FINCH & FINCH
[2019] FCCA 68
•16 April 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FINCH & FINCH | [2019] FCCA 68 |
| Catchwords: FAMILY LAW – Contested property application – long marriage – significant tax debt arises post separation relating to period of marriage – husband solely deals with the consequences which follow – dispute over who is to retain former matrimonial home and items in the property pool – husband and wife each argue long connection with the property – husband’s use of the property to earn an income – issues contested and abandoned during trial – time wasting and fallacious theories advanced in wife’s case. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79, 90XT. |
| Cases cited: C & C (2005) 33 Fam LR 414 |
| Applicant: | MR FINCH |
| Respondent: | MS FINCH |
| File Number: | BRC 11625 of 2015 |
| Judgment of: | Judge Willis |
| Hearing dates: | 12, 13 March and 1 June 2018 |
| Date of Last Submission: | 1 June 2018 |
| Delivered at: | Cairns |
| Delivered on: | 16 April 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Linklater-Steele |
| Solicitors for the Applicant: | Ritt Law |
| Counsel for the Respondent: | Mr Mould |
| Solicitors for the Respondent: | Porta Lawyers |
ORDERS
Property at Property A
That within forty-five (45) days from the date of these Orders the respondent shall do all acts and things and sign all documents necessary to:
(a)Transfer all her right, title and interest in and to the property situated at Property A in the State of Queensland and more properly described as Lot … on … County of … on Certificate of Title … (“the property”) to the applicant for his sole use and benefit absolutely;
(b)Resign and renounce as a director of Company B Pty Ltd and transfer all her right, title and interest in and to Company B Pty Ltd to the respondent;
(c)Resign and renounce as a trustee of the Finch Family Trust and forego and waive all entitlement and interest in any distribution from the Finch Family Trust;
(d)Transfer all her right, title and interest in and to the parties’ Timeshare to the applicant for his sole use and benefit absolutely.
Contemporaneously and in exchange for the respondent fulfilling her obligations pursuant to the provisions of order 1 hereof, the applicant shall do all acts and thing and sign all documents necessary to:
(a)Refinance into his sole name and assume sole responsibility for and release and discharge and indemnify and forever indemnify the respondent with respect to the loan accounts secured against title to the property by way of first registered mortgage number … and second registered mortgage number … in favour of the Commonwealth Bank of Australia;
(b)Pay to the Trust Account of the Solicitor for the wife the sum of $228,697.50 with no less than $100,000.00 to be held on trust pending further order of the Court.
(c)Transfer all his right, title and interest in and to the parties’ Timeshare 2 timeshare to the respondent for her sole use and benefit absolutely.
(d)Refinance into his sole name and assume sole responsibility for and release and discharge and indemnify and forever indemnify the applicant in relation to the parties’ Timeshare.
Pending settlement of the transfer of the Respondent’s interest in the property to the Applicant pursuant to the provisions in paragraph 1 hereof:-
(a)Subject to the provisions of order 3(b) herein, the Respondent shall have sole use and occupancy of the residential dwelling situated on the property to the express exclusion of the Applicant provided that the Respondent:
(i)Continue to meet all mortgage repayments and utility expenses and Council rates attaching to the property as and when such payments become due and wing and payable and ensure that such payments do no fall into arrears at any time; and
(ii)Ensure that the property is properly insured at all times.
(b)That the Applicant be at liberty to attend at the property situated at Property A in the State of Queensland for the purposes of continuing to operate the Applicant’s business from that location including the storing, repairing and maintenance of all plant and equipment and materials and supplies of Company B Pty Ltd save and except for accessing the residential dwelling located at the property and that the Applicant (in his individual capacity and in his capacity of Director of Company B Pty Ltd) indemnify the Respondent in relation to any liability arising from the Applicant’s operation of his business from the said premises.
(c)That the Respondent be restrained from entering into or remaining in the main sheds and leanto situated at the said property and from dealing with or disposing of any of the building supplies and/or equipment located at the property where so situated without the prior written permission of the Applicant.
Company B Pty Ltd
That the Applicant shall be solely responsible for and shall indemnify and forever indemnify the Respondent with respect to any and all liabilities in the business Company B Pty Ltd including but not limited to any income tax including penalties and interest and all debts and liabilities that the Respondent may be liable to pay as a consequence of her involvement as director, employee, partner or otherwise in the business Company B Pty Ltd.
Except as otherwise expressly provided herein that each party shall be solely responsible for and indemnify and forever indemnify the other with respect to all personal liabilities and credit card debts in each of their respective names or possession as at the date of these Orders.
Superannuation
That pursuant to section 90XT (1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment become payable in respect of the superannuation interest of Ms Finch born … 1962 in Super Fund 1 member number …;
(a)Mr Finch born … 1964 shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001 (Cth) using the base amount of $102,252.00; and
(b)There be a corresponding reduction in the superannuation interest of Ms Finch to whom the splittable payment would have been made but for the order.
The said order referred to in order 6 has effect from the operative time.
The operative time in these orders is four (4) business days after the date of service of sealed orders upon the Trustee of Super Fund 1.
That until such time as the said superannuation split to the applicant pursuant to these orders can be rolled over into a separate account of the applicant, the respondent shall:
(a)Provide to the applicant no less than 28 days’ notice before such time as she elects to retire from and/ or take voluntary retirement and/ or for any reason accepts or becomes entitled to access in whole or part of her entitlement in the said Fund;
(b)The Respondent shall direct and authorise the Trustee of the said Fund to communicate with the Applicant and/ or any person authorised in writing by him to answer any reasonable enquiries as may be made by him or on his behalf from time to time in relation to his entitlement to the Fund and to provide to the Applicant and/ or his authorised representative a copy of any notice or any application in the Fund in so far as that release may affect the Applicant’s entitlements pursuant to these Orders.
That in the event the superannuation split to the applicant pursuant to these orders can be rolled over into a separate account of the Applicant, each of the parties shall do all such acts and thing and execute all such documents as may be necessary to facilitate and to implement that rollover.
That until service of this order upon the Trustees of Super Fund 1 the respondent be restrained and an injunction be granted restraining the respondent from dealing with or disposing of her entitlements with Super Fund 1.
Other Orders
Applicant to retain
That save as otherwise provided for in these orders, the applicant shall be entitled to, to the express exclusion of the respondent, all other property and chattels and resources of whatsoever nature and kind in his possession or in respect of which the applicant has an actual, beneficial and/ or contingent interest as at the date of these orders including but not limited to:
(a)Funds held to the applicant’s credit in any bank, savings or credit union accounts;
(b)Interest in the property situated at Property C in the State of Queensland.
(c)Tax credits with the Australian Taxation Office standing in his own name and or in the name of Company B Pty Ltd and or the Finch Family Trust.
(d)Company B Pty Ltd including all plant and equipment including but not limited to:
(i)Bobcat
(ii)Digger
(iii)Tip truck
(iv)Trailer
(v)Tools and equipment
(vi)Cash at bank
(vii)Proceeds of Sale of Digger and Excavator
(e)All items located in the 18mx10m and 6mx6m sheds situated on the property situated at Property A including but not limited to:
(i)Washing machine
(ii)Ride on mower
(iii)Trolley
(iv)Jack
(v)Laser
(vi)Rock Hammer
(vii)Musical equipment
(viii)The two tents and associated camping equipment
(ix)Wakeboard
(x)Snowboard
(xi) Household goods and chattels
(xii) Superannuation entitlements
(xiii) Annual leave and other work related entitlements
Respondent to retain
That save as otherwise provided for in these orders, the Respondent shall be entitled to, to the express exclusion of the applicant, all other property and chattels and resources of whatsoever nature and kind in her possession or in respect of which the respondent has an actual, beneficial and/ or contingent interest as at the date of these orders including but not limited to:
(a)Funds held to the respondent’s credit in any bank, savings or credit union accounts;
(b)Shares and investments;
(c)Fund entitlements;
(d)Piano;
(e)Dining table and chairs;
(f)Bedroom furniture;
(g)Personal items;
(h)Overlockers, sewing machines and haberdashery items;
(i)Superannuation entitlements
(j)Balance of Super Fund 1 entitlements;
(k)Household goods and chattels; and
(l)Annual leave and other work related entitlements.
Section 106A Provision
That the parties shall do all such acts and things and sign all such documents necessary within seven (7) days of a request to do so act in order to give full force and effect to the provisions of these Orders.
That in the event of any party refusing, neglecting or otherwise failing to sign within seven days (7) of a written request to do so, any document necessary to give effect to the terms and provisions of these Orders a Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to the provisions of section 106A of the Family Law Act 1975 (as amended) to execute all deeds and documents in the name of the defaulting party and to do all such acts and things to give validity and operation to all such deeds and documents so as to give validity and operation to the provisions of these Orders.
NOTATION:
A.That these Orders are intended to be in full and final satisfaction of all claims between the parties at property settlement and to end all financial relationship between the parties pursuant to section 81 of the Family Law Act 1975.
IT IS NOTED that publication of this judgment under the pseudonym Finch & Finch is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CAIRNS |
BRC 11625 of 2015
| MR FINCH |
Applicant
And
| MS FINCH |
Respondent
REASONS FOR JUDGMENT
This is a contested property application.
At the commencement of the trial on the first day, the parties were given time to have discussions to try and resolve the matter. I was informed that whilst the parties had not been able to resolve the matter, the parties had been able to narrow some of the issues with the assistance of the accountant. Mr Linklater-Steele of Counsel for the applicant husband, Mr Finch, the husband advised that he was now no longer required to call Mr D for cross examination or Mr E.
Mr Linklater-Steele advised that the following witnesses were still required for cross examination: Mr F, Mr G, Ms U, the husband. Mr J, the accountant for the business since January 2015 was also required.
Mr Mould of Counsel for the wife, Ms Finch, the wife indicated the wife’s accountant Mr K (the wife’s accountant) had a conference with Mr J on the Friday before the trial, which appeared to have reduced the issues albeit a written agreement of what was agreed had not been made available. Mr Mould believed that depending on what Mr J had to say, it might not be necessary to call Mr K. Mr Mould also relied on evidence of Mr L.
Joint valuations[1] were tendered by consent in relation to new machinery purchased by the husband and a separate valuation for the real estate at Property A, the former matrimonial home.
[1] W1 and W2.
Mr Linklater-Steele then advised the Court that each Counsel had helpfully prepared a document as to their own client’s position in relation to the asset pool. As can be seen, over the 30 different items listed, there was significant disagreement.[2]
[2] H1 and W3.
