Fekete and Fekete (No 2)
[2012] FamCA 993
FAMILY COURT OF AUSTRALIA
| FEKETE & FEKETE (NO 2) | [2012] FamCA 993 |
| FAMILY LAW – PROPERTY – Application for property settlement orders – Whether just and equitable to alter property interests and rights – Stanford v Stanford [2012] HCA 52 considered - Where partial property settlement orders had been made – Where the key issues underpinning the difference in the adjustment each party claimed should be ordered is the significance of the husband’s greater initial contribution, the magnitude of funds advanced by the wife’s father, treatment of Capital Gains Tax and the financial consequences of the children living with the wife – Assessment of the contribution of the parties on a global basis – Where husband made significant initial contributions – Where the parties’ financial contributions during the marriage, directly or indirectly, were equal – Where the financial contributions and circumstances post separation do not warrant an adjustment in favour of either party – Where contribution of wife as a homemaker and parent accepted as exceeding the husband’s and given significant weight – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the outcome of the assessment of contributions and other factors has resulted in the husband receiving 60 per cent of the assets compared to the wife’s 40 per cent – Where an adjustment, pursuant to s 75(2), of 10per cent in the wife’s favour is appropriate. |
| Child Support (Assessment) Act 1989 (Cth) Evidence Act 1995 (Cth) Family Law Act 1975 (Cth) |
| Clauson and Clauson (1995) FLC 92-595 Stanford v Stanford [2012] HCA 52 |
| APPLICANT: | Ms Fekete |
| RESPONDENT: | Mr Fekete |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
| FILE NUMBER: | SYC | 5160 | of | 2011 |
| DATE DELIVERED: | 29 November 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan J |
| HEARING DATE: | 29-31 October, 1-2 November 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lloyd SC with Mr Livingston |
| SOLICITOR FOR THE APPLICANT: | Diamond Conway |
| COUNSEL FOR THE RESPONDENT: | Mr Lethbridge SC with Mr Gramelis |
| SOLICITOR FOR THE RESPONDENT: | George Xylas |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Eldershaw |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
Orders
Within four (4) months of the date of these orders, Mr Fekete (“the husband”) shall pay Ms Fekete (“the wife”) the sum of $306,918.00.
In the event that the husband fails to make payment to the wife pursuant to Order 1 by the due date he shall, within fourteen (14) days do all acts and things necessary and sign all documents required to sell the property known as D Street, Sydney Suburb 1 in the State of New South Wales being all that property described in Folio Identifier … for the best price reasonably obtainable and, without limiting the generality of the foregoing:
(a)list the property with a real estate agent of his choosing for sale by private treaty for a period of sixty (60) days after such listing;
(b)co-operate with the agent in the presentation and promotion of the property for sale in relation to which the husband shall pay such marketing costs as are required to be paid in advance; and
(c)maintain the property in a presentable state of repair.
In the event that D Street, Sydney Suburb 1 is not sold within sixty seven (67) days of listing, the husband shall instruct an agent to list the property for sale by public auction at the earliest possible date thereafter and shall sign all documents necessary and do all acts and things required to sell the property by public auction and shall, without limiting the generality of the foregoing:
(a)execute all documents requested by the auctioneer for the sale of the property;
(b)nominate to the auctioneer a reserve price for the sale, such reserve price to be agreed upon by the parties and failing agreement to be the mean value of two estimates of value by estate agents being one agent nominated by the wife and another nominated by the husband, such estimates to be not more than 14 days apart;
(c)attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached and to accept a price not less than 10 per cent lower than the reserve price;
(d)execute all contracts and documents necessary to complete the sale; and
(e)co-operate in every way with the auctioneer in relation to the auction.
The sale proceeds for D Street, Sydney Suburb 1 shall be distributed as follows:
(a)selling costs;
(b)rates and land tax;
(c)an amount equivalent to the Capital Gains Tax payable by the husband;
(d)50 per cent to the husband; and
(e)50 per cent to the wife less $93,082.00 ($6,050.00 on account of Dr F’s fees and $86,582.00 adjustment) which she shall pay to the husband.
In relation to Capital Gains Tax, prior to settlement the husband shall give the wife a calculation by his accountant of the Capital Gains Tax payable by him. In the event the amount is other than $60,086.00, a 50 per cent adjustment is payable by the relevant party at settlement. If it is more, the adjustment is to be made by the wife from the amount she would otherwise be entitled to receive and, if it is less, the amount payable by the husband will accordingly increase.
If either party refuses or neglects to sign any document necessary to implement these orders, that a Registrar sign the necessary document on behalf of the defaulting party pursuant to section 106A of the Family Law Act 1975 (Cth).
Unless otherwise specified in these orders each party is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age and working future provides the conditions for payment out of such payment.
It is declared that each party is respectively liable for their share of Capital Gains Tax arising from the sale of the B property.
The parties shall forthwith sign all documents necessary to close the joint ANZ … account and distribute the final balance equally.
Subject to any application for costs, all outstanding applications are dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fekete & Fekete has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 5160 of 2011
| Ms Fekete |
Applicant
And
| Mr Fekete |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). Ms Fekete (“the wife”) commenced these proceedings by her application filed 25 August 2011. Fortunately for the parties and their daughters, on the fourth day of this hearing final parenting orders were made by consent. There are few significant issues raised in relation to formulation of the property pool and, however it is constructed, the wife claims 55 per cent. In this regard, she contends for a finding that her contributions are 45 per cent and a 10 per cent s 75(2) adjustment in her favour. It is her contention that this would mean the husband must pay her $483,789.00.
Any adjustment must take into account partial property settlement orders made by consent on 31 August 2012. In broad terms, the effect of the August 2012 orders is that the husband will retain the family home at 1 Y Street, Sydney Suburb 1 (“Y Street”) and an investment property at D Street, Sydney Suburb 1 (“D Street”). In addition that the wife manages and receives the sale proceeds of another investment property at E Street, B Town (“B”). B sold at auction on 13 October 2012 for $927,500.00. The ANZ mortgage secured over B is to be refinanced by the husband and secured over Y Street. Upon payment by the husband to the wife of whatever adjusting amount is required, the wife is to vacate Y Street. Thus the August 2012 orders dealt with the entirety of the parties’ real estate holdings with the issues for this hearing essentially focused upon the adjusting amount that the husband will pay the wife.
