Felice and Felice
[2013] FamCA 641
FAMILY COURT OF AUSTRALIA
| FELICE & FELICE | [2013] FamCA 641 |
| FAMILY LAW – PROPERTY – Where the parties’ contributions over the course of a long marriage is the focus of the enquiry of the property settlement – Where there was a lack of disclosure by the husband – Add backs – Where legal fees are added back – Proceeds of sale of the properties sold by the parties – Where the wife’s inheritances are included in the add backs on the balance sheet – Consideration of Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70 and Bevan & Bevan [2013] FamCAFC 116 – Where the financial contributions are equal with the husband making the greater non-financial contribution and that the wife making the greater contribution as parent and homemaker – Where there is a 5 per cent adjustment in favour of the husband – Where it is just and equitable disburse to the wife 60 per cent of the moneys held in the parties’ controlled moneys account and the balance to the husband. |
| Family Law Act 1975 (Cth) ss 75 & 79 |
Bevan & Bevan [2013] FamCAFC 116
Black and Kelner (1992) FLC 92-287
Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Zyk (1995) 19 Fam LR 797
M & M [2006] FamCA 868; (2007) 36 Fam LR 97
Norman & Norman [2010] FamCAFC 66 at [60]
Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Shewring (1987) 12 Fam LR 139
APPLICANT: | Ms Felice |
RESPONDENT: | Mr Felice |
FILE NUMBER: | SYC | 3491 | Of | 2008 |
DATE DELIVERED: | 29 August 2013 |
PLACE DELIVERED: | Sydney |
JUDGMENT OF: | Justice Loughnan |
PLACE HEARD: Sydney
HEARING DATE: | 24, 25 & 26 November 2010, 13 June 2013 |
REPRESENTATION
COUNSEL FOR THE APPLICANT WIFE: | Mr S Thomas |
SOLICITOR FOR THE APPLICANT: | The Norton Law Group |
COUNSEL FOR THE RESPONDENT HUSBAND: | Mr T Hodgson | |
SOLICITOR FOR THE RESPONDENT: | Julie Singleton Lawyers | |
Orders
The parties shall forthwith do all acts and things, and sign all deeds, instruments and writings necessary to authorise Allars Motte Hannaford, Solicitors, to disburse the funds held in the controlled moneys account on behalf of the parties, in the proportions 60 per cent to the wife and the balance to the husband.
Otherwise each of the parties is declared to have the sole right, title and interest in all other real and personal property in their possession, custody or control at the date of these Orders and for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or whose future provided the conditions for payment out of such entitlements.
Liberty is granted to either party to relist the matter within 28 days and upon seven (7) days’ notice to the other party and to the court in relation to the wording of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Felice & Felice is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3491 of 2008
| Ms Felice |
Applicant
And
| Mr Felice |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Felice and Mr Felice were married for about 17 years. They each seek orders for settlement of property. For convenience I will refer to them as the wife and husband.
Applications
The orders sought by the wife in her Application for Final Orders filed 16 June 2008 have been overtaken by events – particularly the sale of the matrimonial home at Suburb C. By arrangement with the parties’ counsel, a minute of the orders sought by the wife was provided by her counsel to my chambers and to the husband’s counsel under cover of an email dated 8 August 2013. Thus, albeit conditional on certain findings, the wife seeks the following orders:
Property Division Proposed by the Wife
(1) In the event that the Pool of assets is found to be $2,642,079 (the wife’s inheritances being included in the asset pool.):
….
Form of Order
(1) Order that the parties do all acts and things, and sign all deeds, instruments and wring necessary to authorise Allars Motte Hannaford, Solicitors, the holder of the parties’ the controlled money account, together with any interest earned, held in the parties joint names to be dispersed to the wife.
(2) Order that the husband in addition to the sum referred to in Order 1 hereof pay to the wife $459,942 within 28 days and failing that the husband do all acts and things and sign all deeds and instruments necessary to sell the [business licence] and shares for the best price reasonably obtainable and from the proceeds of sale pay to the an amount sufficient to discharge his indebtedness to the wife in respect of this order together with interest if any due in respect of the outstanding amount.
(3) Order that if the husband neglects or refuses to sign any instrument, deed or writing necessary to give effect to these orders then a Registrar of the Family Court of Australia is hereby appointed pursuant to section 106 of the Family Act to sign such deed, instrument or writing on behalf of the husband.
(4) Order that the default of the husband shall be established by filing an affidavit setting out the actions taken by the wife and/or her solicitors to have any deed, instrument or writing signed by the husband together with details of the husband’s non-compliance.
(2) In the event that the pool of assets is found to be $2,115,449:
….
Form of Order
(1) Order that the forthwith parties do all acts and things, and sign all deeds, instruments and writing necessary to authorise Allars Motte Hannaford, Solicitors, the holder of the parties’ the controlled money account, to pay to the wife $507,844.66 together with any I nterest earned thereon, to the wife.
(2) Order that the husband in addition to the sum referred to in Order 1 hereof pay to the wife $233,278 within 28 days and failing payment, the husband do all acts and things and sign all deeds, instruments and writing necessary to sell the [business licence] and shares associated with the [business licence] for the best price reasonably obtainable and from the proceeds of sale pay to the wife an amount sufficient to discharge his indebtedness to the wife in respect of this order together with interest, if any, due to the wife in respect of the unpaid amount.
(3) Order that if the husband neglects or refuses to sign any instrument, deed or writing necessary to give effect to these orders then a Registrar of the Family Court of Australia is hereby appointed pursuant to section 106 of the Family Law Act to sign such deed, instrument or writing on behalf of the husband.
(4) Order that the default of the husband shall be established by filing an affidavit by the wife or her solicitor setting out the actions taken by the wife and/or her solicitor to have any deed, instrument or writing signed by the husband together with details of the husband’s non-compliance
The husband sought orders in terms of a Minute included in his Case Outline document as follows:
(1)That the Husband within two (2) months pay to the Wife by way of property settlement the amount of $200,000.00.
(2)That the Wife forthwith do all acts and things necessary to assign to the Husband any interest which she may have in any property in the name of the Husband or in the possession or control of the Husband, including his entitlement to superannuation.
(3)That the Husband forthwith do all acts and things necessary to assign to the Wife any interest which he may have in any property in the name of the Wife or in the possession or control of the Wife, including her entitlement to superannuation.
(4)That the Wife pay the Husband’s costs of and incidental to these proceedings.
Documents Read
The parties relied on the following documents:
Documents relied on by the wife
·Affidavit of Wife filed 25 June 2010
·Affidavit of Wife filed 15 June 2012
·Financial Statement of Wife filed 25 June 2010
·Financial Statement of Wife filed 15 June 2012
·Affidavit of Mr M filed 7 July 2010
Documents relied on by the husband
·Affidavit of Husband filed 6 August 2009
·Affidavit of Husband filed 4 March 2010
·Affidavit of Husband filed 21 March 2012
·Affidavit of Husband filed 12 June 2013
·Financial Statement of Husband filed 4 March 2010
·Financial Statement of Husband filed 21 March 2012 and June 2012 endorsed update
·Financial Questionnaire of Husband filed 6 August 2009
·Affidavit of Professor B filed 4 March 2010
The Hearing
The case was listed for final hearing over three days commencing on 24 November 2010. During the final day counsel for the parties told me that an agreement as to the value of the assets of a trust, in particular a Queensland business licence, had broken down and that the licence would need to be formally valued. Similarly, there was a contest in relation to an updated valuation of the former matrimonial home which necessitated a further valuation. Thus the hearing would need to be adjourned, part-heard. I told the parties that I would be referring the papers in relation to possible revenue fraud and other matters and wanted their submissions as to the timing of the referral. Learned counsel for the wife asked that the matter be put over so he could obtain instructions. After taking submissions from the parties’ counsel I made the following order:
(1) That in the first instance the husband pay or compromise to the satisfaction of the single valuer, Mr [K], his outstanding account in relation to the work done in these proceedings AND the Court noted that the question of ultimate responsibility for Mr [K’s] fees is a matter to be determined in the context of the final decision for property settlement.
(2) That within 14 days from today’s date, the solicitor for the wife nominate to the solicitor for the husband the names of three (3) real estate valuers to value all of the real estate in question and that not later than 28 February 2011 the solicitor for the husband nominate which of those valuers is to be appointed.
(3) That within 14 days from today’s date the solicitor for the husband nominate to the solicitor for the wife the names of three (3) valuers to value the assets of the [Felice] Trust and that not later than 28 February 2011 the solicitor for the wife nominate which of those valuers is to be appointed.
