Fleming and Fleming
[2017] FamCA 520
•20 July 2017
FAMILY COURT OF AUSTRALIA
| FLEMING & FLEMING | [2017] FamCA 520 |
| FAMILY LAW – PROPERTY SETTLEMENT – Where there was little disparity between the parties’ initial capital contributions – Where nothing differentiated their combined financial and non-financial contributions during the relationship – Where the dispute devolved to analysis of their respective access to matrimonial finances after separation – Where the wife applied joint funds towards advance payment of the mortgage over the former matrimonial home when she had the benefit of exclusive occupation of the home – Where the husband used joint funds to set up a separate household – Concluded none of the parties’ expenditure was unreasonable or profligate – Where the wife will have the more onerous responsibility for the care of the children until they attain their majority and financial independence – Where the wife’s future earning capacity is superior to the husband’s – Concluded the wife’s entitlement to property and superannuation is assessed at 55 per cent and the husband’s at 45 per cent |
| Family Law Act 1975 (Cth), ss 75, 79 |
| Balfour v Balfour [1919] 2 KB 571 Chorn v Hopkins (2004) FLC 93-204 Cohen v Cohen (1929) 42 CLR 91 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Marriage of Coghlan (2005) 33 Fam LR 414 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Fleming |
| RESPONDENT: | Mr Fleming |
| FILE NUMBER: | SYC | 2944 | of | 2013 |
| DATE DELIVERED: | 20 July 2017 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 26 & 27 June 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Kennedy |
| SOLICITOR FOR THE APPLICANT: | Clinch Long Woodbridge Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Campton SC |
| SOLICITOR FOR THE RESPONDENT: | Mervyn Finlay Thorburn & Marshall |
Orders
The wife shall pay to the husband the sum of $675,746 within two months of the date hereof.
Subject to compliance with Order 1 hereof, and in consideration of that payment, the wife is declared the sole legal and beneficial owner (as between the parties) of the real property and improvements comprising Folio Identifier …, being the property more commonly known as F Street, Suburb G, NSW (“the property”), and the husband shall do all such things and sign all such documents as may be necessary to transfer all his right, title, and interest in the property to the wife contemporaneously with his receipt of payment pursuant to Order 1 hereof.
Subject to compliance with Order 2 hereof, and in consideration of that transfer, the wife shall do all acts and things necessary to discharge the mortgage in favour of the NAB registered against the title of the property (being dealing number …) and indemnify the husband against all rates, taxes, statutory charges, and other outgoings and liabilities affecting or relating to the property.
In default of Order 1 hereof, the parties shall do all such acts and things and sign all such documents as may be necessary to list the property for sale by public auction on the following terms:
(a)The property shall be listed for auction sale within six weeks of the date of default;
(b)The auctioneer, in the event of disagreement between the parties, shall be the auctioneer chosen by ballot from the respective choices of the parties;
(c)The reserve price shall be as agreed between the parties, and in the event of disagreement between the parties, the reserve price nominated by the auctioneer;
(d)In the event the property is not sold by auction, or private negotiation within a further seven days, then the property shall be submitted to successive auctions within further six weeks periods until sold, otherwise on the same terms and conditions as applied to the first auction;
(e)The wife is restrained from charging, mortgaging, or otherwise encumbering the property, save as to enable her compliance with Order 1 hereof.
Upon completion of the sale of the property pursuant to Order 4 hereof, the parties shall ensure the proceeds of sale are disbursed as follows:
(a)First, to pay all costs, commissions, and expenses of the sale and to pay any Council and water rates outstanding in respect of the property;
(b)Secondly, to discharge the mortgage registered over the property; and
(c)Thirdly, to pay:
(i)The sum of $111,968 to the wife;
(ii)55 per cent of the remaining balance to the wife; and
(iii)The remainder to the husband.
Otherwise:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder and superannuation entitlements are deemed in the possession of the superannuant; and
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names.
In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of the orders made under Part VIII, the Registrar of the Family Court of Australia at Sydney is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.
Costs are reserved for 28 days.
Any and all other outstanding applications are dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fleming & Fleming has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: SYC 2944 of 2013
| Ms Fleming |
Applicant
And
| Mr Fleming |
Respondent
REASONS FOR JUDGMENT
Introduction
At the commencement of the trial of these proceedings in June 2017 the parties reached agreement about orders for their children under Part VII of the Family Law Act 1975 (Cth) (“the Act”), which orders were then made consensually, so the trial was only needed to determine the residual dispute over the alteration of their property interests under Part VIII of the Act.