I was taken through the husband’s position and then the wife’s position on each item disputed. As the case progressed, various issues raised by the wife fell away.
Throughout the trial, the wife through her Counsel handed up amended property pool documents, and Orders sought, amended orders sought,[3] further amended orders sought. Aides memoire were prepared by Mr Mould of Counsel being; “amended effect of orders sought”; “further amended effect of orders sought”; “the wife’s contributions post separation”, an “adjusted income of the parties since separation” and “projected depreciation table of husband’s new machinery”.
[3] Emailed 22 March 2018 and handed up by Mr Mould.
Each party prepared a case summary document which indicated the material relied upon. I was referred to case law including the bundle of cases tendered by Mr Mould.[4]
[4] W12.
Background
The husband was born on … 1964, and is now 54 years old. The wife was born on … 1962, and is now 56 years old.
The husband and the wife lived together since 1987 when the husband was then aged 23 (born … 1964) and the wife was 25 (born … 1962). The parties married on … 1991.
The parties first separated for almost a year from March to December 2000. The parties finally separated under one roof on 1 February 2013 after a marriage of some 26 years.
There is one adult child of this relationship Mr M, born on … 1995. Mr M is now aged 22 and lives independently. He was 17 at the time of separation, turning 18 later that year in … 2013.
The husband had grown up on a farm and tried working in a variety of occupations including trades work, and as a subcontractor. The wife worked full time as a health care worker. In 1991 the husband set up an business and employed staff. The wife continued working and during the marriage in 2008 she studied as well. The wife always did the books of the business.
The parties were divorced on 19 May 2017.
In … 1994, 3 years after the parties married, the husband’s parents gifted two acres of land at Property A to the parties. The husband set out in his affidavit the background to this block of land and how it was ultimately acquired by the parties. This is the property upon which former matrimonial home stands.
The husband says he has a strong connection to this land given its place in his family history since he was a child when his parents bought 35 acres on Property A. He has strong memories of happy years living as a child in his family home with his parents and siblings on Property A. He also set out the background of the parents and the contributions that he made to the development of this land whilst he was a younger man. Seemingly the husband was under the impression that he would have a chance to purchase the land, but found to his dismay that his parents were planning to sell the land to a third party outside of the paternal family.
Amidst the confusion and disappointment as to the land leaving the family and being sold to a third party, the husband and wife managed to avert the proposed sale to the third party. The third party had undertaken some preliminary work on the land with a view to subdividing it. The husband and wife had to pay some modest cost by way of reimbursement to the proposed third party purchaser for his preliminary work.
The husband and wife obtained a joint loan from the Commonwealth Bank of Australia to provide finance for building the former matrimonial home.
The husband assisted in physically building their new home on the property which became the matrimonial home. The husband utilised his association with friends in the construction industry to do “contra” deals to assist with their particular skills in building the former matrimonial home such as building a retaining wall for a friend in exchange for that friend installing ducted air-conditioning in their home.
The wife and husband have each made contributions to the welfare of the family during their relationship, each working and sharing looking after young Mr M when the other was working. For a period in 2000 when the parties separated (most of the year) the wife was the sole carer and the husband spent alternate weekends with Mr M. Apart from that period, the parties have each been working and providing for the welfare of the family.
The wife throughout the marriage attended to the books of the business and structures the parties set up. The wife completed basic computer courses which enabled her to do book work for the benefit of the business. The wife says she has done the book work regularly for the business since about 1991. She says, “Mr Finch had minimal involvement in the paperwork aspect of the business.” The wife has had knowledge of the business books and liabilities.
The parties remained living together separated under the one roof for about 18 months after which the husband left their former matrimonial home. The wife remained living in the former matrimonial home as at the date of trial, by then five years post separation in February 2013. The former matrimonial home has been valued and the agreed value is $570,000.00.
It seems to be agreed that in the transition from sole trader to a company structure, the parties through some oversight, unknowingly incurred a significant tax debt. This appeared to crystalize at or around separation. The tax debt initially stood at $190,000.00, the tax debt. There is no doubt that this is a joint debt, though equally, there is no doubt that the wife left the payment of this debt to the husband. Understandably this catastrophic debt plunged the parties into significant financial distress.
The husband set about dealing with and paying this debt. After consultation with his accountant, the husband negotiated with the tax office to reduce the balance of the debt down to $60,000.00.
The husband worked and directed his post separation earnings to reduction of the debt. There was also tax payable by the Company B Pty. Ltd of $38,341.33 as at 1 February 2013, as set out in the affidavit of the company accountant Mr J. This is also a joint debt. The wife challenges various aspects of the tax debt repayment and subsequent tax assessments owed. Her case outline refers to the “usual position of determining the asset pool as at the date of the hearing should be departed from.” Reference is made to “the husband’s company B Pty. Ltd” and “whether there is a tax debt” and “if so, whether it is to be included within the pool of assets of the parties.”[5]
[5] Wife’s case outline, page 3.
In … 2003, using the equity in the former matrimonial home, a block of land was purchased by the parties at Property N, the Property N property. The property was initially purchased by the parties who borrowed significant funds. After receiving financial advice the parties set up the Finch Family Trust in 2007, the Finch Family Trust. The husband is self-employed and operates a business, the business through Company B Pty. Ltd Company B. Company B is trustee for the Finch Family Trust.
The Property N property was then transferred to the Finch Family Trust in 2007. The property was heavily mortgaged and negatively geared. The mortgage was refinanced through the Finch Family Trust taking out a loan. A second loan was taken out by the Finch Family Trust a year later in 2008 for funds to build a home as an investment property on the Property N property. The wife was the guarantor of the mortgage.
Following the realization of the tax debt, the husband needed to repay that debt. He was unable to keep paying all of their existing debt repayments (including their line of credit which was used to run the business during the marriage, credit card repayments, tax debts and short fall in mortgage repayments on the negatively geared Property N property). On 27 November 2014, the Property N investment property was sold for $569,000.00.
The wife’s case on this issue is twofold. First she is unsure of the debt remaining on the loans at time of sale saying that the husband was solely responsible for distribution of the profits of sale. Whilst conceding that $60,081.00 of the proceeds were paid by the husband against the line of credit, on 9 March 2015, she deposes that:
“The settlement statement I have received indicates Company B Pty. Ltd received credit of $549,864 on 27 November 2014 without any mention of a mortgagee being paid. Without further disclosure from Mr Finch which I would have thought would be forthcoming, I can only assume therefore that there is almost $500,000.00 unaccounted for.[6] I annexe hereto and marked F -2 is a true copy of the settlement of the sale of the Property N property dated 27 November 2014.[7]”
[6] Wife’s affidavit 13 February 2018, paragraph 15.
[7] Wife’s affidavit 13 February 2018, paragraph 15.
The wife further asserts she was not consulted about the sale, and she deposes that:
“The reasons for selling the investment property at this time are unclear…the property remained tenanted and the rent was contributing to the repayment of the mortgage at the time. I had taken over the mortgage repayments (and all other expenses) on the former matrimonial home so that Mr Finch was only responsible for monthly repayments on the business overdraft loan, business and personal credit card debts, and any shortfall on the investment loan repayments. He had other assets which could have been sold instead to pay credit card debt or reduce the overdraft loan balance.”[8]
[8] Wife’s affidavit 13 February 2018, paragraph 16.
As to the credit card debt, the wife’s case is that the Court will not have regard to the increased amounts on the husband’s credit cards which he says were largely used for the business post separation, “especially having regard to the fact that the wife’s has reduced her credit card to nil.”[9] The wife deposes to having a balance of $1,900.00 on her Westpac credit card at separation, but says “I have also reduced my credit card debt since separation. This account is now closed.”
[9] Wife’s case outline, page 1.
Of their business overdraft, the wife says it was used by the business, that the husband has made the monthly loans, but asserts he has continued to use the business overdraft since separation. The wife adds “I have never used this account to make purchases nor have I made any personal purchases on the business credit cards which I had access to before Mr Finch removed my name from these accounts.”[10]
[10] Wife’s affidavit 13 February 2018, paragraph 68.
Other steps were taken by the husband to reduce the tax debt. Assets which could be sold were sold. As seen in her affidavit material and case outline for the wife, the wife does not accept the sales were at arm’s length or that the sale amounts obtained by the husband in the sale of such items (excavator, bobcat, skid loader, motorbike and motor vehicle) were satisfactory saying they were “sold for undervalue to friends after joint valuations had been obtained.”[11] The wife is seeking thousands of dollars in various “addbacks” based on her assertions of their true sale value and or making assertions that assets sold ought to be the husband’s contribution.
[11] Case outline page 2.
The wife asserts that the husband’s tax assessments in the past years ought not be accepted as evidence of his income earning capacity. The wife says that the husband has his superannuation paid by the Family Trust, so therefore his income is reduced by that amount. The wife also submits that the husband has had the benefit of being able to claim depreciation and that she does not have this benefit. The wife therefore contends strongly that the amount shown in the financial records of the Finch Family Trust for depreciation each year ought to be added to the husband’s personal income.
The wife works selectively in two positions, one as a public servant on work days and as a health care worker on weekends and nights. She has chosen this style of combining the two positions so as to earn a higher wage.
The wife is also seeking to challenge the husband’s income earning capacity into the future. The wife submits that the husband’s income referred to in his tax returns will not be accepted as evidence of his income earning capacity. Rather, the wife strongly submits through her Counsel, that sums shown as an expense on a profit and loss financial records for the Finch Family Trust namely “depreciation” relating to the purchase of new machinery since separation, is to be calculated at 30% per year, that figure is to be extrapolated, totalled for each year item by item, then multiplied by 5 to cover the years from 2018 up to 2023. The wife’s theory and submission continues that the Court then will add that figure of total percentage of depreciation for new machinery purchased by the Finch Family Trust to the income of the husband for the period 2018 to 2023.
The wife says this is the correct method for the Court to accept as to properly reflect his income earning capacity. The wife estimates the figure to be $154,710.76 to be added to his future earning capacity in the following 5 years as seen in the calculation completed by the wife’s Counsel. As to the calculations, Mr Mould submits that, “as to the acquisition of new machinery the husband does have the liability to pay the loan repayments on that. However, those repayments are deductible from his income. On top of that he has the advantage of his depreciation. And I did include a document premised upon what Mr F (the accountant) said the 30% of the reduced book value in deprecation each year. Essentially that equates to between 2018 and 2023 the sum of $154,710.76 in depreciation that the husband alone will have the benefit of in terms of reducing his taxable income... Mr Mould added six years inclusive...it was the husband’s position that my client was the superior income earner, but in reality that’s not the case and it certainly will not be the case in the next six years.”[12]
[12] Transcript page 15, 1 June 2018.
