Faraday and McKenzie
[2007] FamCA 1626
•21 December 2007
FAMILY COURT OF AUSTRALIA
FARADAY & MCKENZIE [2007] FamCA 1626
FAMILY LAW – PROPERTY – Settlement in relation to marriage
Family Law Act 1975 (Cth)
MMAL Rentals Pty Ltd v Bruning (2005) 63 NSWLR 167
Mopeke Pty Ltd and Ors v Airport Fine Foods Pty Ltd and Ors [2007] NSWSC 153
In the Marriage of Chick (1987) Fam LR 64
Dean v Dean (1988) FLC 91-982
M & M [2002] FamCA 349
Australian Family Law and Practice at [36-370]
Ramsay v Ramsay (1997) FLC 92-742
Sapir v Sapir (No 2) (1989) FLC 92-047
Georgeson and Georgeson (1995) FLC 92-618
Hull and Hull (1983) FLC 91-360
Turnbull and Turnbull (1991) FLC 92-258
M & M (unreported No CA1542 of 1990)
M & M (unreported No S2132 of 1992)
W & W (unreported No BR9107 of 1995)
Reynolds and Reynolds (1985) FLC 91-632.
M & M [2005] FamCA 1211
SL v EHL [2005] FamCA 132
V & H [2005] FamCA 191 (Moore J)
T & D [2004] FamCA 1160 (Strickland J)
T & T [2001] FamCA 230 (Ellis, Coleman and O’Ryan JJ)
Harrison v Harrison (1996) FLC 92-682 (Ellis, Baker and Warnick JJ)
Orrong Strategies Pty Ltd v Village Roadshow Ltd [2007] VSC 1 (unreported, Supreme Court of Victoria) (Habersberger J)
Surf Road Nominees Pty Limited and Ors v Tass James and Ors [2004] NSWSC 61 (Einstein J)
Hosking v Ipex Software Services Pty Ltd [2004] VSC 299 (unreported, Supreme Court of Victoria) (Habersberger J)
Dismin Investments Pty Ltd v Commissioner of Taxation [2000] FCA 1703 (Heerey J)
Holt & Anor v Cox (unreported, New South Wales Court of Appeal) (Mason P, Priestley JA and Cole JA).
APPLICANT: Ms Faraday
RESPONDENT: Mr McKenzie
FILE NUMBER: SYF 3543 of 1999
DATE DELIVERED: 21 December 2007
PLACE DELIVERED: Sydney
PLACE HEARD: Sydney
JUDGMENT OF: Justice O'Ryan
HEARING DATE: 5, 6, and 7 March 2007, 16 April 2007 and 30 May 2007 REPRESENTATION
COUNSEL FOR THE APPLICANT: Mr Lethbridge
SOLICITOR FOR THE APPLICANT: Swaab Attorneys
COUNSEL FOR THE RESPONDENT: Mr Lloyd
SOLICITOR FOR THE RESPONDENT: Paul & Paul Lawyers
ORDERS
1.By 4.00 pm on 23 February 2008 the Wife do all acts and things and execute all deeds, documents, instruments and writings as may be necessary to transfer to the Husband the whole of her right, title and interest in and to the property situate at and known as …, C in the State of New South Wales being the land in Folio Identifier ….
2.By 4.00 pm on 23 February 2008 and contemporaneous with the transfer in Order 1 hereof the Husband pay to the Wife the sum of $1,092,259.
3.In the event that the Husband fails to comply with Order 2 hereof by the due date then the Husband also pay to the Wife interest on the sum outstanding and otherwise due to be paid by the Husband in accordance with Order 2 hereof at the rate prescribed in the Family Law Rules on such amount calculated as and from the date of the Husband’s default in compliance with Order 2 hereof.
4.By 4.00 pm on 23 February 2008 the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to discharge the mortgage secured on the title of …, C and thereafter do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to the mortgage.
5.If the Husband fails or neglects to comply with Orders 2 and or 4 hereof:
5.1The Husband and the Wife forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to sell …, C by private treaty at the earliest possible date and in particular:
5.1.1Instruct solicitors within 24 hours of nomination by the Wife to prepare a contract for sale.
5.1.2List the property with a real estate agent within 24 hours of nomination by the Wife for the sale of the property at the earliest possible date.
5.1.3Execute all documents requested by the agent relating to the sale.
5.1.4Sell the property if a genuine bona fide offer is received for a sum greater than or equal to $1,200,000.
5.1.5Instruct the agent to recommend a marketing programme and to accept and act in accordance with the agent’s marketing recommendation for the sale.
5.1.6Execute a contract for sale.
5.1.7Co-operate in every way with the agent in relation to the sale.
5.1.8Execute all other documents necessary to complete the sale.
5.2From the proceeds of the sale of …, C the Husband and the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to cause the proceeds of sale to be paid in the following manner and priority:
5.2.1In payment of the agent’s commission and expenses (if any) due on the sale.
5.2.2In payment of the legal costs and disbursements of the sale.
5.2.3In payment of the amount required to discharge the mortgage.
5.2.4In payment to the Wife of the sum remaining pursuant to Order 2 hereof together with interest calculated in accordance with Order 3 hereof.
5.2.5In payment of the Wife’s costs and disbursements on an indemnity basis incurred as a consequence of the Husband’s failure or neglect to comply with any obligation imposed pursuant to these orders.
5.3In the event that there remains a shortfall in respect of the amount due to the Wife pursuant to Order 2 hereof and interest accruing thereon pursuant to Order 3 hereof following the sale, that the Husband do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the Wife all of his right, title and interest in National Australia Bank shares standing in his sole name to the value of the sum outstanding.
6.A base amount of $250,000 be allocated as required by s 90MT(4) of the Family Law Act1975 (Cth) to the Wife out of the Husband’s member account in the K Superannuation Fund.
7.The Husband and the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to satisfy Order 6 hereof by transferring the base amount to the Wife’s member account in the K Superannuation Fund and by transferring the balance of the Wife’s member account in the said Fund to a complying superannuation fund nominated by the Wife.
8.In accordance with s 90MT(1)(a) of the Family Law Act the Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation Regulations) 2001 using the base amount allocated in Order 6 hereof and the Husband’s entitlement in the K Superannuation Fund is correspondingly reduced.
9.The operative time for the orders made in relation to the parties superannuation interests shall be the date four days from the date of these orders.
10.Subject to the trustee of the K Superannuation Fund giving effect to the request by the Wife to rollover or transfer the Wife’s interest out of the K Superannuation Fund at the expense of the Husband the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to:
10.1Transfer to the Husband her shares in K Pty Limited.
10.2Resign as a member of the K Superannuation Fund.
11.Contemporaneously with the Wife’s compliance with Order 10 hereof the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to K Pty Limited and/or the K Superannuation Fund.
12The Husband do all acts and things, execute all documents and writings and pay all moneys necessary to indemnify and keep indemnified the Wife against all claims, actions, suits or demands that may be made against the Wife in relation to:
12.1D Pty Limited.
12.2K Superannuation Fund.
12.3the Wife’s directorship and/or shareholding of K Pty Limited and/or membership of the K Superannuation Fund.
12.4K Pty Limited as trustee of the McKenzie Family Trust.
13.By 4.00 pm on 31 December 2007 the Husband make available to the Wife for her collection:
13.1The framed photographs … which were hanging on the walls of the main hallway of the C property on 25 August 2004, and
13.2Three large paintings … that were hanging on the walls of the main hallway of the C property on 25 August 2004.
14.Pending the Husband’s compliance with Order 2 hereof, the Husband do all acts and things, execute all deeds, documents, instruments and writings and pay all moneys necessary to:
14.1Pay all outgoings in respect of …, C property including all rates, taxes, charges, insurance and expenses in relation to repairs and improvements, arrears relating to the mortgage and other sums due or accruing in respect of this property.
14.2Maintain …, C in a clean, tidy and tenantable condition, fair wear and tear excepted.
14.3Not deal with his interest in National Australia Bank shares standing in his sole name.
15.The Wife and the Husband shall be solely entitled to the exclusion to all other real and personal property of whatever nature and kind in the possession, control or the name of such party as at the date of this order other than the items of property referred to in the preceding orders.
16.In the event that in any of the financial years ended 30 June 2008 to 30 June 2010 inclusive the Husband sold as an undivided lot as it is presently held the property called “[B]” then the Husband do all acts and things and execute all deeds, documents, instruments and writings necessary to diligently lodge his personal income tax return for the financial year in which the property is sold and to obtain from the Australian Tax Office an assessment of his liability for tax for the relevant financial year ended and forthwith upon receipt of the assessment provide to the Wife a copy of the assessment together with a copy of the tax return and also a calculation certified by his accountant as to the amount of the assessable tax that was referable to the inclusion in the Husband’s assessable income of the taxable capital gain made from the sale of the property.
17.Within 28 days of receipt by the Wife from the Husband of the documents in Order 16 hereof the Wife pay direct to the Husband an amount equal to one half of that portion of the assessable tax of the Husband for the relevant financial year that represents the capital gains tax only in relation to the taxable capital gain from the sale of the property called “[B]”.
18.In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all and any of these orders, then the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such deed, document or instrument and upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
19.Leave be granted to the parties to re-list the matter on the giving of seven days notice to the other party in relation to the implementation of this Order.
IT IS NOTED that publication of this judgment under the pseudonym Faraday & McKenzie is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
FAMILY COURT OF AUSTRALIA AT SYDNEY FILE NUMBER: SYF 3543 of 1999
MS FARADAY Applicant
And
MR MCKENZIE Respondent
REASONS FOR JUDGMENT
INTRODUCTION
1.Before me for hearing are applications for property settlement. The applicant is Ms Faraday and the respondent is Mr McKenzie.