Mr Fekete (“the husband”) claims contributions at 65 per cent with no more than a 10 per cent s 75(2) adjustment in the wife’s favour. On the basis of what he contends is the value of the net property pool he says that the wife is entitled to receive a further $200,000.00. Minor adjustments are claimed in relation to payments which he says are outstanding and the wife’s share of the Court expert’s fees. The wife agrees she will reimburse the husband $6,050.00 for Dr F’s fees.
It follows that, rounded out, there is a divergence of about $284,000.00 in the adjustment which each party claims should be ordered. The key issues which underpin this difference are essentially the significance of the husband’s greater initial contribution, the magnitude of funds advanced by the wife’s father, treatment of Capital Gains Tax and the financial consequences of the children living with the wife.
Background Facts
Throughout these reasons contentious findings of fact will be determined upon the balance of probabilities (s 140 Evidence Act 1995 (Cth)).
The husband was born in 1965 and is 47 years.
The wife was born in 1972 and is 40 years.
The parties became engaged in 1993 and married in 1994. They did not live together prior to marriage and are now divorced. The period of cohabitation was approximately 16½ years.
At the commencement of cohabitation the husband’s assets comprised:
·Y Street, Sydney Suburb 1;
·D Street, Sydney Suburb 1;
·savings – approximately $3,000.00;
·Holden Commodore motor vehicle;
·superannuation worth about $18,000.00; and
·personal effects, jewellery and furniture.
It is agreed that at the commencement of cohabitation the husband’s properties were worth $400,000.00. Neither was encumbered.
In addition, during their engagement, the parties purchased B for $230,000.00 for which they jointly borrowed $140,000.00 from the New South Wales Building Society. It is common ground that the husband contributed $10,286.00 from his savings and that wife’s father made a significant gift for this purchase. At issue is whether the husband and the wife’s father paid more than is conceded by the other party. While the husband concedes a gift of $70,000.00, he rejects the wife and her father’s evidence that it was $90,000.00. The husband produced no documents which established his claim that the shortfall between the monies borrowed from the building society, his $10,296.00 and $70,000.00 advanced by the wife’s father was met by him. Neither the wife nor her father produced any documents which establish the larger sum was paid by the wife’s father. Given that the wife was able to produce documents which show payments from her father’s account of $67,000.00 this is somewhat curious. In short and although it is accepted that the wife’s father and the husband both had the capacity to pay the shortfall, it is not possible to determine its genesis.
Between settlement of its purchase and when, upon marriage they moved into B, it was rented for about $250.00 per week. In addition, before the parties moved in, B was renovated.
There is an issue about the cost of the renovations and who paid for them. It is the husband’s evidence that he removed carpet, demolished the bathroom, rewired and painted the house, installed tap ware and rearranged the kitchen. The parties agree some work was undertaken by contractors; as far as the wife is concerned, most of the work was performed by contractors. According to the wife and her father the cost of renovations was $30,000.00 which he paid.
It is the father’s recollection that about $10,000.00 was spent on these renovations, $4,000.00 of which he borrowed from his sister, Ms M with the balance from joint savings. Once again, neither party produced any documents that might assist in resolution of this issue. As will be discussed later, there is no doubt that the husband undertook huge renovations to Y Street and D Street. There is a logical consistency in him also taking a significant role in the B renovations. It is not accepted that the B renovations were primarily undertaken by contractors. It follows that the cost to the parties was less than the amount alleged by the wife. Nonetheless, there was nothing about the evidence given by anyone in relation to the source of funds for the B renovation which establishes that one version is more reliable than the other. In short, it is not possible to determine who paid.
At the time of marriage, the wife was in full-time employment with an annual income for the 1994 financial year of $22,680.00. From the commencement of cohabitation and until separation, the wife, as did the husband, contributed her income to joint matrimonial purposes. In the truest sense, marriage for them was a commitment to a lifelong personal and financial venture. Their financial circumstances were from the outset intermingled with, it is inferred, a desire to share everything.
Excluding B, when the parties commenced cohabitation the wife had approximately $7,000.00 savings, most of which was used towards the wedding, a car worth $5,000.00 and a term deposit in the amount of $10,000.00. With the term deposit, the wife bought furniture for B.
From the time the parties commenced cohabitation Y Street and D Street were tenanted and produced a positive return.
In 1997, the husband resigned his employment with G Pty Ltd and commenced as a sole trader. Three years later he established a company known as H Pty Ltd (“H”) through which he also undertook aspects of his work as an electrician. By 1997, the wife was employed by I Pty Ltd with the entirety of her income applied towards the B loan. At about the same time, she commenced a four year part-time diploma course.
In about November 1998, the parties transferred the B loan to Colonial First State. As at 23 December 1998, the balance on the B loan was $73,610.00. The significance of this amount is it demonstrates that within five years the parties reduced the amount borrowed by half. It is inferred they achieved this by making capital payments in addition to the required loan instalments.
The wife was retrenched in May 1999 and received a redundancy payment of approximately $16,000.00. From her redundancy payment, $12,000.00 was deposited into the Colonial B loan. By May 1999 that loan balance had been reduced to $49,444.00. Again this is consistent with the parties making additional payments over and above required loan instalments.
The parties agree that by May 2000 the Colonial First State B loan was discharged. At issue is the source of the final payment in the amount of $24,200.00 paid to Colonial First State in May 2000. It follows that in seven years, excluding interest and the wife’s redundancy payment, from their income the parties paid about $104,000.00 in capital reduction. This equates to $14,800.00 annually.
According to the wife and her father the $24,200.00 came from him. Again, there are no documents produced which establish that he paid the $24,200.00. The paucity of documents is explained by the wife’s father by his modus operandi used to run his catering business. Essentially, he largely worked in cash. Business demands made it difficult for him to make it to his bank and, in circumstances where suppliers preferred to transact business in cash, he kept large amounts of cash in his safe. Because he has ceased to trade and the period in which taxation obligations require him to maintain business records has expired, these have been disposed of.
Even if that evidence is accepted the wife’s father’s taxation return for the year under consideration ought nonetheless have been available and provide an evidentiary foundation for an inference that he had the funds available to make the $24,200.00 advance. Of course, there would be no issue about this if the husband produced documents that demonstrated the source of funds he says was used to make these final payments.
