Fishlock and Fishlock

[2013] FCCA 1232

FEDERAL CIRCUIT COURT OF AUSTRALIA

FISHLOCK & FISHLOCK [2013] FCCA 1232

Catchwords:
FAMILY LAW – Property settlement – contributions – s.75(2) factors – date of separation and relevance for inclusion of liabilities in the property pool – relevance of wife’s alcoholism and demise of the husband’s business.

Legislation:  

Family Law Act 1975 (Cth)
Federal Circuit Court Rules2001

Federal Circuit Court Regulations

Ferraro & Ferraro (1993) FLC 92-335
Clauson & Clauson (1995) FLC 92-595
Hickey & Hickey v Attorney Desk General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Stanford & Stanford (2012) 87 ALJR 74
Russell & Russell (1999) FLC 92-877

Applicant: MR FISHLOCK

Respondent: MS FISHLOCK

File Number: DGC 1231 of 2011

Judgment of: Judge McGuire

Hearing dates: 12 & 13 August 2013

Date of Last Submission: 13 August 2013

Delivered at: Melbourne

Delivered on: 10 October 2013

REPRESENTATION

Counsel for the Applicant: Mr Laidlaw

Solicitors for the Applicant: Bramich Legal

Counsel for the Respondent: Mr Weil

Solicitors for the Respondent: T J Mulvany & Co

ORDERS

1. That the monies held in trust on behalf of the parties from the proceeds of sale of the former matrimonial home be disbursed as follows:

   (a)An amount of $72,546 to be retained by the husband’s solicitors in trust for the parties jointly, and until satisfaction of any claim by (omitted) Limited against the husband or (omitted) Pty Ltd and thereafter, any remaining balance to be distributed as to 70 per cent to the husband and 30 per cent to the wife.

   (b)An amount to the husband of $96,651 plus 70% in any amount held in Trust over $225,887.

   (c)An amount to the wife of $23,860 plus 30% of any amount held in Trust over $225,887.

   (d)An amount of $13,000 to satisfy the debt to Mr L.

   (e)An amount of $19,830 to satisfy the debt to Mr W/Ms P.

2. That within 28 days of the date of these orders, the husband transfer and/or vest all his right, title and interest in the following to the wife absolutely:

   (a)The parties’ (omitted) Shares shares.

   (b)All personalty and chattels in the possession of or under the control of the wife at the date of these orders.

   (c)The balances of any bank accounts or like investments in the name of or to the benefit of the wife as at the date of these orders.

   (d)The wife’s (omitted) superannuation policy and entitlement.

3. That contemporaneously with the transfer  and vesting orders referred to in paragraph 2 hereof, the wife transfer and/or vest all her right, title and interest in the following to the husband absolutely:

   (a)The Mitsubishi (omitted) motor vehicle retained by the husband (or its proceeds of sale);

   (b)All personalty and chattels in the possession of or under the control of the husband as at the date of these orders;

   (c)The balances of any bank accounts or like investments in the name of or to the benefit of the husband as at the date of these orders;

   (d)The husband’s (omitted) Superannuation Fund superannuation policy and entitlement, but subject to these orders.

4. That each party be solely responsible for and indemnify the other in respect of any liabilities attaching to any of the assets to be retained by that party pursuant to these orders.

5. That pursuant to section 90MT(4) of the Family Law Act 1975 (“the Act”) the base amount allocated to the wife MS FISHLOCK out of the interest of the husband MR FISHLOCK (membership (omitted)) is $19,578.

6. That pursuant to section 90MT1(a) of the Act whenever a splittable payment becomes payable in respect of the interest of the husband in the (omitted) Superannuation Fund the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders.

7. That order 6 has effect from the operative time.

8. The operative time for the purpose of order 6 of these orders is four business days after the service of these orders upon the Trustee of the Fund.