The parties met in 1999, commenced cohabitation in 2000, married in 2003, and finally separated in March 2013.
Their children were born in 2005 and 2006 and, at the time of trial, were aged 12 and 10 years respectively. The children lived primarily with the mother after separation and, as a consequence of the parenting orders upon which the parties agreed, will continue to do so.
Upon separation, the husband vacated the former matrimonial home and rented an apartment from his parents, where he still lives. Both parties continued their professional careers, though the husband was recently made redundant and is contemplating the establishment of his own business. The wife is in well-paid employment in the financial sector.
The principal assets are the jointly-owned former matrimonial home, which remains encumbered by mortgage, and the parties’ superannuation interests. The net value of their assets and superannuation is about $2.4 million. Their proposals for division of the assets and superannuation were 20 per cent apart.
Proposals
The parties tendered minutes of orders they proposed at the commencement of the trial, which superseded the most recent Application and Response they each filed.[1]
[1] Exhibits M1 and F1
The wife proposed her acquisition of sole proprietorship of the former matrimonial home and her sole liability for its encumbrance, subject to her payment to the husband of an unquantified but proportionate cash adjustment, and for the parties to otherwise retain their own personal property, superannuation interests, and debts. The wife’s proposal was said to reflect a division of property and superannuation interests in shares of 70 per cent to her and 30 per cent to the husband.
The husband proposed equal division of the parties’ property, by sale of the former matrimonial home and distribution of the net sale proceeds if necessary, the split of his greater superannuation interest to equalise the parties’ superannuation interests, and the retention of their own personal property and debts. His proposal was said to reflect an equal division of property and superannuation interests.
Evidence
The wife relied upon her affidavit filed on 2 June 2017.
The husband relied upon:
(a)His affidavit filed on 2 June 2017;
(b)His financial statement filed on 2 June 2017; and
(c)The affidavit of his father filed on 2 June 2017.
Legal principles
Orders under s 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2), it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made (see Stanford v Stanford (2012) 247 CLR 108 at [22], [35]). While those two inquiries are not to be conflated (see Stanford at [35], [40], [51]), it is permissible for the factors within s 79(4) to inform the inquiry under s 79(2) (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property are or should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act (see Stanford at [37]-[40], [50]). Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of common use of their property (see Stanford at [42]; Bevan & Bevan at [68]-[70], [82], [164]-[165]).
If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The court must necessarily identify and assess the parties’ contributions within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in ss 79(4)(d)-(g) and 75(2).
Existing property interests
At the commencement of the trial the parties filed a joint balance sheet,[2] which encapsulated their assertions about the identity and value of existing property and superannuation interests. In final submissions, the balance sheet was further refined by the parties’ agreement upon certain facts. It was intended that any other evidence adduced by the parties was superseded by the contents of the balance sheet, as amended by the subsequently agreed facts. The following findings about the parties’ property and superannuation interests are made in reliance upon that evidence.
[2] Exhibit B
The wife’s existing assets, liabilities, and superannuation interests are:
No.
Assets
Value
Total
1
Former matrimonial home (50 per cent)
1,050,000
2
Westpac acc #...87
493
3
Westpac acc # …98
166
4
NAB acc #...80
41
5
(omitted)
0
6
ANZ acc #...39
6,860
7
AMP acc #...11
3,869
10
Money in solicitors’ trust acc
17,600
11
German car
53,500
Sub-total
1,132,529
1,132,529
Liabilities
17
Mortgage (50 per cent)
174,763
18
Loan from mother
0
19
Car loan
30,203
21
(omitted)
0
Sub-total
204,966
204,966
Net assets
927,563
Superannuation
22
BT Super for Life
5,227
23
AMP Signature Super
8,423
24
MLC MasterKey Super
190,557
Superannuation total
204,207
The husband’s existing assets, liabilities, and superannuation interests are:
No.