It is the wife’s evidence her father paid the $24,200.00 as follows:
·10 May 2000 - $5,000.00
·15 May 2000 - $5,000.00
·17 May 2000 - $8,000.00
·19 May 2000 - $6,200.00
The Colonial First State records are annexed to the wife’s affidavit. These show deposits as follows:
·9 May 2000 - $5,000.00
·11 May 2000 - $5,000.00
·15 May 2000 - $8,000.00
·19 May 2000 - $6,200.00
The husband’s Commonwealth Bank Streamline account is also attached to the wife’s affidavit. It shows deposits comprising $5,092.80 (8 May 2000), $7,000.00 (10 May 2000) and $8,000.00 (12 May 2000). On 15 May 2000 a regular Netbank debit in the amount of $2,474.28 is apparent and on 16 May 2000 the account is debited in the amount of $15,400.00 in relation to cheque number #86. Thus, although both accounts show significant activity during that period, the transactions do not align. It follows that the $24,200.00 was not paid from the husband’s Commonwealth Bank account. As was mentioned earlier, no documents were presented which show funds withdrawn from the parties’ accounts so as to make the May payments.
Examination of the parties’ personal taxation returns for the 1999/2000 taxation year reveal that the husband discloses $19.00 income from interest and the wife $87.00 for the same item. This lends support to the notion that the parties did not have savings of any moment. Indeed, as has already been mentioned, it is clear that it was their habit to direct discretionary income into debt reduction.
It is also relevant that no mention was made of these payments in the husband’s affidavit in chief. He said no more than “[b]y May 2000 we paid off the loan for the [B property]. From the time we were married the mortgage repayments and bills and other living expenses were paid from our wages” (par 24). However, in relation to other familial loans, as small as $4,000.00, particulars were given by the husband. Had the husband paid the $24,200.00 one would have anticipated that he would say so in his evidence in chief. On the other hand, the wife and her father disclosed these matters in chief, which weighs in their favour. In short, the preponderance of evidence weighs in favour of the version given by the wife and her father. It is accepted this payment constitutes a contribution made on the wife’s behalf. Had it not been for aspects of the wife’s evidence which raised questions about her reliability, these findings may have resulted in acceptance of other aspects of contentious financial issues unsupported by documents.
In June 2000, the parties purchased an investment apartment at J Street, Suburb K for $328,000.00. A five per cent deposit came from their joint savings with the balance borrowed from ANZ. In total, $540,000.00 was borrowed from ANZ of which $340,000.00 related to the Suburb K property. The remaining $200,000.00 was a facility which only attracted interest as draw-downs were made. The ANZ loan was secured against Suburb K and B. Until the Suburb K property was sold in 2003, it was rented.
In September 2000, the husband obtained development consent as an owner/builder to demolish the existing houses on Y Street and D Street and to construct two new houses.
In anticipation of the birth of their first child (C), the wife stopped work in 2001. C was born in early August 2001. From the outset the wife was primarily responsible for the children’s care. Although the father was also involved, his hours of work rendered him less available. Otherwise the parties arranged the day to day running of their home along fairly traditional lines; with the mother primarily responsible for the children and the home. The father took a primary role with maintenance and outdoor work and supplemented the housework and childcare.
The wife returned to full-time employment in about October 2002. When she was at work, C’s two sets of grandparents cared for her. C’s time with her grandparents was essentially equal.
In mid 2002, Council approval was given to redevelop Y Street and D Street. In order to partly fund the redevelopment, in May 2003, the parties sold the Suburb K property for $405,000.00. From the sale proceeds $130,600.00 was deposited into the ANZ loan facility with the balance of approximately $273,000.00 deposited into a joint ANZ account. From the $273,000.00, a further $186,342.00 was paid into the ANZ loan facility, the effect of which was that they had a redraw facility with ANZ of approximately $320,000.00 (in addition to the original $200,000.00 facility). In other words, of the original $540,000.00 borrowing, there was about $20,000.00 outstanding. In their joint ANZ account the parties had approximately $90,000.00 which was used for living expenses and the redevelopment.
In addition, the husband’s father gave them approximately $35,614.00 and a further $16,000.00 was provided by his sisters towards redevelopment expenses. According to the wife and her father he advanced $17,000.00, again that amount not being conceded by the husband. It is the wife’s evidence that on 12 October 2004 her parents gave her $12,000.00 which she paid into the parties’ joint ANZ account. Again no documents are provided by the wife’s father in corroboration of their evidence. Attached to the wife’s affidavit are bank statements for the ANZ account which cover the period 9 September 2002 to 9 March 2005. However, not all bank statements for this period are included and, relevantly, there are none between 9 September 2004 and 9 December 2004. In short, transactions for which there should be documents are not documented. Nor was it established that but for the ingestion of $17,000.00 from the wife’s parents the redevelopment would have been subject to a shortfall in funds.
As has already been mentioned, there were inconsistencies in the wife’s oral and written evidence which make reliance on her uncorroborated evidence in relation to contentious issues, not completely safe. For example she was adamant she arranged the kitchen renovation through one company. Copies of the contract and associated records (Exhibit “M”) showed her evidence is wrong and the husband’s is correct. In a similar vein, there was a clear conflict between the wife’s father’s evidence about circumstances under which he permitted the children to see the father and sworn evidence given by Mr and Mrs L. He was also mistaken about whether or not the father had paid work during the redevelopment and his evidence about the husband’s items that the wife placed on the footpath was also wrong. Thus, notwithstanding that the wife and her father spoke with one voice in relation to the $17,000.00, the advance has not been proved.
Although the husband and his sister Ms M said he borrowed $29,700.00 the wife said is was $8,000.00. It was only when Ms M produced documents which proved the larger advance that this was conceded by the wife. So that it is clear, it is agreed that recovery of the advance is statute barred and that amount should not be included as a liability in the formulation of the property pool. However, this was a contribution made on the husband’s behalf. In total, therefore, the husband’s family gave the parties approximately $73,000.00 towards the redevelopment expenses.
In about May 2003, the husband started construction for the two new homes. Essentially, seven days a week for 18 months he worked full-time on the site and elsewhere as a tradesman. His sub-contracting work slowed down in 2003 and it is clear that his time was predominantly absorbed with his redevelopment. Details of the work undertaken by the husband are set out at paragraphs 41 – 44 of his affidavit. He was assisted by the wife (to a very small extent) as well as members of his and the wife’s family. So that it is clear the wife’s and family assistance constituted a very small component of the non contractor work. Expert evidence was provided by a quantity surveyor in relation to the value of the husband’s work. Essentially, by completing so much of the redevelopment work himself about $292,000.00 was saved.