9. That the husband shall direct and authorise the Trustee of the Fund to communicate with the wife and or any other person authorized by her in writing to:

   (a)Answer any reasonable inquiries as may be made by her or on her behalf from time to time in relation to her entitlement in the Fund;

   (b)Provide to the wife or her authorised representative a copy of any notice of any application or request by the husband which seeks a release of entitlements in the Fund in so far as that release may affect the wife’s entitlement in the Fund pursuant to these Orders.

10. The husband, his servants and agents be and are hereby restrained from doing any act or thing which would prevent the wife, her heirs and executors, administrators or nominees from receiving benefits in this Fund to which she is entitled pursuant to these Orders.

11. In the event that the Superannuation split to the wife pursuant to these Orders can be rolled over into a separate account to the wife each of the parties hereto shall each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

DGC 1231 of 2011

MR FISHLOCK

Applicant

And

MS FISHLOCK

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for property settlement.  The husband proposes an alteration of property interests whereby he receives 62 per cent of property excluding of superannuation, and the wife receive 38 per cent.  He proposes a splitting order in respect of his superannuation fund in favour of the wife in a quantum of $19,578.50 which would result in an equal division of the parties’ total superannuation entitlement.

2. The husband’s argument is couched in terms of him receiving a 10 per cent loading on account of superior contributions, and a further 10 per cent adjustment, because of relevant section 75(2) factors in his favour. He says, however, that he would be satisfied with an order giving him 62 per cent of the pool as this is in accord with Heads of Agreement reached between the parties in 2012, and where submissions in anticipation of consent orders were made to the Court waiting only for evidence of procedural fairness on the relevant superannuation fund. The consent orders were not made, and hence, the matter proceeded to trial. I was made privy to the contents of the Heads of Agreement.

3. The wife seeks a settlement whereby each of the party retains 50 per cent of the net tangible assets.  The parties are at odds, however, as to what comprises the pool of property.  The wife also seeks a superannuation split in her favour so as to give the parties equal superannuation entitlements.

Background

1. The wife is 52 years of age.  The husband is 48 years old. 

2. The parties commenced cohabitation in 1991.  They married in 1993.  They purchased the former matrimonial home at Property O, in the State of Victoria, in 1992.

3. There are three children of the marriage namely X born (omitted) 1998 (aged 14 years); Y born (omitted) 2000 (aged 13 years) and Z born (omitted) 2001, (aged 12 years).  These proceedings initially involved children’s matters.  Those issues were resolved by consent orders made on 12 October 2012 whereby the children are to live with the husband and spend supervised time with the wife.  At the time of this hearing the children were not spending any time with the wife despite there being orders.

4. Ms Fishlock concedes a history of stress-related illness and depression, compounded by alcoholism.  She no longer works in her profession as a (occupation omitted). 

5. There is a dispute between the parties as to the actual date of separation.  The husband says that separation occurred in August 2010.  The wife says that final separation took place in about August 2007. 

6. The wife has not re-partnered.  The husband is re-partnered with Ms P. 

7. Both parties vacated the former matrimonial home in about August 2010.  It remained vacant until sale in July 2011, netting sale proceeds of $245,375.18.  Each party has received an interim award of $20,000 from the sale of proceeds leaving a current balance of $225,887 inclusive of interest.

8. The husband has been a self-employed (occupation omitted) for most of the marriage.  His business was incorporated in 1998 and known as (omitted) Pty Ltd (“(omitted) Pty Ltd”).  That company was wound up and a liquidator appointed in 2010.  Proceedings were brought against the husband by the liquidator in 2011 alleging insolvent trading with (omitted) Pty Ltd having substantial accrued debts.  That issue was resolved by negotiation with the liquidator in April 2012 by way of a payment of $15,000 “all in”.  The parties agree that the husband pay this amount from his interim distribution of $20,000.  He also paid his own legal costs of the liquidation in a sum of $6,287.

The Issues

1. The issue as to the date of separation has some importance in my determination.  The wife argues for the earlier date of 2007.  There are liabilities arising from the husband’s business to (omitted) Insurance of $72,546 and a personal loan from a Mr W, of $19,830.  The husband also claims his legal costs of $6287 in respect of the liquidation settlement as a debt of the marriage.  The wife argues that these were all liabilities occurred post-separation and should be met by the husband and not included in the pool of property.

