Finlay and Stark

[2014] FCCA 1552

FEDERAL CIRCUIT COURT OF AUSTRALIA

FINLAY & STARK [2014] FCCA 1552

Catchwords:
FAMILY LAW  ̶  De facto property  ̶  whether money drawn from Line of Credit should be added back – whether defacto applicant should receive greater share of non superannuation assets and defacto respondent greater share of superannuation.

Legislation:

Family Law Act 1975 (Cth), ss.90SF, 90SM

Mayne & Mayne [2011] FamCAFC 192

Applicant: MS FINLAY

Respondent: MR STARK

File Number: DGC 1019 of 2012

Judgment of: Judge Phipps

Hearing dates: 24 & 25 February 2014

Date of Last Submission: 25 February 2014

Delivered at: Dandenong

Delivered on: 25 July 2014

REPRESENTATION

Counsel for the Applicant: Mr Williams

Solicitors for the Applicant: Taylor Splatt & Partners

Counsel for the Respondent: Mr Graham

Solicitors for the Respondent: Saines Lucas Solicitor

ORDERS

1. That the applicant pay the respondent the sum of $334,700 (the payment) within 45 days of the date of this order.

2. That contemporaneously with the payment:

   (a)The applicant refinance into her sole name the parties Line of Credit with the (omitted) Bank secured over the properties known as Property J (the Property J property) and Property B (the Property B property) and take all steps necessary to have the (omitted) Bank discharge the respondent from all liability for monies borrowed under the line of credit;

   (b)The respondent take all steps necessary to transfer all of his right title and interest in the Property B property to the applicant;

   (c)The respondent take all steps necessary at his expense to withdraw any caveat lodged in respect of the Property J property.

3. That if the applicant does not make the payment within the time required by paragraph 1:

   (a)Property J property be sold by an agent and upon terms as agreed and if not agreed by an agent nominated by the President of the Real Estate Institute of Victoria for the time being or his or her nominee on terms as decided by the nominated agent.

   (b)The proceeds of sale of the Property J property be applied as follows:

   (i)Firstly payment of the costs and expenses of the sale;

   (ii)Secondly payment of any Capital Gains Tax as estimated by an independent accountant agreed by the parties;

   (iii)The balance if less than the amount of $334,700 less half the estimated Capital Gains Tax (the reduced amount) by payment to the respondent;

   (iv)The balance if more than the reduced amount by payment of the reduced amount to the respondent and the balance to the applicant.

4. That if the proceeds of sale of the Property J property are not sufficient to pay the reduced amount to the respondent then within 30 days of settlement of sale of the Property J property:

   (a)The applicant pay the respondent an amount equal to the difference between the reduced amount and the amount paid to the respondent (the second payment) following the sale of the Property J property;

   (b)Contemporaneously with the second payment:

   (i)The applicant refinance into her sole name the parties line of credit with the (omitted) Bank secured over the properties known as Property J (the Property J property) and Property B (the Property B property) and take all steps necessary to have the (omitted) Bank discharge the respondent from all liability for monies borrowed under the line of credit;

   (ii)The respondent take all steps necessary to transfer all his right title and interest in the Property B property to the applicant.

5. That if the applicant does not make the second payment within the time required after settlement of the sale of the Property J property:

   (a)Property B property be sold by an agent and on terms and conditions agreed and if not agreed by an agent nominated by the President of the Real Estate Institute of Victoria for the time being or his or her nominee on terms and conditions decided by the nominated agent.

   (b)The proceeds of sale of the Property B property be applied as follows:

   (i)Firstly in payment of the costs and expenses of the sale;

   (ii)Secondly in discharge of the mortgage and any other encumbrance over the property;

   (iii)Thirdly by payment of the second payment to the respondent plus interest at the amount prescribed by the Rules of Court from the date at which the second payment should have been made to the date of payment.

6. That the respondent take all steps necessary to transfer into the sole name of the applicant the jointly held (omitted) shares.