2.The Wife seeks the following:
1. That within 30 days of the date of these orders, the husband must:
1.1.Vacate real property situate at and known as […, C] in the State of New South Wales (Folio Identifier […]) (“the [C] property”) and
1.2.Do all acts and things to transfer to the wife all of his right, title and interest in the [C] property, subject to the mortgage in favour of National Australia Bank Ltd (registered no. […]0) (“the [C] mortgage”)
1.3.Have the wife released from any debt or liability due by the wife to:
1.3.1.[D] Pty Limited (“[D Pty Ltd]”)
1.3.2.[K] Pty Limited Superannuation Fund (“[K]”)
1.3.3.[K] Pty Limited (“[K] company”) and/or arising out of the wife’s directorship and/or shareholding and/or membership of [K] and/or the [K] company
1.3.4.The [K] company as trustee of the [McKenzie] Family Trust
1.4.Make available to the wife:
1.4.1.the framed photographs […] which were hanging on the walls of the main hallway of the [C] property on 25 August 2004, and
1.4.2.three large paintings […] that were hanging on the walls of the main hallway of the [C] property on 25 August 2004
1.5.Transfer to the wife all of the husband’s right, title and interest in the husband’s two (2) gold guest membership cards and club cards for the [Sports] Stadium (also known as […] Stadium) and the [Sports] Ground (also known as […]).
1.6.Pay direct to the wife by way of settlement of property the sum of $952,500.
1.7.Pay direct to the wife a sum the equivalent amount of 30,000 ordinary shares in [X], the value of which to be determined at the close of trading of the Australian Stock Exchange at Sydney on the 28th day following the date of these Orders.
2. That pending the husband’s compliance with Orders 1(a) to (g) inclusive, the husband do all acts and things and sign all documents necessary to:
2.1.Pay all outgoings in respect of the [C] property including all rates, taxes, charges, insurance and expenses in relation to repairs and improvements, arrears, repayments and arrears relating to the [C] mortgage and other sums due or accruing in respect of the [C] property
2.2.Pay all outgoings in respect of real property situate at and known as [B] at […] in the State of New South Wales (title references […]) (“[the B property]”) including all rates, taxes, charges, insurance and expenses in relation to repair and improvements, arrears, the [B] mortgage and other sums due or accruing in respect of [the B property]
2.3.Maintain the [C] property in a clean, tidy and tenantable condition, fair wear and tear excepted
2.4.Not deal with his interest in NAB shares standing in his sole name.
3. That upon the husband’s compliance with Orders 1 and 2 herein, the wife do all acts and things and sign all documents necessary to:
3.1.Indemnify the husband and pay for all future outgoings relating to the [C] property including all rates, taxes, charges, insurance and expenses in relation to repair and improvements, repayments due on the [C] mortgage and other sums due or accruing in respect of the [C] property
3.2.Discharge the [C] mortgage.
4. That subject to the husband’s compliance with Orders 1 and 2 herein, that as against the wife, the husband retain the sole right, title and interest in and the legal and beneficial ownership of:
4.1.Any motor vehicles, plant and equipment, chattels, goods, furnishings and other property which are at the date hereof in his possession
4.2.Any moneys, shares and debentures which stand in his sole name as at the date hereof
4.3.Any entitlement to superannuation which stand in his sole name as at the date hereof
4.4.His shareholding and interest in [D Pty Ltd]
4.5.The Nissan Patrol motor vehicle (registration […])
4.6.[K]
4.7.[K] company
4.8.The [McKenzie] Family Trust
4.9.National Australia Bank Superannuation Fund
4.10.National Australia Bank Limited shares
5. That as against the husband, the wife retain the sole right, title and interest in and the legal and beneficial ownership of:
5.1.Any motor vehicles, plant and equipment, chattels, goods, furnishings and other property which are at the date hereof in her possession
5.2.Any moneys, shares, accounts and debentures which stand in her sole name as at the date hereof
5.3.Any entitlement to superannuation which stand in her sole name as at the date hereof
5.4.Without limiting the generality of the foregoing, her interest in the Jeep motor vehicle currently in the wife’s possession, The [R] Pty Limited, The [R] Superannuation Fund, [Q Super] Fund and real property situate at and known as [P] Apartments, […] in the State of Queensland
6. That in the event that the husband refuses or neglects to execute any deed or instrument (“document”) that he is required to execute pursuant to these orders, the Registrar of the Court be appointed pursuant to Section 106A to execute such document in the name of the husband and to do all acts and things necessary to give validity to the operation of the document.
7. That interest accrue on the sum outstanding and otherwise due to be paid by the husband in accordance with Order 1(f) herein at the rate prescribed in the Family Law Rules on such amount calculated as and from the date of the husband’s default in compliance with Order 1(f).
8. That if the husband fails or neglects to comply with Order 1(f) herein:
8.1.That the husband forthwith do all acts and things and sign all documents necessary to sell [the B property] by private treaty at the earliest possible date and in particular to:
8.1.1.Instruct solicitors within 24 hours of nomination by the wife to prepare a contract for sale of land for [the B property]
8.1.2.List [the B property] with a real estate agent within 24 hours of nomination by the wife for the sale of [the B property] at the earliest possible date
8.1.3.Execute all documents requested by the agent and the wife relating to the sale of [the B property]
8.1.4.Sell [the B property] if a genuine bona fide offer is received for [the B property] for a sum greater than or equal to $837,000.00
8.1.5.Instruct the agent to recommend a marketing programme for [the B property] and to accept and act in accordance with the agent’s marketing recommendation for the sale of [the B property]
8.1.6.Execute a contract for sale of land for the sale of [the B property]
8.1.7.Co-operate in every way with the agent and the wife in relation to the sale of [the B property]
8.1.8.Execute all other documents necessary to complete the sale of the [B property]
8.1.9.Instruct the agent to release to the wife any information or documentary material that she may request from the agent relating to the sale of [the B property]
8.1.10.Instruct the solicitor to release to the wife any information or documentary material that she may request from the solicitor relating to the sale of [the B property]
9. That from the proceeds of the sale of [the B property], the husband do all acts and things necessary to cause the proceeds of sale to be paid in the following manner and priority:
9.1.In payment of the agent’s commission and expenses (if any) due on the sale of the [B property] remainder
9.2.In payment of the legal costs and disbursements of the sale of the [B property] remainder
9.3.In payment to the wife of the sum remaining pursuant to Order 1(f) together with interest calculated in accordance with Order 7 herein
9.4.In payment to the wife of the sum due by the husband pursuant to Order (g) herein
9.5.In payment of the wife’s costs and disbursements on an indemnity basis incurred as a consequence of the husband’s failure or neglect to comply with any obligation imposed pursuant to these orders
10. That in the event that there remains a shortfall in respect of the amount due to the wife pursuant to Order 1(f), (g) and interest accruing thereon following the sale of [the B property], that the husband do all acts and things and sign all documents necessary to transfer to the wife all of his right, title and interest in NAB shares standing in his sole name to the value of the sum outstanding.
11. That leave be granted to the parties to re-list the matter on the giving of 7 days notice to the other party in relation to the implementation of these Orders.
3.The Husband seeks the following:
1. That within 28 days of the date of these orders that the Applicant wife do all acts and things and execute all documents as may be necessary to transfer to the husband the whole of her right, title and interest in and to the property situate at and known as [C] in the State of New South Wales (being the land in Folio Identifier […]) (“the [C] Property”) subject to the existing mortgage.
2. That within three months of the date of these orders and subject to compliance by the wife with order No 2 that the Respondent husband do pay to the Applicant wife the sum of $600,000.
3. That in default of payment by the husband of the sum of $600,000 in accordance with the preceding order and if the wife has complied with order No 2 then the husband should forthwith after the expiration of the period referred to do all acts and things and execute all documents necessary to cause a sale of his property situate at […] and known as [the B property] being the land in Folio Identifiers […] to be affected by public auction, to take place as soon as practicable thereafter and at the best price reasonably obtainable and pay to the wife out of the net proceeds of such sale the amount required to be paid to satisfy his obligations under order No 3 and if the whole of the net proceeds are less than the amount due then he shall pay such further amount to the wife as is necessary to satisfy his obligations under the order in satisfaction of her entitlements under order No 3 within a further 28 days.
4. That a base amount of $344,500 be allocated as required by Section 90MT(4) of the Family Law Act 1975 (“The Act”) to the wife out of the husband’s member account in the [K] Superannuation Fund (“The Fund”).
5. That the parties do all acts and things necessary to satisfy the preceding order by transferring the base amount to the wife’s member account in the Fund and by transferring the balance of the wife’s member account in the Fund to a complying superannuation fund nominated by the wife.
6. That in accordance with Section 90MT(1)(a) of the Act the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation Regulations) 2001 using the base amount allocated in order No 4 and the husband’s entitlement in the Fund is correspondingly reduced.
7. That the operative time for the orders made in relation to the parties superannuation shall be the date four days (4 days) from the date of these orders.
8. That subject to the trustee giving effect to the request by the wife to rollover or transfer the wife’s interest out of the Fund at the expense of the husband the wife shall:
8.1Transfer to the husband her shares in [K] Pty Limited.
8.2Resign as a member of the Fund.
9. That contemporaneously with the wife’s compliance with order No 9 the husband shall indemnify and kept the wife indemnified from against all liability of and in relation to the Trustee Company and/or the Fund.
10. That the wife and the husband shall be solely entitled to the exclusion to all other real and personal property of whatever nature and kind in the possession, control or the name of such party as at the date of these orders other than the items of property referred to in the preceding orders.
11. That these orders are inclusive of and in satisfaction of all entitlements either party may have against the other for any amounts otherwise due pursuant to Part VII, Part VIII and Part VIIIB of the Act.
12. That in the event that either party refers or neglects to execute any deed, document or instrument necessary to give effect to all and any of these orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
13. That the wife do pay the husband’s costs of and incidental to these proceedings.
RELEVANT PRINCIPLES
4.The approach to the determination of an application pursuant to s 79 of the Family Law Act 1975 (Cth) is well established by authority. Section 79(2) provides that I shall not make an order, under the section, unless I am satisfied, in all the circumstances, that it is just and equitable to make the order. I am required, in considering what order, if any, I should make, to take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s 79(4); the effect of any proposed order upon the earning capacity of the parties; the matters referred to in s 75(2), so far as they are relevant; any other order made under the Act affecting a party or a child, and any child support under the Child Support (Assessment) Act 1989 (Cth).