2. There is, on the face of the documents, an issue as to whether the parties are liable to the wife’s father, Mr L, in the sum of $13,000.  Interestingly, the husband claims this to be a liability of the marriage.  The wife does not.  However, during the course of the evidence it appears to have been resolved and/or conceded by the parties that there is, in fact, an outstanding liability to Mr L in that amount.

3. The wife argues generally that the liquidation of the husband’s business/company was post-separation, and that he wantonly, negligently or recklessly ran down that business, and that she should not, therefore, be responsible for any of the liabilities to the business, including the $15,000 “liquidation settlement” paid by the husband from his interim distribution of $20,000.  The husband argues that the marriage continued until about July or August 2010.  He asks the Court to find that the business failed due to the stresses that he suffered from the marriage breakdown, and him taking on the responsibility for care of the children.  He says that the wife should share in these consequent liabilities and argues that her own alcoholism was a prime contributor.

4. There are issues between the parties as to the weight to be given to various contributions made by or on behalf of each of them during the marriage and also as to the relevant section 75(2) factors, including the wife’s alcoholism. The husband argues that the wife’s condition has been a form of “negative contribution” whilst the wife prefers that she suffers from an illness like any other and should not be penalised in any property settlement accordingly.

The Evidence

1. Both parties gave evidence and were cross-examined.  Ms P provided an affidavit and was cross-examined.  Specifically she gave evidence of her taking a personal loan and repaying a loan of almost $20,000 to a Mr W.  It follows that the husband argues the loan liability of Ms P is a debt of the marriage as a successor to the Mr W debt.

2. The wife’s father, Mr L provided an affidavit which was read into her evidence.  He was not required for cross-examination.

The Relevant Law 

1. There has been much recent debate as to the statutory and intellectual approach for trial Courts in the alteration of property interests of parties pursuant to section 79 of the Family Law Act (“the Act”). Until recently it was generally accepted though that this pathway was settled[1].  That is, the Court was to follow a step-by-step process whereby it first identified and attributed value to the property pool, including assets, liabilities, financial resources, and with superannuation to be “treated as property” for these purposes. 

   [1] Ferraro & Ferraro (1993) FLC 92-335; Clauson & Clauson (1995) FLC 92-595; and Hickey & Hickey v Attorney Desk General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143

2. Secondly, the Court would consider the contributions of the parties, under the headings in section 79(4) of the Act including financial, non-financial, direct and indirect contributions by or on behalf of each party including contributions as homemaker and parent. The Court then made a determination of whether or not an adjustment or loading be awarded to either party on account of such contributions. The third step then, was to consider the evidence in respect of any relevant matters under section 75(2) of the Act (formerly often referred to as the “needs” factors), and then determine whether any further adjustment be made to the distribution of property made after consideration of contributions. Somewhat controversially then there may have been a “fourth step” whereby the Court was to stand back and consider whether its proposed orders are just and equitable in respect of the orders themselves, rather than the simple percentage calculations.

3. The High Court in the recent decision of Stanford & Stanford[2] has arguably determined that the multi-stage approach set out above is not appropriate. The Court noted and emphasised that section 79(1) provides that the Court may make such order as it considers appropriate, and that it is essential to commence any such consideration by addressing whether it is just and equitable to make any property settlement order between the parties.

   [2] (2012) 87 ALJR 74

4. Importantly, the majority in Stanford emphasised that this early determination as to whether any alteration of property interests between parties is just and equitable, is not to be conflated with the “staged” process of considering the contributions and relevant section 75(2) factors of each factual platform. Rather, the issue of whether it is just and equitable to make any property alteration order at all must address the particular circumstances of the parties, and their legal and equitable interests in property. This is a qualitative consideration, and not “to be exercised” in accordance with fixed rules. Nevertheless, the Court identified three, fundamental propositions that provide a framework for the power to make orders under section 79.