(6A)That the respondent do all things necessary to transfer into the name of the applicant the registration of the BMW motor vehicle in the possession of the applicant.

1. That pending sale of the Property J property the applicant apply any rent received to the rates, taxes and insurance for the Property J property and any balance in payment of interest on the line of credit with the (omitted) Bank.

2. That pending transfer of the respondent’s interest in the Property B property to the applicant or sale of the Property B property the applicant have the sole right to occupy the Property B property and pay all rates taxes and insurances in respect of the Property B property.

3. That pending transfer of the respondent’s interest in the Property B property to the applicant or the sale of the Property B property the applicant and the respondent pay interest on the Line of Credit with the (omitted) Bank in equal shares after taking into account any amount paid from the rent received for the Property J property

4. That the chattels and furniture (the contents) in the Property B property and the Property J property be divided as agreed and if not agreed as follows:

   (a)The applicant shall divide the contents by preparing two lists;

   (b)The respondent shall select one or other of the lists as the chattels and furniture he wishes to retain;

   (c)Upon selection of a list by the respondent:

   (i)The applicant is declared to have no interest in the chattels and furniture in the list selected by the respondent;

   (ii)The respondent is declared to have no interest in the chattels and furniture in the list not selected by the respondent.

5. That the applicant cause her solicitors:

   (i)To prepare minutes of proposed order providing for a splitting of the respondents superannuation allocating a base amount to the applicant of $81,800;

   (ii)To provide procedural fairness to the trustee of the respondent’s superannuation fund in respect of the minutes of proposed order;

   (iii)To file an affidavit annexing the minute of proposed order and evidence of the provision of procedural fairness to the trustee of the respondent’s superannuation fund and notify the associate to Judge Phipps of the filing of the affidavit.

6. That upon compliance with paragraph 11 an order will be made in chambers in terms of the minutes of proposed order without further oral hearing.

7. That otherwise each party is declared to have no interest in any property including bank accounts and other monies, choses in action or insurance policies in the possession or ownership of the other party.

NOTATION: These orders have been amended pursuant to rule 16.05(2) of the Federal Circuit Court Rules 2001 to reflect Order 6 to replace the applicant with the respondent and the respondent with the applicant and to reflect the addition of Order (6a) providing for the transfer of the motor vehicle from the respondent to the applicant.

IT IS NOTED that publication of this judgment under the pseudonym Finlay & Stark is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 1019 of 2012

MS FINLAY

Applicant

And

MR STARK

Respondent

REASONS FOR JUDGMENT

1. The parties were in a de facto relationship from 1993 until 2010.

2. Subject to issues about money each party drew from a line of credit subsequent to the breakdown of the relationship, the parties agree the property for the purpose of this application is as follows:

   Property

   ·Property B (joint)                  $637,500

   ·Property J   $340,000

   ·BMW (sold by respondent proceeds

   retained by him)  $  57,000

   ·BMW (respondents name in

   applicants possession)  $  25,000

   ·(omitted) shares  $    1,500

   ·Insurance monies retained by

   respondent  $  40,500

   ·Insurance monies retained by

   applicant  $  32,900

   Total  $1,134,400

   Liabilities

   ·Line of credit (joint)  $   270,000

   Net:  $   864,400

   Superannuation:

   §Applicant ((omitted))  $     23,068

   §Applicant ((omitted) super)  $     45,750

   §Respondent ((omitted))  $     84,089

   §Respondent ((omitted) super)  $  293,510

3. The insurance monies are the amounts each party received after a robbery at the property at Property J.

4. The parties’ relationship has come to an end and the basis upon which they lived together and conducted their joint financial affairs no longer exists.  Each wants an order made.  It is just and equitable to do so.

5. The first two steps in a de facto property application under s.90SM of the Family Law Act 1975 (Cth) are satisfied. The remaining steps are to consider the parties financial and non-financial contributions as described in s.90SM(3), then whether any adjustment should be made for the matters referred to in s.90SF(3) and finally to again consider whether the proposed orders are just and equitable.