Assets
Value
Total
1
Former matrimonial home (50 per cent)
1,050,000
8
Citibank acc
27,196
9
Money in solicitors’ trust acc
19,530
12
Japanese car
6,500
13
(omitted)
0
14
Redundancy payout
0
15
Notional add-back of paid legal fees
16,956
Sub-total
1,120,182
1,120,182
Liabilities
17
Mortgage (50 per cent)
174,763
20
(omitted)
0
Sub-total
174,763
174,763
Net assets
945,419
Superannuation
25
MLC MasterKey Super
278,047
26
AMP Signature Super
65,239
Superannuation total
343,286
The parties eventually agreed upon the values attributed to items 8 and 14, which agreement overtook the disputes evident from the balance sheet.
The sum of $16,956 is notionally added-back as an asset of the husband (item 15). The husband expended joint funds in that sum to pay his own legal costs associated with this litigation.[3] Where the payment of legal costs can be regarded as a premature distribution of funds in which both parties have an interest it is appropriate to add back those costs as a notional asset of the party who had the benefit of the funds (see Chorn v Hopkins (2004) FLC 93-204 at [55], [57]).
[3] Wife’s affidavit, paras 163, 164.25
The debt of $7,000 for which the wife contended (item 18) was not proven. While she undoubtedly received money from her parents, the evidence did not prove she has a legal liability to repay it. Ordinarily, financial accommodation given in a domestic or family context does not create enforceable liabilities because the parties do not intend to create legal relations with one another (see Balfour v Balfour [1919] 2 KB 571; Cohen v Cohen (1929) 42 CLR 91 at 96; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105-106). The wife deposed her parents gave her other money from time to time,[4] but she gave no explanation for why that money should be distinguished from the amount she claimed to be repayable as a loan.
[4] Wife’s affidavit, para 70
The Court is generally exhorted to assess the parties’ contributions to superannuation entitlements separately (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429). Although the husband contended for the parties’ superannuation interests to be treated separately from their property interests, he contended for an identical assessment of their contributions and proportional entitlements to both property and superannuation.
Section 79(2)
Both parties contended it was just and equitable to alter their financial interests, though they contended the alteration should be achieved by different methodology. The parties’ financial interests remain entangled in the former matrimonial home and the mortgage by which it is encumbered, which makes orders under Part VIII of the Act a necessity.
Sections 79(4) & 75(2)
The parties disputed when cohabitation commenced during 2000. The wife contended for February and the husband contended for December, but it was unnecessary to decide because the answer made no appreciable difference to the outcome.
At or about the time of the commencement of their cohabitation in 2000, the wife introduced the following assets to the relationship:
(a)A parcel of real property at Suburb H, subject to mortgage, which yielded net sale proceeds of $82,592 when sold in 2001;[5]
(b)AMP shares worth about $2,519;[6]
(c)Optus shares worth about $5,860;[7]
(d)Telstra shares worth about $5,803;[8]
(e)Savings of $8,800;[9]
(f)A car and some household contents;[10] and
(g)Accumulated superannuation of an unspecified amount[11]
[5] Wife’s affidavit, paras 17, 31
[6] Wife’s affidavit, para 16.2
[7] Wife’s affidavit, para 16.3
[8] Wife’s affidavit, para 16.4
[9] Wife’s affidavit, para 16.5
[10] Wife’s affidavit, paras 16.6, 16.7
[11] Wife’s affidavit, para 18
The capital and superannuation introduced by the wife to the relationship therefore amounted to at least $105,000 in net value. To the extent that her car, household contents, and accumulated superannuation were valuable, it was offset by the unquantified capital gains tax for which she must have been liable upon the sale of the Suburb H property.
At or about the time of the commencement of their cohabitation in 2000, the husband introduced the following assets to the relationship:[12]
(a)Savings of $5,000;
(b)Accumulated superannuation of about $27,000, since the husband’s estimate of the value of his own superannuation is likely to be more accurate than the wife’s higher estimate;[13]
(c)BT Investments of $15,400; and
(d)Colonial First State savings of $10,300.
[12] Husband’s affidavit, para 9
[13] Wife’s affidavit, para 22
The wife contended the BT and Colonial First State investments did not exist at the time of cohabitation, but that was only because the husband apparently failed to produce documentary evidence of the accounts prior to 2002. The husband gave evidence he owned the investments prior to his return to Australia from Asia and, hence, prior to the parties’ commencement of cohabitation. There was no justification to reject the husband’s evidence outright, which the wife’s submission impliedly required. The wife’s counsel correctly conceded the parties’ credit was not an issue of significance in these proceedings so, in circumstances where the husband gave sworn evidence about the existence and approximate value of the investments, his evidence is accepted in preference to the wife’s conjecture to the contrary.