5. Firstly,

   “it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property”.

6. Secondly, and whilst section 79 of the Act confers a broad power in a Court:

   Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those than then exist. All the more is that so when it is recognised that section 79 of the Act must be applied, keeping in mind that ‘community of ownership arising from marriage, has no place in the common law’. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be ‘decided according to the same scheme of legal titles, and equitable principles as govern the rights of any two persons who are not spouses.’ The question presented by section79 is whether those rights and interests should be altered.

7. Thirdly, the Court in determining whether making an order for property settlement is “just and equitable”, must not begin “from the assumption that one or other party has the right to have the property of the parties divided between them, or has the right to an interest in marital property, which is fixed by reference to the various matters (including financial and other contributions) set out in section 79(4). The majority said:

   To conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in section 79(4), without a separate consideration of section 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

8. Despite this jurisprudence, the High Court noted that the requirement for a determination as to whether any orders will be “just and equitable” is usually readily and easily satisfied by the circumstances of the parties as, for instance, their separation and that they no longer use common property.

9. Although the Full Court in a judgment post-Stanford in Bevan & Bevan[3] threw doubt on the appropriateness of a strict “stage approach” of consideration, it seems to me that a trial Court will ordinarily need to approach matters under section 79 as follows:

   a)Firstly, to identify the pool of property being the existing legal and equitable interests of the parties in that property; 

   b)Ascertain pursuant to s.79(2) of the Act whether it is just and equitable to make any order altering the interests of the parties in their property;

   c)If the answer to (b) is in the affirmative then the Court must still attribute value to the constituents of the property pool;

   d)Identify and attribute weight to the various contributions of the parties within the meaning of section 79(4)(a) – (c), and then make a determination as to the entitlements of the parties based on their contributions;

   e)Then to identify any relevant matters under section 79(4)(d) to (g), including the matters referred to in section 75(2), and then determine whether any further adjustment is appropriate after the contribution-based entitlement of the parties;

   f)Finally, the Court should, still with reference to section 79(2) consider its proposed orders and whether they be “just and equitable” per se rather than simply on account of the underlying percentage division determined after consideration of contributions in section 75(2) factors[4]. 

   [3] (2013) FAM CAFC 116

   [4] Russell & Russell (1999) FLC 92-877

10. The Full Court in Bevan (supra) has considered the effect of Stanford and seems to be of the view that little new jurisprudence arises except perhaps in its own limited factual circumstance.  That is, the Full Court have emphasised that the consideration of “just and equitable” should always have permeated the considerations of the Court rather than being simply a final “fourth step”.

11. Further, the Full Court in Bevan emphasized that it is the existing legal and equitable interests of the parties in property that is the subject of consideration. That is, it is the property pool as at the date of the trial that will be addressed by the trial judge. This seems to impact on the long practice of the Court making notional “add backs” to a pool where one of the parties might have dissipated the assets post-separation or even during the relationship. The Court appears to favour dealing with such an issue under section 75(2)(o), rather than by “add backs” although this will, obviously, create difficulties in small property pools, or where the total or majority of the pool has been dissipated.

12. Finally, in Bevan (Supra) the Full Court cautions against elevating or entrenching a “staged process” in a trial judge’s consideration.  That Court observed at [71] and [72]:

    Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result.’  Any future re-statement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests, is conditioned upon the Court finding that it is just and equitable to make an order.

    It follows that judges would be well advised to avoid what we consider to be arid discussion of the ‘stage in the process’ at which ‘adjustments’ are permissible.  Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact, it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.