6. The applicant was born on (omitted) 1966. She is aged 47 years old. The respondent was born on (omitted) 1966. He is aged 47 years old. The parties commenced living together in 1993. They did not marry and there are no children of the relationship. The relationship came to an end on 18 September 2010. The respondent moved to West Australia in March 2009. He returned to Victoria relatively frequently but that became less frequent over time. The parties agree that the relationship came to an end on 18 September 2010 when the respondent told the applicant that the relationship was over. For the purpose of applying s.90SM, 18 September 2010 is the date of the breakdown of the relationship.

7. At the commencement of the relationship the respondent says he had savings of $50,000, the applicant says she had $40,000.  The applicant says she had approximately $20,000 in shares and an (omitted) endowment policy valued at approximately $20,000.  The respondent says he does not know if the applicant had the shares and the policy.  There are no documents.  On that evidence the balance of probabilities favours a finding that the applicant did have about $40,000 in assets.  Given the size of the property pool and a 17 year relationship a $40,000 to $50,000 difference in initial contributions is of little consequence.  I will proceed on the basis that the parties’ initial contributions were about equal.

8. The applicant worked full time in (omitted) from the commencement of cohabitation in 1993 to 1998.  She then moved to (omitted) work from 1998 until 2003.  In 2004 and 2005 for a 12 month period she did a (omitted) course.  After that course she returned to (omitted) work in 2006 and worked in that capacity until 2009.  After that she commenced an (omitted) course, she says with the intention that she could earn money for the parties by investing in property.  The parties took out a line of credit, according to the applicant to use for the purpose of property investment.

9. The applicant commenced a (omitted) course which she undertook full time commencing about when the respondent moved to Western Australia.  When the relationship came to an end on 18 September 2010 the applicant had not had paid employment for about two a half years.  After the end of the relationship the applicant was unemployed for eight months.

10. Sometime was taken up in the hearing with cross examination and discussion about the parties’ bank accounts and after the breakdown of the relationship.   This created some confusion but for the purposes of determining this property application the position is straightforward.  The parties had bank accounts with the (omitted) Credit Union.  They do not need to be described.  Both parties had access to the accounts.

11. The applicant did not work for two and a half years before the breakdown of the relationship.  She continued to live in the parties’ property in Property B.  All expenses for both parties were paid from the respondent’s income.  After the breakdown of the relationship the applicant withdrew half of the respondent’s salary from their joint account for three months.  She used some of this money to make interest payments on the parties line of credit and some for expenses on the parties’ properties.  Her own expenses were paid from this money.  She says to that the parties had $16,000 in a savings or investment account and that she drew out half, $8,000, and half went to the respondent.  The respondent says he has no knowledge of such an account.

12. It matters little whether there was such an account because the source of all the funds available to both parties at this time, whether current income or savings, was the respondents earnings. It does not matter whether the applicant made payments for her own expenses, interest payments or joint expenses direct from the parties’ joint account, or from the account she later opened in a her own name because the source of all the money was the respondents earnings. The issue for which all this is relevant is the financial contribution of the parties to the acquisition and maintenance of property for the purpose of s.90SM. The source of all the funds expended by the parties at about the time of and for some months after the breakdown of the relationship is the respondent’s income.

13. The applicant says that her withdrawal of half the respondent’s salary in the months after the breakdown of the relationship was by agreement.  The respondent was ambivalent about whether there was an agreement, but again it does not matter.  The relevance is the parties’ contributions.  All financial contributions around this time were made by the respondent.

14. One aspect of the way money was used by the applicant at the time of and after the breakdown received some attention.  The applicant made 11 x $500 payments, a total of $5500, into the line of credit account from 30 August 2010 until 28 June 2011.  The source of the funds was the parties’ (omitted) Credit Union account or her own (omitted) Bank account which she opened in December 2010 or January 2011.  The payments probably did not warrant the amount of attention they received during the hearing.  The source of the money was the respondent’s earnings.

