attempted to downplay the wife’s contributions in respect of management of the parties’ financial affairs. The husband was clearly extremely busy in the running of his legal practice. He became managing partner at [D] not long after the parties were married. I find that the task of organising the parties’ financial affairs was left to the wife and I find that she performed that task. I also find that the wife was a good manager of money and that she set the husband on a course of debt reduction. These tasks performed by the wife provided a benefit to the family. It is important to recall that the wife’s professional career was in [finance] and it is only logical that she would perform these types of tasks during the marriage. It also freed up time for the husband to devote to his career.
Even though, for some period of time, one of the husband’s assistants at [D] may have written cheques on behalf of the parties I find that it was the wife who primarily managed the parties’ financial affairs.
The husband admits in paragraph 58 of his Affidavit filed 15 September 2009 and also admitted in cross examination that the wife did prepare the information to be sent to the accountants for the preparation of taxation returns. The husband also admitted in cross examination that the wife assisted him with the setting up of his new [business], “[Y]”. Her assistance apparently related to the implementation of e business records from the Australian Taxation Office. The husband conceded such software was very confusing.
The husband also admitted that the wife was frugal – being very careful with finances. I infer from the husband’s evidence in this regard that he considered the wife’s frugality as a virtue.
In addition to the contributions made by the wife to the organisation of the parties’ finances the wife also managed the household. The parties live at the Property C property. The wife cooked the meals for the parties. The husband made a point in his evidence of stating that he would ensure he was home from work each evening in time to enjoy the evening meal prepared by the wife.
Even though there was some domestic assistance paid for by the husband - the wife substantially provided the home making contributions in respect of this relationship.
Even after the wife was injured she continued to provide some home making contributions. The wife had suffered an injury in a motor vehicle collision in December 2001.
After the wife suffered personal injury she continued to cook and iron for the parties. I infer from the evidence that the wife was able to continue with home making duties. To the extent that the wife received assistance from her mother and another friend (Ms G) in respect of housework after the motor vehicle injury – those contributions should be seen as contributions made to the marriage on behalf of the wife.
Exhibit 14 (the Supreme Court of Queensland Statement of Loss and Damage relied upon by the wife in her personal injuries claim) makes it clear that the wife’s ability to perform housework was reduced following the motor vehicle injury. I find as a fact that the wife was able to and did continue to perform some home making duties notwithstanding her injury. I had the chance to listen to the wife give evidence in the witness box for several days. I formed the impression that the wife was truthful in her explanations concerning her personal injuries and the impact of those injuries upon her life. I do not consider that the wife, in any way, attempted to over state the impact of her injuries. I also note and accept the evidence of the husband that he would not have “had anything to do” with the wife’s claim for personal injuries if he had in any way suspected that it was anything other than a genuine claim. It should be noted that the compulsory third party insurer paid to the wife a substantial amount of damages ($80,000.00). I do note that the net amount received by the wife was substantially less. I infer that this takes account of government refunds and legal fees.
To the extent that the wife’s evidence in this case is in any way inconsistent with her Statement of Loss and Damage I accept the wife’s evidence given in this case. I also note that English is the wife’s second language. I further note that it was the husband who assisted the wife in translating her concepts into English. I also note that it was the husband who was involved in editing the Statement of Loss and Damage.
I have concluded that neither the husband nor the wife in any way acted inappropriately in respect of the wife’s personal injuries claim.
The wife and the husband jointly agreed to attempt to start a family. Initially the parties were involved with a so called “assisted pregnancy”. The wife then underwent invitro fertilisation (“IVF”) treatment. The wife underwent three or four IVF procedures. The procedures were invasive. Neither party has children and it was their wish to have a child. The wife paid for all such IVF treatments. Some treatment was received in Australia and some treatment was received in Argentina. In respect of each treatment the cost was approximately US$5,000.00. All of those amounts were paid by the wife. Unfortunately, the wife suffered a miscarriage on one occasion.