Property Pool

1. I must determine the date of separation of the parties as it will influence the nature of and content of the property pool or more particularly, how I deal with the various constituents of it.  The wife says that they separated in 2007.  The husband says they separated in about August 2010.  It is agreed that the wife had emotional illnesses during the course of the marriage.  They agree that in 2007 the Department of Human Services became involved concerning their children.  They agree that the husband was given an ultimatum by the Department that the wife leave the former matrimonial home failing which the department would take the children into care.  The wife moved into a bungalow at the rear of the husband’s father’s property.  The husband continued to provide some financial support.  The parties attended ongoing counselling.  Their sexual relationship continued up until the husband went on a trip with the children to (omitted) in about June 2010. Neither party re-partnered during the relevant period. The parties agree that on his return from (omitted), the husband informed the wife that the marriage was at an end.  The wife volunteers that she was fielding calls from creditors of the husband’s business during his absence in (omitted) in 2010 and shortly before his business failed.  There is little dispute between the parties as to these facts.

2. There is often dispute in these Courts as to the date of separation in respect of divorce matters where a party may argue separation under the one roof.  While the factual background might differ in this case, I am satisfied that the requirements remain the same.  Separation should involve an unambiguous statement of the fact or desire to separate from one party to the other.  The mere fact of living in different residences does not, of itself, denote separation.  The wife concedes that the husband made such an unambiguous statement only in early August 2010 on his return from (omitted).  Both parties concede that they were working on their marriage during the interim period.  They concede that their sexual relationship continued.  The fact of the physical separation of residences in 2007 was connected to issues in respect of the care of their children and the wife’s emotional and alcohol difficulties rather than their marriage.  I am satisfied that, in all of the circumstances, that the parties separated in late July or early August 2010. 

Debt to Mr W

1. The husband alleges that he received a loan from a Mr W on 12 June 2008 in a sum of $19,830.  In his affidavit, Mr Fishlock deposes: 

   These funds were borrowed with the knowledge of the respondent, and applied to the payment of arrears of mortgage and general living expenses.  It was necessary to borrow these funds because, at the time, the respondent’s alcoholism had affected her to such an extent that she was no longer effectively acting as a breadwinner, or providing financial support, and at that time I was therefore solely responsible for supporting the family financially, and maintaining the family household.

2. Mr W did not give evidence.  The only corroboration provided by the husband was a receipt for a bank cheque drawn by a Mr W in the sum of $20,000 on 12 June 2008.  Sitting alone, that document offers little probative corroboration.  Nevertheless, the wife was extremely candid, and willing to make concessions in her evidence.  She agreed in cross-examination, and even in re-examination from her own counsel, that she knew that there was a debt.  She simply didn’t know the identity of the donor other than he being a man she knew as “Mr W” who would visit the family home.  Effectively, the wife in her evidence conceded that there was a loan advanced by Mr W.  In any event, on the balance of probabilities, I find that this is the case.

3. That loan was made during the course of the marriage.  The husband’s evidence as to its disbursement went unchallenged.  The wife conceded that at various points of her own evidence that the husband’s business was in trouble for long periods of the marriage, and not just prior to its liquidation.  The evidence of the husband’s taxable income suggests, as he says in his affidavit, that he may have been reliant on the wife’s income from her business as a (omitted) to support the family.  Further, and importantly, the husband’s current partner gave evidence that she has since taken a personal loan to repay Mr W.  I am satisfied that the liability to Mr W, and now a loan being in the name of Ms P, is properly a debt of the marriage and should be included in the property pool as a liability.

(omitted) Liability

1. The husband proposes that a liability to (omitted) Insurers in the sum of $72,546 be included as a liability in the property pool.  The liability arises from two claims against the husband’s company, (omitted) Pty Ltd for (omitted) prior to the company entering into liquidation.  The claims against the husband arise by reason of his personal/director’s guarantees.  I am satisfied that indemnity insurance was compulsory or prudent prior to any job commencing.  The husband’s evidence is that he walked off one job before its completion in mid-2010, and that another job required significant rectification which he did not complete, also in 2010.  The husband’s rationale is that “my life imploded at the time”.  This was the period before he left with the children to travel to (omitted) on a camping trip in June 2010 and returned to end the marriage with the wife at the end of July or early August.  It is during this period that the wife said she was fielding calls from the creditors of the business.