The wife alleged the husband then had a credit card debt of about $11,000,[14] but he refuted the allegation in cross-examination. He admitted having a credit card debt of about only $2,000, which admission he made at an early stage of the proceedings in a document he filed. In the absence of independent documentary proof of the higher figure, I accept the husband’s admission as the best evidence.
[14] Wife’s affidavit, para 21
Accordingly, the capital and superannuation introduced by the husband to the relationship therefore amounted to about $55,000 in net value, which figure includes his accumulated superannuation. Although he contended for separate consideration of superannuation contributions under s 79(4) of the Act, the accumulated superannuation of $27,000 he brought into the relationship should not then be double-counted.
In 2002, not so long after the parties began cohabitation, the husband injected some $42,000 (not $54,000) into their banking accounts. He received the money by way of a redundancy payment, calculated by reference to the duration of his employment with his former employer, which commenced in 1997.[15] Consequently, a substantial proportion of the redundancy payment related to his pre-cohabitation effort and should properly be regarded as an extra capital contribution made by him to the parties’ financial affairs. Taking that contribution into account, there was not much to differentiate the parties’ overall capital contributions at, or close to, the commencement of their cohabitation. Other redundancies thereafter paid to the husband were incidental to the employment he held both during the relationship and after the parties’ separation and are accounted for as part of his ordinary financial contributions.
[15] Husband’s affidavit, para 14
Throughout the relationship both parties devoted all of their effort to their mutual financial advancement and the care and supervision of their children. They agreed nothing differentiated their combined financial and non-financial contributions during the relationship. They both worked and then applied their income to the household and they both took responsibility for household duties and the care of the children commensurately with their available time at home.
The husband’s senior counsel submitted the husband’s parents gave the parties $10,000 in 2006, which money was spent on renovations to the former matrimonial home, but there was no evidence of that. The only evidence was of the husband’s parents lending the parties $20,000 to assist with the renovation of another real property, which loan was repaid upon sale of that property.[16]
[16] Wife’s affidavit, para 47
The parties’ argument therefore really devolved to analysis of their respective access to matrimonial finances after their separation in 2013.
At the time of separation, the parties’ joint account contained about $210,000.[17] The wife withdrew $100,000 and applied it to advance repayment of the loan secured by mortgage over the former matrimonial home, which she continued to occupy with the children.[18] The husband then withdrew $80,000 and deposited it into his own account, and the wife then withdrew the remaining $30,000 and deposited it into her own account.[19]
[17] Wife’s affidavit, para 119
[18] Wife’s affidavit, para 120; Husband’s affidavit, paras 33, 39
[19] Wife’s affidavit, paras 122-123; Husband’s affidavit, para 34
The $100,000 taken by the wife from the joint account and applied towards the mortgage covered the mortgage repayments for about two years, so it was not until May 2015 that she began making irregular mortgage repayments, which barely kept the loan serviced.[20] At separation, the loan balance was $332,000, but it has since increased to $349,000.[21] Although it was the wife’s decision, the $100,000 she paid towards the mortgage was equally contributed by the husband from joint funds, but the wife had the benefit of exclusive occupation of the home.
[20] Wife’s affidavit, paras 125-129; Husband’s affidavit, para 40
[21] Husband’s affidavit, para 40
The husband explained his expenditure of the $80,000[22] and the wife explained her expenditure of the $30,000.[23] The husband spent $16,956 on payment of his legal fees, which amount was notionally added back to the husband’s property interests (item 15), so his expenditure was really about $63,000. None of the parties’ expenditure of those funds was unreasonable or profligate. In the husband’s case, he needed to set up a separate household, he needed to buy a car, and, since he was unemployed for about the first six months after separation, he needed those funds to meet living expenses. The wife spent the money she withdrew on the children and living expenses.
[22] Wife’s affidavit, paras 160, 162-164; Husband’s affidavit, paras 35-36
[23] Wife’s affidavit, para 161
The wife sold the car the parties owned at the time of separation and kept the sale proceeds, which she admitted amounted to $18,000.