15. The parties have been attempting to sell the Property J property without success.  The property was empty until the applicant rented it early in January 2014.

16. The proceedings were commenced by the applicant on 5 April 2012.  The parties agreed on orders on 13 June 2012 which included an order for a conciliation conference on 27 July 2012 and directions for a valuation of the Property B property and discovery.  The conciliation conference was held on 27 July 2012.  Both parties were represented by counsel.  The parties reached agreement and both signed heads of agreement. 

17. The heads of agreement provided that for the purpose of the agreement (and subsequent orders) the pool of assets shall be:

    i)Property B valued at $650,000;

    ii)The net proceeds of sale of Property J being the sale price less selling costs, and anticipated Capital Gains Tax and line of credit currently approximately $170,000;

    iii)Proceeds of sale of respondent’s BMW motor vehicle $57,000;

    iv)Applicant’s BMW motor vehicle $35,000;

    v)(omitted) shares approximately $1500.

18. The heads of agreement provided for the sale of Property J with a reserve price of $568,000 for the first six months, $530,000 for the next six months and then $500,000.

19. The heads of agreement provided that the pool of assets would be divided $35,000 to the applicant and the balance equally between the parties with the applicant to retain her BMW car and the joint (omitted) shares.

20. The heads of agreement provided that each party could withdraw $150,000 from the line of credit and retain it as part property settlement.  It provided for a superannuation splitting order of the applicant’s superannuation in the sum of $81,800 and that the parties would divide chattels by agreement.

21. Minutes of orders where never agreed by the parties and the order was never made.  The Property J property was placed on the market but has not sold.

22. The parties had a bank line of credit from which both parties withdrew money after the end of their relationship.  The history is described later.  Using $25,000 from the line of credit the applicant went into a business partnership in a (omitted) franchise.  She had 12 weeks of training and worked in it for some time.  She left the business in February 2012.  She received her money back plus some costs.  During the time she was working in the (omitted) franchise she was on a wage of $1,000 a week from a company that she had incorporated.  She transferred her directorship of the business to the other partner.

23. After February 2012 she was unemployed for eight months and then obtained casual work in the (omitted) business doing (omitted) work.  That was in July or August 2012.  Her earnings varied between $350 and $500 a fortnight.  In March 2013 she commenced full-time with (omitted) where her income is $65,000 a year.

24. When the parties commenced their relationship the respondent was working for (omitted).  He stayed with them until 2006 and then was employed by (omitted) from 2007 until March 2009.  His salary was $220,000 and he says that he also received bonuses of up to $50,000 a year.  He received a severance package of $80,000 when he left his employment with (omitted).

25. In March 2009 he moved to Western Australia.  He has had a number of contracts with (omitted).  From January 2010 until June 2010 his income was $69,124.  The 2010/11 year’s total income was $169,283.  At the time of the breakdown of the relationship he had a contract which on a pro rata rate was $100,000 a year.  In March 2011 he obtained a five-year contract at the annual salary of $175,110.  There was some cross examination of the respondent about payments made direct by his employer as a result of him salary sacrificing.  I am satisfied that $175,110 is the annual amount of his remuneration.  The contract is until March 2016.

26. The property at Property B was purchased for $450,000 in 2004.  This was the party’s residence and remains the applicant’s residence. The property at Property J is a house on 10 acres.  It was purchased in 2000 and transferred into the applicant’s name in 2006.  The parties had plans to operate a bed and breakfast and that has not happened.  The property was purchased for $180,000.

27. Subsequent to the breakdown of the relationship the parties have both drawn amounts out of the line of credit, the applicant $90,000 and the respondent $85,000, done in various instalments.  There was considerable debate about the fate of the amounts.  All the amounts have been expended by each party, some on legal expenses, some by the respondent in purchasing household contents and in financing the purchase of his current Western Australian property and the rest on expenses.