2. The wife says that she was not informed of the liability or potential liability to (omitted) Limited until the 28 September 2012 and then only by the husband’s lawyers in the family law proceedings.  She argued the date of separation being 2007 but I note my findings that separation occurred in July or August 2010.

3. In her evidence in Court, the wife agreed that the husband had continued his business through the company umbrella from 2007 until 2010.  She agreed that her own difficulties with alcohol had placed a considerable burden on the husband in respect of the care of the children.  She said, however, the husband had endured historical problems in the running of his business, prior to 2007.

4. I should emphasise that the liability to (omitted) Limited is not yet crystallised.  It is the subject of negotiation between the husband’s lawyers and the insurers and may well be negotiated and compromised at a lesser sum.

5. I am satisfied on the balance of probabilities that the (omitted) Limited debt should be brought into the pool of property.  It cannot, however, be dealt with until it is finally crystallised as to quantum.  However it can then be satisfied in accordance with any percentage distribution of the pool that I make between the parties. 

6. I accept that the husband was primarily, if not solely, responsible for the business post-2007.  This was, however, due in a large part to the wife’s alcoholism and with her dealing with these personal issues.  It follows that the husband took on a major and burdensome role in respect of the care of the children.  He was dealing with the difficulties in the marriage which, on my findings, endured until mid 2010.  Generally, I accept his evidence that his emotional state, due to these factors, was a cause of or a primary contributor to the demise of the business.  In all of these circumstances he should not bear the brunt of any losses alone.

Mr L Liabilities

1. On the evidence before me it seems that the parties now agree that there is an outstanding liability to the wife’s father, Mr L, in the sum of $13,000.  I emphasise that it was at all times the husband who alleged this loan despite the familial relationship between Mr L and the wife.

Liquidation Costs 

1. Analagous to the (omitted) Limited debt, and the liability to Mr W, the husband argues that his payment to settle the liquidation (involving no finding that he traded whilst insolvent), together with his own legal costs in those proceedings, should properly be “added back” into the pool of liabilities.  He says that they are liabilities that he paid post-separation.  The payment to satisfy the liquidator was $15,000.  His legal costs were $6287.  The husband met the liquidator’s payment ($15,000) from the interim property settlement of $20,000 which was made to each of the husband and the wife. 

2. Given my findings above in respect of the demise of the husband’s business ((omitted) Pty Ltd) and that the wife should share in the consequences, for reasons of consistency, I make the same finding in respect of the liquidator’s settlement and the legal costs incurred by the husband.  In doing so, I am satisfied that the husband did not act negligently or wantonly.  Rather, I accept that he is a victim of circumstances of the breakdown of the marriage which were contributed in part by the wife’s own difficulties and the consequent responsibility falling on the husband.  I am of the view that he has met joint liabilities post separation.  However, a close reading of the Full Court judgment in Bevan (Supra) suggests that this issue is properly dealt with under section 75(2)(o) rather than by way of an “add-back”. I differentiate between these liabilities and that to “Mr W” that the Mr W debt are now evident in a debt owing to Ms P.

Property Pool

1. Consequently, I determine the property pool as follows:         

ASSETS:
Balance sale proceeds and interest	$225,887
(omitted) Shares	$7848
Interim distribution to the wife	$20,000
Interim distribution to the husband	$20,000
Mitsubishi (omitted)	$4,000
Total	$277,735
NET TANGIBLE ASSETS	$171,359
LIABILITIES:
(omitted) Limited (yet to be crystallised)	$72,546
Mr L	$13,000
Mr W debt (Ms P)	$19,830
Total	$106,376
SUPERANNUATION
Wife's (omitted) Superannuation	$17,843
Husband's (omitted) Superannuation	$57,295

1. There was some argument between the parties as to chattels.  I have no valuation evidence.  I accept the husband’s evidence that the wife was given a licence to remove items of her choice from the former matrimonial home.  I have no inventory of what she took.  Without specific valuations as to the husband’s gun collection, camping equipment and tools, I will simply include them in general chattels, which I find have been distributed evenly between the parties.  I note that the husband has retained a camper trailer valued at $5000 but has taken on a liability in the same amount for that vehicle and I therefore include neither in the pool of property.