At the end of either 2004 or 2005 the parties vacated B and moved into Y Street. Both B and D Street were then rented.
N was born in March 2005. Again, the wife ceased work (February 2005). She resumed full-time employment in about February 2007. From that time, N went to day-care and, with the wife’s parents in retirement, her father took the children to and from day-care or school.
It is the wife’s evidence that throughout cohabitation her father helped:
…either through giving us money or providing us with our weekly food such as meat, fish, chicken and vegetables. We were able to meet our financial commitments through the assistance by my parents during the period when we were redeveloping [the Sydney Suburb 1] Properties particularly in 2004 when we had minimal income.
During the period 1 July 2001 to 30 June 2005, we maintained payments on the [B] Loan of approximately $562 per month and paid for our living expenses through our drawings from the ANZ Loan Facility or the Equity Account. (Wife’s affidavit, pars 67 & 68)
It will be recalled that the B loan was paid out in May 2000. It is inferred the wife intended to refer to the ANZ loan. In this regard, the parties’ ANZ account confirms her evidence about monthly payments in the amount of $561.83. It is her father’s evidence that during 2003 to 2005:
[The husband] was not working and [the wife] had ceased work to give birth to their first child, [C]. During the period between 2003 and 2005, my wife and I helped both [the husband] and [the wife] by providing them with food and “pocket money”. The “pocket money” varied from $100 to $300 a week. In addition, I gave them $12,000 in October 2004 from monies my wife had received following the sale of a property her late father owned in Greece and which my wife and her sister subsequently sold. (Affidavit wife’s father, par 25)
Again no documents are produced in support, not even in relation to the funds said to have come from Greece.
There is no doubt that during these years the parties’ income fell significantly. For the 2003 taxation year, the husband’s taxable income was $11,860.00 and the wife’s was $9,362.00. Her 2004 taxation return is unavailable and she believes she probably incurred a loss (on B rental). The husband’s 2004 taxation return shows a $3,250.00 loss which is offset by depreciation in a similar amount. In 2005, the husband’s taxable income was $2,906.00 which means, when claimed depreciation is taken into account, he had approximately $6,800.00 disposable income. For the same year, the wife’s taxable income was $5,749.00. On this basis, neither party paid tax and between them they had approximately $12,561.00 for the year or $241.00 per week. In addition, their ANZ records show they received family tax benefits.
It will be recalled that the husband was employed by H Pty Ltd. He was its only employee. For 2003, H Pty Ltd earned $49,298.00 and in 2004 $23,641.00. The amounts paid in salary (Exhibit “D”) equate to the income that the husband declared in his personal returns. Through H Pty Ltd the husband was able to claim motor vehicle expenses and a variety of other costs as legitimate business expenses. Nonetheless, it is accepted that from wages alone the parties are unlikely to have been able to meet their necessary living expenses.
However, analysis of the parties’ ANZ account, for the period under consideration, shows deposits considerably larger than their income from personal exertion would indicate they had available. A significant component is referable to rent, but when claimed expenses are taken into account, the picture remains as emerged from their taxation returns. It is also clear that from the $272,604.53 deposit (from Suburb K) made on 2 May 2003 many of their day to day expenses were met. The picture which emerges from taxation and bank records is that from income and capital the parties had sufficient to meet their day to day, albeit very modest expenses.
Nonetheless it is also clear that this was a difficult time financially and the parties were financially stretched. Just as the wife’s parents generously helped out with the children and she had previously helped in their restaurant (without payment) it is reasonably likely that the wife’s parents did help with their day to day expenses. The wife’s father was particularly enlivened when he perceived this aspect of his evidence was under attack. In short, although the payments are not documented it is accepted that the wife’s parents gave regular cash “pocket money” and regularly provided assistance in kind. Because of their modest size, the lack of documentation is of no consequence. On the other hand the lack of documentation in relation to the monies said to have come from Greece tips the balance of evidence in favour of a finding that this advance was not proved. There appears to be no dispute that the wife’s parents paid for N’s christening, $5,000.00 for private hospital expenses when she was born and spent $5,000.00 on a new stove for Y Street.
In late 2006, the ANZ loan facility and equity account were consolidated into a new loan account with ANZ secured against B. The effect of this was to offset interest against the ANZ loan, which had a balance of about $392,000.00.
In February 2007 the wife returned to full time employment. By then the wife’s parents were retired. N went into day care and while the parties were at work, the wife’s parents did most of the child care.
The parties separated in early April 2011. The circumstances surrounding separation were difficult and do not need to be discussed. Suffice to say the wife and children remained in Y Street and the husband moved in with his parents.
At the wife’s behest a child support assessment issued on 20 April 2011.
At separation, $352,108.00 was outstanding on the ANZ loan. Until May 2011, as agreed, the wife paid $650.00 per week towards the ANZ loan. The husband continued to receive the rental income and paid school fees and other outgoings for Y Street and the other properties. There seems to be no issue that the husband continued to pay the ANZ loan facility from rentals (after the wife stopped paying) until November 2011.
The husband was retrenched in August 2011 for which he received approximately $8,600.00 net final payment. He used his retrenchment pay for personal living expenses and outstanding bills. However, not towards child support which was then in arrears.
Because the husband did not pay the December 2011 school fees, the wife paid them for which, without the husband’s consent, she reimbursed herself from an account used by him.
Between December 2011 and March 2012 (15 weeks), no payments were made by either party on the ANZ loan. Because the parties’ payments were ahead, they were able to use $9,553.00 advance payments rather than pay periodic instalments. Although this became a source of tension there was simply insufficient income to do anything else.
In December 2011, the husband and his sister Ms M entered into an arrangement whereby he moved into her apartment at Coogee and she moved into D Street. It was agreed they would not pay rent and that each would cover the outgoings for the property they each lived in. The effect of this was that D Street no longer provided an income but the husband was able to live independently of his parents. From this period each of the parties had, in effect, exclusive use of one of their three properties.
B continued to be rented until 4 June 2012 when the tenants vacated. At that time, B was rented for $525.00 per week. For reasons which are not entirely clear, the wife did not agree that B should be relet and it has been vacant ever since.