28. When the respondent moved to Western Australia he lived in rental premises.  He purchased furniture and appliances.  In January 2012 he bought a residential property at Property S for $727,500.  He sold his BMW and used some of the money from the line of credit and borrowed $680,000 on a commercial bill to complete the purchase.  He has re-partnered and he says that his partner has a joint financial interest in the property.  He says he is solely responsible for the debt.

1. Counsel for the applicant argued that the $85,000 withdrawn from the line of credit by the respondent should be added back into the property pool and treated as a distribution to the respondent of property.  He argued that the $90,000 withdrawn by the applicant should not be added back.  Counsel argued that the money drawn by the applicant was used in part to maintain the parties’ properties and the balance used by the applicant to maintain herself  He argued that that money should be seen as meeting the respondent’s obligation to maintain the applicant.  This argument was based upon the applicant’s average income from separation until the trial, an average of $27,000 to $28,000 per year, and the respondent’s income of $170,000.

2. In Mayne & Mayne [2011] FamCAFC 192 Faulks DCJ said at [72]-[74]:

   72. Parties to proceedings about the division of property before the Family Court (and the Federal Magistrates Court) frequently urge the Court to add-back assets or funds that have been applied by one party or another for allegedly his or her own purposes after separation. The rationale is that one party should not benefit from a premature distribution of the assets. An obvious example is withdrawing and using money from a bank account either joint or owned by one of the parties. It is also the case that the parties may decrease the pool by increasing liabilities. The issue in such cases is whether the liability should be a joint liability or a liability only of the party who created it.

   73. The application of the funds removed (or the debt incurred) may have been for a personal purpose (for example, to pay legal fees) or it may have been applied in the sustenance of a party or the children of the parties.

   74. If the former is the case this has generally found to be a pre-emptive unilateral division of property. If the latter is the case then the principles enunciated in Marker v Marker[24] and NH & RC[25] apply. If the money was, or part of the money, was used to meet reasonable living expenses then that money, or that part of the money, is not “added-back” or regarded as a pre-emptive distribution.

3. The respondent since the breakdown in the relationship has had substantial earnings.  He lived in rented premises before purchasing his current property.  While the premises he rented and the premises he purchased are all comfortable premises the evidence does not suggest extravagance by the respondent.  He does not now have substantial savings.  He has the asset of the net value of his residence.

4. Neither party put a specific submission that any amount spent on legal expenses should be added back although I raised it as a possible issue.  Not adding back legal expenses is a reasonable approach.  I do not have exact figures but a reasonable expectation is that each party has spent in total about the same amount of money.  Each party has earned income since the breakdown of the relationship.  Arguably, some of the money that the applicant drew from the parties’ bank accounts can be treated as taken at least with the implied consent of the respondent.  He did not acknowledge it was by agreement but he did not object to it happening.  As he said, he still had some feelings for her.

5. The applicant annexed to her affidavit of 10 February 2014 details of her expenditure from the breakdown of the relationship.  It shows expenditure on expenses for both properties and her own expenditure.  Other than maintaining the properties she has not improved her asset position.  A reasonable inference is that she has lived quite frugally.  Her evidence was that she has paid some legal expenses and has some owing.

6. Determining whether the parties have paid legal expenses from the amounts they received from the line of credit is difficult.  The applicant can argue that she used her own earnings and money from the parties bank accounts other than the line of credit.  The respondent can argue that he used his own income.

7. The argument for the applicant that because the amount she received should be treated as maintenance the amount the respondent received should therefore be added back does not fit with the summary of the law set out above by Faulks DCJ. If the amount received by the respondent was used for reasonable living expenses then it should not be added back. The amount used by the respondent in the purchase of his current property is in a different position but otherwise I am satisfied that his expenditure was for reasonable living expenses. The same applies to the amount received by the applicant. The respondent does not argue that the amount received by the applicant should be added back. The amount used by the respondent in the purchase of his current property I will take into account s.90SF(3)(r).

8. This means that the assets and liabilities of the parties for the purpose of determining a distribution of property under s.90SM is agreed between the parties.