The involvement of the wife in the IVF treatment and the payment for such treatment was, clearly, a contribution by the wife to the marriage and to the welfare of this family.
There was substantial income splitting by the husband. Money was ascribed to the wife in order to effect income splitting. The wife did not receive or have the use of such money but it does reflect a contribution by her. I accept the submission of Mr Hamwood of counsel on behalf of the wife in this regard.
To the husband’s credit he did summarise the wife’s good points including as follows:-
(a)he considered the wife to be beautiful, smart and persuasive;
(b)the fact that the wife was a great cook;
(c)the fact that the wife was great fun to travel with;
(d)the fact that in the early years the wife was very loving;
(e)the fact that the wife was frugal – very careful with finances;
(f)the fact that the wife was great company; and
(g)that fact that she spent her own money freely (I infer this related primarily to the South American holidays but is not necessarily restricted to those holidays).
Unfortunately, in 2003 the husband’s position as managing partner at [D] was terminated. The husband was essentially locked out of the [D] work place. The husband brought an action against [D] in the Human Rights and Equal Opportunities Commission. This claim was eventually settled and the husband received a compensation payment of $816,000.00 from [D]. The wife provided critical support to the husband during the husband’s dispute with [D]. The wife provided emotional support for the husband. The wife accompanied the husband to mediations and other meetings. I accept the wife’s evidence that she did speak up on behalf of the husband at the final mediation. The husband conceded as much in cross examination. I have also reached the conclusion that the husband has attempted to down play the wife’s support which she provided to him during this critical stage.
Dr V, psychiatrist, has provided a report to the Court in respect of the parties. That report is annexed to an Affidavit filed 14 September 2009. Dr V was not cross examined.
It is apparent from Dr V’s report that the husband suffered a major depressive episode as a result of his dispute with [D]. On page 2 of
Dr V’s report he notes:-
“Mr York goes on to repeat that when he was locked out of his firm in 2003/2004, ‘they tried to get rid of me on psychiatric grounds’. He states ‘all this was very traumatic’ and ‘bad for both of us’”.
Further, on page 3 of Dr V’s report he states:-
“I asked Mr York about the symptoms he was having when he first saw Dr S. He believes this was in 2002 or 2003. He states he was ‘anxious’ and ‘tearful’. He states he had been ‘at the top of his profession’ and was ‘feeling the loss’. He describes ‘not sleeping’ and ‘waking up in a sweat’. He was ‘down all day on a daily basis’. I note increased weight but there was decrease initially accompanied by decreased appetite. He describes marked anhedonia and decreased self-esteem. He denies ever being suicidal but states ‘I had no desire to do anything’ and that ‘everything was an effort’.
Regarding the severity of his symptoms, he states he would have rated himself as ‘1 to 2 out of 10’. ‘I was very low”. He states he was in this condition for ‘quite a long time’ and relates this to ‘problems at work’. I note that hospitalisation was considered.
As to how he currently rates himself, he provides a figure of ‘5 out of 10 and occasionally 7 out of 10’ on a scale of naught to 10.
I note he does not describe any past history of depression and there is no past history of any hypomanic episodes.”
I note in particular the husband told Dr V that he would have rated himself as “1 to 2 out of 10”. He confirmed, “I was very low”. It is apparent that the husband was in that condition for “quite a long time”.
In oral evidence during the hearing the husband confirmed that this was, “a high stress time” which he managed by using drugs and psychotherapy. Dr S was his treating psychiatrist. The husband considered that the high stress time lasted from August 2003 to February 2006.
The wife supported the husband throughout this very difficult period. He was obviously very unwell suffering as he was from major depression. I accept that the wife continued during this period to provide emotional support to the husband in his endeavours to obtain fair compensation from [D]. I also accept that the wife continued to provide those home making contributions that she was able to provide (subject to her personal injury symptoms). I do note those home making contributions included, at least, cooking and ironing. I also accept that the wife continued to look after the household finances and the family finances.