Contributions

1. There were no substantial initial contributions by either party.  The wife worked as a (omitted) and in her own business.  The husband was firstly a (omitted) and then a (omitted).  He became a (omitted) and obtained his own (omitted) licence.  The husband’s material, however, suggests that his taxable income was not substantial.  He deposes to an income in 2006 of just $15,067.  His income subsequently has not exceeded $26,000 with a low of just under $12,000 per annum.  The wife’s unchallenged evidence as to the income from her business, suggests that she was a major financial provider for the family, at least until her illness set in. The husband’s evidence as to requiring a loan from Mr W corroborates this version of events.

2. Following the birth of the party’s youngest child it is clear that the wife developed an emotional illness compounded by alcoholism.  She eventually lost her right to practise as a (omitted).  Her income obviously suffered accordingly.  The husband argues that the wife’s alcoholism is “self-inflicted” and it constitutes a form of negative contribution.  I disagree.  Although I have no expert medical evidence, it is clear from the material before me, and having heard and seen the wife in the witness box, that she suffers from an unfortunate illness.  It is not a direct deliberate or negative act on her part.  I am satisfied on the evidence that she has made attempts to address her condition as for instance in entering marriage counselling and leaving the matrimonial home at the behest of the Department.  It does not, therefore, constitute a “negative contribution”.  Rather, I see it as a sad and unwelcome intrusion on this family which has had dire consequences for the marriage and for each of the wife and the husband personally.  The result was, however, that the husband took on a far greater responsibility for the care of the children during the latter stages of the marriage.  His own evidence as to his taxable income during the marriage suggests, however, that he did not take on an increased financial responsibility, which, no doubt, was due to his need to care for the children.  Taking all of these matters into account, I am of the view that the direct contributions of the parties during the marriage were equal.

3. The wife, in her affidavit material, deposes that her father, Mr L, advanced significant funds to the parties in a total of approximately $64,000 over and above the $13,000 referred to above.  The wife concedes in her evidence that she did not necessarily advise the husband of these advancements.  Nevertheless, I am satisfied that these moneys from Mr L were put towards and necessary to keep the parties’ “heads above water”.  The wife was obviously not maximising her income from her (omitted) business.  The husband’s own evidence is of a minimal income from his own (omitted) business.  The parties had the responsibility for the financial support for a family of five.  They had mortgage commitments.  I am satisfied that Mr L did make the contributions alleged and that they constituted contributions on behalf of the wife.

4. The husband has had the primary, and often sole, responsibility for the care of the three children of the marriage since separation in 2010.  He receives no financial support from the wife.  She is assessed to pay child support but is substantially in arrears.  The wife no longer practises as a (omitted) and, despite her best intentions to retrain as a (omitted), having seen her in the witness box, I expect that she will need to deal with her own personal demons before she can realistically re-enter the workforce and, hence, contribute to the financial support of the children.  This burden will therefore continue to fall on the husband as it has done since separation.

5. The husband’s unchallenged evidence is that he contributed $15,801 towards the maintenance and expenses of the former matrimonial home following separation.  Whilst it is difficult to understand where these funds came from given the husband’s precarious financial position and his obligations to the children, I note that the home was vacant for some time after August 2010 and before it’s sale and I accept the husband’s evidence in this regard.

6. Taking into account the husband’s post-separation contributions and those made by Mr L on behalf of the wife, I am of the view that the contributions of these parties remain equal.  There will be no adjustment between them on the basis of contribution. 

Section 75(2) Factors 

1. The husband has the ongoing responsibility for the care and financial support of the children.  He receives no current respite or assistance from the wife, given a recent relapse by her in dealing with her alcoholism.  There is a significant impact on the husband’s ability to pursue his trade.  He is fortunate that he has the emotional and financial assistance of his partner, Ms P.  Nevertheless, the burden that falls upon him is an onerous and continuing one.