(4) The proceedings are adjourned to 10:00 am on 28 February 2011 before Justice Loughnan in relation to the question of the timing of a referral of the papers for investigation in relation to potential revenue fraud, in respect of non payment of compulsory superannuation payments, the income tax relating to the parties and to [Business 1] and in respect of alleged practices in that business which may have the effect of perpetrating a fraud on an insurance company and others. That date is to be the return date of any application filed on behalf of the wife for interim financial relief and served within 21 days from today’s date.
(5) That any Response to that application and any affidavits in support of that Response be filed and served not later than 21 February 2011.
(6) The substantive hearing is adjourned to a date to be fixed AND the Court noted that the proceedings are adjourned after the close of the parties’ oral evidence and subject to evidence in relation to the valuation of the assets referred to and evidence in relation to the outcome of the referral of the papers referred to prior only to submissions to be made in the proceedings.
(7) Liberty to the parties to restore the matter on seven (7) days’ notice to the Court and to the other party.
On 28 February 2011 I dealt with two issues – whether the substantive proceedings should be adjourned until the outcome of the referral of papers and any resultant investigation was known and whether there should be an order for interim property settlement in favour of the wife. For reasons given on the day I made the following orders:
(1) That the substantive proceedings be adjourned to a date to be fixed by arrangement between the legal representatives and Justice Loughnan’s associate.
IT IS NOTED
(2) It is the intention of the Court that the adjournment facilitate any reasonably foreseeable investigation and the outcome of any such investigation arising from the referral of the papers foreshadowed on 26 November 2010.
IT IS FURTHER ORDERED
(3) That the husband cause to be paid to the wife from the proceeds of sale of the property at [L] in the state of New South Wales, the sum of $40,000.00 within seven days of receipt of the proceeds of sale.
(4) That the husband cause the solicitor for the wife to be advised of the progress of the sale of that property AND leave is granted to the parties to restore the matter to the list on giving seven days’ notice to each other and to the court in relation to that order.
(5) That the costs of the parties be reserved.
On 1 March 2011 I made the following orders in chambers:
(1) The papers are referred to the Principal Registrar in relation to evidence given for the purposes of a hearing conducted on 24, 25 & 26 November 2010 about potential revenue fraud in the form of non payment of compulsory superannuation payments, understatement of income tax relating to the parties, and to [Business1], and in respect of alleged practices of that business which may have the effect of perpetrating a fraud on an insurance company and others.
Ultimately an application was made by the parties to resume the hearing. I was not told that any action had been taken by any authority as a result of the referral. The matter was listed to resume the hearing on 13 and 14 June 2013. Only one day was required and after brief oral evidence from each party and submissions, judgment was reserved on 13 June 2013.
One of the parties’ counsel put to me that the parties have been given “a clean bill of health” in relation to the issues referred to the authorities. Given the evidence before me, in my view that is not a fair summary. Suffice it to say, at that stage, no action had been taken against them.
Short History
The wife was born in 1966 and as at the conclusion of the hearing she was 47 years of age. The husband was born in 1962 and as at the date of the hearing he was 50 years of age. The parties were married in 1989. It is common ground that the parties finally separated in September 2006. The wife, however, contends that the parties lived separately and apart for much of the period from 2002. One of the key enquiries in property settlement proceedings enquiry is the fact of contributions. In many proceedings the date of the breakdown of the consortium vitae or of physical separation is not critical. That was the situation here. Nevertheless in order to aid understanding of these reasons I find that the parties separated on about 27 September 2006.
Children
There are four children of the marriage:
X Felice was born in 1990 and as at the conclusion of the hearing was 22 years of age;
R Felice was born in1993 and as at the conclusion of the hearing was 19 years of age;
N Felice was born in1996 and as at the conclusion of the hearing was 17 years of age; and
A Felice was born in 1998 and as at the conclusion of the hearing was 14 years of age.
Background Facts
The husband has suffered from severe Crohn’s disease since 1981. He is on high doses of several medications.
On 14 September 1987, a property at L was purchased by the husband’s father in the names of the husband and his two brothers. The husband says this property was purchased for $60,000.
In 1987 or 1988, the wife suffered a work related injury and later received $14,000 in compensation. The husband says this was received in 1991.
In June 1988 or May 1994, the parties purchased a property at W which was owned by Defence Housing with a 10 year lease. It is not possible to resolve the dispute about the date of purchase. The wife contends that the parties paid about $230,000. They sold the property after five years and cleared approximately $100,000. These funds were deposited into the parties’ joint account.
In 1989, the parties married. The husband was then employed by Z Business. The wife was working at CG Hospital.
The husband says the parties purchased a property at Suburb C (“the C property”) with a mortgage of $580,000. The wife suggests something else but I can find no evidence from her on the point.
In June 1989 the parties purchased a town house at Suburb Y (“the Y property”). The wife says that they paid about $100,000.
In 1990, the wife took time off work to care for the child X.
In early 1992, the wife returned to work part time.
In August 1992, the wife resigned from her job at CG Hospital.
The child R was born in 1993.
The husband left Z Business and commenced work as a specialist tradesman at V Business.
The husband says his parents transferred a property at the Y property into the names of him and his brothers in June 1994. A total amount of $34,200 was paid by the sons to the husband’s father. The husband received one third of the rental income from that property.
The child N was born in 1996.
In 1997, the husband left his job with V Business and commenced work with Business 1 for a period of three years.
The child A was born in 1997.
On 14 September 1998 a Family Trust was established. The beneficiaries of the trust were the husband, the wife, and their children.
In 2000, the trust purchased a business licence for about $450,000. The husband says he used the proceeds from the sale of the property at W for the deposit and the balance of the purchase price was provided from a mortgage with the National Australia Bank secured over the C property.
In 2000, the husband entered a partnership with Mr P at Business 1.
In 2000, the wife commenced part-time employment at Business 1.
In June 2001, the wife says the husband’s parents transferred to the husband a one sixth interest in a Suburb F property (“the F property”) for consideration. She says that the husband’s parents forgave the brothers $10,000 ($3,333 each) of the purchase price. The husband says in May 2001, he and his brothers received a one half interest in the F property from his parents and that no consideration was provided. Whether the interest was a gift or transferred for value, the husband has a one sixth interest in this property.
In June 2001 or in 2004, the husband’s partner in Business 1, Mr P, left the business. The husband continued on as business manager for Business 1. The husband bought out Mr P by paying him $80,000 that he obtained from his brother.
The husband obtained a building consent and approval to supervise the demolition of the old house and the construction of a new house at the C property. While that work was done, the parties rented a property at E Street, C (“the E Street property”).
The parties lived in separate homes from 2002. The wife and children remained in the E Street property and the husband moved out. The wife says that for the next four years the parties both worked at Business 1 and both maintained an interest in the renovations but that they only socialised together at family functions.
In 2003, the wife’s work with Business 1 became full-time.
In about 2003, the wife says that parties obtained a joint loan from the National Australia Bank to conduct renovations on the C property.
On 3 April 2006, the wife retired as trustee of the Family Trust and was removed as a beneficiary of the Family Trust. She also ceased drawing a wage.
The parties agree that final separation occurred on 26 or 27 September 2006. The wife says that was the time she gave up hope of a reconciliation. The wife remained in occupation of the E Street property. The husband visited the children from time to time. The wife left her job at Business 1.
At the end of 2006, the husband reoccupied the matrimonial home.
In November 2006, the husband resigned as director of Business 1. He says that he resigned due to illness. He transferred his interest in the business to his brother, O, who thereafter paid the husband a wage for working in the business as business manager. The husband says his share of the equipment at the time was valued at approximately $18,700.
In early 2007, X, who was then 16 years of age, moved in with the husband. The wife did not see much of X when she lived with the husband. That improved after X turned 18.
In June 2007, the husband had his left hip replaced.
In March 2008, the husband says he transferred a Tarago motor vehicle into the wife’s name.
In April 2008, the child R, who was then 15 years of age, moved in with the husband. At first the wife did not see much of R. They had occasional telephone conversations. At the time of the 2010 hearing, the wife had dinner with R on occasions, she watched him play sport and in the school holidays In July 2010 he spent a few nights at her home. They had frequent telephone conversations.
In June 2008 the husband had his right hip replaced.
In 2008 Mr M sent a parcel to the husband’s brother O enclosing business records of Business 1, trust records and the husband’s personal records. The accompanying letter advised that Mr M’s firm would no longer undertake work for the business, the trust or the husband. The reason cited in the letter was irregularities in the conduct of the business accounts. It is the evidence of Mr M in cross-examination that there were two reasons for ceasing to act for the Felices. One reason was what he saw as the increasingly illegal activities of O in running the business and the other was the husband’s declared intention to defeat the wife’s financial claims against him. Mr M said the second reason was not included in the letter because he did not want to commit that to writing.