5.There is a preferred approach to the determination of such an application which involves four inter-related steps. The first step is that I have to make findings as to the identity and value of the assets of the parties at the date of the hearing. The second step is that I have to identify and assess the contributions of the parties within the meaning of paras (a), (b) and (c) of s 79(4) and determine the contribution based entitlements of each party expressed as a percentage of the net value of the property of the parties. The third step is that I have to identify and assess the matters referred to in paragraphs (d), (e), (f) and (g) of s 79(4)(d). Pursuant to s 79(4)(e), this includes consideration of the matters in s 75(2). I have to determine the adjustment if any that should be made to the contribution based entitlements of each party established at the second step. The fourth step is that I have to consider the effect of my findings and determinations in relation to the first three steps and resolve what order in all the circumstances of the case it is just and equitable to make.
PRELIMINARY OVERVIEW
6.There are issues in relation to the extent and value of the assets of the parties which I will shortly identify. In summary, the Husband contended that the parties have assets of a net value of $2,486,031 and the Wife contended that the parties have assets of a net value of $3,027,152.
7.As to contributions, being the matters in s 79(4)(a), (b) and (c) of the Family Law Act the Husband’s case is that I should assess the contribution based entitlements of each party expressed as a percentage of the current net assets of the parties at 55 per cent to the Husband and 45 per cent to the Wife. The Wife’s case is that I should assess the contribution based entitlements of each party expressed as a percentage of the current net assets at 50 per cent to the Husband and 50 per cent to the Wife.
8.As to the matters in s 79(4)(d), (e), (f) and (g) of the Family Law Act, which I will refer to as the ‘other factors’, the Husband’s case is that if I made the finding as to the contribution based entitlement sought by him then there should be no further adjustment having regard to these other factors. The Wife’s case is that if I made the finding as to the contribution based entitlement sought by her, then there should be no further adjustment having regard to the other factors. However, the Wife submits that if I found that the contribution based entitlements favoured the Husband then I should make an adjustment in the Wife’s favour having regard to the other factors.
9.In summary, the Husband seeks an entitlement of 55 per cent of the net assets and the Wife seeks an entitlement of 50 per cent.
10.The Husband contended that there are two matters which support his entitlement to a greater share of the net assets. First, his contribution of the greater assets he had at the commencement of the relationship and second the contributions he has made since separation to his superannuation interests.
11.There are also issues in relation to how the entitlement of each party should be satisfied. This relates to which party should receive the matrimonial home at C and whether I should make a splitting order in favour of the Wife in relation to the Husband’s superannuation interests.
12.I received a joint case summary document in accordance with the Case Management Directions which was not complete. Fortunately, as a result of the ultimate issues that fell to be determined in this case, a great deal of the marital and financial history is no longer relevant except by way of background. The affidavits of each party are extensive and what is of concern is that a very large portion of what is in them, subject to admissions, is inadmissible. As well, when reading them I was uncertain as to whether I was being asked to consider what happened during a marriage relationship or a business relationship. It has been difficult to get an understanding of precisely what happened during the relationship and the contributions each party made, amongst other things from what I consider were merely submissions or contentions and not evidence.
13.The Wife was born in June 1951 and she is therefore aged 56. The Husband was born in December 1951 and he is therefore aged 56.
14.There is an issue as to when cohabitation commenced. The Wife contended that it was in November 1984 and the Husband contended that it was in March 1985. This is not material. There is also an issue as to when the parties separated.
15.There are two children of the relationship, S born in September 1990 and H born in June 1992. The Wife has a child from a prior relationship who was born in 1984.
16.On 5 March 2007, by consent I made the following final parenting orders:
1. 1. That commencing Friday 9 March 2007 [H] born […] June 1992 (“[H]”) and [S] born […] September 1990 (“[S]”) live with the mother as follows:
1.1From 6:00pm on Friday for one week and each alternate week thereafter, commencing the first Friday after the date of these Orders;
1.2For the first half of all school holiday periods commencing in odd numbered years;
1.3For the second half of all school holiday periods commencing in even numbered years.
2. 2. That [H] and [S] live with the father as follows:
2.1From 6:00pm on Friday for one week and each alternate week thereafter commencing the second Friday after the date of these Orders;
2.2For the first half of all school holiday periods commencing in even numbered years;
2.3For the second half of all school holiday periods commencing in odd numbered years.
3. 3. That for the purposes of Orders 1 and 2, if [H] and [S] are living with a party in the week preceding the commencement of the school holiday period, [H] and [S] commence living with the other party for the first week following the conclusion of his school holiday period.
4. 4. Note the agreement of the parties that both the husband and the wife have regard to the wishes of the children in the operation of the orders.
5. 5. That each party immediately notify the other if either [S] and / or [H] are seriously ill or are admitted to hospital at such time as [S] and/or [H] are living with that parent.
6. 6. That the parties have equal joint parental responsibility in respect of [S] and [H].
7. 7. That the parent with whom [S] and/or [H] is living is to be responsible for the day-to-day decisions concerning the care, welfare and development of [S] and [H].
8. 8. That the parties forthwith do all acts and things necessary to cause to be delivered to the Registrar of the Sydney Registry of the Family Court of Australia (“the Court”), [S] and [H]’s current passport.
9. 9. That the Registrar of the Court be directed to maintain custody of the said passports pending:
9.1the mother and the father’s joint written consent to the release of the passport (“written consent”), or
9.2further Order of the Court.
10. 10. That if either party intends to take [S] and/or [H] out of the Commonwealth of Australia, that party (“the requestor”) shall:
10.1Give to the other party (“the releasor”) not less than 28 days written notice of such an intention including details of:
10.1.2the proposed departure and return dates and
10.1.2the country of the intended travel.
10.2Ensure that the dates of the intended travel are in accordance with Orders 2, 3 and 4 herein where possible.
11. 11. That if the requestor gives written notice in accordance with Order 12 above, the releasor shall not unreasonably withhold furnishing the Registrar with his or her written consent pursuant to Order 11(a).
12. 12. That if the releasor fails or neglects to comply with Order 13 above within 96 hours (4 days) of service upon the releasor of the written notice, that leave be granted to the requestor to list the matter before the Court on the giving of 48 hours written notice to the releasor.
13. 13. That the requestor do all acts and things necessary to cause to be delivered to the Registrar of the Court [S], [H]’s or both of their passports within 72 hours of [S] and/or [H]’s return to the Commonwealth of Australia.
14. 14. .…
15. 15. Direct that that parties’ legal representatives forthwith approach the Registry Manager, Sydney Registry, Family Court of Australia to ascertain the Court’s preparedness to comply with paragraphs 8 and 9 above.
BACKGROUND
17.The marital and financial history is set out in the affidavits of evidence in chief and the joint case summary document. Very few submissions were made in relation to that background even though there were a considerable number of matters about which there appeared to be a dispute. Thus I am not going to repeat all of it.
18.The Husband obtained a science degree in 1973. In 1980 he commenced working for a firm called G & Co as an analyst. In 1981 he completed a Masters Degree.
19.In 1979 the Husband, in partnership with his brothers Mr V McKenzie and Mr A McKenzie, acquired a property called “[W]” for $176,798. The Husband contended that between 1979 and 1983 he contributed around $18,000. In 1983 the Husband and his brothers sold a portion of the property. In 1987 the Husband and his brothers sold the property and the Husband received around $20,000.
20.In July 1982 the Husband purchased the M property in Melbourne for $76,000. To pay the costs he borrowed $55,000. He contended that he paid $21,000, presumably from his own resources. He also contended that he spent around $30,000 on renovations to the property and that during 1984 he spent a further $45,000 on renovations. He gave evidence of some of the work that was done. The parties lived in the M property from November 1984 or early 1985 to July 1985.
21.As to the shares in D Pty Ltd I will identify the relevant history when considering the issue of the current value of the Husband’s shares. The Company owns a rural property called “[S]”. On “[S property]” primary production activities are carried on including the growing of trees and it comprises various allotments.
22.At the commencement of cohabitation in late 1984 or early 1985 the Wife owned a motor vehicle and personal effects. She had a debt to the Commonwealth for $3,000 being a deferred university loan.
23.The Husband contended that at the commencement of cohabitation he had significant assets being:
·Motor vehicle
·The M property
·28.50 per cent of the issued capital of D Pty Ltd
·33.33 per cent of the rural property called “[W]”
·Shares
·Superannuation interest
·Cash
24.The Wife does not put into issue what the Husband said as to the assets he had at the commencement of the relationship. However, the Husband also had liabilities. The Husband contended that at the commencement of cohabitation he had cash of $50,000 and superannuation of $30,000. In final submissions on behalf of the Wife it was submitted that apart from the amount of cash and the value of his superannuation interest there was no evidence as to the value of the Husband’s assets at the commencement of the relationship. When asked by me whether or not the Husband’s contentions as to the amount of cash he had and the value of his superannuation interests were accepted I was told that there was no evidence leading to the contrary.
25.The Wife graduated from Melbourne University in 1984 with a Bachelor degree. In 1992 she obtained a Masters degree. The Wife is a member of several professional agencies.
26.During the relationship both parties were in paid employment.
27.Between October 1984 and December 1986 the Wife was employed as a professional.
28.In April 1985 the parties purchased, as an investment, a property at T for $78,000. To pay the costs a loan was obtained from the Bank of Melbourne for “around” $81,000. The Husband contended that he contributed about $5,000 and the Wife contributed about $2,000. The parties lived in this property until 1987.
29.The Husband gave evidence of renovations which were undertaken to the T property, from 1985 until 1988. He contended that he performed many hours of labour on the renovations and did extensive painting, landscaping and carpentry work. He contended that the renovations cost a total “of around $43,000”.
30.In July 1985 the property at M was rented out. The Husband contended that the rental was used to pay the mortgage debt which was approximately $60,000. He gave no evidence as to how the debt had increased from $55,000. He also said that at that date around $148,000 of capital expenditure had been made on the property. It cost $76,000 and the renovations cost $75,000 being a total of $151,000. The Wife contended that she arranged for a tenant of the property, prepared the relevant agreements and organised the rental. The rent covered the mortgage repayments.
31.In 1985 the Husband’s parents moved from “[S property]” to a residence in central western New South Wales.