The husband returned to work in March 2012 as a contractor with N Pty Ltd.
As was mentioned earlier partial property orders were entered by consent on 31 August 2012.
B was sold on 13 October 2012.
General principles for the adjustment of matrimonial property
The approach to the determination of an application under s 79 of the Act is set out in Stanford & Stanford [2012] HCA 52. The question which ultimately must be answered is whether it is just and equitable to alter the parties’ rights and interests in their property. The power to make a property settlement order must be exercised in accordance with legal principles, including the principles which the Act itself lays down. In this case the parties agree (as do I) that by reason of the manner by which they conducted their marriage, which has now irretrievably broken down, it is just and equitable that their interests and rights in property are altered; where they disagree is in relation to what that adjustment should comprise.
Thus, it is necessary to first, identify the nature of the parties interests in their property, liabilities and financial resources at the time of the hearing. Then to evaluate the contributions made by the parties as defined in s 79(4)(a), (b) and (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s 75(2) insofar as they are relevant, including any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 (Cth) (“CSAA”) that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage. Consideration of whether it is just and equitable that an alteration of the parties’ interests so as to effect a property settlement order is made and, if it is, its terms is required. So that it is clear, the first question must not be conflated with the outcome of the s 79(4) and s 75(2) deliberations, albeit these may inform the justice and equity determination.
Section 81 imposes on the Court an obligation, that as far as practicable, the orders will finally determine the financial relationships between the parties and avoid further proceedings between them.
Assets, liabilities and financial resources at the date of hearing
The parties reached agreement as to the value of most assets and liabilities.
The value and identity of the parties’ property, liabilities and financial resources at the date of hearing are as set out in the table below:
ASSETS
Ownership Description Value Husband Y Street, Sydney Suburb 1 $1,100,000 Husband D Street, Sydney Suburb 1 $800,000 Joint B $927,500 Joint ANZ A/C 1 $7 Wife ANZ A/C 2 $1,500 Husband ANZ A/C 3 $471 Husband CBA A/C $843 Joint Household contents (Y Street) $10,000 Joint Tools of Trade $11,000 Wife Jewellery $1,400 Husband Jewellery $5,000 Wife Toyota $30,000 Husband Toyota $9,500 Total $2,897,221
ADDBACKS Ownership Description Value Husband Legal fees $72,264 Wife Legal fees $77,000 Total $149,264
LIABILITIES Ownership Description Value Joint ANZ Mortgage re B Property $353,268 Husband Loan from Ms M $57,500 Husband Loan from Ms & Mr O $19,900 Wife Loan from her parents $77,000 Joint School fees $3,185 Joint Agents’ commission and costs of sale of B $27,105 Wife ANZ Loan $33,000 Husband Capital Gains Tax (not agreed) $60,086 Total $631,044
SUPERANNUATION Member Name of Fund Value Husband P Super Scheme $91,992 Wife AMP Signature Super Plan $60,000 Total $151,992 Total net property (not agreed) $2,567,433
Unless stated differently, the items and values referred to in the tables are agreed.
There is an issue about whether Capital Gains Tax liabilities accrued in relation to D Street and Y Street should be taken into account as joint liabilities. D Street is subject to a Capital Gains Tax liability in the amount of $60,086.00 and Y Street in the amount of $80,799.00. According to the husband both amounts should be taken into account in the formulation of the property pool. The wife resists this approach and submits that consistent with Rosati v Rosati (1998) FLC 92-804 (which it is accepted sets out the relevant law) these liabilities should be excluded. It is conceded by the wife that in the event it is necessary for the husband to sell D Street so as to pay her the adjusting amount, provision should be made in the orders for payment of any Capital Gains Tax liability in the proportion that each party achieves for the overall adjustment. The difficulty with this approach is that the evidence does not make it possible to determine a clear point which triggers the sale of D Street. Nor was a minute of order provided which addressed how a formulaic approach might be implemented, other than a sale by order. As can be readily seen, this does not address this complex issue.
In Rosati the Full Court said and adopted the following as a general approach to this issue at 85,043:
It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s 79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:—
(1) Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.
(2) If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(3) If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s 75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(4) There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.
The husband’s evidence is that he plans to live in Y Street and rent D Street. The later has always been an investment property, with its primary purpose being generation of rental income. In other words he has no plans to sell either property in the foreseeable future. This is consistent with the approach adopted in the partial property settlement orders. However, he has taken on responsibility for the B mortgage ($353,268.00) and his answers as to future intention were given in the context of his application that he pays the wife $200,000.00. It will be recalled that he has recently experienced a period of unemployment and was unable to afford to pay even the B mortgage. True it is that he now earns $1,240.00 per week and as a consequence of these orders will be able to rent D Street for about $690.00 per week. However, as will be discussed later he has outstanding legal fees in the amount of $102,850.00 and will need to raise at least $200,000.00 to pay the wife. If follows he will need to be able to service borrowings at least only slightly less than double the B loan. With current total personal expenditure of $1,915.08 it is not accepted that he is able to afford to service an additional $300,000.00. This is consistent with the wife’s submission to the effect that the husband’s financial future is uncertain as a consequence of which she should receive an adjustment pursuant to s 75(2) because he will only ever pay modest child support.
On balance, the preponderance of evidence is to the effect that the husband is highly unlikely to be able to afford to retain D Street and that in the near future, its sale is all but certain. Thus his argument for its inclusion as a liability in the formulation of the property pool is accepted.
An application of the same principles to Y Street achieves a different result. In short the husband is likely to do everything he possibly can in order to retain the family home. He has a close attachment to the property and provided he sells D Street his ability to keep it is not in jeopardy. It is quite clear that in relation to this property payment of Capital Gains Tax is unlikely to arise for many, many years.
Section 79(4) – Evaluation of contributions and other factors
The submissions were made of the basis that contributions should be assessed globally which approach will be adopted (Norbis v Norbis (1986) 161 CLR 513).
Section 79(4) requires that the Court looks at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense (Farmer and Bramley (2000) FLC 93-060). In Ferraro and Ferraro (1993) FLC 92-335, the Full Court highlighted the difficulty involved in evaluating and balancing fundamentally different contributions. It also reinforced that the Court’s task includes evaluating the significance of the various contributions, the weighing of which is ultimately a matter for the Court.