The relevance of this to the wife is that she asserts that even though it seems that the husband does not have the capacity to earn as much as she does based on tax assessments and returns, in fact by the time the accounting exercise regarding adjusting the husband’s income is completed, (as seen in the calculations undertaken by her Counsel in an aide memoire) the wife really does not earn more than the husband. Mr Mould of Counsel for the wife explained in final submissions that he had prepared a document and said “essentially one of the documents that I’ve sent to you is an adjusted income of the parties. And what I’ve done there is I compiled the parties’ earnings since separation and then I’ve essentially added back to the husband the superannuation he paid, which is deductible, the deprecation which is deductible and the rent” all of which was said to be deductible.[13]
[13] Transcript, page 15, line 15, 1 June 2018.
Through causing a Family Trust distribution of funds to their son, the husband caused a saving of tax payable in the amount of $9,371.56. The wife now challenges this saving stating, “whether the income tax debt incurred by the parties’ son Mr M because of the husband distributing his income to him under the family trust ought to be included in the asset pool. The wife says not as the husband has received the benefit of doing so exclusively. His own accountant says that the overall net saving to the husband was $5,504.76.”[14]
[14] Wife’s case outline, page 5.
After living separately under the one roof for 18 months post separation, the husband moved in with a friend at Town O. The husband does contract work and has no certainty as to where he will be working on any given day. His work however, requires the use of heavy haul vehicles, including a bobcat, tip truck, excavator, loader and car carrying trailer along with other tools and equipment. Consequently, the husband has continued to have daily use of the sheds at the former matrimonial home to house his machinery and to use facilities of the shed including where he undertakes washing.
One of the sheds still used by the husband was extremely large (18 metres x 10 metres with a five metre high entrance to accommodate his excavation equipment) and purpose built to assist in his workday requirements. The wife challenges that the husband has left his work equipment at the sheds of the former matrimonial home as often as the husband states and says, “Mr Finch has been storing his truck and machinery at the former matrimonial home since separation. Since September 2015, Mr Finch has not parked the truck and equipment at the former matrimonial home on many week days but usually brings it back for weekends and while he is away or not working. I have note the dates when the machinery has not been stored here.” The wife speculates where he might be parking the truck on some nights “I believe when it is not stored here, it is parked outside the residence of Property C where Mr Finch now resides.”[15] It can be seen that the wife does not accept the husband’s case that one of the reasons he wishes to retain the former matrimonial home is that he uses the purpose built sheds for his machinery.
[15] Wife’s affidavit 13 February 2018, paragraph 66.
As to the issue as of whether the former matrimonial home is retained by one of the parties, the wife does not accept the husband’s case that he has historical or nostalgic reasons for wishing to retain the former matrimonial home. The wife’s case outline states, “It is submitted that the husband’s claim to the former matrimonial home is merely an illegitimate extension of his spiteful, controlling and domestically violent behaviour.” This submission references the husbands conduct as referred to in paragraphs 65, 67 and 79 of the wife’s affidavit.
In looking closely at those paragraphs, paragraph 65 refers to the wife’s request to the husband when he voluntarily moved out of the former matrimonial home “not to access the property on a daily basis” and allegations by the wife that a small box containing jewellery belonging to her went missing when the husband drew up a list of goods and chattels contained in the house in April 2015. The wife refers to semi-precious stones worth $300.00, a chain $1,000.00, and some sentimental items. The wife concludes “Mr Finch claims he does not know anything in relation to my jewellery going missing.”
Paragraph 67 refers to “on 2 November 2015 Mr Finch brought clothing and personal items back into the house and stored his bedding and furniture in the shed. I told Mr Finch that it is was inappropriate for him to move back into the property.” And finally paragraph 79 states, “my situation has not been assisted by Mr Finch’s controlling behaviour and the domestic violence he has perpetrated against me in particular assaulting me in my home in September 2016 when he threw a small hard case at me causing a black eye.”
The wife also does not accept and challenges at trial the husband’s evidence that he does not own a jet ski which is stored in the shed at the former matrimonial home. The husband’s evidence is that he is storing the jet ski for a friend (Mr G) in exchange for occasionally having use of the jet ski.[16] The wife remains living in the former matrimonial home and working at her two occupations on a relief or casual basis.
[16]Mr G also purchased the motor vehicle and a motor cycle from the husband when these items were for sale, the proceeds of which were required for payment towards the tax debt.
Around … 2015, the husband commenced a relationship with Ms H who is now his current partner. They have been cohabitating since … 2015. The husband moved in with Ms H at her rented home at Property C (the Property C home). Where she had been living in for about 5 years. Ms H and her then landlord agreed that improvements would be made to the Property C home with the landlord meeting the out of pocket expenses and Ms H providing the labour.
In … 2017, the husband and Ms H purchased the Property C home in their joint names as tenants in common on a 60/40 basis, in Ms H’s favour. The husband and Ms H obtained a joint loan to fund the purchase of the Property C home for $591,500.00 in March 2017. At trial the wife did not accept that the husband would be jointly and severally liable for the joint debt on the mortgage held by he and his partner, as seen in the wife’s case outline and in the list of items to be included in the wife’s property pool. The wife asserted that the husband would only be responsible for 40% of the joint mortgage. The wife agreed that legally his interest was held as to 40% interest in the property, however, the wife argued that the figure which was to go into the asset pool should also reflect that the husband was only liable for 40% of the joint mortgage. This had the effect of increasing the husband’s equity in the property and therefore in the property pool.
The wife has not re-partnered.
As can be seen, now at the end of the marriage and at the final trial, each of the husband and wife wish to retain the former matrimonial home for their own reasons.
In light of the original financial contributions at the commencement of the relationship, the significant post separation financial contributions by the husband and the disparity in income earning capacity, the husband seeks a division of slightly higher than 50/50 on the basis that the house is put up for sale by a trustee. If the husband is able to retain the former matrimonial home and take advantage of savings associated with his use of the sheds purpose built for his machinery, his position has been that a division of 50/50 is just and equitable.
Whilst the wife’s overall figures fluctuated at and during the trial of “around 50 or 55%”, at the conclusion of the trial Mr Mould submitted when asked to state his proposed division for financial and non-financial contributions, “we consider it should be fifty-fifty in terms of contributions.” When asked about the s.75(2) factors Mr Mould replied, “We say that essentially should be equal as well, if not tipped in our client’s favour. My client is 56 years of age, two years older than the husband. You might recall that I spent some effort explaining why there should be a different consideration of the husband’s income on the last occasion.”[17]
[17] Transcript 1/6/18, p. 15. Reference to his theory as to adding depreciation back into the husband’s income over the coming years.
I have had regard to all of the evidence and the submissions. A statement of fact in these reasons represents a finding unless indicated otherwise.
The husband – Orders sought
The husband’s application was filed on 4 December 2015. Overall, he seeks a final division of 50/50.
In the application (and as seen in his case outline) he essentially seeks Orders that within 30 days the wife do all acts and things to result in the wife transferring to the husband the former matrimonial home, Company B and the Finch Family Trust in return for which he assumes all of the liabilities attached to those entities and assets including mortgages and tax debts.
Orders were sought that upon the transfers referred to above, the husband would transfer the mortgages on the former matrimonial home (first and second) into his name only and pay to the wife the sum of $62,526.35.
The husband also proposes that he transfers the Timeshare 2 time share to the wife for her sole use together with the motor vehicle, and that the wife transfer into his sole name the parties’ Timeshare.
The husband also seeks that save as provided for in the Orders, that the property and chattels and resources of whatsoever nature and kind (including money in the applicant’s bank and his interest in the Property C property) are retained by the applicant to the exclusion of the respondent. The specific items to be retained by each party are at Orders 6 and 7 of the Application.
In the husband’s case outline[18] the husband maintained his position in terms of retaining the home, the business, the Finch Family Trust and assuming the liabilities that are attached to these entities and assets. The husband also proposed he pay to the wife a sum sufficient to affect an equal division of the non-superannuation assets after adjustment for the assets which remain with each of the parties.[19]
[18] Filed 20/2/18. Assumes husband retains house.
[19] See case outline, p. 3, order 2(b).
Precise minutes of Orders are set out with section 2 providing that the wife transfer her interest in the former matrimonial home to the husband; resign as a director of Company B Pty. Ltd and transfer her interest to the respondent; resign and renounce as a trustee of the Finch Family Trust and waive all entitlement and interest in the Finch Family Trust and transfer her interest in the parties’ Timeshare to the applicant for his sole use.
Simultaneously the husband will:
a)Refinance into his sole name and assume responsibility for and indemnify the wife for the loan accounts secured against the title to the former matrimonial home (first and second mortgages);
b)Pay to the wife a cash sum to affect an equal division of the non-superannuation assets of the marriage set out in Schedule ‘A’ adjusting for the assets to be retained by the parties set out at Order 2(b) of the Outline.
c)Transfer his interest in Timeshare 2 time share and the motor vehicle to the Respondent for her sole use;
d)Hold the respondent indemnified against all liabilities including taxation penalties and interest arising from the business Company B Pty. Ltd; and
e)Pursuant to section a 90MT a splitting Order from the wife’s Superannuation interest in her Super Fund 1 is made in favour of the husband, using the base amount of $66,000.00.
At the final submissions in this trial, Mr Linklater-Steele prepared and forwarded the balance sheet as advanced by the husband and a short working sheet as to how the 50/50 division is contemplated. A final draft of the orders sought was provided.[20] Whilst the husband accepts that the Court could order the former matrimonial home be sold or a trustee appointed, Counsel for the husband submits a trustee is cost prohibitive, and a close look at the Orders sought by the respondent for a trustee are styled to favour the wife. The husband’s primary position is that he retain the home, failing which a real estate agent be appointed and Orders for sale be made by the Court.
[20] Exhibit H5 and H6.
Most of the trial in this matter has involved the wife’s challenges to the husband’s evidence.
Respondent Wife – Orders sought
The Orders sought by the respondent were originally contained in her response filed on 15 January 2016.