32.The Husband contended that in 1985, in order to provide his father with some superannuation, he acquired from D Pty Ltd for $125,000 a property of 200 acres known as “[the B property]” which was part of the “[S]” property enterprise. He said that a valuation for $120,000 was obtained. The purchase was completed in June 1986. The Husband contended that he paid $35,000 from a “cash bonus” he received “from my father’s distribution in the 1984/1985 financial year” and the remaining $90,000 he borrowed from the ANZ Bank. The transfer to the Husband was completed in June 1986.
33.The Husband contended that the Wife’s only contribution to “[the B property]” was when the parties worked together to secure two development applications for the property. The Husband also contended that he carried out improvements to the property which included the installation of stock yards, the construction of fences to divide the property into six paddocks, the installation of a water bore, the construction of six dams, planting numerous trees, the installation of electrical fencing, and pasture improvements. The Husband contended that he spent “hundreds of hours of my time personally” removing noxious weeds and watering the trees. As well, from about 1991, he spent many hours watering trees and “on some of these occasions” the Wife and the children accompanied him to central western NSW. The Husband said that the manner in which the operations were conducted was that his father operated the business as if he was running his own farm.
34.In 1985 and 1986 the Wife assisted the Husband with the preparation of documents in relation to proceedings in the Family Court between the Husband and his first wife. In 1986 the Husband was ordered to pay $15,000 to his first wife. The Husband contended that this was satisfied by transfer of a motor vehicle and cash in the amount of $11,000 from pre-cohabitation savings.
35.The Husband contended that in the period 1985 to 1990 he regularly traded in shares and options and after offsetting the losses against his income and reducing his PAYE tax payments he incurred after tax losses of $33,044.
36.In 1986 the Wife accepted a position with a professional firm.
37.In 1986 the Husband completed a Graduate Diploma.
38.In 1987 the property at T was tenanted until 1991. The Husband contended that the income at least equalled the outgoings.
39.In 1987 the Husband traded in livestock at the “[B]” property.
40.In June 1987 the transfer of “[the B property]” to the Husband was registered. The total purchase price and incidentals was $126,626, of which $90,000 was borrowed by way of mortgage from the ANZ Bank.
41.In 1988 the Wife became a senior professional with a company. In 1988 the Wife also worked part time in Melbourne.
42.In August 1988 the Husband moved to Sydney. The Husband was transferred by G & Co.
43.Between November 1988 to March 1990 the parties rented a property in North Sydney. The rent was $1,600 per month.
44.In December 1988 to January 1989 the parties went on a skiing trip to Europe at a cost of about $20,000.
45.In January 1989 the Wife moved to Sydney. The Wife was transferred by her employer.
46.In 1989 the Wife worked at an institution in Sydney and she continued doing so until 1996.
47.In July 1989 the parties were married.
48.In February 1990, upon learning that she was pregnant, the Wife left employment with the professional company and accepted a three year contract with the Sydney based institution. This reduced her hours of work to three mornings a week.
49.In April 1990 the parties moved to rented accommodation in Sydney’s north shore where they remained until July 1991.
50.In mid 1990 the husband was retrenched after G & Co closed. Thereafter the Husband was unemployed for about three years. In July 1990 the Husband received a redundancy payment from G & Co in the amount of $101,000. The Wife was involved in negotiating the Husband’s redundancy package.
51.In 1990 the Husband sold the property at M for $247,000 and received $217,000. The Wife performed the legal work and liaised with the agent for the sale of the property.
52.From 1990 to 1992 the Husband looked at further developing his career. The Husband applied to agencies for a professional Licence. The Wife assisted the Husband with the completion of his application for a license.
53.From 1990 to 1992 the Husband completed six subjects in a professional course.
54.In late August 1990 the Wife took six weeks maternity leave and in September 1990 the child S was born. He is now aged 17 years.
55.In February 1991 the Wife resumed employment at the Sydney based institution.
56.In 1991 the Husband obtained a professional Licence.
57.The Husband contended that in the period 1991 to 1995 he regularly traded in shares and options and after offsetting the losses against his income and reducing his PAYE tax payments he incurred after tax losses of $37,000.
58.In June 1991 the parties sold the T property for $161,500. The Husband contended that the net proceeds of sale were $80,691.50.
59.In July 1991 the parties completed the purchase of the C property for $377,000. The Husband contended that to pay the cost of the purchase a loan was obtained from the Commonwealth Bank for $50,000. As to the balance the Husband contended that he applied $217,000 from the sale of the M property; $64,000 from the proceeds of sale of the T property; $48,000 he withdrew from his superannuation fund and $14,000 from “surplus cash”. The Wife performed the legal work for the purchase of the C property.
60.In July 1991 the parties commenced to live at the C property.
61.The Husband contended that in the early years he did a considerable amount of work to the C property being gardening and painting as well as what he called general construction activities. He contended that he spent many hours jack hammering at the back of the house where an old garage under the house was located and also many hours over a number of weeks excavating, hiring conveyor belts and renting bins to clear rubble.
62.In November 1991 the Husband and Mr A McKenzie entered into an agreement with Mr V McKenzie. The Husband contended that he did this so as to prevent any further debt being allocated to portions of the “[S property]” land holding in order to stabilise the debt position of D Pty Ltd. The Husband contended that the Company debt increased following the effect of drought conditions, recession and high interest rates. He said that during the following five years Mr V McKenzie was able to stabilise the debt position and that he did so by the sale of small parcels of land on the western extremities of the property. By the terms of the agreement Mr V McKenzie granted the Husband and Mr A McKenzie an option to require that Mr V McKenzie purchase 20,000 shares in D Pty Ltd of the Husband and Mr A McKenzie and the Husband and Mr A McKenzie granted Mr V McKenzie an option to require the Husband and Mr A McKenzie to sell the shares. The agreement had a provision for determining the purchase price which was subject to land valuations without any allowances for minority shareholding interests.
63.The Husband said the Wife provided some legal assistance with drawing up the agreement. The Husband said that during the entire period of cohabitation he had not spent any money in order to retain his shareholding in the Company.
64.In December 1991 the Husband sold half of his shares in the D Pty Ltd to Mr V McKenzie for $134,000. Thereafter the Husband held 14.28 per cent of the issued capital.
65.Between 1992 and 1996 renovations were carried out on the property at C.
66.The Husband contended that in June 1992 the mortgage on the title of the C property was reduced by $48,500.
67.In June 1992 the Wife took six weeks maternity leave from her employment for the birth of the child H. The child was born in June 1992.
68.In July 1992 the parties obtained a mortgage loan for $50,000 on the title of the C property to pay for renovations.
69.The Husband contended that in 1992 he received a further $27,000 from G & Co as part of his redundancy payment.
70.In October 1992 the Wife’s contract with her employer expired
71.In 1992 the Husband completed the professional course.
72.In 1993 the child S started at … Pre-School.
73.In March 1993 the Wife commenced full time employment with a professional agency.
74.In 1993 the mortgage on the title of the C property was increased to $88,000 to pay for renovations to the property.
75.The Husband said “we organised the renovations to [the C property] as owner/builders, predominantly during the 1993 - 1996 period, but some minor renovations were carried out in the 1991 - 1993 period and some in 1997 – 2004”. He contended that he spent many hours, during 1991 and 1996, probably in excess of 1000 hours, doing labouring work and planning the renovations. He completed painting the house in 1996 and 1997 and also in 1999 and 2000. He appeared before the Small Claims Tribunal when a builder initiated action against the parties for the recovery of costs arising from alleged variations in a contract. The Husband contended that the house was transformed from a small two-storey terrace into a spacious three-storey dwelling. However, the renovations remain incomplete.
76.The Husband contended that between 1993 and 1996 he contributed about $150,000 to the renovations of the C property funded from cash flows from his employment with A Company and from surplus funds from the sale of his shares in D Pty Ltd. He contended the renovations cost in excess of $200,000. As well, in order to pay for these costs, the parties obtained a mortgage loan of $50,000 which was increased to $88,000.
77.In May 1993 the Husband commenced working at A. He commenced on a contract basis on behalf of K Pty Ltd as trustee of the McKenzie Family Trust and from January 1995 as an employee. The Husband contended that after some “initial testing in [… services]” without any capital commitment “I repositioned myself with a […] firm, [A Company] in early 1993 under a contract through [K] Pty Limited”.
78.Between December 1993 and March 1994 the Wife was employed by a professional agency.
79.The Husband contended that in 1994 the mortgage on the title of the C property was reduced by $38,000 to $50,000.
80.In June 1994 the parties refinanced their C property mortgage to Natwest Markets at concessional rates by reason of the Wife’s employment. The Husband contended that the mortgage was increased from $150,000 to $200,000.
81.In June 1994 the Wife engaged the children’s nanny who was employed until July 1996.
82.In July 1994 the Wife travelled to London for work for about five weeks. The Wife’s employer paid for the Husband and the children to fly to London and also the costs of accommodation. The Wife hired a nanny to care for children for about 20 days.
83.In 1994 the Wife received an employment bonus of $15,000.
84.In 1995 the child H started at … Pre-School.
85.In 1995 the Wife commenced employment with a professional agency. Her starting salary was $110,000 per annum plus bonus payments.
86.In 1995 the Husband deposited $100,000 of his income into his superannuation account.
87.The Wife contended that in 1995 she derived profit of just under $10,000 from her share trading activities.
88.In 1996 the child S started kindergarten at ….
89.In February 1996 the Wife received an additional payment of $28,273 by way of a distribution from her employer.
90.The Husband contended that between May 1996 and November 1996 he travelled to central western NSW on many occasions, at times early in the morning.
91.In 1996 the Wife received a bonus of $11,000 through her employment with a leading investment management business.
92.In 1996 the Wife received a bonus of $5,000 from her employment which was rolled over into a superannuation fund.
93.In 1996 the Husband applied an additional $60,000 into his superannuation account.
94.The Husband contended that in June 1996 the investment loan was increased to $220,000 such that the mortgage debt secured on the C property was more than $270,000.
95.The Husband contended that in the period 1996 to 2005 he conducted only minimal share trading activity and over a ten year period had an after tax loss of $197.60 per annum.
96.The Wife contended that in 1996 she derived a profit from share trading activities of $22,154.