In December 2008, the child A, who was then 10 years of age, moved from the wife’s home to that of the husband. From that time to June 2010 the wife did not spend much time with A. Since June 2010 A stayed with the wife each Tuesday night and for many weekends. The child A lived with the wife for all of the October school holidays prior to the 2010 hearing.
In late August or early September 2009, the child N, who was then 13 years of age, moved from the wife’s home to that of the husband. From that time to June 2010 the wife did not spend much time with him. From June 2010 N stayed with the wife for three out of every four Tuesday nights and for about one weekend every six weeks. The child N spent three nights of the school holidays immediately prior to the 2010 hearing with the wife.
Just before Easter 2010, X moved from the husband’s home to live with the wife.
In early 2010 the wife was working part-time at a supermarket, Suburb LL for various hours on four days a week. She said her net pay was of the order of $550 per week. In May 2010 she obtained a full-time position with the supermarket at Suburb D. The wife worked some weekends but had week days off in lieu. She started on $990 per week gross and in November 2010 her salary increased by about $50 per week to $1,040 per week. At some point in the 6 months leading up to the first phase of the hearing the wife commenced paying $55 per week in child support.
The parties sold the property at L. The net proceeds were of the order of $76,000. $40,000 was paid to the wife by way of interim property settlement. The husband retained the balance of $36,000. Of that about $11,000 was paid in capital gains tax and the husband retained the remaining balance of about $25,000.
The wife moved to rented premises in February 2012 and at about that time X and her child ceased to live with the wife and found independent accommodation.
As at March 2012 the wife was employed as the store manager for a clothing retailer. She remained in that employment at the conclusion of the hearing.
The wife inherited $526,630 from her late uncle. In November 2012 the wife bought a property at Suburb MM for $480,000. She borrowed $185,000 and paid the balance of the purchase cost (about $300,000) from her inheritance. As to the balance of the inheritance, the wife paid $132,000 on legal fees associated with these proceedings, refurnished her new property, bought a motor vehicle for N and paid the rental bond and several months of rent in advance for X and her partner.
It is the evidence of the husband that he borrowed $50,000 from his brother, U. The husband completed the C property. It is his unchallenged evidence that he arranged for the following work to be done:
(i) The installation of a completely new kitchen which included Granite benchtops, sink, appliances, splashback and plumbing and electrical work;
(ii) Installation of glass shower screen and mirror in downstairs bathroom;
(iii) The tiles to be professionally cleaned;
(iv) The painting of the exterior and interior of the home;
(v) Fitted skirting boards, architraves, doors and cabinet in basement;
(vi) Replaced various tiles in front and rear porch due to cracks or looseness;
(vii) Repaired venetian blind;
(viii) Supply and fit screen doors at rear of the house and fly screen;
(ix) Steam cleaned the carpets;
(x) Various electrical work - floor heating, intercom, kitchen and general;
(xi) To have the home professionally furnished whilst the home was on the market;
(xii) Thorough cleaning of the home for inspection;
(xiii) Re-coat all timber windows and doors with weather proofing clear coats (work carried out by myself);
(xiv) General maintenance of the garden, windows, and interior to prepare the home for sale and while the home has been on the market for sale; and
(xv) Staining and clear coating woodwork.
It is the husband’s evidence that he spent $83,161.33 on the renovations which he funded from $50,000 borrowed from his brother U and the balance from his earnings.
The C property was sold at auction in October 2012 for $1,820,000. The husband caused a payment to U of $50,000 in respect of the advance from U. The balance of the proceeds of sale, in the sum of $847,845, are held on trust for the parties in a controlled moneys account.
Upon the sale, the husband, the children R, N and A moved into the property long owned by the husband’s family at Suburb F. The property is owned as to one half by the husband’s parents and the other half is held by the husband and his two brothers equally. Thus the husband has a one sixth interest in the property. There is no mortgage debt secured on the property. The husband pays no rent but pays the outgoings on the property.
The husband says the following improvements were made to that property:
(i) Fitted air conditioning;
(ii) Fitted brand new hot water system;
(iii) Painted rooms and ceilings;
(iv) Sanded and re-polished floors;
(v) Painted front exterior of house;
(vi) Assembled new garden shop;
(vii) Re-tiled bathroom and replaced toilet and window in bathroom;
(viii) Replaced clothesline;
(ix) Erected 5.5m sail in backyard;
(x) Erected 2 steel poles to support a sail;
(xi) Purchased materials needed for jobs;
(xii) General maintenance of the house and garden.
On 20 February 2013, N moved out of the husband’s home and moved in with the wife. He briefly resumed high school in 2013 but then found an apprenticeship and commenced TAFE studies. He was subsequently fired from his job and as at the final stage of the hearing, he was unemployed and fully supported by the wife. The wife had reduced her child support payments from about $87 per week to $25 per week and anticipated that, provided N did not find a job, a new assessment would issue, requiring the husband to pay her.
The wife is named in her deceased father’s will. Her brother is the executor of the estate which comprises a residential property and some furniture. The wife expects to receive $50,000 from that estate.
The husband paid for valuations to be undertaken (costs letter exhibit B) and seeks that those costs be treated as a joint liability.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties, Mr M and Mr K. There are issues that fall to be determined solely by reference to the uncorroborated testimony of the parties. It is therefore necessary to made credit findings. I accept the caution advanced on behalf of the wife, sourced in the observations cited in the Full Court decision of M & M [2006] FamCA 868; (2007) 36 Fam LR 97 to the effect that the trial judge’s advantage of observing witnesses may be lost where there is a long period between the date the evidence was given and the date of judgment.
The wife answered questions directly and to my observation, sought to tell the truth. However, the written evidence about her income and some of her expenses was wrong. Her June 2010 Financial Statement put her income at $990 per week and her expenses at $750. Of those expenses she deposed to $190 per week in tax. However, the wife gave oral evidence that her net pay was of the order of $650 per week. The only other deduction made from her net pay was Child Support which then stood at $55 per week. Thus the wife could not explain her own evidence. In updating her financial circumstances for the November 2010 hearing, she said that her income had increased by about $50 since the Statement was sworn and that her rent increased from $380 to $400 per week. Although her Financial Statement showed a weekly surplus in her household budget of the order of $240, it was the wife’s case that she ran at a deficit prior to taking up her full-time job and that at the date of that hearing, there was no surplus. After this problem was identified the wife produced pay slips which revealed that her gross weekly income was likely to be between $700 and $800 and her income, after tax and child support, was likely to be in the range $570 to $670.
The wife’s 2010 Financial Statement does not refer to her friend, Mr WP[1] staying in her accommodation two or three nights a week, nor to the benefit he received from her expenditure on rent, utilities and food. Similarly, her Statement does not identify the benefits that X and her child received from the payments the wife said she made for nappies and formula. The regular benefits to X had apparently ceased by the date of the resumed hearing.
[1] I am not certain about the correct spelling of his name.
The wife said that her evidence at paragraph 21 of her affidavit, to the effect that she saw Mr M every six weeks, was wrong.
The wife called Mr M to give evidence in her case. The thrust of his affidavit is critical of the business practices of the husband. Although not referred to in his affidavit, Mr M revealed in cross-examination that the wife had knowledge of many of the issues going to Mr M’s complaints about the conduct of the business and personal affairs of the husband. For example, according to Mr M the wife was present when the husband asked him to take the wife off the books of the company in order that the parties could pretend that they were separated and the wife could claim Centrelink benefits. Those matters were not revealed in the wife’s own evidence. Leave was not sought to challenge Mr M’s evidence on these issues, nor was the wife called to give evidence in reply. The resultant damage to the wife’s credit is obvious.
The husband made many concessions against interest. For example, he was he was asked about a practice engaged in Business 1 whereby itemss required by an insurer for repairs were purchased and billed to the insurer and sometimes the items were not used in the repair, were returned to the supplier for a refund and Business 1 did not subsequently account to the insurer for the item. The husband rejected the general contention but offered that it did occur with small items and said words to the effect “we all do it.” The contents of a number of asserted conversations he had with Mr M were put to the husband and in respect of most of them he responded to the effect that he could not recall the conversation but conceded that it may have occurred.
The husband was not careful about his written evidence. For example, the husband’s 2010 Financial Statement says that he paid $1,240 per week in child support. Neither at the date of the 2010 hearing nor at the date he swore the Statement did the husband pay $1,240 per week in child support or indeed, any amount in child support. The husband deposed in his Financial Statement that he paid superannuation contributions to an industry fund. That is not true; the only contributions were made by his employer.