In that response the wife sought Orders wherein the husband retained:
a)The company Company B Pty. Ltd; the Finch Family Trust;
b)sporting and hobby equipment including guitar collections, snow gear, wakeboards, inflatable boats, musical instruments and equipment, camping equipment;
c)the party’s interest in Timeshare;
d)the motor cycles;
e)his superannuation;
f)half of the furniture in the former matrimonial home as agreed; a
g)cash payment from the wife to bring the husband’s share of the overall property pool to 40%;
h)All of the personal effects in his possession;
i)Any funds in any bank account of the husband.
The wife was to retain:
a)The former matrimonial home;
b)The motor vehicle;
c)The party’s interest in Timeshare 2;
d)Half of the furniture in the former matrimonial property as agreed;
e)All of the personal effects in her possession;
f)Any funds in any bank account of the wife.
The wife sought to:
a)Occupy the former matrimonial home on the basis that she pay all instalments on the mortgage of the former matrimonial home;
b)transfer her interest in Company B to the husband and relinquish any claim to the Finch Family Trust;
c)ensure the husband retains all debts and liabilities including arising from Company B Pty. Ltd and the Finch Family Trust and specifically that the husband be responsible for all income tax assessed on income received or deemed to have been received by the husband and to pay and indemnify the wife with respect to any capital gains tax assessed as a result of the sale of any property owned by the Finch Family Trust;
d)within 7 days of settlement of the former matrimonial home the husband to collect all equipment, machinery tools and dispose of any work-related rubbish external to the matrimonial home.
The wife forwarded a document to the Court on 22 March 2018 headed “Amended Orders sought by the Respondent Wife”. This was at the conclusion of the two days of evidence on 12 and 13 March 2018 but before the final submission on 1 June 2018. The changes were:
a)A re-wording of the Orders sought for transfer by the husband of the former matrimonial home to the wife, the inclusion of an Order giving the husband 7 days to remove “all chattels including sporting and hobby equipment, machinery, tools and debris at the property belonging to the husband and Company B in default of which the chattels will be declared the property of the wife” and;
b)a new Order that “the husband is to remove all debris at the property deposited by the Husband and/or the officers, servants or agents of Company B”; and
c)a new Order that the wife is to refinance into her sole name the mortgage debt secured by the property with the Commonwealth Bank of Australia and will indemnify the Husband in relation to any liability arising therefrom; and
d)a new Order that the wife will pay to the husband the sum of $331,504.47.
The document then added an “alternative position” that a trustee for sale be appointed for the sale of the former matrimonial home with a proviso that the husband and wife are entitled to make offers for the property for consideration by the Trustees.
Other orders regarding the wife having exclusive occupation pending the sale and continuing to pay the mortgage remained and machinery provisions for the sale proceeds;[21] and in 5(d) an Order that payment from the proceeds to the husband in the sum of $72,769.26 (instead of $58,333.93)[22] and thereafter the net proceeds of sale be distributed equally between the parties.
[21] Orders 5(a), (b), (c).
[22] The Response document filed on 15 January 2016 did not specify any specific amount as a payment to the husband, rather it stated “an amount to bring his share to 40% of the overall property pool.”
The amended Orders also sought to retain the releases and indemnities arising from Company B and the Finch Family Trust and specifically tax liabilities past, present or contingent.
On the day of final submissions, which I heard via video-link between Cairns and Brisbane, a third document was prepared by those representing the wife and it is entitled “Further amended Orders sought by the Respondent Wife.” Mr Mould submitted that, “there were slight changes and an additional document.”[23] An additional document was prepared showing the effect of the Orders and during the subsequent submissions there was a significant shift in relation to issues which had been agitated during the trial.
[23] Transcript 1/6/18, p. 2, line 20 – 25.
In addition to the material referred to in their respective case outlines and or read into the record, each Counsel sought that the Court include into evidence on behalf of their respective clients a Notice to Admit facts directed by the husband to the wife on 3 February 2017 and a response by the wife filed on 10 February 2017.
At the commencement of the trial, the husband’s property pool was marked as exhibit H1. The wife’s property pool was marked as exhibit W3. As seen in the respective figures on those documents there were a myriad of issues in contest. As I have said elsewhere, the Court was to determine whether they were to be included the pool and if so what figure was to be assigned to each item.
The case summary documents referred to the issues in particular which required determination namely:
a)Which party was to retain the former matrimonial home;
b)A determination of whether the husband was entitled to an adjustment to the proposed division of the assets on account of the:
i)Gift of vacant land to the parties (estimated value $40,000.00) by the husband’s parents;
ii)The non-financial contributions made by the husband to the construction of the former matrimonial home.
c)The effect of the post separation financial contributions made by the husband
d)Whether the wife was entitled to an adjustment to the proposed division of the asset pool on account of:
i)Her post separation contributions made towards her superannuation fund;
ii)The contributions made by her towards the outgoings including her mortgage repayments (in the former matrimonial home which she continued to occupy) made after the husband vacated the home in around October 2014.
e)Whether the Tax credits held to the husband’s favour with the Australian Tax Office are to be included in the matrimonial asset pool.
f)Whether an adjustment in favour of either party is warranted given their capacity to earn incomes.
g)Whether it is in the circumstances, just and equitable to make a superannuation splitting order, and if so, the amount of that order.
After being given time to have discussions at the commencement of the trial, Counsel advised that some issues in contest had been narrowed. Mr Linklater-Steele Counsel for the husband handed up a property pool document[24] setting out the assets and liabilities indicating which values were agreed to and which issues/values were not.
[24] Exhibit H1.
As the case proceeded, during or at the end of the trial, the wife through her Counsel conceded issues which she had contested. I will address each of the issues in this judgment.
The wife’s position and challenges to the husband’s case has been a moving feast from day to day, or from one part of the day to later in the day.
It was only in final submissions that the wife indicated financial and non-financial contributions were equal, and further, that as to s.75(2) factors, Mr Mould submitted, “we say that essentially should be equal as well, if not tipped in our client’s favour.”
The wife’s primary position is that she should retain the former matrimonial property. The wife does not accept the husband’s position or reasons for retaining the former matrimonial home. The wife has provided a draft order for the appointment of a trustee for sale and other orders including that she have exclusive occupation until sold.[25]
[25] Handed up in final submissions.
The Law
In this matter I am required to follow the approach to property division set out in various authorities and described as a four step process in cases such as C & C (2005) 33 Fam LR 414; In the Marriage of Hickey (2003) FLC 93-143 and Ferraro and Ferraro (1993) FLC 92-335. The four step approach is to first determine the pool of assets and liabilities, then evaluate each of the parties’ financial and non-financial contributions during the marriage and post separation, determine if that contribution figure requires adjustment in light of the relevant section 75(2) factors and finally to consider whether the proposed result is just and equitable in all of the circumstances having regard to the actual result in real terms.
As the Full Court (Bryant, CJ, Finn & Thackray JJ) noted in Bevan & Bevan [2013] FamCAFC 116 at [65] although the High Court in Stanford & Stanford (2012) FLC 93-495 did “not disapprove the four step process, we accept it was not approved either”. However it is clear that after an identification of the existing property interests (as determined by common law and equity), the Court is required to consider under s.79(2) whether it is just and equitable to make an order at all.
As the High Court said in Stanford at [42]:-
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationships. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also bought to an end. Hence it will be just and equitable that the court make a property settlement order….”
I am satisfied that in this matter, given their long marriage and the need to end their financial relationship, and having regard to the pool of assets, that it is just and equitable in this case to make a property adjustment order.
Witnesses
The Husband
I accept the husband’s testimony. I have found him to be an honest witness who well understood the parties’ situation. The strain of the responsibility he has solely carried for the past five years was at times evident in the husband’s presentation. The husband’s approach to resolving their catastrophic debt situation at separation and beyond and in particular in relation to the tax debt, was pragmatic and focused. He was the only party who had a solution to their financial dilemma and who responded to their changed and dire financial situation. The husband worked hard to address the reality of the disastrous consequences of what was a monumental “mistake” in the book keeping and or tax preparation.
My very strong impression of the husband is that he has worked tirelessly carrying the pressure of being solely responsible for payment of the tax and other debts in the last five years post-separation. He has attempted to reduce debt. He solely has addressed payment of the Tax Office debts.
He has managed to maintain and service the other significant debt being the actual tax repayments and arrangements, the line of credit facility, mortgages, credit cards, business expenses and his own expenses. He has done this responsibly. He has been heavily cross-examined about continuing to use the line of credit post separation and I satisfied that he has acted in a business-like manner with the best financial interests of the parties and the business upper most in his mind at all times.
The husband readily conceded in his evidence under cross examination that his trip to Country R was put on the MasterCard credit card.[26] The wife appears to believe that every cent of the husband’s post separation earnings ought to have been spent on their joint debt reduction by challenging his holiday expenses.
[26] Transcript 13/3/18, p. 84, line 5.
It is superficial of the wife to suggest that the line of credit, which had been used as a finance facility throughout the marriage, was to somehow be frozen in time and not be accessed by the husband even though he continued to operate the business five years post-separation and continued to pay and reduce their joint debt. He continues to do so at trial.
There is no evidence of any wastage. Any suggestions to the contrary by the wife are without foundation. The husband has had the burden and responsibility of managing the stress and pressure of the onerous tax debt without any assistance from the wife whilst continuing to run the business. His use of the line of credit has been nothing other than appropriate in the business setting.
The wife has chosen to challenge various individual financial transactions by the husband as part of her case. For instance, significant time was spent challenging the husband’s decisions to sell assets post separation or to challenge their value, without any evidence to the contrary. The suggestions were without foundation. In general I am satisfied that in her focus on the minute details of individual financial transactions, the wife has not been able to see the forest for the trees. I am satisfied that the assets sold by the husband post separation were sold to obtain funds used to pay their joint debts. The submission made that the assets which were sold ought to be “added back into the pool as the husband’s contribution” is rejected. There is no evidence produced by the wife to support her challenges.
The wife sat comfortably for years sheltered from their dire financial situation by the husband who took responsibility and all of the pressure for tackling the repayments, keeping the tax office satisfied so as they would not proceed further with enforcement of the debt, whilst working long hours in his physical work. Notably, the wife made no contributions to the effort or responsibility of repayment of their large and at times, overwhelming tax debt.