The husband sold some shares in 2014. He said they were sold for about $61,000, not the higher sum of about $75,000 alleged by the wife, upon which he paid tax of about $20,000. He spent the net proceeds of $41,000 mainly on rent, tax, and living expenses.[24] The weekly rent he paid, which was $600 per week from 2014 onwards, was significantly more than the mortgage repayments the wife made to maintain the loan over the former matrimonial home from May 2015 onwards. There was a mathematical anomaly in the husband’s total rent expenditure, as was notified to the wife, but the anomaly did not change the fact that the husband needed to spend much more than the wife maintaining his accommodation. The wife abstained from any cross-examination of the husband’s father about the probity of their lease agreement and the correctness of the calculations annexed to his affidavit, so that evidence is accepted as correct.
[24] Wife’s affidavit, paras 166-179
The parties are both aged in their mid-forties and both are in good health. The children will remain in the wife’s primary care and the husband will likely continue to pay child support, which is unlikely to ever be more than about the average amount of $14,500 per annum he has so far paid since separation,[25] but which has sometimes been as low as $600 per month.[26] The wife will therefore bear the brunt of the children’s future financial support, particularly if she chooses to allow them to pursue their current academic and extra-curricular activities, because the combined cost of running her household amounts to over $10,000 per month (excluding her payment of legal expenses).[27]
[25] Husband’s affidavit, para 61
[26] Wife’s affidavit, para 148
[27] Wife’s affidavit, para 132
The wife admitted in cross-examination the husband has always paid her child support in accordance with the prevailing assessments, though she regards the assessments as unrealistically low, given the actual cost of maintaining the children.[28] That may be so, but the amount of her discretionary expenditure does not dictate the calculation of the child support assessments. In circumstances where the parties’ wealth now needs to support two households, not just one, the wife must take responsibility for her own choices. For example, she chose to lease an expensive European car, which she admitted she would not keep if she could not afford to, and she chose, over the husband’s objection, to enrol the eldest child at a private school and to therefore incur and pay the substantial fees.
[28] Wife’s affidavit, paras 132, 148-152
The wife is currently employed in a managerial role with a reputable corporation in the financial sector, which she admitted in cross-examination generates her base salary of $260,000 plus superannuation and an expectation of annual bonuses of up to 40 per cent of salary.[29] By comparison, the husband is unemployed due to his recent redundancy,[30] though he has the proven capacity to earn up to about $260,000 per annum.[31] Nonetheless, until the husband’s recent redundancy, the parties were employed by the same corporation, with the wife in a superior role to the husband[32] and her income greater than his.[33]
[29] Wife’s affidavit, paras 9, 139; Exhibit F3
[30] Wife’s affidavit, para 10
[31] Wife’s affidavit, paras 71.14, 140
[32] Husband’s affidavit, para 68
[33] Wife’s affidavit, para 140
The husband is now interested in setting up his own business, which was the goal he wished to pursue but abandoned at around the time of the parties’ separation in 2013,[34] though he said in cross-examination his plans were not yet “concrete”. The wife said in cross-examination she supported his proposal in 2013, though she seemingly does not now. She believes his idea is a “contrivance” designed to obtain a more advantageous property settlement.[35] The husband’s lawyers dismissed her suspicion as misconceived,[36] as indeed it is. In any event, the analysis dictated by ss 79(4)(d)-(e) of the Act requires advertence to the husband’s income-earning capacity, not just his income.
[34] Husband’s affidavit, paras 23-28, 69-74
[35] Wife’s affidavit, paras 141-143
[36] Husband’s affidavit, para 76, Annex T
Conclusions and orders
The wife advocated for her entitlement to 70 per cent of the parties’ property and superannuation, though she was opposed to any superannuation splitting order and wanted her greater entitlement reflected in her sole ownership of the former matrimonial home. She conceded such an assessment was “top of the range”, which was reached by the combination of her contribution-based entitlement of “up to 60 per cent” and an adjustment of “up to 15 per cent”. Conversely, the husband advocated for equal contribution-based entitlements and no adjustment either way.
The parties’ contribution-based entitlements are equivalent, though not equal. The wife’s capital contributions in the period between 2000 and 2002 were at least $10,000 greater, but that sum represents a tiny proportion of the net value of the parties’ current property and superannuation. Their contributions during the relationship were equal, though the wife’s contribution to the care of the children post-separation was greater than the husband’s.