97.In October 1996 the Husband was retrenched from employment with A Company. Thereafter the Husband was unemployed for about three years. The Husband received a redundancy package of $80,000 and other funds being a total of $86,125.13. The Wife contended that for about 18 months prior to his retrenchment the Husband had conflicts and disagreements with the Managing Director and was the subject of a number of performance reviews which required a written response. The Wife assisted the Husband drafting these responses. Following the Husband’s retrenchment the Wife liaised with J & Co in negotiations for an increase in the Husband’s remuneration package. The Husband was then unemployed from October 1996 until November 2000.
98.In 1996 the Husband’s father died. The Husband contended that at the time the 1991 agreement with Mr V McKenzie lapsed.
99.In October 1996 the Wife travelled to London for work for about five weeks. The children accompanied the Wife and the Husband remained in Australia.
100.In December 1996 the parties ceased to employ a nanny but engaged a cleaner who attended twice a week until 1999 and thereafter once a week until January 2000.
101.The Husband contended that in December 1996 the home loan was increased to $200,000 and the investment loan was reduced to $70,000.
102.The Wife contended that January 1997 the Husband traded in options and lost money as a result of this activity. As well, between 1998 and 2000 the Husband traded in futures contracts using funds invested in a superannuation fund. The Wife contended that the Husband again traded at a loss in respect of many of the contracts.
103.The Husband contended that in early 1997 he decided that he needed a break from the “very heavy personal commitments in [his employment]”. He contended that from 1997 to 2000 he worked from home and looked after the children on a more or less full-time basis. He contended that during this period he spent considerable time developing a system, “completed […] subjects as part of the […] requirements and worked with [the Wife] to develop her […] business”. As to developing a system for investment and trading he purchased text books, attended seminars, became a subscriber to professional providers, purchased equipment, purchased a computer and “discussed the professional aspects with experts in this area”. The Husband contended that in 1997 and 1998 he “…[c]ompleted […] subjects as part of the […] requirements of the [professional agency], attended seminars held by the [professional agency]”.
104.The Wife contended that by early 1997 the Husband had expended all of his redundancy monies and his investment funds following business transactions and other expenditure.
105.In 1997 the child H started kindergarten at ….
106.In February 1997 the Wife was made redundant following a restructure of the professional agency and she received a payout of $76,749.72. She gave evidence as to how she expended this money.
107.In February 1997, following the cessation of the Wife’s employment with a leading business, the parties refinanced the C property mortgage with the Hong Kong and Shanghai Bank. The Husband contended that the home loan was $220,000 and the investment loan was $20,000.
108.In March 1997 the Wife commenced employment with a company where she remained until February 1998. She received an income of about $170,000 per annum.
109.The Wife contended that during 1997 until August 1998 the school fees for the children were paid either by her or from undeducted superannuation contributions. The Wife then paid the school fees from August 1998 until September 1999.
110.In 1997 the Wife received a redundancy payment of $55,000.
111.In 1997 the Wife derived profits of $17,183 from share trading activities.
112.The Husband contended that in August 1997 he received a loan for $60,000 from his mother and a gift of $10,000. During the period 1997 to 2000 the Husband paid $300 per month to his mother as interest.
113.The Wife contended that in August 1997 the Husband deposited $47,000 into a cheque account with the ANZ Bank. The Husband procured the release of an amount from his undeducted superannuation contributions and the Wife became aware of this when she was reviewing the financial accounts of the K Superannuation Fund.
114.In February 1998 the Wife accepted a redundancy package from her employer of $72,579. In June 1998 the Wife received an additional $4,742 from her employer as a superannuation contribution. The Wife gave evidence as to how she applied the redundancy package she received.
115.In May 1998 the Wife commenced a business, initially using K Pty Ltd as the corporate vehicle until 2000 and thereafter Faraday Pty Ltd which subsequently changed its name to R Pty Ltd. … She continued the business until late 2006. In the early years of her business the Wife used K Pty Ltd as trustee for the McKenzie Family Trust to take advantage of accumulated tax losses of $40,276 in the 1999 financial year and about $20,000 in the 2000 financial year. The Wife contended that these losses arose by reason of the Husband’s share and option trading.
116.The Husband contended that on 10 October 1998 the relationship of the parties started to deteriorate. In November 1998 the parties separated for about three days.
117.Between February 1999 and November 2000 the Husband procured the release of additional funds from his undeducted superannuation contributions to assist with payment of living expenses of the family and the payment of school fees.
118.In March 1999 the Wife incorporated Faraday Pty Ltd.
119.On 16 March 1999 the Wife filed an application in the Family Court for final orders. On 26 March 1999 the application was withdrawn.
120.On 15 July 1999 the Wife filed an application for an apprehended violence order and interim orders were made. On 20 July 1999 the apprehended violence order proceedings were withdrawn.
121.On 16 July 1999 the Wife filed an application in the Family Court for final orders. It was either withdrawn or discontinued on 20 July 1999.
122.The Wife gave evidence of a conversation the parties had in July 1999 in relation to the Husband’s unsuccessful trading. The Wife also gave evidence about a conversation the parties had in August 1999 where the Husband sought her assistance with his futures trading. The Wife contended that she read a number of texts and wrote notes for the Husband to follow, dealing with goals and rules for his trading pattern.
123.The Wife contended that in August 1999 she prepared a budget for the parties and calculated that their expenses were about $84,000 per annum. At the time her income was insufficient to pay all obligations and she obtained a loan for $20,000 from a credit union to assist with payment of expenses.
124.On 8 March 2000 the Wife filed an application for an apprehended violence order. The proceedings were either withdrawn or discontinued on 22 March 2000.
125.The Wife contended that by 2000 the family’s income was insufficient to meet expenditure and she withdrew $10,000 from the K Superannuation Fund to cover expenses.
126.On 10 March 2000 the Husband filed an application seeking interim orders for the residence of the children and exclusive occupation of the matrimonial home.
127.On 11 March 2000 the Husband moved to Sydney’s north.
128.In June 2000 the Husband moved back into the former matrimonial home.
129.In November 2000 the Husband commenced employment in Sydney. The Wife contended that in November 2000 the Husband obtained employment at PG Company. The Husband told the Wife that his commencing salary was $80,000 per annum.
130.In November 2000 the Husband was deemed to have entered the National Australia Bank Group Superannuation Fund.
131.Between 2001 and 2003 there were a number of sub-divisions and sales of the “[S]” land by D Pty Ltd
132.The Wife gave evidence about a conversation the parties had in January 2001 with respect to their financial position. The Wife contended that the parties were living beyond their means. I have no doubt that during the relationship from time to time the parties had a number of disagreements about financial matters.
133.On 28 February 2001 the Husband was served with a copy of consent orders and given until 14 March 2001 to vacate the former matrimonial home.
134.On 16 August 2001 the Husband filed an application for an apprehended violence order.
135.On 26 September 2001 orders were made in the Family Court transferring the Wife’s superannuation entitlement to an account of her choice.
136.On 26 September 2001 the parties signed undertakings in the Local Court not to threaten, molest or harass each other.
137.In October 2001 the Wife left the matrimonial home. The Wife and the children commenced to live in a unit in Sydney’s north shore.
138.On 30 January 2002 the Wife returned to the matrimonial home. The Husband contended that the Wife wanted to reconcile and would no longer continue court proceedings.
139.On 3 June 2002 the Husband received a letter from Barkus Edwards Doolan, Solicitors enclosing a Notice of Discontinuance of proceedings in the Family Court.
140.The Husband contended that in 2002 he organised the “defence” against a development application by next door neighbours who sought to build a rooftop garden terrace which would have impacted significantly on the privacy of the C property. The Husband contended that the “defence” cost around $2,000.
141.In August 2002 the mortgage over the C property was increased by $50,000 to $242,000.
142.In October 2002 the Wife instructed the Hong Kong and Shanghai Bank to withdraw $30,000 from the parties joint account and place this amount in an account under her name only.
143.On 5 November 2002 the Husband was served with an apprehended violence order summons issued on behalf of the Wife. On 19 November 2002 the Husband filed an application for an apprehended violence order. The proceedings were discontinued in about February 2003.
144.The Husband contended that in 2004 the mortgage loan over the C property was increased to $300,000.
145.The Wife contended that in April 2004 the Husband agreed for the parties’ superannuation fund to be moved to the National Bank and for the Wife to be a joint signatory on the account of the superannuation fund.
146.In July 2004 the Wife removed an amount equivalent to her direct contributions in the K Superannuation Fund ($125,000) to establish her own fund being the R Superannuation Fund. She purchased 100,000 shares in X at $0.32 per share with an investment of $32,000.
147.In July 2004 the Wife resigned as a director of K Pty Limited.
148.In July 2004 the Wife paid a holding deposit for the purchase of the P apartment in Queensland.
149.On 12 July 2004 the parties finally separated but remained living under the same roof.
150.On 24 August 2004 the Wife and children vacated the former matrimonial home and moved to the E property.
151.On 24 September 2004 the Wife completed the purchase of the P apartment for $295,000 with incidental costs of an additional $9,900. The Wife funded the purchase by a loan for $206,500 from Homeside and an additional $92,401.41 from Balconie, subsequently assumed by the Wife. As there was a shortfall of $10,000 the Wife relied upon vendor finance, there being an amount outstanding of $9,000. The property is currently rented.
152.On 18 October 2004 interim parenting orders were made to the effect that the children were to live with Wife for nine nights out of 14 and with the Husband for five nights out of 14.
153.In February 2005 the Husband obtained a loan for $50,000 from the National Bank. The loan was to repay an ANZ Bank personal loan for $36,358 and credit card debts for $13,642.
154.In the year ended 30 June 2005 the Husband made employer contributions to the R Superannuation Fund of $9,903.60 and pre tax salary package contributions of $46,423.62. He contended that in December 2004 he received a bonus of $40,000 which less contributions and surcharge tax he paid to his superannuation fund.
155.In April 2006 the Husband borrowed $30,000 from his mother.
156.In the year ended 30 June 2006 the Husband made employer contributions to the R Superannuation Fund of $11,283.88 and pre tax salary package contributions of $46,826.92. According to the agreed schedule the Husband’s post separation superannuation contributions in the year ended 30 June 2006 were $75,207.