I am very troubled that so much time of this trial was expended by the wife arguing baseless allegations and challenging the husband’s decisions in managing the post separation business, debts and keeping it going whilst paying the debts. The challenges were mostly unsupported by any evidence other than her own opinion. The wife either ignored or failed to understand the urgency and grave consequences of non-payment of the tax debt, whether it was $190,000.00 or $60,000.00. The husband acted on the advice of his accountant and accepted that he and the wife had made mistakes in earlier tax lodgement. Subsequently penalties and interest were waived and the husband and his accountant negotiated the debt down to $60,000.00, still a considerable debt to be paid to the tax office, whilst hopefully maintaining payment of existing debt. If ever there was a situation where assets needed to be sold, this is that situation. In 2018, in her preparation for trial, the wife engaged her own accountant Mr K,[27] to now second guess how the husband might have or could negotiate with the tax office to reduce the $60,000.00 debt further.
[27] Affidavit filed 13/2/18.
Overall, wherever the husband’s evidence is contradicted by the wife, in the absence of any independent evidence, I prefer the evidence of the husband. He was an impressive and honest witness and a reliable historian.
The Wife
Regrettably, the wife was not an impressive witness. I found the wife’s evidence to be focused on trivial details, often descending into nit-picking and always wanting to have the last word. The wife is a very educated woman, having studied ….. Despite those excellent qualifications, and her own capacity for hard work, she appeared incapable of appreciating their overall financial situation, particularly when the tax assessment issued requiring the repayment of $190,000.00. Instead, the wife has demonstrated her steadfast ability to focus selectively on individual transactions closing her mind to their overall position.
It was only through the process of cross-examination that, when boxed into a corner, the wife decided that she would agree to things or issues in dispute that ought to have been agreed long before she walked into the court room. Her reluctance to concede issues, right down to even general propositions such as public servants being in demand was consistent with her position, which was that she would not make admissions against her own interests.
The wife failed to readily accept that the credit card debt of the husband was a legitimate joint debt until cross examined. Her answer that “I am not sure how much he paid for that car”[28] was untruthful. It was pointed out to the wife by Counsel for the husband that she must know as she was accusing the husband of underselling it. The wife then stated the precise figure he paid for it.
[28] Transcript 13/3/18, p. 134, line 0.
The wife failed to be candid regarding her own legal fees. Her answer when asked, that she did not know if she had to pay any more in legal fees, when in fact she knew precisely how much more in legal fees she had to pay pursuant to her fee agreement and instead pretending that she did not know. The wife referred to the precise figure when she was caught out being untruthful by Counsel for the husband.
The wife demonstrated no insight into the reality that the tax debt had to be paid. The wife deflected all reasonable suggestions made to her by Counsel for the husband as to the parlous state of their financial affairs post separation. It was clear to me that the wife became cocooned in her own safety net of her work, the home in which she lived (and wishes to keep) her own credit card, her own expenses, her own improvements to the former matrimonial home, her desire to increase the value of her own superannuation and her own life. The wife distanced herself from the tax and debt quagmire that the parties were in post separation.
The wife steadfastly made no concession as to the sustained and hard physical work of the husband in working as much as possible operating the machinery outdoors, in order to keep their business afloat and pay the tax and other debts, until such times as this property application has been heard or the matter settled. The wife’s attitude has been dismissive and suspicious of the husband’s behaviour rather than accepting that he was working hard for their joint benefit post separation. This stance did her no credit.
It seemed to me that the husband and wife had both worked hard during the marriage to achieve their goals in life. They took advice about setting up structures to be tax effective, such as the appropriate use of the Family Trust with Company B Pty. Ltd as the trustee company to preserve assets.
Whilst no doubt being a competent health care worker and public servant, unfortunately the wife’s subjective approach to business affairs, profit and loss figures, balance sheets and the taxation system in Australia, have left her feeling unnecessarily resentful towards the husband’s use of business entities, which were acceptable to her during the marriage.
Her refusal to concede what should have been obvious and her insistence on challenging the husband’s evidence wasted time, lead to longer cross examination and a longer trial. The wife lived in a comfortable cocoon post separation. She retained her earnings from her two occupations and lived in the former matrimonial home rent free for the first 18 months. Her lifestyle did not change.
In her evidence the wife implied she was somehow forced to pay the mortgage on the former matrimonial home after 18 months post separation. [29] She alone lived in this joint asset from that time onwards.[30] The mortgage was extremely modest at around $60,000.00 with similarly modest repayments. The wife was earning an income. It was entirely reasonable that she paid her own expenses such as her personal credit card.
[29] This was conceded in cross examination.
[30] Mr M moved out in December 2013. Wife’s affidavit paragraph 54.
Once the husband moved out of the former matrimonial home July/August 2014, some 18 months after separation, he stopped paying the mortgage. The wife who remained living in the home paid the mortgage. She claims $39,172.00 in addition to rates and contents insurance as part of her own post separation contribution for the period July 2014 until March 2018, a period of 43 months. The relatively modest amount the wife paid on the mortgage to secure her own accommodation is seen in the submission that she paid $39,172.00 for rent over 43 months, around $910.00 per month. The expenses paid towards maintenance on the home occupied by the wife are expenses incurred and incidental to her occupation of the house.
The wife fails to accept that she had the sole benefit of occupying the home. The financial reality for the husband was that he lived elsewhere, and in addition he alone paid repayments of some $166,000.00 on their joint debts and reduced them.[31]
[31] Paragraph 212 husband’s affidavit.
In fact, whilst the husband was directing most of his post separation funds to their joint debt reduction, the wife prepared for her own future through choosing to make additional salary sacrifice in to her own superannuation fund and Fund Entitlements.[32] This occurred whilst the husband was working physically hard using his bobcat and earthmoving equipment. He worked long days and was clearly desperate to make as many payments as possible to prevent the Tax Office from taking legal action against him, with the dire consequences which would beset the husband and wife if this occurred. The pressure and exhaustion carried by the husband in all these years since separation, and then being attacked by the wife’s challenges, was seen in the witness box when the husband at times became emotionally overwhelmed in recalling how he handled and reduced the debts post separation.
[32] See Fund in asset pool - $14,435.33.
The wife did not pay a single dollar from her post separation earnings directly towards the tax debt.
The husband also solely paid the timeshare debt,[33] the shortfall on the Property N mortgage, the Commonwealth Bank equipment loan, the Capital Gains tax, loan repayments on the digger, bobcat and finance company loan and the tax due as a result of a distribution to Mr M, to save tax. The wife’s attitude in refusing to properly acknowledge this was breathtaking.
[33] Husband paragraph 212 (a) figure of $14,280.00 noting wife’s evidence she paid $2,640.00 over five years for the Timeshare 2, considerably less. The value of each time share is “nominal” on the asset pool.
The wife has attempted through creative accounting to “match” and in fact exceed the husband’s post separation payments to their joint debt, as submitted by Mr Mould of Counsel, who says the wife has made post separation contributions of $225,723.11.
At the time of separation in February 2013 the husband and wife remained living under one roof. The husband was paying the mortgage and other debts when Mr M moved out of the home in … 2013. Mr M turned 18 a month earlier on … 2013.[34]
[34] Born … 1995.
The wife submits and includes as her own post separation contributions to the assets Mr M’s rent, food and clothing for a period of 5 years “274 weeks includes 2013-2018) x $120.00, total $31,680.00.” Mr M was then aged 18 to 22. The husband did not physically leave the former matrimonial home until around July 2014 when Mr M was then aged 18 years. Mr M turned 19 on … 2014.
Added to this figure is payment of $2,500.00 being four years of car registration for Mr M “($665 x 4).” Also the wife includes his dental surgery $2,000.00 for an unknown period, a new laptop, new appliances and a bed. The wife’s calculations for these expenses totals $38,767.00.
These expenses are not made towards their joint debts, or to the cost of maintaining assets. Even if the wife paid them, and this was not ever put to the husband, there is no presumption that the husband had to pay all or any of this cost as implied by the wife. There is no evidence of an application made currently or within the past five years nor evidence at this trial to support an adult child maintenance Order. The funds the wife alleges she spent in no way reduced their joint debt. Neither did the wife’s alleged payments of Medibank for “the whole family”.
The wife’s payments towards improvements to the former matrimonial home did not reduce debt. The value of the house is agreed. Given the husband’s evidence of his financial obligations post separation, which far exceed the wife’s, it is inconceivable that the wife now suggests that the husband ought to have paid some or all of these expenses.
In her continuing attempt to ameliorate the weight to be given to the husband’s direct post separation contribution, the wife claims a sole contribution in relation to the increase in her Superannuation. The wife speculates that that the increase in her Super Fund 1 from $92,636 at separation to $201,354.00 has increased in value due to “mainly due to my increased income.”[35] The figure of $112,000.00 is therefore put forward by her Counsel in arriving at his overall figure of post separation contributions by the wife of $225,723.11.
[35] Paragraph 71 of the wife’s trial affidavit.
Determining the 30 years of market investments, interest, and growth from year to year and employer and employee contributions to the superannuation fund and whether or not “overtime” is even considered as income from which a superannuation contribution is calculated[36] is far more complex than the wife understands.[37]
[36] As opposed to the annual wage.
[37] Wife’s affidavit paragraph 70.
I see no reason to depart from the agreed value of the assets as at the date of trial.[38] In the circumstances of this matter and on the evidence before me, I do not accept that the wife’s increase in Superannuation is due to her sole contribution as submitted. The husband continued working in the business post separation and paying down debts and making financial contributions and his superannuation increased too during this period. These were contributions by both parties.
[38] Agreed property pool shows all values.
The wife paid the mortgage post separation on the former matrimonial home. That debt was at about $60,000.00 to $70,000.00. The wife lived in the former matrimonial home and therefore I consider it axiomatic that she alone would pay the modest mortgage repayments.
In final submissions, by Counsel for the wife set out in an Aide Memoire a total figure of $225,723.00 was submitted as the wife’s post separation contributions. Generally this submission is inaccurate and without regard to, and acknowledgement of, all of the evidence.
During the trial, the wife adopted the position that she would be excessively exacting in respect of any item or value so as to ensure the result was in her favour in terms of being in or out or a higher or lower value, in the asset pool to suit her own case. This has continued right to the last submissions made on her behalf, which I am told were made on instructions from the wife. The wife has never grasped that the husband used post separation income to reduce debts.
The wife wasted time in her obtuse answers, her false answers and her failure to make concessions and admissions until she was cross examined into a corner with nowhere to go except to admit the truth.
This is seen throughout the cross examination. Although it is painstaking to do so, I will set out some examples of the wife’s less than helpful testimony in these reasons.