Despite being warned by me, the husband was not careful about his oral evidence. On several occasions the husband agreed with a proposition put to him in cross-examination, only to have to withdraw it later. For example he agreed that the only source of information in relation to him or Business 1, available to the Commonwealth Bank in respect of loan applications he made in 2004 and 2005 came from him. Minutes later he said that he had used a mortgage broker, who in turn had obtained information from the company accountant (Mr M).
The husband said in cross-examination that the only instance where an item was bought by the company and was repaired and not entered onto the books of the company was in relation to the Holden motor vehicle he then drove. Learned counsel for the husband drew from Mr M in cross-examination that there was also a similar situation in relation to a Toyota motor vehicle. That was a vehicle driven by the wife and ultimately transferred into her name.
There were aspects of the husband’s evidence that were not believable:
·As at the 2010 hearing, he sought orders whereby he would pay the wife $500,000. He said he owed $555,000 on the home mortgage. He said he needed $100,000 to $150,000 to complete the construction of the home. He had made enquiries of his family and the Commonwealth Bank whereby he would borrow, with his brothers, U and O, those moneys on the security of their real estate. His brother O was reluctant and if he would not join in, then the husband planned to borrow the money on the security of the former matrimonial home with a guarantee from U. The husband contended that an interest only loan of about $1.1 million would require interest payments of $7,000 per month. He agreed that the payments on the amount he actually required – about $1.2 million would be more. He contended that he earned no more than his disclosed income. He said he might get some assistance from his parents but he also said that he did not know if they can afford to help him with $24,000 in upcoming legal fees. I put to the husband that those calculations would leave him unable to live and that therefore his figures do not add up. He then agreed with the wife’s counsel that the home would eventually have to be sold. The husband’s evidence made no sense.
·The husband was asked why income from the trust was not distributed to the children. His answer was that the income has always been distributed to the children. There is no suggestion of that fact in any Financial Statement filed by the husband. A similar issue was put to the husband in the June 2013 hearing and the effect of the answer was that the distributions from the trust he controls had nothing to do with him but were a matter for his accountant.
Mr M had some difficulties in giving his evidence. In some instances during cross-examination he directly contradicted his written testimony. For example he deposed to Mr P being bought out of the business for $80,000, which was the value of his equipment and not goodwill. Mr M strongly asserted the opposite in cross-examination – that is, he denied that the purchase price related to value of equipment.
It is Mr M’s evidence in cross-examination that he left out of his affidavit some events and details in an effort to protect the parties. However, he was called in the wife’s case and his affidavit (unlike his oral evidence) contains very little evidence critical of her or her conduct. When pressed in cross-examination, he said, for example, that the wife was present when the husband asked him to take the wife off the books of the company in order that the parties could pretend that they were separated and the wife could claim Centrelink benefits.
Taken together, the evidence of Mr M implicates the wife in at least knowledge of the dishonest practices he identified in the management of the business. I can think of no possible motive for Mr M to lie. It was not put to him on behalf of either party that he did so. Despite the problems with the way in which his evidence was given, I am satisfied that Mr M was a truthful witness.
Mr K gave evidence as a single expert and his credit was not called into question.
Submissions
Events overtook both the initial list of assets of liabilities of the parties and some of the written submissions but the written submissions on behalf of the wife were:
7.RELEVANT MATTERS TO BE RELIED UPON IN SUPPORT OF ORDERS SOUGHT
Section 79(4)(a)
· Each party made direct financial contributions to the property and resources of the parties.
· The husband had an interest in a property at [Suburb C].
· The husband had an interest in the property at [L].
· The husband had an interest in the property at [Suburb Y].
· The wife contributed her workers compensation payout of approximately $14,000 to the parties’ savings.
· The parties’ joint income was used to pay mortgage repayments in respect of property owned by the husband solely, or wife jointly with the husband.
Section 79(4)(b)
· Each party made direct and indirect non-financial contributions to the property and resources of the parties.
· The wife worked in the business [Business 1] from 2000 and was not paid for the hours she worked.
· The wife contributed her whole income to meet family expenses.
Section 79(4)(c)
· Each party made a contribution to the welfare of the family.
· The wife was the main caregiver for the children during their infancy and teenage years.
· Until January 2007 the children lived with the wife.
· Until separation the wife undertook the majority of the homemaker and parent duties.
· The wife had the care of the children for a time following separation.
· The husband now has the care of the three younger children of the marriage.
8. SECTION 75(2) FACTORS
75(2)(a) Parties’ age and state of health.
· The husband is aged 48.
· The Wife is aged 44.
· The husband suffers from
· The wife is in good health.
· The wife left High School in year 10 and has limited work opportunities because of her education and age.
· The husband has successfully run a [trade] business. But for his decision to sell that business, he would be in receipt of the income from it which would be superior to the wife's income earning capacity.
(b) Parties income, property, financial resources and physical and mental capacity for appropriate gainful employment.
· The husband has a resource in the form of his parents who have in the past transferred property to him.
· The husband asserts that he has guaranteed lifelong employment.
(c) Whether either party as care or control of a child of the marriage under 18 years.
· The husband has the care of the parties’ children under the age of 18.
(d) Parties’ commitments necessary to enable support of themselves and any child or person the party has a duty to maintain.
· Not applicable
(e) Parties’ responsibilities to support any other person.
· Not applicable
(f) Subject to subsection (3), parties’ eligibility for pension, allowance, benefit under - any law of the Commonwealth, State or Territory, or other country; any superannuation fund or scheme established or operated within our outside Australia.
· Not applicable
(g) Parties standard of living that in all circumstances is reasonable.
· The wife has since separation lived in rental accommodation while the husband has had the benefit of living in the newly renovated matrimonial home.
· The wife is unlikely to have any significant borrowing capacity in order to re-accommodate herself in a similar style to that planned by the parties as evidenced by their rebuilt home.
(h) Extent to which maintenance payment (under consideration) would increase earning capacity
· Not applicable
(j) Extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party.
· Not applicable
(k) Marriage duration and extent of effect of earning capacity of party whose maintenance is under consideration.
· The wife had received training as a chef prior to marriage. The wife left her employment in order to have a family and has lost those skills. The wife worked in the husband’s business for a number of years during the marriage. The wife is now employed in an unskilled occupation.
(l) Need to protect party who wishes to continue role as parent.
· Not applicable
(m) Financial circumstances relating to parties’ cohabitation with another person.
· Not applicable
(n) Terms of any Order made or proposed under s.79 (property).
· The terms of the proposed orders would allow the wife to purchase an unencumbered home, or one with a small mortgage, for herself in an acceptable area.
· This would allow the wife to present an attractive environment for the children to visit and spend time with the wife.
(na) Child support under Child Support (Assessment) Act 1989 that a party has provided or is to provide.
· The wife would be in a position to pay child support in accordance with her income.
(o) Fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
· The husband disposed of his interest in [Business 1] without advice to the wife.
· The wife asserts that the business sale may be a sham transaction.
· The wife asserts that the disposal of the business was for under value.
· The husband has been in occupation of the matrimonial home since separation.
· The husband did not make any payments to the wife to assist the wife to support herself after separation.
· The husband failed to disclose his use of income or capital received by him during the marriage and after separation.
· The husband enjoyed a superior standard of living to the wife since separation.
· The husband retained the control and use of the parties’ assets and income, to his own benefit, and to the detriment of the wife since separation.
· The wife faces a significant financial impost by way of her legal costs at the conclusion of the hearing without the benefit of the income and/or assets that the husband is likely to have to use to pay his legal costs.
· The wife wishes to reside in the [C] area and is likely to need $850,000 to reaccommodate herself.
The wife’s counsel added written argument to a draft balance sheet used for the final day of the hearing. The points made there included:
·Due to the time between the main hearing and the judgment it may be difficult to make reliable credit findings unless detailed notes were kept at the time;
·The husband made the greater initial contribution;
·The wife made valuable contributions;
·The husband had the benefit of occupying the C property since separation;
·Initially the children lived with the wife but then drifted back to the husband
·The contributions favour the husband as to 55 per cent or 60 per cent;
·The husband’s health issue has apparently not affected his capacity to work since the first hearing;
·The husband disposed of Business 1 without consideration;
·The husband’s earning capacity is greater than that of the wife;
·The husband’s superannuation is greater than that of the wife;
·The husband has a financial resource in the form of his family – likely able and willing to help him in the future;
·The wife brought in $560,000 after separation, which represents about 30 per cent of the pool of assets. Because the husband made no contribution to that, it is submitted that it should be excluded from the main pool and considered separately;
·The inheritance will affect the s 75(2) considerations.