157.In the year ended 30 June 2005 the R Pty Ltd had fees of $98,709.09 and a net profit of $3,507.01. In the year ended 30 June 2006 the R Pty Ltd had fees of $77,559 and a net loss of $18,583.38. In the year ended 30 June 2006 the Wife had no net taxable income.
158.In August 2006 the Wife commenced employment with O Firm working part time.
159.For the year ended 30 June 2007 the Husband had anticipated total revenue of $181,362 and taxable income of $170,562.
160.By letter dated 26 March 2007 I received an agreed schedule titled “Husband’s superannuation schedule of husband’s post separation contributions”. According to this document in the financial years ended 30 June 2005 to 30 June 2007 the Husband contributed a total of $245,452 to his superannuation, being shares transferred of $70.663, salary package contributions of $144,996 and employer contributions of $29,793. However as pointed out by senior counsel for the Wife in February 2005 the Husband obtained a loan for $50,000 from the National Bank to repay an ANZ Bank personal loan for $36,358 and credit card debts for $13,642 and in April 2006 borrowed $30,000 from his mother.
FINANCIAL CIRCUMSTANCES
161.The first step is to determine the extent and value of the assets of the parties at the time of the hearing. I received a joint statement of assets which disclosed the following:
Assets Husband Wife
$ $
·The C property (h/w) 1,200,000 1,200,000
·Interest in the B property (h) 837,000 837,000
·14% interest in S property (h) 150,000 504,000
·1991 Nissan Patrol (h) 5,000 5,000
·The R Pty Ltd (w) 33,875 33,875
·NAB Ltd fund (h) 9,261 9,261
·Sports Stadium Membership (h) nil 17,000
·Paid past disbursements to Swaab (w) 27,650 27,650
·P apartment (w) 310,000 310,000
·Swaab Trust (future disbursements including interest) (w) 39,392 39,392
·CBA Savings Account (w) not known nil
·Husband’s savings (h) 3,600 not known
·Contents (h/w) nil nil
·Paid legal fees (w) 3,000 3,000
·Paid legal fees (h) 134,255 134,255
Total2,753,033 3,120,433
Liabilities
·Loan to D Pty Ltd (h) 61,000 61,000
·Loan from R Pty Ltd (w) 52,210 52,210
·Loan from K Pty Ltd (h/w) 2,600 2,600
·NAB mortgage (C property) (h/w) 260,700 260,700
·AMP (P Apartment) (w) 236,000 236,000
·Income tax unpaid (w) nil nil
·Impact Funding for past disbursements paid to Swaab (w) 27,650 27,650
·Impact Funding (for urgent expenses) including the
costs of borrowing and interest to 11 January 2007 (w) nil 117,079
·Impact funding for anticipated disbursements including SC and
witness expense for experts (Controlled monies account) (w) 38,750 38,750
·Additional Interest due to 5/3/06 Impact Funding between
11 January 2007 & 5 March 2007 (w) nil 2,953
·Salvation Army (w) nil 5,100
·School debt (h/w) 51,538 51,538
·Loan from superannuation fund (w) nil 18,000
·Vendor finance loan (P Apartment) (w) nil 9,000
·Wife’s debt due to Superfund (w) 92,400 92,400
·Husband’s Liabilities (h) 43,000 nil
·Debt to Husband’s Mother (h) 90,000 nil
·CGT on sale of B property (h) 169,750 nil
·Husband anticipated tax (h) 23,612 nil
·Loan to Director (w) nil 5,000
·Tax on NAB shares (h) 4,491 nil
·Impact Funding Loan (h) 100,017 100,017
Total(1,253,718) (1,079,997)
Net$1,499,315 $2,040,436
Superannuation interests $ $
·K Superannuation (h) 493,533 493,533
·NAB Super Fund (h) 351,000 351,000
·R Superannuation (w) 149,015 149,015
·Q Super (w) 3,168 3,168
Total$996,716 $996,716
162.In summary, the Husband contended that the parties have assets of a net value of $2,496,031 and the Wife contended that the parties have assets of a net value of $3,037,152.
Shares in D Pty Ltd
163.There is an issue as to the value of the Husband’s shares in D Pty Ltd. The Husband holds 10,000 ordinary shares being 14.28 per cent of the issued capital. Evidence was given by Mr W, who was a single expert, and on behalf of the Husband evidence was given by Mr L.
164.The rural property called “[S property]” was purchased in 1915 by the Husband’s grandfather and the Husband’s father inherited the property in 1957. The Husband’s parents operated in partnership a rural business on the property. In 1969 the Husband’s father had a heart attack and following legal advice on 19 September 1969 D Pty Ltd was incorporated.
165.In 1971 the Husband acquired ordinary shares in D Pty Ltd being 28.57 per cent of the issued capital. At that same time Mr A McKenzie acquired 28.57 per cent of the issued ordinary shares and Mr V McKenzie acquired 42.86 per cent of the issued ordinary shares. In 1971 the company acquired “[S property]” from the Husband’s father.
166.In 1971 Mr V McKenzie joined the partnership conducted by the Husband’s parents. Currently Mr V McKenzie and his wife Mrs P McKenzie conduct the rural business through a partnership and simply use the land owned by the Company. The Company receives no rent and has no income from the rural business. All operations are conducted on the property by the partnership of Mr V McKenzie and his wife.
167.In 1985 the Husband’s parents moved from “[S property]” to central western NSW where they lived. Mr V McKenzie and his wife remained on the property.
168.In November 1991 the Husband and Mr A McKenzie, entered into an agreement with Mr V McKenzie. The Husband said he did this so as to prevent any further debt being allocated to portions of the “[S]” land holding in order to stabilise the debt position of the Company. The Company debt increased following the effect of drought conditions, recession and high interest rates and during the following years Mr V McKenzie was able to stabilise the debt position. He did so by the sale of small parcels of land on the western extremities of the property.
169.In December 1991 Mr V McKenzie purchased half of the shares of the Husband and Mr A McKenzie; a total of 28.57 per cent of the issued capital and the Husband received $134,000 being $13.40 per share in consideration for the sale of his shares. This amount was paid in December 1991. Thereafter the Husband and Mr A McKenzie each retained 14.28 per cent of the issued shares.
170.In final submissions on behalf of the Wife, senior counsel submitted that two valuations were obtained one being for $850,000 and the other for $1,100,000 and that the average value is $975,000. Fourteen per cent of this average value is about $136,000 which is approximate to the amount which the Husband received for the sale of his shares in December 1991 to Mr V McKenzie. Thus, as between the Husband and his brother the purchase price was determined on a pro rata basis of the value of the land being the only significant asset owned by the Company without any discount having regard to the size of the shareholding and in particular, the minority shareholding interest of the Husband. So also in relation to the valuation formula in the agreement it was to be determined by an average of two valuations from independent valuers, without any discount having regard to a minority interest.
171.The Husband contended that in 1996 his father died after a long illness and, at the same time with the rural financial position improving, the 1991 agreements lapsed.
172.The current directors of the Company are Mr V McKenzie and Mrs P McKenzie. The Husband and Mr A McKenzie at all times have acquiesced in the management and control of the Company by Mr V McKenzie.
173.The current shareholders of the Company are Mr V McKenzie who holds 49,990 ordinary shares and one preference share; Mrs P McKenzie who holds one preference share; Mr A McKenzie who holds 10,000 ordinary shares; the Husband who holds 10,000 ordinary shares; the husband’s mother who holds five ordinary shares; and the husband’s father who holds five ordinary shares. The right to vote rests in the ordinary shares and each ordinary share carries a right to one vote. Each ordinary share participates equally in the surplus assets in the event that the Company was wound up. The Husband’s shareholding of 14.28 per cent does not constitute a majority interest.
174.There was put into evidence a copy of the financial statements of the Company for the years ended 30 June 2003 to 30 June 2005 inclusive. The accounts and other statutory records were signed by Mr V McKenzie and his wife as directors of the Company. The 2005 statement reveals, as a fixed asset, an amount of $61,000 owed by the Husband. This loan was made in the year ended 30 June 2003 and appears in the 2003 and 2004 accounts. The accounts also reveal as a fixed asset “Loans to Directors” of $591,165 for 30 June 2002, $809,659 for 30 June 2003, $1,313,078 for 30 June 2004 and $1,285,885 for 30 June 2005. No ledgers or other records were put into evidence.
175.In the joint statement of assets I received on 6 March 2007 the Wife contended that the shares are valued at $504,000 or $50.40 per share. In the joint statement the Husband contended that the shares are valued at $150,000 or $15 per share.
176.Mr W was appointed by the parties as a single expert pursuant to Part 15.5 of the Family Law Rules and he prepared a valuation report dated 9 February 2006. In this report Mr W said that in summary the value to be ascertained is the value to the owner having due regard to the underlying concepts of value such as willing buyer, willing seller, market value and fair value. Mr W said that a net assets based valuation should be adopted because the value of the shares rests in the underlying value of its assets comprising cash, “[S property]” and loans to directors. The property “[S]” was valued in August 2005 at $2,200,000. As seen above in 1991 when it was probably a larger holding “[S]” was valued at $850,000 or $1,100,000. After adjustment to the net assets for the market value of “[S]” Mr W arrived at a value of the capital of the company of $3,714,208. Mr W then ascribed a value of $53.065 to each of the ordinary shares and this had the result that he valued the 10,000 shares of the Husband at $530,600. However, Mr W was of the opinion that as the Husband had a minority interest he could not control decisions as to the management or realisation of assets, dividend policy nor effect distribution of assets or force a liquidation and under the circumstances considered that a discount should be applied to reflect the impediment of a minority interest. Mr W ascribed a discount of five percent and thus was of the opinion that the Husband’s shares had a value of $504,000.
177.Subsequent to the report of Mr W there was a great deal of correspondence between the Husband’s solicitors and Mr W and it is apparent that the Husband was dissatisfied with the report of Mr W. Mr W prepared a further report dated 25 May 2006. In this further report he was asked to make certain assumptions in relation to the recoverability of shareholders loans.