9. At the conclusion the parties did had not have an agreed position about the furniture and chattels in the two properties.  A solution discussed at the hearing was an order that the applicant draw up two lists to divide the furniture and chattels into her estimate of an equal division and that the respondent could then select which list he wished to retain in his possession.  That is the course I will adopt.

10. The only chattels that the respondent removed from the house were firearms and the safe in which he kept ammunition.  He removed the firearms because licensing conditions required that they be kept in a property under his control and the licensing conditions also required that they not be removed from the State of Victoria.  He has placed them with a gun dealer in (omitted) where they are for sale.  He gives them an estimated value of $3,000.  The applicant does not propose that they should be taken into account.

11. The parties had a large disparity in income over the course of the relationship.  Counsel for the respondent calculated that the respondent had turned over $3 million while the applicant had earned a little over $200,000.  I do not have the detail of the calculation but it is quite clear that the respondent earned substantially more than the applicant by many multiples is justified.  There were periods when the applicant was not earning income.

12. The applicant’s proposal is that the property should be adjusted with her retaining both properties with no adjustment of superannuation.  She proposes a calculation which divides the non-superannuation property 60% to her and 40% to the respondent and superannuation 50% each and there be a 25% reduction in the total amount of the two because she is receiving immediate assets rather than superannuation by way of a splitting order.

13. The respondent’s proposal is that the non-superannuation property should be divided 65% to the respondent and 35% to the applicant.  The respondent’s argument is that contribution should be assessed at 70% by the respondent and 30% by the applicant and there should then be an adjustment of 5% for the parties disparity in income and income earning potential.

14. For superannuation the respondent proposes that there be a splitting order in favour of the applicant with a base amount of $81,000.  The argument for this is that this was the amount agreed between the parties when they entered into heads of agreement in July 2012.

15. The respondent argues that two other amounts should be taken into account.  In August 2013 the applicant rented the Property J property for $360 a week.  The respondent argues that he should be entitled to half that amount.  The other amount is notional rent for the Property B property where the applicant has been living rent-free.  In one of his affidavits the respondent asserts that comparable properties in Property B rent for $600 a week.  The respondent applied after the hearing had commenced to file an affidavit from an estate agent about the rental value of the property.  For reasons I gave at the time I rejected the application and so the affidavit did not become part of the evidence.

16. The two amounts are not property and should not be added in.  They need to be taken into account in terms of contributions.  As to the rent I note that the applicant has spent substantial amounts of money on expenses and maintenance of the properties.

17. Normally the assessment of contributions and adjustments should be done separately for non-superannuation property and superannuation but in the appropriate case they can be assessed together.  This is not an appropriate case to do that.  The parties had a 17 year relationship.  There are no children.  The only reason the applicant puts forward for adopting a different approach is that she wishes to keep those properties.  The respondent does have his own residence but with a substantial mortgage.  He is entitled to have his share of the parties’ capital immediately and not have it deferred by receiving a greater share of superannuation.

18. Financial contribution has come overwhelmingly from the respondent.  The difference comes about for two reasons.  When both parties were working the respondent had higher income.  The applicant did not work for substantial parts of the relationship, 3 to 3½ years.  She was not employed for eight months after the breakdown of the relationship and then for some of the remaining time she had part-time work.  When not working the applicant was undertaking a (omitted) course and then later a (omitted) course.  Both were undertaken with the consent of the respondent so that the applicant’s absence from paid employment was part of the way the parties organised their lives.

19. The applicant made non-financial contribution in the tasks of maintaining the parties’ properties including attending to financial matters.  She contributed in a homemaker role.  Her non-working periods during the course of the relationship were with the agreement of the respondent.  After the breakdown of the relationship she remained living in the party’s residence without paying rent.  Much of the money used to maintain both properties and to pay interest on the mortgage came from the respondent’s income.  The applicant did attend to upkeep and maintenance of both properties.

20. When all these matters are taken into account the proper assessment of the parties contributions is 60% by the respondent and 40% by the applicant.