Again the wife’s position changed by the conclusion of the trial. By way of oral submissions the wife’s counsel argued that the outcome of the husband’s proposals – that the wife retain what she has and be paid $200,000 from the controlled moneys account, would be manifestly unjust.
It was submitted that the options are – one pool including the wife’s inheritances or two pools with the wife’s inheritances in the second pool. The wife’s counsel said that the one pool approach would lead to an equal division of that pool. That is slightly different to the earlier submissions.
Based on two pools, the argument for the wife was that the husband is ahead on contribution (5 per cent -10 per cent) (presumably only on the main pool) and an adjustment should be made in his favour for the inheritances. The submission for the wife was that I could take either approach but on balance, a one pool approach is to be preferred.
I am invited to keep in mind the lack of disclosure of the husband and therefore I should not be too cautious in deciding on the adjustments against the husband.
It was submitted that there was no renovation to the original property on the C site. That home was demolished. Therefore the home built on that site was entirely contributed during the marriage. It is submitted that the wife was not challenged in respect of her evidence about the date of separation. It is noted that despite predictions about it during the 2010 hearing the husband has not given evidence of any impact on his capacity to work arising from his health – he had consistent employment over the period of the adjournment.
It is submitted that the husband cannot be believed as to his income. He claims to have spent $193,000 in recent years, from post separation income and that was not possible if his income was as disclosed. It is noted that the husband conceded that he was careless in completing his written evidence.
In summary, the proposed outcome of the wife’s case is as follows:
Property Division Proposed by the Wife
1. In the event that the Pool of assets is found to be $2,642,079 (the wife’s inheritances being included in the asset pool.):
On the basis of the contribution of each of the parties the division should be 60% in favour of the wife and 40% to the husband.
That is, the wife would receive $1,585,245 of the funds available for distribution.
The husband would receive $1,056,834
minus money already received by him being:1. Paid legal expenses $ 140,401
2. Sale proceeds released from [L property] $ 25,000
$ 165,401Dollar value of property pursuant to orders to be owned by husband $891,433.
There should be no adjustment pursuant to section 75 (2).
There should be no adjustment in relation to monies paid to the wife, or on behalf of the wife by the husband as a consequence of the husband's failure to disclose his income and/or assets.
2. In the event that the pool of assets is found to be $2,115,449:
On the basis of the contribution of each of the parties the division should be 45% ($951,952) in favour of the wife and 55% ($1,163,496) in favour of the husband.
That is, the husband should receive $1,163,496
minus money already received by him being:1. Paid legal expenses $ 140,401
2. Sale proceeds released from [L property] $ 25,000
$ 165,401Dollar value of property pursuant to orders to be owned by husband $ 998,095.
There should be no adjustment pursuant to section 75 (2).
There should be no adjustment in relation to monies paid to or on behalf of the wife by the husband as a consequence of the husband's failure to disclose his income and/or assets.
The wife’s counsel submitted that with her inheritances included in the pool, she could be ahead on contribution but an equal division would be appropriate.
By way of oral submission I was asked to make inferences against the husband by reference to the fact that the husband did not call either of his brothers to give evidence. It was argued that in relation to $50,000 said to have been advanced by U to the husband and later repaid and in relation to the disposition of the business Business 1 to O for no consideration, inferences could be made against the husband.
The written submissions on behalf of the husband are:
I. CONTRIBUTION ENTITLEMENT:
1. The Husband made a significant initial contribution as he had a one third interest in the property at [L] at the commencement of cohabitation.
2. The Husband was in full-time employment throughout cohabitation and earned a significant income, which he used for the benefit of the household in the payment of outgoings and household expenses.
3. The Husband acquired a one third interest in the [Suburb Y] property in 1994. He and his two (2) brothers paid a total amount of $34,200.00 to their parents to acquire this property.
4. The Husband was given a one sixth interest in the [F] property by his parents in May 2001.
5. The Husband made a significant non financial contribution in relation to the construction of the new house at [Suburb C] as well as carrying out improvements, repairs and maintenance to prepare the property for sale in 2012. The husband contends that as a result o his efforts the property sold for in excess of the agreed reserve by $320,000.
6. The husband contributed an amount of some $33,000 from post separation earnings in order to carry out repairs and improvements to the [C] property to prepare it for sale.
7. The husband contributed some $19,000.00 or renovations to be carried out to the F] property after the time of separation.
8. The Husband has met the repayments of the loan obtained to pay for the construction of the [C] property and has paid other outgoings in respect of this property since the time of separation.
9. The Husband made a contribution to the welfare of the family during cohabitation in assisting the Wife in carrying out household tasks and domestic duties and in caring for the children during the period of cohabitation.
10. The Husband had the care of all of the children of the marriage under 18 years until 4 February 2013, when the child [N] then 16 years, commenced to live with the wife. He is now in employment. The Husband has made a contribution to their welfare and financial support since the time of separation. The Wife in January 2012 commenced to pay child support. Prior to that time she provided no financial support for the children.
J. RELEVANT SECTION 75(2) FACTORS:
1. The Husband is aged 50 years.
2. The Wife is aged 47 years.
3. Cohabitation was for a period of some 16½ years.
4. The Husband is in poor health.
5. The Husband asserts that the Wife is in reasonable health.
6. The Husband asserts that he has a limited capacity for gainful employment.
7. The Husband asserts that the Wife has the capacity to undertake gainful employment.
8. The Husband asserts that the Wife resides in a de facto relationship with [Mr WP].
9. The Husband has the ongoing care of one (1) child of the marriage under the age of 18 years, which will continue for a further 3 years and 1 month.
10. The wife has received significant inheritances post separation.
K. HUSBAND’S CONTENTIONS AS TO ASSESSMENT OF CONTRIBUTION BASED ENTITLEMENTS.
The Husband asserts that his contributions should be assessed in proportions of 65% to 35% of the net asset pool available for distribution between the parties, having regard to the inheritances received by the wife post separation.
L. HUSBAND”S CONTENTIONS AS TO 75(2) FACTORS
The Husband asserts that an adjustment of 5% to 10% of the net pool should be made in his favour to reflect relevant Section 75(2) factors.
By way of oral submissions it was argued for the husband that the court would be cautious about making a Black and Kelner[2] finding against the husband. I was asked to make no inferences from the failure of the husband to call his brothers. The husband’s evidence was clear on the issues of the transfer of the business to O and the advances and repayment made by and to U and there was no real challenge to that evidence.
The Law
[2] (1992) FLC 92-287.
The approach in proceedings under section 79
In the context of these proceedings s 79 of the Family Law Act relevantly provides:
FAMILY LAW ACT 1975 - SECT 79
Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
….
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; …
….
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
….
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
……
The application of s 79 has been the subject of extensive judicial interpretation and comment. In Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 the Full Court said:
39.The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
In Hickey the Court was not asked to address the preliminary aspect of the requirement created by s 79(2) as to whether any order should be made. Similarly, the proceedings before me do not involve any controversy about that issue. As was observed in Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70 that preliminary, just and equitable requirement is often readily satisfied. Here, after a long marriage, the parties’ relationship has broken down and they live apart. Some $850,000 of joint funds is held in a controlled moneys account. Both parties have invoked s 79, seeking, apart from other orders, orders about that fund. I note the exhortation in s 81 to as far as practicable, “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the parties have relief under s 79.
I turn to the task of identifying just and equitable orders that will alter the interests of the parties in property. There is no mention of steps or stages in s 79, let alone of the sequence set out in a) – d) below. Despite the guidance in Hickey, the Full Court has regularly noted that the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.[3] I will employ that illumination.
[3] Norman & Norman [2010] FamCAFC 66 at [60]; Bevan & Bevan [2013] FamCAFC 116.
I will address the following matters:
a)Make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;
b)Identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
c)Identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and
d)Consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The property of the parties
In determining what order is appropriate, it is necessary to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
The husband and wife settled a joint balance sheet as follows:
Assets
Value
Proceeds of the sale of [Suburb C property] – joint
$847,845
[Suburb F property] (1/6th share) – husband
$141,666
[Suburb Y property] (1/3rd share) – husband
$86,666
[Business licence] – husband
$540,012
[Business] shares - Husband
$55,105
Household contents – husband
$10,000
Nissan … motor vehicle – husband
$1,000
Shares – husband
$4,385
Paid legal fees – husband - disputed
$140,401.33
motor vehicle – wife
$15,000
Jewellery – wife
$8,000
IAG shares – wife
$1,500
Total
$1,851,580.33
Add Backs and Adjustments
Value
$50,000 advanced to the husband’s brother from the [C] proceeds of sale – husband
$50,000
Proceeds of sale of [L property] – husband
$0
Proceeds of sale of [L property] – wife
$40,000
Total
$90,000.00
Superannuation
Value
Superannuation ([Industry 1]) – husband
$95,000
Superannuation(Colonial) –husband
$12,539
Superannuation (AGEST) – wife
$6,743
Superannuation ([Industry 1]) – wife
$3,768
Superannuation ([Industry 2]) – wife
$1,191
Superannuation ([Industry 3]) – wife
$4,627
Total
$123,868.00
Financial Resources
Value
Wife’s interest in her father’s estate
$50,000
Wife’s inheritance from the estate of [uncle]
$526,630
Total
$576,630.00
Notwithstanding the presentation of the draft balance sheet, ultimately the case was argued on the basis that the wife’s inheritances would be included as property, either in one pool with all of the property or as a separate pool.