Cash at bank – 2013
Under cross examination it was suggested to the wife that at item 7, she asserted in sworn evidence in her affidavit filed on 7 January 2016 [39] that the company had $30,000 available in cash. The wife tried to move away from her assertion. She was then shown her affidavit. The wife said “I signed that but I didn’t put the original figures in. That’s - that’s correct.”
[39] Wife’s affidavit sworn on 7 January 2016.
It was suggested to the wife that she was swearing to the Court as to her belief as to what assets were available to the company. The wife replied “That’s right. Yes I did.”
Counsel for the husband then said to the wife, “You purported to suggest that the company had available to it $30,000.00 in a bank account. You see that there?” The wife replied, “They’re the amounts in there. But I didn’t …I didn’t put that in there.”[40]
[40] Transcript 13/3/18, p. 90, line 35.
Counsel said to the wife, “Well, it’s your affidavit ma’am. Do you accept that.” The wife replied, “Yes I do.”
Counsel continued, “Right. You’re telling the court to the best of your knowledge and belief – sworn evidence, that you say that, indeed, the company had available $30,000.00 in cash, don’t you.” The wife said, “I do.”
Counsel continued, “Right. Because that’s the central point of your argument later on in terms of the disposal of assets. You keep asserting the company had $30,000.00 available to pay tax debt, don’t you.” After being told to answer the question by the bench, the wife replied “sorry could you reword – re ask…”
Counsel for the husband again suggested that, “Part of your argument is to suggest that what my client was doing was inappropriate, you continue to assert that the company had $30,000.00 in cash available to use. That’s part of your argument, as I understand it. Is that not right? There‘s $30,000 written down as the asset for Company B.” The wife replied, “correct.” Counsel said, “Right, which you asserted he had available to use?” The wife replied, “Yes. That’s what went into the property pool.” [41]
[41] Transcript 13/3/18 p. 91, and as seen in wife’s current asset pool exhibit W3, page item 5.
Counsel for the husband put to the wife “And your complaint was, in effect, he should have used that $30,000.00 other than do what he has done in relation to the selling of the investment property and the selling of assets. Yes? $30,000.00.”
The wife said “sorry could you reword - reword that question. I don’t understand it.” Counsel said, “I won’t belabour the point. You say he should have used that $30,000. Even though now you concede that it wasn’t actually there; is that right?” The wife said, “At that time I don’t believe there was a tax debt.” Counsel said, “No. You’re asserting what the assets available to the company were?” The wife said, “Yes.” Counsel put to the wife, “You’re saying he had $30,000.00 in cash. Now, that was just not right, was it?” The wife replied “that I – that I signed to say that there was $30,000. In the…” Counsel said, “I know you assert that. Did you have any information to actually have a reasonable belief that they had $30,000 in cash.” The wife replied, “No I did not.”
Asked by Counsel, “was this just a figure plucked out of the air?” The wife replied, “I didn’t actually insert that figure.” Counsel said “Right. You’re blaming your lawyers are you?” The wife said, “No Mr Finch put the asset pool forward.” It was pointed out to the wife that she had sworn to the truth of her own affidavit.
At the trial, two years later in 2018 the wife (not the husband) still includes in her property pool document, a sum of $30,000.00.[42] Also her case outline filed in February 2018 by those representing her, and relied upon at the trial states as an issue in dispute, “whether the $30,000.00 the husband had in the bank at the time of separation should be added back. There is no evidence that the funds were directed towards reducing or maintaining the asset pool. It could be readily inferred that the funds were instead used to fund the husband’s post separation purchases and holidays.” This inference is without foundation. This is further evidence of the wife’s time wasting in this case.
[42] Exhibit W3, item 5.
The Jet Ski
Another issue agitated by the wife and which caused a dispute in the property pool was the wife’s insistence on including a jet ski as an asset of the husband. It was suggested to the wife that in the 5 years since separation, she continued to put forth to the Court that the husband owns the jet ski which is stored in a shed at the former matrimonial home. Her answer was “that was originally the case.” The wife was asked a second time “you continue to ask this court for a finding that he owns it, don’t you.” The wife replied, “No.”
It was pointed out to the wife that “it’s in your property pool. Jet ski. You try and attribute a value. It was the document that was put forward to the court as part of the things that are still in dispute. You’re asserting that, indeed, he was the owner of the jet ski, and it had a value?” The wife replied “it did. But I believe that that may not have been included. I would have to check with my solicitor.”[43] The wife agreed it had been in the affidavit she filed on 15 January 2015, also in the affidavit when the first trial was set to occur, and that it is in her current trial affidavit. It was suggested to the wife that it is still an item included in her asset pool,[44] to which she replied “that’s right”. It was suggested to her that the basis upon which she makes the allegation is in effect because it was present on the property and therefore she believed that the husband actually owns it. The wife said “yes I do.”
[43] Transcript page 91 line 45, page 92, 93, 94 and 95.
[44] Item 18.
The wife was asked if she agreed that the shed also stores a camper trailer and trailer for a friend of the family. The wife replied, “I do.” The wife agreed that the husband had asserted that all three items were owned by Mr S. She agreed all the items were stored at the shed. She did not challenge that the other two items were owned by Mr S. It was suggested by Counsel for the father that the whole basis of her asserting that the husband owns the jet ski “is because he has used it.” The wife replied, “that’s correct.”[45] The wife also agreed with the suggestion that she had seen Mr S at the former matrimonial home shed area a few times accessing his equipment. She was asked if she had ever asked Mr S whether it was his jet ski. The wife replied “I haven’t.” When asked why, the wife replied, “I don’t speak to Mr S.”
[45] Transcript 13/3/18, p. 93.
Counsel for the husband then suggested a few other ideas to the wife as to how she might have gone about confirming the ownership of the jet ski. She said she did not have access to the jet ski, because in “the last Court order I am not allowed in the shed.” Given the husband is not present during the day, it was suggested that she could have at any stage walked up to the jet ski and taken down the number of the registration and done a search. Also, she could have taken the registration plate and done a search to see who the registered owner was. The wife said she didn’t do either. The wife confirmed that she still doesn’t believe the husband. The wife said, “there is still some doubt yes.”[46] The wife then said that it was only on the morning of day two of the trial, that she finally agreed to the jet ski not forming part of the pool. When asked where she got the figure from that she included in the property pool, the wife admitted that she had been doing research on Gumtree and Red Book.
[46] Transcript 13/3/18, p. 94, line 35.
The wife was asked why she didn’t just accept what appeared to be a fairly straight forward and reasonable explanation about the jet ski. She replied, “just knowing how particular Mr S is with his possessions and equipment, he doesn’t usually hold onto things that he doesn’t use, he sells them…it has just been sitting in the shed… sits there. Collects dust…. For someone like Mr S he would take better care of it… that is why I am assuming that it is no longer his.”
The wife confirmed that the jet ski has been stored in the shed. She confirmed that there has been no suggestion that Mr S has sold it to the husband saying, “not that I am aware of.” It was suggested to the wife that “You’ve never asked him. You’ve never done a registration search.” The wife replied “No.”
Counsel for the husband suggested to the wife that she did the books of the business up until separation. The wife replied, “I did some bookkeeping yes.” In her trial affidavit when describing her non-financial contribution she stated, “I collated all documentation for taxation purposes. The bookkeeping for the investment property I did at the same time as book keeping for the business and continued to do so until the end of December 2013.”[47]
[47] Wife’s trial affidavit 13/2/18 paragraph 49.
The wife was asked if she can point to any payment being made at any stage for the purchase of the jet ski or the payment of the registration by the husband. The wife replied, “No.”
The wife had no basis for making the allegation that the husband owned the jet ski. The wife had the opportunity to clarify the ownership through a myriad of ways, including asking Mr S directly, doing a search, or issuing a notice to admit facts if there was in fact some basis to query the husband’s evidence. As with many issues in this matter, the wife has adopted an oppositional position and maintained it without any genuine basis for doing so.
As can be seen from the transcript referred to, the sheer waste of time on the whole issue was entirely disproportionate to the issue, but this is the level to which the wife descended in her obstinate refusal to make appropriate concessions. I am satisfied that her insistence on ever running this issue was not only a waste of time, but that in all of the circumstances it was dishonest of the wife to do so. Any misunderstanding by her could have been corrected, but it suited the wife not to do so. The wife finally folded on insisting that the jet ski was in the asset pool, through her Counsel at the end of day two of the trial.
Property N investment property – the sale
Another issue raised by the wife was the sale of the Property N investment property. At the outset the wife denied the suggestion by Counsel for the husband that in her affidavit evidence that was claiming to be unaware of the husband’s intention to sell the property. She replied “No. No.” to this proposition. This is despite the contents of her affidavit material regarding the Property N investment property in which she said, “I am aware that Mr Finch has since sold this property.” And “The sale price, the time of sale, method of sale or other matters relating to the sale of this property were never discussed with me nor did I consent to the sale.”[48] The wife also said, [49] “The reasons for Mr Finch selling the investment property at this time are unclear.”
[48] Affidavit paragraph 14 wife’s trial affidavit.
[49] Wife’s trial affidavit, paragraph 16.
The wife set out a range of reasons why the husband did not need to sell the house, and that he had other assets to sell (motorbikes and cars) which could have been sold instead to pay credit card debt or reduce the overdraft loan balance. Only through thorough cross examination did the wife accept that she had no criticism of the husband for selling the property and paying down the debt.”[50]
[50] Transcript 13/3/18, p. 99, line 35 to 40.
After the Court expressed concern as to why a particular tax deduction would be regarded as a s.75(2) factor Mr Mould then submitted:-
“Well, if you – if you – if you add back the depreciation component
Her Honour: But why would I? – um where is the authority for me to add it back?
Mr Mould: See simply – simply because if my client doesn’t have that capacity to depreciate.”
After again querying the basis of this naïve proposition that the court would start extracting depreciation figures from the financial records of the Finch Family Trust and adding these taxable expenses to a past or future income of the husband Mr Mould responded:-
“Your Honour, my – my main point is but for the depreciation expenses the husband’s income would be significantly higher especially with regard to his latest purchase of machinery – significantly higher than my client.”[77]
[77] Transcript 13/03/18, p.143.
Mr Mould was unable to refer the Court to any authority for doing this at the time of submissions or at the resumption date of the submissions. I reject submissions that depreciation should be added to the husband’s past or future income. I accept the submission of Counsel for the husband that, “Mr K, the accountant for the wife hasn’t advanced any of this. This is all a construction beyond the evidence, not examined upon, thrust upon Your Honour to somehow deal with.”[78]
[78] Transcript 1/06/18, p.27, line 25.