21. An adjustment must be made for s.90SF(3) matters including the amount from the line of credit is by the respondent to purchase his property. Both parties are 47 years old and both are in good health. Both have employment, and although the respondent says that (employer omitted) is undergoing substantial restructure and he cannot be sure of the further contract after March 2016, his history shows that he has been in constant employment and that he has long experience and skills in (occupation omitted).

22. The applicant has found employment when she wished to have it, so again the history shows that she can obtain employment and that she does have skills.

23. The adjustment needs to be made on the basis that each party can obtain employment for the foreseeable future at about their current rates of remuneration, $65,000 per annum for the applicant and $170,000 per annum for the respondent.  The division of property will enable the applicant to purchase her own residence.  The respondent will be able to reduce the mortgage on his residence.

24. Taking these matters into account the appropriate adjustment is 10% for non-superannuation property.  The result is that property should be adjusted equally.

25. The issue concerning superannuation is at what point the adjustment should be made.  The applicant says that it should be made as at the date of the hearing.  The respondent points to the splitting order agreed under the heads of agreement in July 2012.  I do not have figures for superannuation at the commencement of the relationship or at the time of the breakdown of the relationship.

26. The respondent would be treated unfairly if his current superannuation was used for the purpose of making a splitting order.  The hearing was 3½ years from the date of the breakdown of the relationship.  In that time he has continued to make contributions to superannuation and investment income has continued.

27. The contribution considerations for superannuation are the same as for non-superannuation property.  That is there should be division of 60% in favour of the respondent and 40% in favour of the applicant.  The adjustment for matters for disparity of income are not relevant given that the parties agreed in July 2012 that the splitting order should be $81,000.  I consider that is a reasonable indication of the proper amount given the conclusions I have reached.  While this was not dealt with specifically in the evidence the inference I draw is that failure to agree on the terms of a superannuation splitting order was not the reason the heads of agreement of July 2012 did not result in a consent order.

28. Of the non-superannuation assets each party receives $432,200.

29. The applicant proposes that the respondent should retain the (omitted) shares.  In the July 2012 heads of agreement she was to retain the (omitted) shares.  Who retains them is of little consequence but since the parties agreed in July 2012 that the applicant should retain them I will do the same in the orders.

30. The respondent retains the following:

    §Proceeds sale of BMW              $57,000

    §Insurance monies  $40,500

    Total  $97,500

31. The additional payment to the respondent is $334,700.

32. The applicant retains the following:

    §BMW  $25,000

    §Insurance monies  $32,900

    §(omitted) shares  $  1,500

    Total  $59,400

33. The additional payment to the applicant is $372,800.

34. The applicant’s proposal is that she retain both the Property B and Property J properties, that she refinance the line of credit into her name alone, and make a payment to the respondent.  She proposed a provision that if she was unable to raise the finance the Property J property be sold and after payment of selling expenses and Capital Gains Tax the balance be paid to the respondent.

35. The line of credit is $270,000 and so to make the payment of $334,700 to the respondent the applicant would have to obtain a mortgage of $604,700 and probably an additional amount to cover expenses.  There is no evidence of the applicant’s ability to borrow this amount of money.  Her income is $65,000 a year and if she retains the Property J property and additional $18,500 a year in rent.  I consider it would be just and equitable to give her the opportunity to obtain a loan within 45 days. 

36. If the applicant cannot obtain a loan, sale of the Property J property, unless for an amount greater than the agreed valuation, will not be sufficient to make the payment to the respondent.  After selling expenses in making an allowance for Capital Gains Tax there will still be a small amount payable to the respondent.  The just and equitable way is to then give the applicant the opportunity to retain the Property B property.  The Capital Gains Tax will have to be taken into account.

37. I do not have the exact name of the respondent’s superannuation account or the trustee, nor am I aware that there has been procedural fairness.  I will make appropriate orders so that the superannuation splitting order can be made in chambers at a later date.

I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Date:  25 July 2014