The final phase of the hearing in this case occurred after the delivery of the High Court decision in Stanford and before the Full Court decision in Bevan and Bevan [2013] FamCAFC 116.
There are circumstances whereby assets are included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the [business] licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31.As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
“44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
As to the disputed items in these proceedings:
Proceeds of sale of the former matrimonial home
The Suburb C property was sold in October 2012 for $1,820,000. The husband caused a payment to his brother U of $50,000 in respect of the advance made earlier. The net proceeds of sale in the sum of $847,845 are held on trust for the parties in a controlled moneys account.
The wife argues that the $50,000 should be added back to the balance sheet.
I will not add back the $50,000.
The husband gives evidence that he borrowed $50,000 from his brother. A copy of a loan agreement is in evidence. It is the husband’s evidence that he spent $83,161.33 to complete the construction of the home and to present it for sale. It is an agreed fact that work was done, including the renovation of a kitchen. It is the husband’s evidence that he funded those works in part with $50,000 advanced from his brother.
The wife did not have sufficient (or any) time to address the husband’s affidavit that details the work he undertook. However, I was told, without complaint on behalf of the wife, that she had previously been provided with invoices and receipts evidencing some or all of the payments claimed.
In a perfect world the husband would have secured the wife’s prior agreement to meet the costs from what were to be claimed to be joint funds but on balance I accept his evidence.
Paid legal fees
The parties have paid some of their legal fees associated with these proceedings. The wife has paid $132,000 in legal fees using the funds inherited from her uncle. The husband paid $140,401.33 in legal fees from post separation income.[4] That included disbursements in respect of the evidence of single experts - $26,802.05. It is proper that those experts’ fees be seen as a joint expense. Therefore, in terms of partisan costs, the husband has paid $113,599.28 and the wife has paid $132,000. In effect the wife’s fees are added back as the parties have proposed that the inheritances themselves, rather than assets bought or money unexpended from those inheritances, be included in the pool/pools for division.
[4] Costs advice letter dated 23 May 2013 – Exhibit B.
As at the conclusion of the hearing the husband has no debt. Therefore, but for the payment of legal fees, I take it that the pool would have been greater than it is, to the extent of that payment. On the basis of the approach summarised in Omacini above, and particularly because the agreed treatment of the wife’s inheritance, I will add back the amount paid for legal fees. Of course, subject to the issue about his capacity to have funded these fees from the stated source, like the wife he is entitled to claim the sole direct contribution to the “asset” added back. The wife has paid more than the husband but the amounts paid are similar and therefore, provided a consistent approach is taken, it does not matter much what the approach is.
The time to apportion the responsibility for one party’s legal fees is when and if an application is made under section 117.
Proceeds of sale of the L property
The parties sold the property at L. The net proceeds were of the order of $76,000. $40,000 was paid to the wife by way of interim property settlement. The husband retained the balance of $36,000. About $11,000 was paid in capital gains tax and the husband retained the remaining balance of about $25,000.
Ignoring the joint liability of CGT, the fairest approach is to add back the preliminary distributions to the parties. I will add-back $40,000 in the hands of the wife and $25,000 in the hands of the husband.
The wife’s inheritances
After separation the wife inherited $526,630 from her late uncle. In November 2012 the wife bought a property at Suburb MM for $480,000. She borrowed $185,000 and paid the balance of the purchase cost (about $300,000) from her inheritance. As to the balance of the inheritance, the wife paid $132,000 on legal fees, refurnished the new property, bought a motor vehicle for N and paid the rental bond and several months of rent in advance for X and her partner.
As is identified above the draft balance sheet had the inheritances as financial resources. In oral submissions on 13 June 2013 the approaches raised by counsel were to include the wife’s inheritances in one pool with the other assets or to put them in a separate pool. I obtained a concession from Mr Thomas for the wife that it would be acceptable for me to take either of those approaches. After describing what he saw as the likely outcome for his client in the event that a two pool approach was taken the wife’s counsel said:
… so if you work on that basis, you would come out with a result that would be advantageous to the husband and I don’t think that would be just and equitable in the circumstances and I think it might be better to just use one pot and divide it and come up with a result that it near equity.
In effect, by the conclusion of the case the parties had agreed that the inheritances, including the prospective inheritance of about $50,000 should be included in the balance sheet and at the value of the inheritances. Thus the wife’s inheritance from her uncle would be included at $526,630 rather than as the equity in the MM property, the money she paid for legal fees etc.
While potentially unfair to the wife, that approach would not have been wrong prior to the decisions of Stanford and Bevan. To the extent that those decisions are authoritative in respect to the approach taken beyond the preliminary enquiry required by s 79(2), the flagged approach may not sit comfortably with the import of those decisions. This hearing was conducted without significant reference to Stanford and judgment was reserved before the decision in Bevan. I have given consideration to, yet again, listing the matter to receive any further submissions from the parties’ counsel about the import of those recent authorities. Ultimately I decided not to. The parties are represented by very experienced counsel who can be expected to be familiar with the Stanford judgment. No issue was raised before me from that judgment on this point. Nor was an application made to re-list the matter to address the Court in response to Bevan. On balance it seems to me that it is permissible to determine the matter as argued.
Given the way in which the case was argued I will include the wife’s inheritances, albeit that one estate has yet to be distributed, in the pool of assets.
I find that the assets are:
Assets
Value
Proceeds of the sale of Suburb C property – joint
$847,845
Suburb F property (1/6th share) – husband
$141,666
Proceeds of sale of L property – husband
$25,000
Proceeds of sale of L property – wife
$40,000
Suburb Y property (1/3rd share) – husband
$86,666
Business licence – husband
$540,012
Business shares - Husband
$55,105
Household contents – husband
$10,000
Nissan motor vehicle – husband
$1,000
Shares – husband
$4,385
Paid legal fees - husband
$113,599.28
motor vehicle – wife
$15,000
Jewellery – wife
$8,000
IAG shares – wife
$1,500
Wife’s inheritance estate of the wife’s late uncle (…)
$526,630
Wife’s inheritance estate of wife’s late father
$50,000
Superannuation (Industry 1) – husband
$95,000
Superannuation(Colonial) –husband
$12,539
Superannuation (AGEST) – wife
$6,743
Superannuation (Industry 1) – wife
$3,768
Superannuation (Industry 2) – wife
$1,191
Superannuation (Industry 3) – wife
$4,627
Total
$2,590,276.28
Liabilities:
The husband and wife agree that they have no relevant debts for the purposes of establishing the net pool of assets.
Net assets
The net assets have a value of $2,590,276.28 of which $123,868 is in the form of superannuation and $2,466,408.28 is in the form of non superannuation assets.
Financial Resources
It is submitted on behalf of the wife that the husband has a resource in the form of financial support from members of his family. The husband has benefited from financial assistance from members of his family. However, there is no evidence of the financial circumstances of members of the husband’s family and so no evidence about their capacity, let alone their willingness to provide further support in the future. It is more probable than not that the husband will have future support from one of more members of his family but the evidence does not permit a finding that there is a relevant financial resource.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions by and on behalf of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[5] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the husband and wife in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of husband and wife.
[5] In the Marriage of Shewring (1987) l2 Fam LR 139.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred in appropriate circumstances, either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests at [61] that:
… This approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.
Here the superannuation interests are less than 10 per cent of the pool of assets and neither party seeks a splitting order. I will not treat superannuation differently from the other assets.
However, there could be an argument about the treatment of the wife’s inheritance. Whether it could be addressed in a separate pool or lumped in with the assets. As I have recorded, through her counsel, the wife ultimately favoured one pool. I will apply s 79 to the assets on a global basis. Unlike Coghlan the benefit of a two pool approach does not arise because of any difference in the type of asset. A problem with the Coghlan approach is that the statutory enquiry is not all about contributions (s 79(2) & (4)(d), (e), (f) and (g)) and the contributions enquiry is not limited to contributions to property (s 79(c), s 75(2)(j)).