I accept the submission made on behalf of the wife in respect of the contributions that she provided to the husband during the period when he was seriously depressed. It seems to me consistent with accepted principle that the wife should receive extra weighting in respect of the contributions that she provided during this period. I accept the submissions of Mr Hamwood of counsel on behalf of the wife so far as they relate to this issue. The reasoning behind the submission is consistent with the principle referred to in cases such as Kennon & Kennon (1997) FLC 92-757. At page 84,294 Fogarty and Lindenmayer JJ stated, inter alia:-
“Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s.79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that.
…
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).”[3]
[3] Also, see generally the comments by the learned author Anthony Dickey QC in his text, “Family Law”, 5th edition at pages 584 and 585.
I accept the evidence of the wife contained in paragraph 100 of her Affidavit filed 14 September 2009:-
“100.From 2003 to 2005 was a very stressful period for the Respondent and he relied upon me to provide him with support. We worked endlessly in preparation of his case. It was during this period that he was seeing his psychiatrist, Dr S, on a regular basis. It was during this period that I started to find the Respondent extremely difficult to live with. I found that I also needed psychiatric assistance.”
In particular I draw attention to that evidence of the wife contained in paragraph 100 where she stated:-
“It was during this period that I started to find the Respondent extremely difficult to live with.”
I infer from this evidence that the contributions which the wife continued to make from the time the husband’s major depression commenced (in particular following the lock out of the husband by [D]) – were made significantly more arduous.
Conclusion in respect of contributions up to the date of the trial
The parties married [in] 1998. Final separation occurred in December 2007. I note that there was a four month period of separation during the course of the marriage. I do not accept that this was a so called “short marriage”. I accept the submission made on behalf of the wife that it ought properly be seen as a marriage of approximately median duration.
The husband’s major depression is described by his counsel as “recurrent major depression” (note paragraph 4.3 of the written submissions on behalf of the husband). From the date of the commencement of the husband’s dispute with [D] until final separation was approximately four years. The husband was suffering from a major depressive illness for much of that time. I note that his major depression is “recurrent”. The wife’s contributions must be seen in that light.
As I stated at the outset - the husband’s financial contributions to the net pool of the parties are significant. Counsel for the husband submitted that the wife should receive a total of 10% of the pool. Counsel on behalf of the wife has submitted that the contributions based entitlements of the wife should be 25% - 30%.
In my view the contributions based entitlements of the parties as at the date of the trial should be assessed as 15% to the wife and 85% to the husband. In reaching this conclusion I have also taken into account the post separation contributions of the parties.
Section 75(2) factors
The husband is 58 years old. The husband suffers from recurrent major depression. Dr V notes that the current mental state examination reveals that the most recent episode of major depression suffered by the husband is in remission.
The wife, according to Dr V, is suffering from a current major depression of at least moderate intensity.
The husband has set up practice as a [occupation omitted] in his own right. His practice is called, “[Y]”. In the 2008/2009 financial year the husband grossed approximately $400,000.00 in fees. So far, this current financial year (2009/2010) the husband has grossed approximately $125,000.00 in fees. The husband points out that he has recently lost his major client, [omitted]. I had the opportunity to observe the husband in the witness box. I find that he is diligent, intelligent and capable. I note the husband continues to attend [occupation omitted] conferences and I consider that the husband is motivated to continue to build his sole practice as a [occupation omitted] in Brisbane.
The wife has returned to live in Argentina. She has been out of the work force in the [finance] industry since the time that she was married to the husband. I accept the evidence of Mr L that the wife was well regarded in the [finance industry]. I accept his evidence as follows:-
“5.Prior to settling abroad, Ms Eltham had a very bright future in the [finance] and IT industry in Argentina. She was very well regarded. Her high professional profile reduces her chances of now obtaining employment in a lower paying category, after such a long period of time has elapsed.