The evaluation of financial contributions is more complex than the mere calculation of the funds introduced by each party. This point is reinforced by the often quoted comments in Pierce v Pierce (1999) FLC 92-844 where, in relation to initial contributions, the Full Court said at 85,881:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution…
Findings have already been made in relation to initial contributions. In this regard, there is no doubt that at the commencement of cohabitation compared to the husband, the wife had modest assets. In fairness, she conceded that as a consequence of the husband’s significant initial contribution an adjustment in his favour is warranted. It will already be apparent that not only do the two properties which the husband owned, unencumbered at the commencement of cohabitation, constitute the large majority of the parties’ net worth, these properties constitute the financial platform for rental income, further property acquisition and the opportunity for development.
During closing argument there was tendered in the husband’s case an aide memoir that accurately sets out the rental income generated from Y Street and D Street (also B) for the tax years 1993 – 2003. Gross rental income during that decade constitutes a significant proportion of the husband’s taxable income and, thereby, the family’s income. Following redevelopment of both properties this pattern continued albeit, B rather than Y Street was rented. Self-evidently, had the husband not owned Y Street the parties would have been unable to rent B. It follows that the husband’s introduction of these two properties and the use to which they were put following the parties’ marriage, is a significant factor in the husband’s favour.
Once the parties commenced cohabitation each contributed income earned to the betterment of the family. Both worked hard and earned modest income from personal exertion. Their personal financial contributions during cohabitation were supplemented by funds advanced by various relatives, the details of which have already been discussed. The various lump sum payments were put to good use; for example, the acquisition of B and property development. Other than as to quantum these lump sum contributions by family have comparable weight. The point being, they were of real benefit to the parties. When the periodic payments advanced by the wife’s parents are taken into account, it can be seen that overall familial financial contributions are more or less equal. So that it is clear, advances made by the wife’s family are contributions made on her behalf and weigh in her favour with advances made by the husband’s family given similar treatment in his favour.
It will be recalled that expert evidence established that by doing so much of the redevelopment work on Y Street and D Street, the husband saved about $292,000.00. In order to do so, he dramatically reduced his paid employment and thus his earned income during that period fell substantially. Somewhat reluctantly he conceded that the wife provided some assistance during the redevelopment; such as contributing to the kitchen design and visiting showrooms and stockists. That said, while the husband worked on the redevelopment the wife worked in paid employment, assumed overwhelming responsibility for C’s care and ran the parties’ home. The point being, just as the husband took on a heavy load during the redevelopment, so did the wife. In short, when the nature of the wife’s contributions during the period are taken into account, it is not accepted that the savings made by the husband performing so much of the redevelopment work himself warrants an adjustment in his favour. Nor is it accepted that the contribution by the wife of her redundancy payments somehow requires further acknowledgement beyond her contribution of all income earned by her to the betterment of the family.
It follows that it is accepted the husband made a significantly greater initial financial contribution worthy of real weight at the commencement of cohabitation.
During cohabitation the parties’ financial contributions, made directly and indirectly, were equal.
Post separation the wife has had exclusive use of Y Street in relation to which she made two mortgage payments. Mortgage payments were otherwise made by the husband and by using credit built up prior to separation. Although the wife was unhappy about it, the financial consequences of the husband’s decision to permit his sister to live in D Street so that he could live independently of his parents, does not warrant an adjustment in her favour. In a similar vein, the wife’s decision to resist reletting B in the lead up to this hearing is inconsequential. Overall, the financial contributions and circumstances post separation do not warrant an adjustment in favour of either party.
Members of both families assisted with the redevelopment of Y Street and D Street. The non-financial contributions made on each parties’ behalf are assessed as roughly equal and do not warrant an adjustment in favour of either of them.
It is accepted that the wife was primarily responsible for the children’s care and that, in her role as homemaker and parent and to the welfare of the family, her contributions exceed the husband’s. As has already been mentioned, for example, during the period of redevelopment, she was effectively exclusively responsible for C’s care and running their home. Although the husband wishes it was different, it is clearly the fact that post separation she has been all but exclusively responsible for the children’s care. Her contributions as a homemaker and parent, overall, are accepted as considerably exceeding the husband’s and worthy of significant weight.
The orders will not affect either party’s earning capacity.
The husband was assessed as liable to pay child support for the period 20 April 2011 to 26 September 2011 at the rate of $255.00 per week. His payments were irregular and generally made by erratic lump sums.
He paid $2,800.00 in October 2011 and $5,300.00 in July 2012.
Following his retrenchment, he applied to have his liability reassessed and on 28 September 2011 he was assessed as liable to pay $47.00 per week.
Having returned to work, he was reassessed on 1 July 2012 as liable to pay $142.00 per week.
Between July 2012 and 16 August 2012 no child support was paid by the husband.
In the lead up to this hearing periodic payments resumed and the balance outstanding, of approximately $1,000.00, was paid the week before the hearing started.
Presently, there are no arrears of child support.
When one stands back and evaluates the significance of these contributions and other s 79(4) factors, a number stand out. Namely, that throughout their marriage the parties filled different key roles and together worked hard to advance their family’s financial interests and their and their children’s welfare. Their efforts bore fruit and notably resulted in property acquisition, a comfortable standard of living and children who were well cared for. Although family advances were the subject of considerable focus in the evidence and closing argument, ultimately they are assessed as indistinguishable.
It is the husband’s initial contribution and the use to which it was put that notably favours him. As was mentioned earlier, his initial contribution provided the financial backdrop for the family and is the platform upon which much of the property pool (and family income) was achieved. When these matters are weighed with all other relevant contributions and factors discussed above, expressed as a percentage of the net value of the parties’ property as at the date of hearing, they favour him 60 per cent compared to her 40 per cent.
Section 75(2) factors
As was mentioned earlier, the wife sought a 10 per cent adjustment pursuant to s 75(2) in her favour. Although it was properly conceded by counsel for the husband that 10 per cent was not outside the appropriate range for adjustment, as I understood the submission, it was argued that this represented the upper limit. The adjustment sought by the wife relied upon her being the children’s major carer into the future, the husband’s greater earning capacity, the prospect he will achieve a greater share of the parties’ property by virtue of his higher contributions and is likely to be unreliable in relation to the payment of child support.