Contributions
Section 79(4)(a) Contributions
Financial contributions to property, both direct and indirect were made by each of the husband and wife.
The husband came into the marriage with a one third interest in the L property. The parties used that property as a holiday house over the years and it is represented by $65,000 in the current pool of assets.
There is no evidence to suggest that the wife came into the marriage with any significant assets.
During the marriage, the husband:
(a)received a one third interest in the property at Suburb Y from his parents in 1994 for an outlay of one third of $34,200. That interest is represented by $86,666 in the current list of assets. In addition, throughout the marriage and since, the husband received one third of the rental income from that property; and
(b)was given a one sixth interest in the Suburb F property in May 2001. That interest is represented by $141,666 in the list of assets.
Both parties had paid employment during the marriage, the husband throughout the marriage and on a full-time basis. The wife was in paid employment for periods and for some of those periods, she worked on a part-time basis. Generally the husband earned at a greater rate than the wife.
The parties both worked in Business 1. The husband was the business manager. His initial trade was as a specialist tradesman but over the years he increasingly moved from doing some trades work to doing office work and supervising the business. The husband last did any trades work 18 months prior to the November 2010 hearing. He gave quotes, organised the priority of the jobs on hand and supervised the subcontractors who performed the trades work.
For three years (2003 to 2006), the wife worked in the office of the business. At the direction of the husband, … and O, she engrossed quotes, ordered some items, provided receptionist duties, answered the telephone, drew cheques, collected payments, drew receipts and did all of the bookkeeping. The wife used the bookkeeping software “HandiLedger”. The wife provided any information needed by the accountant, Mr M. At first she worked about four hours a day. She says she worked more hours later in that period. The wife conceded that she was paid for her work.
Since separation the husband had the main benefit of the Suburb C property but he also applied over $33,000 of his post separation income to the final renovations. It is conceded that those renovations are likely to have contributed to the amount realised on the sale. He also applied over $19,000 of his post separation income to improvements at Suburb F. There is no evidence about the impact of those improvements on the value of the Suburb F property. The husband made the exclusive contribution to the $113,000 odd added back for his paid legal fees. The husband bought X a motor vehicle.
Since separation the wife has largely lived in rented accommodation and did not have the main benefit of the Suburb C property. She made the exclusive contribution to an inheritance from her uncle of $526,630. Some of that was applied by the wife for the benefit of X and N. The wife made the only contribution to her expected inheritance of $50,000 from her father’s estate.
In my view the financial contributions of the parties were of similar order. They were made at different stages and in different amounts but combination of his earnings and the initial and subsequent injections of funds through the husband equates to the wife’s financial contributions made up of her wages from paid employment, her compensation award of $14,000 early in the marriage and the inheritances of $576,630.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
Each of the parties contends that they attended at the building site of the former matrimonial home at Suburb C. The husband deposed to attending on a daily basis, before and after work. In cross-examination the wife said that paragraph 42 of her affidavit was incorrect and that she did not go to the building site of the former matrimonial home at Suburb C every morning, just some mornings. Nevertheless she attended at the property to allow access to tradespersons in the mornings and to lock up after them on some afternoons.
The husband arranged and assisted with recent improvements to the Suburb C property as follows:
(i)Fitted air conditioning;
(ii)Fitted brand new hot water system;
(iii)Painted rooms and ceilings;
(iv)Sanded and re-polished floors;
(v)Painted front exterior of house;
(vi)Assembled new garden shop;
(vii)Re-tiled bathroom and replaced toilet and window in bathroom;
(viii)Replaced clothesline;
(ix)Erected 5.5m sail in backyard;
(x)Erected 2 steel poles to support sail;
(xi)Purchased materials needed for jobs;
(xii)General maintenance of the house and garden.
He does not give evidence as to the breakdown of work performed by him and that undertaken by tradespersons. That information is known to the husband but it does not find expression in the evidence before me. It is not for me to struggle to make findings in those circumstances.
Non-financial contributions were made by and on behalf of both parties. It is likely that the husband’s contributions exceeded those of the wife.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
In cross-examination the wife was asked by the husband’s counsel to concede, and did concede, that during the marriage she was largely the homemaker and the husband was the breadwinner. Thus, that is an agreed fact.
The parties’ arrangement had the wife available to the children on a full-time basis from August 1990 until 2000, save for eight months of part-time work from March 1992. The parties lived in separate homes from 2002. The wife and children remained in the E Street property and the husband moved out. The children continued to live with the wife until January 2007 when X moved in with the father. X lived with a paternal uncle for three months and from March 2010 lived with her maternal grandfather and the wife. In April 2008, R moved in with his father. In December 2008, A moved in with her father.
The wife conceded that the husband had some involvement with the children. However, she said that he rarely assisted the children with their homework. The wife conceded that the husband occasionally cooked on Sundays and occasionally did the washing. The wife conceded that from the time the children variously returned to live with him after separation, the husband alone has undertaken the parenting role.
The thrust of the wife’s evidence is that she performed cleaning, shopping cooking, washing and ironing for the family. By way of example of the parties’ involvement in the extra-curricular activities of the children, the wife deposes to transporting X and A twice and once each week, respectively, to dance lessons and attending annual dance concerts. It is her unchallenged evidence that the husband attended one concert. Similarly the wife transported R and N to and from football and (with A) sports practice and attended Saturday games. The wife negotiated with other parents so that the children she could not transport to weekend sport were delivered to and collected from those venues. The wife assisted the children with homework, liaised with the children’s schools and attended parent teacher evenings and other school events. The wife arranged for inoculations for the children, took them to the doctor when they were ill and managed discipline between them in the home. The wife records that the parenting task was made difficult, as the family grew because of cramped conditions in the family home.
Since separation, the husband has had the greater share of parenting responsibilities. More of the children lived in his household from time to time, than lived with the wife.
Given the division of labour and the fact that the main parenting load fell during the marriage and was mainly performed by the wife, in my view the wife made the greater contribution as parent and homemaker.
Conclusion on Contribution
The argument on behalf of the wife is that the contributions to a combined pool of assets, could favour the wife. The contention on behalf of the husband in relation to one pool is that his contributions were 65 per cent compared to 35 per cent by the wife. I have found that the financial contributions were equal, that the husband made the greater non-financial contribution and that the wife made the greater contribution as parent and homemaker.
All in all the evidence supports the conclusion that the contributions were about equal.
The other matters in Section 79
Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. Part of the husband’s income is sourced (through the trust) in an asset which is brought to account in the pool of assets. That asset can only perform one job. It cannot both provide him with income and be applied, for example, to a new residence or to the purchase of motor vehicles. The husband has compromised health and he may need to rely on income from the trust. Of recent times the trust has provided an income of the order of the income of the wife from paid employment. The disposition of that asset will have an impact on the husband’s earning capacity.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in s 75(2) would seem to be paragraphs (a), b), (c), and (f).
(a) the age and state of health of each of the husband and wife;
The wife and husband are 47 and 50 years of age respectively.
The husband does not enjoy unqualified health. He has suffered from Crohn’s disease since he was 19 years of age. He continues to take medication for the condition and has had numerous admissions to hospital, transfusions and has been given steroids. The symptoms he experiences include urgency, diarrhoea and incontinence. In his affidavit filed 4 March 2010 the husband deposed to symptoms experienced from time to time that cause him severe pain and fatigue. From time to time he is unable to attend work for a full day or at all. On some occasions he suffers from a severe case of diarrhoea or incontinence and needs to go home from work. He attends on Dr B once a month for treatment and to monitor his medication.
Dr B is a Physician Gastroenterologist. From 1995 to date he has been a Consulting Gastroenterologist to the … Hospital, from 2004 to date he has held an Adjunct Professorship at a University and from 2007 to date has been a Consulting Gastroenterologist to a Private Hospital. In a 2008 report, Professor B said that the husband had been a patient of the Specialist Centre where Professor B practices, since 1998. The husband has had severe Crohn’s disease since the age of 19 years and has suffered complications as a result of treatment and the disease itself. Professor B said that the disease can cause urgency, diarrhoea, incontinence, abdominal pain, blood loss requiring transfusion, chronic tiredness, fatigue and inability to function properly, enough to prevent a person from working. It causes subtle symptoms which can be socially unacceptable for example, flatulence – especially with a fistula as the husband had – so that he is not able to work in public places. The chronic inflammatory process in the bowel increases manyfold the chance of bowel cancer so that colonoscopic screening and biopsy of suspicious areas is required. On two occasions the disease has caused the husband painful abscesses which required surgery. They were excruciatingly painful and can leave him bedridden with drains that also have to be surgically removed. The husband was on antibiotics along with his usual medication. The husband takes long term immunosuppressive agents. Professor B said that the early high doses of Prednisone also caused weakening of the husband’s bones and osteoporosis. That became so severe that (from the 1998 report) the husband had to undergo surgery to replace both hip joints. The Professor said that the disease can flare up as a result of stress, changes of diet, the common flu and an infection from a seemingly normal meal. Professor B said that the husband suffers from a severe case of Crohn’s disease and he has a relatively poor prognosis with respect to work and complications.