178.The Husband then retained Mr L and he prepared a valuation report dated 26 June 2006 which was a critique of the report of Mr W. It thus becomes necessary to see what Mr L did and the source of the value of $150,000 contended for in the joint statement of assets.
179.In the executive summary to his report Mr L identified the “unattractive characteristics” of the Husband’s shareholding which included an agreement made between the shareholders to allow Mr V McKenzie the right to use “[S]” for as long as required without interference and that “[i]t is estimated that this period may be some 15 to 20 years”. Mr L then said that his “indicative calculations” demonstrate that the appropriate discount to pro rata value to reflect the long deferred receipt of any capital value and lack of any dividend income in the meantime and the minority nature of the investment would be in the range of 48 per cent to 72 per cent before application of a discount for non negotiability of 25 per cent. Mr L took the pro rata net asset value determined by Mr W but deducted from the value what he called property devaluation and non recoverability of the loan to Mr V McKenzie. He then did the following calculations:
10 years 15 years 20 years
$ $ $
Pro rata net asset value 307,495 307,495 307,495
Discount for deferred receipt (143,684) (187,932) (220,228)
Net present value 163,810 119,562 87,266
Less 25 per cent for non-negotiability (40,953) (29,891) (21,817)
Adjusted value 122,858 89,672 65,450
Percentage reduction 60% 71% 79%
Elsewhere in the report (pa 22) Mr L explained how he arrived at the amount of $307,495. As to the periods of 10 to 15 years Mr L said (pa 23) that it was based on the evidence of the Husband and Mr V McKenzie. In summary, according to this evidence the value could be between $64,450 and $122,858.
180.As Mr L had been told of an agreement between the shareholders for Mr V McKenzie to be able to continue to use the Company’s property for as long as required without interference and also Mr L’s estimation of how long this period may be, Mr L stated that his indicative calculations demonstrated that the appropriate discount to the pro rata value to reflect the “long deferred receipt of any capital value and lack of any dividend income in the meantime and the minority nature of the investment would be in the range of 48 per cent to 72 per cent (depending on the time of realisation) before application of a discount for non negotiability of 25 per cent”.
181.Mr W and Mr L then conferred in relation to their reports of 19 February 2006, 25 May 2006 and 26 June 2006 and produced a joint statement dated 29 November 2006 (Exhibit A). In the joint statement they set out the areas of agreement and disagreement.
182.Mr L and Mr W both agreed as a matter of principle that:
·the market value of the minority interest in a private company is less than the pro rata share of the value of the whole company;
·the discount for minority interests is dependent upon the circumstances that prevail in each particular case although Mr L contended that the discount is generally around 25 per cent to pro rata value;
·this discount is derived from empirical stock market evidence of takeovers and the average controlled premium paid in public company takeovers;
·a separate and additional discount for non negotiability normally applies to the valuation of minority interests in unlisted companies;
253.The Wife contended that she owes an amount of $9,000 being a vendor finance loan. I accept her evidence and I will include it.
254.The Husband contended that I should include as a liability a debt of $43,000 relating to the “[B]” property. The Wife was prepared to concede an amount of $36,000. In February 2005 the Husband borrowed $50,000. An amount of $36,000 was used to repay an existing loan and the balance was applied to meet credit card liabilities. The parties agreed that their credit card liabilities be excluded from the list of net assets. For this reason the Wife is prepared to accept an amount of $36,000 be included in the liabilities. I have considered the submissions which were made to me on 7 March 2007 in relation to this debt and in the result I propose to only include an amount of $36,000.
255.The Husband contended that I should include as a liability an amount of $90,000 he owes to his mother. The Wife conceded an amount of $50,000. I accept that during the relationship the Husband obtained a loan from his Mother of $60,000 and after separation he borrowed a further $30,000. I will include the amount of $90,000.
256.The Husband contended that I should include as a liability an amount of $169,750 described as “CGT on sale of [the B property]”. It was accepted by the Wife that capital gains tax may be payable on the sale of the property.
257.The property has not been sold. However, it is agreed that for the purposes of determining the net assets of the parties I should include a value of $837,000 for the property. It was also agreed that the Husband will have a taxable capital gain included in his assessable income for the financial year in which the property is sold. In the financial year in which the property is sold the Husband’s tax liability may increase. However, there was no evidence from an accountant, no assessment from the Australian Taxation Office and in any event the quantum was an estimated figure. The Wife however, accepts that some provision should be made for capital gains tax with respect to the realisation of the property and the Husband proposes a formulaic order. In the circumstances, I propose that when the property is sold the Husband will diligently lodge his tax return for the relevant financial year and obtain an assessment of his liability for capital gains tax payable on the sale of the property and that thereafter there be an adjustment of an amount of money by one party to the other. There has to be some end to this obligation and thus in my opinion the Wife’s obligation will continue only to the end of the 2010 financial year and on the basis that the land is sold as one lot in its current unsubdivided state.
258.The Husband contended that I should include as a liability of his an amount of $23,612 for anticipated tax. On behalf of the Wife it was submitted that the contingent debt arises in respect of two years out of three where tax should have been the subject of filed income tax returns, or if not filed at least prepared, so that I could make an order that returns be filed in the terms of what I was shown. It was also submitted that the debt should not be included because the Husband had the benefit of the income in respect to which the tax relates. It was submitted that the Wife was being asked to in effect bear a proportion of the tax debt notwithstanding she did not have the benefit of the income to which it relates. I accept the submissions on behalf of the Wife and will not include the anticipated tax debt.
259.The Wife contends that I should include as a liability of hers an amount of $5,000 described as “Loan to Director”. I will include the debt.
260.The Husband contended that I should include as a liability of his an amount of $4,491 described as “Tax on NAB shares”. The amount claimed was calculated at the marginal rate once the shares were realised. However, the Husband did not realise the shares by disposition to an unrelated third party but transferred the shares to his superannuation fund. The transcript reveals that there was then discussion about these shares and it was contended that the shares are presently in the name of the Husband but historically since the parties separated he has transferred the shares with the National Australia Bank into his superannuation fund. I then asked how the tax obligation arises and I was informed by counsel for the Husband that in his report Mr W had referred to tax payable on 9,000 shares in the Husband’s name with National Australia Bank and when questioned whether there would be tax paid at the marginal rate Mr W agreed. Counsel for the Wife then submitted that the Husband receives shares as part of his salary package, that is in lieu of cash remuneration. I am going to include the debt.
Conclusion - financial circumstances
261.In my opinion, for the purposes of these proceedings, the parties have the following net assets:
Assets $
·The C property (h/w) 1,200,000
·Interest in the B property (h) 837,000
·14% interest in S property (h) 504,000
·1991 Nissan Patrol (h) 5,000
·R Pty Ltd (w) 33,875
·NAB shares (h) 9,261
·Double Gold Pass Membership (h) 17,000
·Single Gold Pass Membership (w) 9,000
·Paid past disbursements to Swaab (w) 27,650
·The P apartment (w) 310,000
·Swaab Trust impact for future disbursements including interest (w) 39,392
·Savings (h) 3,600
·Paid legal fees (w) 3,000
·Paid legal fees (h) 134,255
·K Super (h) 493,533
·NAB Super Fund (h) 351,000
·R Superannuation (w) 149,015
·Q Super (w) 3,168
Total 4,129,749
Liabilities
·Loan to D Pty Ltd (h) 61,000
·Loan from R Pty Ltd (w) 52,210
·Loan from K Pty Ltd (h/w) 2,600
·NAB mortgage (C property) (h/w) 260,700
·AMP (P apartment) (w) 236,000
·Impact Funding for past disbursements paid to Swaab (w) 27,650
·Impact Funding (for urgent expenses) (w) 117,079
·Impact funding for anticipated disbursements (w) 38,750
·Additional Interest due to 5/3/06 (w) 2,953
·Salvation Army (w) 5,100
·School debt (h/w) 51,538
·Loan from superannuation fund (w) 18,000
·Vendor finance loan (P apartment) (w) 9,000
·Wife’s debt due to Superfund (w) 92,400
·Husband’s liabilities (h) 36,000
·Debt to the husband’s mother (h) 90,000
·Tax on NAB shares (h) 4,491
·Loan to director (w) 5,000
·Impact Funding Loan (h) 101,017
Total (1,211,488)
Net assets$2,918,261
CONTRIBUTIONS
262.The period of the relationship was at least 15 years and probably longer. There are two children.
263.I am satisfied that at the commencement of the relationship the Husband had significantly greater assets than the Wife. Although the Husband also had liabilities, I accept that in a comparative sense the Husband probably had a significant equity in his assets at that time. The Husband purchased the M property in 1982 for $76,000 and borrowed $55,000. It was sold in 1990 for $247,000. The Husband had a superannuation interest of a value of perhaps $30,000 and cash of perhaps $50,000. The Husband had an interest jointly with his brothers in a rural property. Importantly, the Husband had a shareholding in D Pty Ltd part of which he sold in December 1991 for $134,000 and his current shareholding is valued at $504,000.
264.During the relationship both parties were in paid employment. However, the Husband was unemployed for two periods of a total of approximately six years. The Husband did receive redundancy payments as did the Wife.
265.By letter dated 26 March 2007 I received what was called an agreed schedule of the Husband’s taxable income for the financial years ended 30 June 1985 to 30 June 2004 inclusive. This document reveals that in a comparative sense the Husband did not have a significant taxable income. In a number of years he had significant real losses and share trading losses. For example in the year ended 30 June 1993 he had a taxable loss of $43,425. In the year ended 30 June 2000 he had a taxable income of $2,277. He has however, had a significant increase in his taxable income since the year ended 30 June 2002. For example, in the year ended 30 June 2001 he had a taxable income of $46,250 and in the year ended 30 June 2002 he had a taxable income of $108,958.
266.In final submissions senior counsel for the Wife submitted that if the taxable incomes of each party were compared the probability is that the Wife’s taxable income over the period of the relationship was probably greater than that of the Husband, although it was said that not a great deal of “weight turns on that”. I am satisfied that during the relationship the Wife’s taxable income was greater than that of the Husband. For example, when the Wife was working for a professional agency earning about $170,000 per annum. During this time the Husband was not in paid employment. The Husband did engage in share trading as did the Wife. However, the Husband’s tax returns suggest that his share and option trading activities were not a profitable activity. The Husband did receive a gift of $10,000 from his mother.