2. Further, the wife, of course, does not currently work. She has received psychiatric assistance and counselling in respect of her alcohol and emotional issues. She will need to work through these issues but will be assisted in doing so by the husband taking on the abovementioned responsibilities for the three children of the marriage. In respect of these considerations I am of the view that there should be an adjustment in his favour of 12 per cent of the property pool. The pool is limited in its quantum and I am of the view that such an adjustment is necessary to give proper recognition to the weight I attach to these relevant section 75(2) factors, which favour the husband.

3. It remains for me to deal with the payments that the husband has made from his interim distribution of $20,000 and in respect of the finalising of the liquidation and his own legal costs. As mentioned above, the authority suggests that it is proper to deal with such matters under section 75(2)(o) of the Act, rather than as “add backs”. I am satisfied in all of the circumstances that this is a matter that should be taken into account given my findings as to the date of separation and the components of the property pool. The payments made by the husband total $21,287. The pool of property is not substantial. In all of the circumstances, I’m of the view that there should be a further adjustment to the husband on account of this consideration of 8 per cent of the tangible net property pool. After consideration of all the s.75(2) factors therefore, I am satisfied that there should be an adjustment to the husband of 20% of the pool of property. I note that the husband seeks only 62% of the pool. His “pool”, however, would have me include “add-backs” of $21,287 which I have declined to do.

4. The husband seeks an order whereby the parties superannuation be split so as to give an equal entitlement to each of the parties.  This would involve a splitting order in favour of the wife from the husband’s fund of $19,729.  I am satisfied that such an order would be appropriate given the limited balances of the superannuation funds, the circumstances of the parties, and the years until they are likely to crystallise.

5. Given that the (omitted) Limited debt is not yet crystallised, it is proper that the sum of $72,546 be quarantined from the pool and kept in trust pending a final settlement of that issue.  Any balance funds remaining can then be distributed as to 70 per cent to the husband and 30 per cent to the wife.

6. The parties jointly own the (omitted) Shares shares.  Each seeks a transfer of them to the other.  Given the financial responsibilities taken on by the husband in respect of the children, I am of the view that the wife should retain the shares with the husband retaining a slightly greater cash component.  It is then open for her to sell them if she so desires.

7. The final pool adjusted accordingly is therefore:

Sale Proceeds	$225,887
(omitted) Shares	$7848
Interim property settlement – wife	$20,000
Interim property settlement – husband	$20,000
Mitsubishi (omitted)	$4,000
TOTAL	$277,735
Less (omitted) (quarantined)	$72,546
Loan to be repaid to Mr L	$13,000
Loan to be repaid to Mr W (Ms P)	$19,830
TOTAL	$105,376
NET TANGIBLE ASSETS	$172,359
Husband’s entitlement at 70 per cent	$120,651
Husband has already received:
Interim property settlement	$20,000
Mitsubishi (omitted)	$4,000
TOTAL	$24,000
Cash adjustment to husband from proceeds IN TRUST	$96,651
Wife’s entitlement at 30 per cent	$51,708
Wife has already received:
Wife has retained interim settlement	$20,000
(omitted) Shares	$7848
TOTAL	$27,848
Cash adjustment to wife form proceeds in trust	$23,860

1. Finally, the husband in his case outline sought an order whereby the wife repay to him a sum in excess of $13,000 which is alleged child support arrears.  I take the view that it is the function of the Child Support Agency.  They are generally the authority charged with pursuing arrears of child support under assessment.  In any event, no real argument was made before me as to whether or not such arrears are properly recoverable.

Discussion and Conclusions

1. I have little difficulty in determining that it is just and equitable between the parties in this matter to consider making orders altering their property interests. They have separated from a relatively long marriage. Their former matrimonial home has been sold and moneys remain in trust subject to argument as to apportionment on the basis of contributions and also relevant section 75(2) factors.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date:  10 October 2013