The husband highlighted that he is six years older than the wife, he has experienced periods of unemployment, he will have a significant liability, as well as his taking assets which are subject to a significant Capital Gains Tax liability. In the event he was unable to persuade the Court that these liabilities should be included in the formulation of the property pool, it was argued they should be taken into account pursuant to s 75(2)(o) or s 79(2). Although this approach was not mentioned in Rosati, it was referred to with implied approval in IABH and HRBH [2006] FamCA 379.
The husband is 46 years and the wife 39 years. Each has reasonable health and is likely to remain in the paid workforce for many years.
The husband’s financial circumstances are set out in his Financial Statement filed 24 October 2012. This discloses that he earns $1,240.00 per week as an employee and has total personal expenditure of $1,915.08, including $133.08 child support. As a consequence of property orders he will move back into Y Street and will have his sister vacate D Street which will be rented. The husband anticipates rental income in the vicinity of $690.00 per week. He has approval to refinance the ANZ mortgage with CBA on better terms and thus lower repayments than the current $572.00 per week. Although his taxation liability is likely to increase, the gravamen of the husband’s evidence is that he expects to be in a position to maintain both properties and meet his outgoings. As was discussed earlier, evaluation of his financial circumstances demonstrates that he will almost certainly shortly sell D Street. He has outstanding legal fees in the amount of $102,850.00 which must be paid. The effect of this is that the most likely scenario is that the husband will pay his legal expenses from the D Street sale and will not receive additional income. Without rental income he will also need to reduce expenses.
The wife’s financial circumstances are set out in her Financial Statement filed 19 October 2012. This discloses that she receives $1,269.00 per week salary and $142.00 per week child support. Nothing turns on the minor discrepancy between the parties’ evidence about the weekly amount. Presently her total weekly expenses amount to $1,855.00. Her average weekly expenses are $1,349.00 of which $797.00 relates to the children. In this regard she claims the children’s school fees which, as has already been discussed, have been paid by the husband as well and are now in arrears. As to the future, it is the husband’s evidence that he will continue to contribute to the children’s school fees. However, even if the children’s school fees are excluded it is apparent that the wife carriers the brunt of the children’s expenses and will continue to do so.
The wife is to receive the B sale proceeds which she will use to purchase a home of comparable value in the Sydney Suburb 1 area. She expects she will continue to work full-time which, given her parents’ active support for her and the children, is achievable. It is unclear whether the wife will decide to borrow in order to acquire property and, feasible she may raise a small mortgage. She too has outstanding legal fees which are roughly equivalent to the husband’s. The point being, payment of her outstanding fees from the B proceeds is likely which increases the probability she may raise a small mortgage so that she can comfortably rehouse herself and the children. These factors warrant an adjustment in the wife’s favour.
By reason on the parenting orders, it is clear the children will reside with the wife until they are 18 years. Although the husband will pay child support, as the Full Court said in Clauson and Clauson (1995) FLC 92-595 at 81,911:
…it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails…
Although in the future the husband will have a role in the children’s lives and they will spend time with him, the wife’s primary care of the children until they reach 18 years, warrants a significant adjustment in her favour.
Neither party has repartnered nor has a responsibility to support another person.
Both parties will be able to enjoy a comfortable standard of living which does not warrant an adjustment in favour of either of them.
Section 75(2)(l) recognises that a parent may legitimately consider his or her children’s needs when structuring life post separation. There is an obvious connection between s 75(2)(l) and s 75(2)(b) and (c). The Court must be careful not to double count the impact upon the wife’s circumstances of her having primary responsibility for the children’s care. Having regard to the adjustments already made, no further adjustment is made pursuant to subsection (l).
Section 75(2)(n) achieves a cross-referencing between s 75(2) and s 79(4). The outcome of the assessment of contributions and other factors has resulted in the husband receiving 60 per cent of the assets compared to the wife’s 40 per cent. These findings do not warrant further adjustment pursuant to the subsection.
Section 75(2)(na) concerns a party’s liability to pay child support. I have already considered the husband’s payment of child support to date. Under this subsection the Court considers the impact of child support payments not already taken into account. There is no doubt that since separation the husband has not regularly paid child support which invites consideration of whether that pattern will continue. Financially, the period between separation and hearing has been difficult for both parties. The husband experienced a period of unemployment and D Street and B, for different periods, did not produce income. In addition, both parties incurred significant legal expenses in relation to which the husband alone paid, for example, Dr F’s costs. What follows from this is that it is accepted there were particularly unusual financial circumstances for the parties that arose following separation and the husband’s erratic payment of child support has occurred in response thereto. He is now in full-time salaried employment, the effect of which is that the wife can make arrangements with the Child Support Agency for the payment of child support at source. The effect of this is that the husband is likely to pay child support as assessed in the future. An adjustment pursuant to the subsection is not warranted.
There are two s 75(2)(o) factors to considers. First, both sets of grandparents assisted with the children’s care, albeit in recent years the wife’s parents more than the husband’s. By doing so, the parties were able to work in paid employment and the costs associated with childcare were avoided. The greater role undertaken by the wife’s parents does not warrant a very small adjustment in her favour.
The second factor relates to capital gains tax on Y Street. As has already been established, Y Street is unlikely to be sold for many, many years. The potential for the payment of capital gains tax in relation to that property and in the amount currently assessed, is so temporally remote that whether pursuant to s 75(2)(o) or s 79(2), an adjustment in the husband’s favour is not warranted.
Having regard to all of the s 75(2) factors, it is appropriate that there is a 10 per cent adjustment in the wife’s favour. This reflects the cumulative outcome of the findings made pursuant to s 75(2) (Tomasetti and Tomasetti (2000) FLC 93-023). To test the measure of that assessment, it should be viewed in monetary terms (Waters and Jurek (1995) FLC 92-635). This adjustment puts in the wife’s hands a further $253,743.30. In the context of this case, this is a significant amount.
Section 79(2)
Reference has already been made to the manner in which the parties conducted their marriage, their intermingling of finances and their common stance that now their marriage has irretrievably broken down, it is just and equitable that their interests and rights in property are altered. In this regard, they have already completed a partial property settlement by reason of which B, which was acquired in their joint names, was sold with the wife receiving the entire sale proceeds. The mortgage attached thereto, which was borrowed in their joint names, will be discharged with the husband refinancing that advance in his sole name. Thus, as was mentioned earlier, I agree that justice and equity requires an alteration to their rights and interests in property.