267.As to the contributions by the Husband to his superannuation interests after the parties separated on behalf of the Wife it was submitted that these contributions were a product of the Husband’s income and largely were met by salary sacrifice or the transfer of shares comprising part of the Husband’s employment package and that the Wife had contributed to the Husband’s acquisition of skill over the period of the relationship. Overall I do not see these contributions as significant. I accept the submissions made on behalf of the Wife.
268.I am satisfied that although the parties from time to time had the assistance of a nanny and there were significant periods when the Husband was unemployed, the Wife made a greater contribution to the welfare of the family in the capacity of homemaker and parent. For example, the Wife took maternity leave when the children were born. The Husband undertook what he contends was significant physical work in relation to the maintenance and improvement of the T property and the C property. As well the Husband spent time away from the matrimonial home undertaking physical work on the rural property “[B]”. In fact the Husband contended that he spent “hundreds of hours” working on this property. The Husband probably also spent time in the central western NSW area for various reasons associated with members of his family and the “[S]” property.
269.The Wife also provided assistance to the Husband in relation to various matters such as his first divorce settlement, the rental of properties, the negotiation of the Husband’s redundancy package, the Husband’s application for a securities dealer’s licence, the purchase of the C property, the agreement, conflicts and disagreements between the Husband and the managing director of the A Company and the Husband’s futures trading.
270.Both parties have since separation, and will continue in the future, made contributions to the care and support of the children.
Conclusion - contributions
271.In my view, if it were not for one significant matter I would find that the contributions of the parties were at least equal and perhaps favour the Wife given her greater earnings from paid employment. However, the matter that remains significant, notwithstanding the duration of the relationship and the significant contributions made by the Wife during the relationship, is the assets the Husband had at the commencement of the relationship which he contributed. I am of the view that given the significant contribution by the Husband of the assets overall his contributions should be assessed as greater than those of the Wife.
272.The Husband contended that the contribution based entitlements should be assessed as to 55 per cent to him and 45 per cent to the Wife. However, this position was on the basis that I would find that the Husband’s shares in D Pty Ltd had a value of $150,000. I have found that the shares have a value of $504,000. In determining the weight to be given to the initial contributions by the Husband it is instructive that $504,000 is approximately 17 per cent of what I have found to be the net assets of the parties namely $2,918,261. However, my discretion is not limited and I also take into account that the Husband was able to retain this shareholding notwithstanding that the parties used their earnings, redundancy payments and borrowings to meet various expenses. On the other hand I also take into account that the Husband had other assets at the commencement of the relationship.
273.In all the circumstances, I am of the view, that the contribution based entitlements of the parties, expressed as a percentage of the net assets of the parties, should be assessed as to 40 per cent or $1,167,304 to the Wife and 60 per cent or $1,750,957 to the Husband.
OTHER FACTORS
274.The Husband is aged 55 years and the Wife is aged 55 years.
275.Both parties are in good health.
276.The Husband contended that he has a total average weekly income of $3,089 which includes a salary of $2,737 or $142,324 per annum.
277.On behalf of the Husband evidence was given by Mr D who is a certified management consultant and organisational psychologist. Mr D is the managing director of a consulting company. He provided a report dated 31 August 2006 in which he gave an opinion as to the remuneration that the Wife was capable of earning. Mr D was of the opinion that the Wife’s qualifications and experience suggests that she realistically could have expected to be employed in the professional sector at the executive level and that in 2006 her average market earning capacity would be $176,000. In addition there would be superannuation and some performance bonus entitlements. He said that as an executive, the Wife’s experience should be readily marketable and in his assessment could attract a salary package in the range of $120,000 per annum to $150,000 per annum at this lower less demanding level.
278.On behalf of the Wife it was submitted that at least for the foreseeable future I would find that the Wife’s income earning capacity is consistent with the income she presently earns which is approximately $62,000 per annum. However, it was conceded that having regard to the evidence of Mr D, the Wife may be able to obtain a position at a total remuneration of around $125,000 per annum. However, the Wife seeks to be able to remain at home in order to care for the children after school which would effect her earning capacity. Further, in recent years for a period of time she conducted her own business and was not in paid employment.
279.I am satisfied that both parties have a capacity for future paid employment although given their respective ages there is some limit to this capacity.
280.I am satisfied that the Husband has a capacity to earn an income from paid employment of about $142,000 per annum and the Wife has a capacity to earn an income of at least $125,000 per annum and perhaps more.
281.Both parties will have the responsibility for the care and support of the children in the future among other things consistent with the orders made on 5 March 2007.
282.As a result of my findings as to the contribution based entitlements of the parties the Husband has significantly greater assets than the Wife, namely $583,653.
283.The orders I propose to make have no effect upon the earning capacity of either party.
284.It will be seen shortly that I am going to include as part of the Husband’s entitlement the home at C. However, the Wife will have to acquire accommodation and it is the expectation of both parties that the Wife will acquire accommodation in the same area so as to facilitate the parenting arrangements and the children’s schooling. If the Wife acquires a home she will have to pay stamp duty and conveyancing costs and it is agreed that I should take those unquantified liabilities into account in favour of the Wife.
Conclusion – other factors
285.I have taken into account the various matters I have identified above including the duration of the marriage, the age of the parties, their income, their earning capacity and so on. However, the matter which remains significant is the greater assets of the Husband as the result of my findings as to the contribution based entitlements of each party. It is a disparity of $583,653 which I observe is greater than the value I put on the shares in D Pty Ltd. Obviously the weight to be given to this matter depends on the circumstances of each case.
286.In conclusion, in my view, there should be a further adjustment in favour of the Wife to her contribution based entitlements having regard to the “other factors” and I assess this further entitlement at 5 per cent of the net assets of the parties or $145,913.
EFFECT OF ORDERS
287.The Husband will receive an entitlement of 55 per cent of the net assets of the parties or $1,605,044.
288.The Wife will receive an entitlement of 45 per cent of the net assets of the parties or $1,313,217.
289.There remain two issues. The first issue is which party will receive the C property as part of his/her entitlement. The second issue is whether I should make a splitting order in favour of the Wife as sought by the Husband in respect of his superannuation interests.
290.As to the first matter I am going to include the home in the entitlements of the Husband. The reasons why I include this are because the Husband is currently in occupation of the home and has been in sole occupation for some years. The Wife has not established, to my satisfaction, why this should not continue. On the other hand the Wife will have to acquire a home, and when she does so she will have to pay stamp duty and conveyancing fees in respect of the purchase.
291.As to the second matter the parties superannuation interests have a value of $996,716. The Husband’s superannuation interests have a value of $844,533 and the Wife’s superannuation interests have a value of $152,183. The superannuation interests’ represent 34.15 per cent of the total net assets and thus are a significant portion of the wealth of the parties.
292.On the basis that no splitting order was made then 52.65 per cent of the Husband’s entitlement would comprise his superannuation interests. So far as the Wife is concerned 11.59 per cent of her entitlement would be represented by her superannuation interests. On the other hand the Wife has to acquire a home and this may be difficult if a significant portion of her entitlement was represented by superannuation.
293.I have come to the conclusion that a splitting order should be made of the Husband’s superannuation interests in favour of the Wife. I propose to make an order that the Wife receive as a splitting order an amount of $250,000.
294.This is an interesting case, among other things because of one matter. When I had to consider the issue about which party should receive as part of his/her entitlement the home at C I could only do so, in the circumstances, when considering the fourth step of the preferred approach. However, in doing so it raised for consideration a matter which may more appropriately have to be dealt with sooner being the costs that the Wife will incur in acquiring a home. It was conceded by counsel for the Husband that such costs were a relevant matter when considering the matters referred to in s 75(2) of the Family Law Act. It is for this reason and others that the fourth step is not necessarily simply a machinery step but an ultimate consideration of what is just and equitable in all the circumstances and it may, in appropriate circumstances, necessitate further adjustment to orders already been dealt with at earlier steps of the preferred approach.
295.The Husband will receive the following:
Assets $
·The C property 1,200,000
·Interest in the B property 837,000
·14% interest in S property 504,000
·1991 Nissan Patrol 5,000
·NAB shares 9,261
·Double Gold Pass Membership 17,000
·Savings 3,600
·Paid legal fees 134,255
·K Super 493,533
·NAB Super Fund 351,000
Total 3,554,649
Liabilities
·Payment to Wife 1,092,259
·Superannuation splitting order in favour of the Wife 250,000
·Loan to D Pty Ltd 61,000
·Loan from K Pty Ltd 2,600
·NAB mortgage (C property) 260,700
·School debt 51,538
·Husband’s liabilities 36,000
·Debt to the husband’s mother 90,000
·Tax on NAB shares 4,491
·Impact Funding Loan 101,017
Total (1,949,605)
Net assets$1,605,044
296.The Wife will receive the following:
Assets $
·Payment by Husband 1,092,259
·Superannuation splitting order in favour of the Wife 250,000
·The R Pty Ltd 33,875
·Single Gold Pass Membership 9,000
·Paid past disbursements to Swaab 27,650
·P apartment 310,000
·Swaab Trust impact for future disbursements including interest 39,392
·Wife’s paid legal fees 3,000
·R Superannuation 149,015
·Q Super 3,168
Total 1,917,359
Liabilities
·Loan from R Pty Ltd 52,210
·AMP (P apartment) 236,000
·Impact Funding for past disbursements paid to Swaab 27,650
·Impact Funding (for urgent expenses) 117,079
·Impact funding for anticipated disbursements 38,750
·Additional Interest due to 5/3/06 2,953
·Salvation Army 5,100
·Loan from superannuation fund 18,000
·Vendor finance loan (P apartment) 9,000
·Wife’s debt due to Superfund 92,400
·Loan to Director 5,000
Total (604,142)
Net assets$1,313,217
297.In my opinion, in all the circumstances of this case, the outcomes I propose are just and equitable.
I certify that the preceding two hundred and ninety seven (297) paragraphs are a true copy of the reasons for judgment of the Honourable Justice ORyan
Associate
Date: 21 December 2007
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