In his report of February 2010 Professor B said that the joint complications from the disease and the medication used to treat it will require the husband to have both his knees replaced. As the replacement knees themselves would need to be replaced, those procedures have been deferred. As a result the husband is in severe pain, night and day. Professor B says that the husband is being treated by Dr KL for arthritis in his knees. The husband has been using Tramal, Cerebex, Panadeine Forte and has had steroid injections intermittently into his knees.
There is no evidence about the current health of the wife.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife’s income is $47,000 per annum (about $903 per week) by way of wages as the manager of a clothing retail store.
The wife currently lives with N and he has no income. As at the 2010 hearing, Mr WP stayed with the wife on two or three nights a week. He did not contribute to the household expenses. He benefited from the wife’s expenses. There was no evidence about his financial circumstances. No evidence was given by the wife about any change in that situation as at June 2013.
According to the wife’s evidence, her expenditure is as follows:
| Expense | Amount |
| Income tax | $126.00 |
| Mortgage ($1,400 per month) | $323.00 |
| Motor vehicle registration – Holden vehicle | $15.00 |
| Credit card repayments – Mastercard and Coles | $100.00 |
| Child support | $25.00 |
| Living expenses | $500.00 |
| Total | $1089.00 |
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
It is not suggested that the wife is not fully exercising her earning capacity.
It is the husband’s evidence that his income is $2,062.70 made up of wages as a sales representative of $1,057.70, $20 in rent from a property at Suburb Y, $840 in distributions from the Felice Family Trust (business licence), $25 per week in child support from the wife, $100 in the form of a company vehicle and $20 for mobile telephone use. The husband worked as a sales representative for the 20 months leading up to the June 2013 hearing. The facts raise doubts about the husband’s evidence about his income. The husband gave evidence that he paid out more than $192,401.33 (in addition to the cost of a car for X), from his post separation earnings. The husband said he paid $140,401.33 in legal fees, including disbursements, for experts’ fees. He also applied over $33,000 of his post separation income to the Suburb C renovations and over $19,000 to improvements at Suburb F. The husband bought X a motor vehicle. The parties separated more than six years ago. It seems unlikely but it is possible that he was able to pay, presumably from his after tax income, $28,500 each year towards those costs. Other than his most recent evidence, his Financial Statements do not suggest a weekly surplus that would allow the accumulation of those funds. However, no contrary case was made out. For example that the funds came from elsewhere or that his income was greater than he disclosed.
The husband lives at Suburb F with R and A. R earns $180 per week and A $25 per week.
By updating his Financial Statement for the purposes of the final phase of the hearing the husband deposed that he spends $698.38 per week made up as follows:
| Expense | Amount |
| Income tax | $206.00 |
| Superannuation | $95.19 |
| Rates and levies | $25.00 |
| Car registration – Nissan vehicle | $23.00 |
| Other expenses. | $349.19 |
| Total | $698.38 |
I do not accept that the husband pays $95.19 to his superannuation. It is likely that is a payment made by his employer. Thus the husband shows a surplus of income over outgoings of the order of $1,400 per week.
As to the husband’s capacity for gainful employment, in his updating affidavit the husband gives evidence of an investigative procedure in relation to his lungs conducted on 22 May 2013 and having received advice that he may require surgery. The husband does not say that his illness has impacted on his employment in the period since the first phase of the hearing. However, the husband has suffered what is a chronic and debilitating disease for decades. The husband’s treating expert is guarded about his working future. I accept that it is likely that the husband is likely to experience restrictions on his working capacity due to his health and may well be forced out of the paid workforce at an earlier stage than the normal retirement age.
The evidence about his assets and liabilities is addressed above.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are four children of the marriage. B is 17 years of age and lives with the wife. A lives with the husband and spends time with her mother.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out above, what there is of the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
Neither of the parties receives a pension, allowance or benefit. The husband has about $100,000 in superannuation interests and the wife has a modest superannuation interest.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is no evidence in relation to the standard of living of the parties during the marriage. The Suburb C property was clearly a substantial property.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no evidence of either party seeking further study or intending to set up in a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
There is no relevant issue.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
There is no application for maintenance but in my view it cannot be confidently said that either of the parties has contributed to the income or earning capacity of the other party.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no suggestion that the marriage adversely affected the earning capacity of either of the parties. The wife was out of the full-time work force for many years but it is not clear that her earning capacity has been affected.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have set out above what there is of that evidence.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
There is a child support assessment but the parties have made a provisional arrangement because N moved to the wife’s home. It is possible that the liability will fall to the husband in future.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
Beyond those referred to above, there are no relevant orders made under the Family Law Act1975.
Section 79(4)(g)
There is a child support assessment.
Conclusion
Albeit on the basis of her other contentions as to pool issues and contributions, the wife argues for there to be no further adjustment. The husband seeks an adjustment in his favour of 5 per cent.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
·The husband is three years older than the wife and he has a guarded health prognosis;
·A property settlement based on contributions alone will leave the parties in a similar asset position;
·The husband will have more of his assets in the form of superannuation than the wife;
·Ignoring the income from the joint asset, the husband earns slightly more than the wife;
·The younger child lives with the husband and therefore, as things stand he is likely to have a greater ongoing parenting load; and
·The husband has had consistent financial help from his parents and brothers and there is no indication that will cease. However, as is noted above, the extent of that help cannot be quantified.
In my view these elements call for countervailing adjustments but in the context of this case should result in a modest adjustment in favour of the husband, to the outcome warranted by virtue of contributions alone. In particular, the parenting load and the guarded medical prognosis warrant that allowance. In my view the allowance should be 5 per cent. Five per cent represents about $130,000 and will make a difference between the parties of twice that sum.
Just and Equitable
The net assets have a value of $2,590,276.28 of which $123,868 is in the form of superannuation and $2,466,408.28 is in the form of non superannuation assets.
If the assets are divided in the proportions 55 per cent to the husband and 45 per cent to the wife then equally then the husband will have about $1,424,652 and the wife will have about $1,165,624. As to the form of the orders, the operative order will deal with the division of the fund held in the controlled moneys account.
Of the pool of assets identified by me, the wife has the benefit of and would like to retain:
Assets
Value
Proceeds of sale of L property – wife
$40,000
Motor vehicle – wife
$15,000
Jewellery – wife
$8,000
IAG shares – wife
$1,500
Wife’s inheritance estate of the wife’s late uncle (…)
$526,630
Wife’s inheritance estate of wife’s late father
$50,000
Superannuation (AGEST) – wife
$6,743
Superannuation (Industry 1) – wife
$3,768
Superannuation (Industry 2) – wife
$1,191
Superannuation (Industry 3) – wife
$4,627
Total
$657,459.00
In order to bring her to 45 per cent of the net assets she would need to receive $508,165.
That would leave the husband with:
Assets
Value
Suburb F property (1/6th share) – husband
$141,666
Proceeds of sale of L property – husband
$25,000
Suburb Y property (1/3rd share) – husband
$86,666
Felice Trust business licence – husband
$540,012
Business shares – husband
$55,105
Household contents – husband
$10,000
Motor vehicle – husband
$1,000
Shares – husband
$4,385
Paid legal fees - husband
$113,599.28
Superannuation (Industry 1) – husband
$95,000
Superannuation(Colonial) –husband
$12,539
Balance of proceeds of the sale of Suburb C property – joint
$339,680
Total
$1,424,652.28
In order to deal with the likelihood that interest has been earned on the controlled moneys account I will provide for a division of balance of the account in the proportions that reflect the ratio of my calculations above. That is a division in the proportions 508,165 : 339,680 which I will round up to 60 per cent to the wife and 40 per cent to the husband.
Conclusion under Section 79
This was a marriage that spanned 17 years and very significant contributions were made by each of the parties. They acquired substantial assets and provided a secure life for their family. The parties shared the work of the marriage in different ways but overall their contributions were equal. An adjustment in favour of the husband is justified by reference to the non-contribution aspects of s 79(4) – particularly the living arrangements for A and the husband’s health. In my view that will reflect a just and equitable division of their property.
I certify that the preceding one hundred and ninety four (194) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan.
Associate:
Date: 29 August 2013
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