The submissions on behalf of the wife at the end of the trial that the items that were sold off by the husband to reduce debt (the motor vehicle and motorbike) ought to be added back into the asset pool are unsupported by evidence and without any foundation. I reject these submissions. The ease with which various classification of items have been attributed a figure followed by adopting the position of including them as an “add back” is alarming and without regard to the cases on add backs.
Time was wasted in cross-examination by the Counsel for the wife in questioning the husband regarding what was to happen if the property was to be listed for sale or retained by the wife, suggesting that that there would need to be a clean-up.
There were general propositions put to him that he would have to do landscaping and remove dirt and rocks that was on the property. Explaining the precise position of the wife’s and her expectations of what work was to happen prior to her retaining or selling the house was longer and more confusing than it should ever have been. Having taken some time even with a Counsel produced an undated photo to assist understand what debris he was talking about. When asked how long this was all going to take, Counsel indicated that there were 30 more photographs to go through. The time taken for 29 more photographs was disproportionate to the issue being raised, namely the wife asking the husband to remove dirt and rocks from the property. The value of the house was agreed prior to the commencement of the trial. I do not consider it to be the role of the Court to then set about working what if any improvements or tidying up needs to be done to a property with an agreed value.
I also reject the submission that a figure of $12,633.00 being payment of invoices prior to separation ought to be added back into the pool.[79] Whenever this money flowed into the business I accept that it was part of the turn over required to operate the business and part of the joint accounts from which monies were used to pay mortgage repayments for their investment account, expenses in relation to the business. I accept that these funds were used as the ongoing joint account which the wife acknowledged in her evidence that she had access to and the ability to use in terms of the business credit card.
[79] Exhibit W8.
I accept without reservation the husband’s evidence that he used his post separation income together with the proceeds of sale of some assets to put towards the tax debts which were a joint debt. I also accept that whilst he continued to work and direct funds to reduce the tax debts, the income he earned attracted more tax debts. The husband continued to work and earn money and he used the money he earned to pay the existing tax debt and the tax debts that arose. He had to pay his current tax debt and he paid the significant tax debts owed jointly by the parties. The wife has not paid her post separation earnings towards reduction of the tax debt.
Overall, my impression of the wife was that she was combing through the figures in the asset pool and financial records, trying to create arguments to suit her case, without considering whether these arguments had any factual or legal basis.
Wherever the husband’s evidence is contradicted by the wife, in the absence of any independent evidence, I prefer the evidence of the husband. I found the husband to be an honest, credible and candid witness, with a good understanding of their financial matters, and pragmatic and honest approach to dealing with their financial situation as he found it at separation.
The wife has made a number of false allegations about the husband. She made allegations that he was hiding at least half a million dollars, allegations that he was not disclosing his full financial situation and that he was selling things under value and that he did not pay sale proceeds towards the tax debt. She has been unsuccessful in proving any of them. She has admitted finally, that she did know that the husband did not own the jet ski.
One of her arguments at the commencement of the trial was abandoned when the Court sat for the first day of the trial, only after the trial commenced and the Court indicated surprise that the issue even needed determination. This was the wife’s argument, and those representing her was that the mortgage which the husband held jointly with his de facto partner, ought to be included in the property pool on the basis that as the husband held a legal interest of 40% of the home he purchased with his de facto partner, that the husband must therefore only be responsible for 40% of their joint mortgage. After being directed to do so by the bench, inquiries were made and on day two the appropriate concession was made. This issue ought never have been raised.
In relation to the item 5, the wife proposes that the sum of $5,771.69 be included in the asset pool as representative of a balance at separation on 1 February 2013. That may have been the case however, the business has continued to run and as I have said repeatedly the income generated by the husband has been paid toward debt reduction. That figure would have fluctuated over the years and I do not accept in an ongoing business it is appropriate to add in a figure from 6 years earlier as to cash at bank.
Overall the wife has refused to show any reasonable approach to having this matter resolved as quickly as it ought to have been. She has chosen to run issues without any basis for doing so. This matter ought not to have taken two days with a 3rd for submissions.
Step 1 – Determining the assets and liabilities
Asset Pool
Given my findings as set out in this judgment, I am satisfied that the following figures ought to be adopted for the asset pool.
Assets
Ownership
Value
1. Former matrimonial home at Property A.
In joint names
$570,000
2. Equity in Property C.
(40% x $755,000.00 = $302,000
less 50% of $543,200.79 =
$271,600.00
$302,000 – 271,600 = $30,400.00)40 per cent husband, 60 per cent Ms H
$30,400
3. Add-back for sale of Property N, not injected into the CBA business line of credit ($13,714) less CGT liability paid for Mr M by the husband, and incurred by husband personally ($13,714) (offset agreed)
Husband
$NIL
4. Company B Proprietary Limited –ATF the Finch Family Trust
· Skid steer aka bobcat
CBA equipment loan (bobcat)
· Digger
CBA equipment loan (Digger)
· Truck
CBA equipment loan (Truck)
· Car carrying trailer
· Work related tools and equipment
· Add-back for sale of trailer
· Tip-cab chassis (wife to retain and collect) truck
· Ute
· CBA Smart Access account
· CBA Mastercard…(12/02/2018) business
· CBA Mastercard…4(12/02/2018) personal but used for business acquisitions.
Assets for Company B Pty Ltd.
Liabilities for Company B Pty Ltd.
TOTAL FOR COMPANY B PTY LTD.
Husband
$36,000
($53,612)
$37,000
($57,122)
$95,000
($136,306)
$13,500
$NIL
$1,000
Wife to retain and agreed to collect
$2,500
$NIL
$18,257.09
$4,895.07
$185,000.00
$270,192.16
($85,192.16)
5. Motor vehicle station wagon – in the wife’s possession, but registered with Company B Proprietary Limited
Company B Proprietary Limited
$6,500
6. Sporting, camping and hobby equipment
Husband
$4,000
7. Musical instruments and equipment
Husband
$7,500
8. Household goods, including upright piano and jewellery
Wife
$NIL
9. Timeshare 2
Joint
Nominal
10. Timeshare
Joint
Nominal
Subtotal
$533,207.84
Bank Accounts
Ownership
Value
11. … Bank account
12. … Bank account
13. … Bank account
14. CBA Complete Access …
15. CBA Account …
16. Fund entitlements
Wife
Wife
Wife
Husband
Joint with husband’s de facto
Wife
$83.32
$177.20
$1,646.03
$817.03
$393.54
$14,435.33
Subtotal
$17,552.45
TOTAL ASSETS:
$550,760.29
Liabilities
Ownership
Value
17. CBA home loan on former matrimonial home
Joint
$52,529.29
18.Westpac Mastercard (closed)
Wife
$NIL
19.Debt owing to …
Wife
$1,803.72
20.Visa
Wife
$NIL
21.Finance (timeshare)
Joint
$NIL
22.CBA personal credit card …
Husband
$NIL
23.… Bank personal loan
Wife
$3,831.12
Subtotal
$58,164.13
TOTAL NET ASSETS
$492,596.16
Superannuation
Ownership
Value
24.Super Fund 2
Husband
$17,251.48
25.Super Fund 3
Wife
$22,528.62
26.Super Fund 1
Wife
$199,239.30
Subtotal superannuation
$239,019.40
Total net asset pool, including super
$731,615.56
Step 2 - Contributions s.79(4) financial and non-financial
The husband brought in property being the blocks of land at the site of the former matrimonial home. The estimated value of this was around $40,000.00. Given the length of the marriage, the weight given to that contribution is to be seen in light of the length of the marriage and contributions made by each of the parties. I accept that the husband worked on the home construction and that he organised for work to be carried out through contra deals with friends in the business.
I also accept that the wife worked long and hard, that she did the book work and made contributions to the welfare of the family when she was not at work, as did the husband when he was not at work.
During the marriage the parties each worked hard at their respective occupations. The wife has sought to emphasise her contributions in painful detail as could be seen in questioning by Counsel for the wife to the husband asking him (in a 26 year marriage) to accept “that the wife contributed by planting grass seed at the back of the house as it was bare dirt initially.”[80] Seemingly this question about the grass seeds in 1998 was to adduce evidence to counter the husband’s position that he was physically helped to build the home. I directed Counsel to concentrate on the big issues, and that the court did not have enough time to cover the grass seed contributions for the following 22 years up to separation in 2013. This is particularly so when on either case the position appeared to be the non-financial contributions were equal.[81]
[80] Transcript 12/3/18 p. 31, line 35.
[81] Refer to each party’s case outline.
I am also cognisant that the husband has contributed significantly more financially over the five years post separation than the wife post-separation financially to the joint debts. There was no child raising of a child under 18 by November 2013 their only child turned 18. The husband reduced debt as discussed in my judgment and that includes debts for the timeshare. The wife also did not put in the physical and mental exertion into working and paying down the debt as did the husband. If it were not for the husband’s actions, and if the husband just looked after himself, the wife would probably be bankrupt as the guarantor of the Property N Investment property and the line of credit, the loans for which were serviced by the husband.
I consider that overall, on a close analysis if anything the husband’s post separation contributions are higher than those of the wife. Generally though, in this long marriage I will nonetheless assess the financial and non-financial contributions as 50% to the husband and 50% to the wife.
Step 3 - Section 75(2) factors
I accept the property pool as produced by the husband. I do not accept, in relation to s.75(2) factors, that the husband is going to earn as much as the wife into the future. He has not earned as much as the wife in the past. He is not nearly as qualified as the wife, who earns a superior income to the husband.
The wife has dual qualifications in both …. During the marriage, the wife completed a degree at the University … obtaining a qualifications in 2007 to be able to take up work. Part of this involved full-time study during 2007. This is her second qualification, health care being her first qualification. The wife works primarily as a public servant and does casual health care work.
The wife earns more than the husband and says her combined income is $95,000.00 plus superannuation. I note that her income has been $99,000.00 in 2016 and 2017 as seen in the husband’s affidavit.[82] In addition, I note the wife has been able to put away further funds in Fund entitlements of $17,000.00 per annum over and above her superannuation.
[82] Paragraph 15.