6.The IT industry is constantly changing and it is necessary for IT consultants to continually upgrade their skills. I am aware that Ms Eltham has not worked in the IT industry for the last 10 years. It would be very difficult for her to find employment in this field, as she would not have the skills required.
7.Other relevant factors are her age and the current slowdown of both the local and global labour markets.”
I note that Dr V says that with appropriate treatment the wife will recover from her major depression.
I note that there is a disparity in terms of the parties’ income, property and financial resources. The husband being in a substantially stronger position. I note the husband’s submissions in relation to disparity and wealth. The particular circumstances of this case (obviously) must be noted. The wife did in fact forego an otherwise lucrative career in [finance] in Argentina when the parties married and she migrated to Australia. The husband was able to continue to pursue his career. Furthermore, the wife provided contributions (as referred to above) in difficult circumstances – namely during a time when the husband was suffering from major depression. This occurred in the timeframes referred to earlier herein. Furthermore, the wife did use her savings and property for the benefit of the parties in particular in relation to their overseas holidays in South America. The disparity in wealth between the parties is one consideration which I will take into account in assessing any adjustment under s.75(2).
The husband does have a prospect of an inheritance from his mother. The evidence in that regard is somewhat inconclusive. That is so because the husband’s brother is apparently the executor of the estate. The husband is unhappy with his brother’s conduct. I do not consider that the evidence concerning the inheritance is strong enough for me to take it into account as a consideration pursuant to s.75(2)(o) of the Act.
I will take into account the fact that there will be some capital gains tax liabilities in respect of Property A and a portion of the Property C house. However, I do accept the submission made on behalf of the wife that it is highly unlikely that the husband will sell any of his motor cars, motorcycles or number plates. The husband clearly values these items very highly and I conclude that it is highly unlikely he will sell those items. Accordingly it is highly unlikely that he will therefore incur any capital gains tax in respect of those items.
The husband has contended that there could be an overall s.75(2) adjustment in favour of the wife of 5% (within the context of an order whereby the wife would receive 10% of the pool). The wife has sought an adjustment of 10% - 15% pursuant to s.75(2).
In the circumstances I have reached the conclusion that there should be an adjustment in favour of the wife under s.75(2) of 5%.
Just and equitable
In my view an outcome whereby the husband receives 80% and the wife receives 20% of the net pool in this case is, in all the circumstances, just and equitable. The husband has referred the Court to three cases of the Full Court of the Family Court in GBT and BJT [2005] FamCA 683, D v D (2006) FLC 93-300 and Blanks & Blanks [2006] FamCA 354.
Those cases are distinguishable from this case. In the current case there are five glaring facts not present in those cases, namely:-
(a)the wife in this case was a professional who was highly skilled in the [finance industry] and who gave up her career in Argentina in order to marry the husband and move to Australia;
(b)the wife in this case brought substantial assets into the relationship and did make available for the use of the parties her property and resources (note the findings I have made above);
(c)the parties in this case were together for a longer period of time than any of the cases referred to by the husband’s counsel;
(d)the wife in this case provided home making contributions as well as the arranging of family finances and household finances including preparation of material for the accountants to prepare taxation returns;
(e)finally, and significantly, the wife’s contributions were provided in the context of the following fact – the fact that the wife was living with a husband who was suffering from major depression. The wife’s contributions made after August 2003 (the commencement of the husband’s major depression) should receive extra weighting. This fact alone distinguishes the current case from those cases referred to by the husband. I agree with the submission of Mr Hamwood of counsel (on behalf of the wife) in relation to this aspect. That submission appears at pages 46 and 47 on day four of the Transcript.
In all of the circumstances I have concluded that it is just and equitable for there to be an adjustment of the property interests of these parties in the terms proposed.
I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of Howard FM
Associate: J Witenden
Date: 18 December 2009
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