The form of alteration, in this case, is driven by matters discussed above and the outcome of the s 79(4) and s 75(2) findings. It is unnecessary to slavishly recite findings already made and sufficient, when one stands back and looks carefully at the outcome of the s 79(4) and s 75(2) process, to refer to the quantum and nature of the husband’s greater initial contribution, that during cohabitation both parties contributed in a real way in their respective roles and into the future the wife’s primary responsibility for the children’s care. The effect of this is that to the extent necessary, the husband must pay the wife an amount which achieves an alteration that delivers equality. In the context of the matters referred to in paragraph 108 this outcome is just and equitable.
Structure of the orders
Section 81 imposes on the Court an obligation that as far as practicable the orders will finally determine the financial relationship between the parties and avoid further proceedings between them. These principles, combined with the parties’ agreement about how assets will be received means that the wife will receive the following assets:
·B $927,500
·ANZ account 2 $1,500
·50 per cent ANZ account 1 $3.50
·Household contents – Y Street $10,000
·Jewellery $1,400
·Motor vehicle $30,000
·Paid legal fees $77,000
·AMP Superannuation $60,000
$1,107,403.50
Less
·Loan to her parents $77,000
·ANZ loan $33,000
·Selling costs – B $27,105
$137,105
Thus the effect of these findings is that without the adjusting payment the wife will receive net assets worth $970,298.50. It follows that the husband must pay her $313,418.00 less the $6,050.00 which she is to pay for her share of Dr F’s expenses.
Calculated on the same basis the husband will receive:
·Y Street $1,100,000
·D Street $800,000
·CBA account $843
·ANZ account 3 $471
·50 per cent ANZ account 1 $3.50
·Tools of trade $11,000
·Jewellery $5,000
·Motor vehicle $9,500
·Legal fees $72,264
·P Superannuation $91,992
$2,091,073.50
Less
·ANZ mortgage $353,268
·Loan – Ms M Fekete $57,500
·Loan – Mr & Mrs O $19,900
·School fees $3,185
·Capital Gains Tax $60,086
$493,939
Thus the husband has total net assets worth $1,597,134.50. By way of cross-check $1,597,134.50 less $313,418.00 is $1,283,716.50.
In the partial property orders, the parties agreed the husband would have four months within which to pay the wife. This period is clearly necessary to provide a just balance between her entitlement to properly receive the adjustment with affording the husband a proper opportunity to reorganise his financial circumstances and raise that amount. In the event that the husband fails to make the payment within four months D Street will be sold. Although it has an agreed value, its selling price cannot be known. If D Street is excluded from the asset pool, the parties’ net property is reduced to $1,767,433.00. An equal division of that smaller pool will have the parties receive $883,716.50. On this smaller pool and having regard to the property which the wife will retain ($970,298.50) from her equal share of D Street she must pay the husband $86,582.00.
The husband holds about 442 ANZ shares on trust for the children. It is the wife’s application that she is appointed joint trustee. There is no evidence that the husband is deficient as trustee or any principled basis upon which this well established trustee/beneficiary relationship should be altered.
Because of the complexity of the proposed orders, before they are entered the parties will have an opportunity to check the calculations and address the Court about the form of order.
Proposed Orders
That by way of final property settlement, pursuant to s 79 of the Family Law Act (Cth):
(1)Within four (4) months of the date of these orders, Mr Fekete (“the husband”) shall pay Ms Fekete (“the wife”) the sum of $306,918.00.
(2)In the event that the husband fails to make payment to the wife pursuant to Order 1 by the due date he shall, within fourteen (14) days do all acts and things necessary and sign all documents required to sell the property known as D Street, Sydney Suburb 1 in the State of New South Wales being all that property described in Folio Identifier … for the best price reasonably obtainable and, without limiting the generality of the foregoing:
(a)list the property with a real estate agent of his choosing for sale by private treaty for a period of sixty (60) days after such listing;
(b)co-operate with the agent in the presentation and promotion of the property for sale in relation to which the husband shall pay such marketing costs as are required to be paid in advance; and
(c)maintain the property in a presentable state of repair.
(3)In the event that D Street, Sydney Suburb 1 is not sold within sixty seven (67) days of listing, the husband shall instruct an agent to list the property for sale by public auction at the earliest possible date thereafter and shall sign all documents necessary and do all acts and things required to sell the property by public auction and shall, without limiting the generality of the foregoing:
(a)execute all documents requested by the auctioneer for the sale of the property;
(b)nominate to the auctioneer a reserve price for the sale, such reserve price to be agreed upon by the parties and failing agreement to be the mean value of two estimates of value by estate agents being one agent nominated by the wife and another nominated by the husband, such estimates to be not more than 14 days apart;
(c)attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached and to accept a price not less than 10 per cent lower than the reserve price;
(d)execute all contracts and documents necessary to complete the sale; and
(e)co-operate in every way with the auctioneer in relation to the auction.
(4)The sale proceeds for D Street, Sydney Suburb 1 shall be distributed as follows:
(a)selling costs;
(b)rates and land tax;
(c)an amount equivalent to the Capital Gains Tax payable by the husband;
(d)50 per cent to the husband; and
(e)50 per cent to the wife less $93,082.00 ($6,050.00on account of Dr F’s fees and $86,582.00 adjustment) which she shall pay to the husband.
(5)In relation to Capital Gains Tax, prior to settlement the husband shall give the wife a calculation by his accountant of the Capital Gains Tax payable by him. In the event the amount is other than $60,086.00, a 50 per cent adjustment is payable by the relevant party at settlement. If it is more, the adjustment is to be made by the wife from the amount she would otherwise be entitled to receive and, if it is less, the amount payable by the husband will accordingly increase.
(6)If either party refuses or neglects to sign any document necessary to implement these orders, that a Registrar sign the necessary document on behalf of the defaulting party pursuant to section 106A of the Family Law Act 1975 (Cth).
(7)Unless otherwise specified in these orders each party is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age and working future provides the conditions for payment out of such payment.
(8)It is declared that each party is respectively liable for their share of Capital Gains Tax arising from the sale of the B property.
(9)The parties shall forthwith sign all documents necessary to close the joint ANZ 1 account and distribute the final balance equally.
(9)Subject to any application for costs, all outstanding applications are dismissed.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 29 November 2012.
Associate:
Date: 29 November 2012
0
3
0