The husband’s income reflects the sale of items of machinery this included capital gains of $42,902.00 in 2015. In 2017 the husband’s income was $68,288.00 (exclusive of the sum of $36,000.00 exclusive of GST) received upon the sale of the old bob cat and excavator. The husband has also borne the brunt of the CGT as reflected in his income. The figures as to the husband’s earnings therefore, have to be seen in this light. I note the wife in discussing the husband’s “actual income” makes reference to the turnover figures of the business. The turnover does not represent the husband’s income.
I am aware that the wife is 2 years older than the husband however, I am also aware that not only does the husband earn less, and have no formal qualifications unlike the wife, but the nature of the husband’s work is that he undertakes significant physical outside work in his occupation. I accept the husband’s evidence that the nature of his work is very physical and I consider that at age 54 he is noticing that he does not manage as well as the younger men. I think it will be harder for the husband to continue working as long as the wife given their respective occupations.
There is no evidence of any medical condition suffered by either party that would impact on either party’s income earning capacity.
It is submitted on behalf of the wife by Mr Mould that essentially the s.75(2) factors should be, “equal, if not tipped in our client’s favour.”
This is justified on the basis of the wife being 2 years older than the husband and requires a “different consideration of the husband’s income.” I do not accept that there is any uplift in the wife’s favour.
I do not accept that the equations carried and theories put forth by Counsel wherein the figure of $154,710.76 in depreciation over the next 5 years is to be effectively added to the husband’s income on the basis that he will receive this money in tax deductions for depreciation, as submitted by Counsel for the wife. This is the figure calculated by adding 30% depreciation and projecting forth five years, as submitted by Counsel for the wife.
Mr Linklater-Steele submits that the s.75(2) factors are equal, though if pressed the husband has made more post separation contributions to the debt reduction and worked hard doing so. Also, if the husband did not have the house, he would incur additional expenses in setting up similar arrangements elsewhere to accommodate his business. I have taken account also of the husband’s tax credits as part of his current overall financial situation.
Overall, I do not intend to make any adjustment for the s.75(2) factors.
Former Matrimonial Home
At the commencement of the trial I was informed that each of the parties intended to keep the former matrimonial home. I raised with the parties the practice and possibility of the court appointing a trustee for sale in relation to a property which both parties sought Orders to retain. I urged the parties to consider their positions on day one of the trial as it was not unusual for the court to Order that where each party wants to retain the same asset, that orders be made for it to be sold with each party being able to bid. I also stated that the parties’ position may be that each wished to retain it, but I flagged the possibility of Orders being made for the appointment of a trustee providing for each of the parties to bid on the home.
Since that time, I have sat through this trial hearing evidence for days and considered the evidence and the case run by each party. I have considered their respective reasons for wishing to retain the former matrimonial home.
The husband seeks to retain the home given his family connection with the block of land. Moreover, he states that his ability to run his business and earn his income would be significantly compromised without having the access to and use of, the space and the purpose built sheds. I accept that the sheds are an advantage to the husband’s business. I accept that the husband did and does use the sheds purpose-built with extra high ceilings for all his machinery. His need to do this and the refusal of the wife to continue to agree that he could, resulted in an application by the husband to this Court that he be permitted to use the sheds for conducting his business. An order was made by Judge Purdon-Sully on 7 February 2017 that he be permitted to attend the property to continue to operate the business from the former matrimonial home including the storing, repairing and maintaining of all plant and equipment and materials and supplies of Company B Pty Ltd.
I have considered the submission of Counsel for the husband that there will be a cost to the parties for a trustee for sale and that orders could be made for the appointment of a real estate agent and sale of property instead.
The wife submits that she has lived in the former matrimonial property for years including for the 5 years post separation. She says that the land was given to both parties initially as a wedding present. Whilst this may have been so, there is no evidence to rebut the presumption that this gift be attributed to the husband. It seems highly unlikely that the husband’s parents would have given the wife this gift but for the fact she was marrying their son.
I also accept that the husband and wife together paid out costs associated with expenses that were incurred by a proposed third party purchaser on improving the land at a time when the husband’s parents intended to sell the land to that third party purchaser.
The wife does not accept that the husband would use the machinery sheds saying that they are “full of junk”. For the same reason the wife does not accept the husband’s position that the shed is required to park his vehicles. The wife does not accept that the husband has used the facilities of being able to park or utilise the sheds nearly as much as the husband says he has. The wife says she has kept records of the nights he has parked elsewhere. I accept that she has. She also speculates that the husband is not really is going to live there. Counsel has made a submission (without any evidence in support of his submission) that “the reality is they don’t intend to relocate to Property A. It would be used, if anything, as an investment property. My client is there; has been there; wants the home.”
The wife also seeks to diminish the husband’s family ties to the property stating that the reality is that the husband “lived in a house across the road from the acreage from the age of 14.”
The wife also says in her case outline, “The husband’s claim for nostalgia is thwarted by the fact he left the property in July 2014 and offered the wife the property himself.”[83] This submission is misleading as the paragraph in the husband’s affidavit that the court is referred to actually says, “At one time I can recall offering for Ms Finch to keep the Property A property provided I was given access to the property for the purposes of storing my vehicles and running my business. Ms Finch refused my offer and said ‘no you can’t use it.’”[84] This position is in accordance with the husband’s subsequent application to use the shed for his vehicles and machinery.
[83] Page 8 paragraph 3(c).
[84] Husband’s affidavit paragraph 132.
The wife’s case outline submits that, “The husband’s claim to the former matrimonial home is merely an illegitimate extension of his spiteful control and domestically violent behaviour.” There is no evidence to support the wife’s submissions that the husband seeks to retain the home due to his “spiteful control” as alleged.
The wife’s Counsel spent time asking questions in relation to moving what the wife refers to as a debris (the wife includes in this dirt and rocks) from the property in the event she retains it. This is associated with the husband’s business. The wife also seeks to have the husband remove all of his chattels including sporting and hobby equipment, machinery and tools at the property belonging to the husband or Company B. These orders are sought whether the wife retains the property or there is a trustee for sale appointed. The wife’s proposed orders for the appointment of a trustee involve the trustee being able to undersell the property, spend money in preparation for sale, the trustee or their agent being able to inspect the property only upon 2 days notice and the wife having exclusive occupation of the property. “Exclusive occupation” is contrary to the current Orders of the Court.
Having heard evidence from each of the parties and I am mindful in particular of the husband’s significant post separation contributions not just financially, but in his physical efforts at doing so, whilst experiencing the pressure and burden in solely addressing the tax debts. These parties were thrown into a dire financial situation. Tax debts as they have arisen in this matter are a profoundly serious matter with significant ramifications if they remained unpaid, not just to the husband but also to the wife. The husband did not allow payments to fall into arrears on the Property N Investment property or the line of credit to fall into arrears, thus saving the wife from the consequences of not being liable as guarantor.
It is also clear to me from the evidence that the husband has been using the property for his business.
Noting the draft of Orders sought by the wife and her expectations in retaining the house, there is likely significant cost and argument ahead in having to go through the exercise of removing debris and all of the items associated with the husband’s business. Added to this is my concern at the wife’s conduct thus far in her approach to this litigation. It is regrettable that the wife has been so uncharitable towards the husband’s desire to finalise the property settlement and so critical of his efforts to pay down all of the debt. She has wasted significant time at the trial pursuing issues that were either trivial or not relevant, and made criticisms about the husband’s conduct which are frankly untenable.
Having seen the wife’s proposals and her requests for debris, equipment and machinery to be removed (and a multitude of other belongings) and noting her attitude and hostility towards the husband’s commendable efforts at reducing their joint debt I am most concerned that the wife will continue to adopt her obstructionist attitude towards the husband if she is to retain the property and the husband is ordered to set about removing soil and rocks and debris and all of his other items at the property.
The wife does not accept that the husband has strong family ties to the particular property. I do.
I am satisfied that the wife’s income earning capacity will not be affected by finding another home elsewhere. In either of her pursuits she does not require the use of the significant structures of particular value to the husband on the property which were purpose built by him.
I have seriously considered appointing a trustee for sale to enable each of the parties to buy the property and to avoid any further arguments. This might solve some of the hurdles I anticipate which lie ahead, however, it will be costly exercise for the parties and at the end of the day, I am not satisfied that this is the appropriate course. It will also likely lead to further delays and expense in final settlement.
On balance the husband’s retention of the property and the sheds is the option least likely to lead to further and unnecessary litigation and delay in finalising this matter. It will also enable the husband, who already earns less than the wife, to continue operations of his business without incurring additional expense.
I consider that it is just and equitable in all of the circumstances to allow the husband to retain the former matrimonial home.
Just and Equitable
I am satisfied in this long marriage which has unfortunately ended in such bitterness, at least on behalf of the wife that given all of the factors, contributions and size of the asset pool the order for a 50:50 division represents a just and equitable division of their assets.
The total of the non-superannuation assets in this matter are $492,516.16. The total superannuation is $293,019.40. Overall, the total pool is $731,615.56. The amount payable to the wife allowing for items that she is to retain is $228,697.50. The wife retains the balance of her superannuation funds and is free of debt from Company B Pty Ltd.
There are sufficient funds for each of the parties to have financial security and Orders providing a division of the superannuation. For the reasons set out I have also concluded that the husband should retain the former matrimonial home and receive a superannuation split. Obviously, the husband will retain his business plant and machinery conducted through Company B Pty Ltd.
I have had regard to the proposed split in dollar terms and I am satisfied that overall, the orders providing for that division and payment of money to the wife of $228,697.50 plus the retention of the balance of her superannuation funds and specified items is in all of the circumstances a just and equitable settlement.
I intend to make orders as per the draft provided by the husband. I note that procedural fairness has been accorded to the Trustee.[85]
[85] Submissions of Counsel 1/6/18.
I also intend to agree to the orders sought on behalf of the husband that in light of the application foreshadowed by Counsel for the husband in final submissions regarding the quarantining of at least $100,000.00 of the funds payable by the husband to the wife on account of a proposed indemnity costs application. I intend therefore, to order that the husband pay the sum of $228,697.50 care of the wife’s solicitors with $100,000.00 to be held on trust until such time as the application is determined. I anticipate given Counsel’s submissions that the application will be ready to file at the time of this judgment.
I certify that the preceding two hundred and ninety-six (296) paragraphs are a true copy of the reasons for judgment of Judge Willis
Date: 16 April 2019
Key Legal Topics
Areas of Law
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Family Law
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Tax Law
Legal Concepts
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Injunction
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Remedies
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Costs
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Statutory Construction
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Fiduciary Duty
0