The most controversial issue was the parties’ respective use of joint property after their separation. The wife contended the husband “misused or wasted” family assets, but she could not sustain that submission on the evidence. None of the husband’s expenditure was wanton or reckless. Nor could it be reasonably contended his expenditure amounted to the premature distribution of more property to him. The husband’s initial expenditure was essential to buy a car and to set up his own household, in circumstances where he allowed the wife to have exclusive occupation of the former matrimonial home and contributed equally to the payment of the mortgage for not less than two years. Thereafter, he was obliged to spend more than the wife to maintain his separate accommodation and to enable her continued exclusive occupation of the former matrimonial home. Aside from expenditure of their own income, the husband spent about $104,000, whereas the wife spent $30,000, used $100,000 to meet mortgage repayments (but still let the mortgage debit balance expand by $17,000), and kept $18,000 from the sale of the parties’ former car. The husband did not derive any advantage over the wife through their post-separation expenditure of joint funds.
The wife will have the more onerous responsibility for the care of the children until they attain their majority and financial independence. The parties agreed the children will live with the mother and spend alternate weekends and periods of school holidays in the father’s care.
The wife will nonetheless continue her well-paid employment and her income-earning capacity is likely to remain superior to the husband’s. The husband’s senior counsel contended the wife’s income was on an “exponential uplift”, but that was an exaggeration. She now earns an income commensurate with her commercial expertise, but there was no evidence to suggest her income will continue increasing exponentially. Conversely, the wife’s counsel contended the husband traditionally had a “far superior income”, which was similarly an unbalanced appraisal of the facts. The wife deposed to her historical income[37] and, while it was less than the husband’s,[38] the disparity was not so pronounced given the periods of the wife’s maternity leave, part-time work, and inactivity through redundancy. She now occupies an employed position that generates higher income than the husband ever earned or will ever likely earn.
[37] Wife’s affidavit, paras 55-68
[38] Wife’s affidavit, paras 71-75
In all, pursuant to assessment of all factors prescribed by ss 79(4)(a)-(g) of the Act, the wife’s entitlement to property and superannuation is assessed at 55 per cent. The differential of 10 per cent fairly reflects the parties’ overall contributions and future needs. In monetary terms, that difference amounts to some $242,000.
If the wife acquires sole ownership of the former matrimonial home, subject to exclusive liability for its encumbrance (as she wants), and retains the other property and superannuation she already owns, she would have property and superannuation with a net value of $2,007,007. But a 55 per cent share of the property and superannuation would only entitle her to $1,331,261, so such an outcome would require her payment to the husband of a cash adjustment in the sum of $675,746. Added to the existing mortgage balance of $349,526, the wife would then be liable for a total sum of $1,025,272, secured over the former matrimonial home.
The wife admitted in cross-examination she had investigated the prospect of loan extensions, secured by mortgage, to enable her payment of cash to the husband and her retention of the home subject to an enlarged mortgage. She made enquiries of two financial institutions, as a result of which she expected to receive loan approval for an increased loan of up to $1 million from the current loan debit balance of $349,526. With or without loan approval from a financial institution, she expects some financial support for that purpose from her parents. In combination, her approval for an increased loan and the help of her parents may mean the cash adjustment payable to the husband is within her means. If not, there is no option but for the former matrimonial home to be sold and the net sale proceeds divided between the parties so as to achieve the appropriate proportional result. The orders give her two months within which to arrange the necessary financial accommodation.
The husband submitted for a superannuation splitting order to equalise the parties’ superannuation interests, but that would only serve to increase the size of the cash adjustment payable to him by the wife to offset the extra superannuation split from his interest and consolidated with her own. The husband proposed $70,000 (not $82,651)[39] be split from his superannuation and allocated to the wife’s superannuation interests, but that would mean the cash adjustment payable to the husband would be $745,746 and her loan secured over the former matrimonial home would climb to $1,095,272. She doubted she could service a loan of that magnitude. Her loan enquiries were for an amount up to $1 million.
[39] Exhibit F1, Order 6
The proposed superannuation split would not be just and equitable. The wife does not want it because she would prefer to retain the former matrimonial home as a stable base for herself and the children and a superannuation splitting order would make that objective even harder to attain. Rejection of the husband’s proposal for the superannuation splitting order would not cause him undue prejudice because he would retain his existing superannuation interests worth $343,286 and, while he would have less cash and assets than the wife to use or alienate, he would still have a secure base of property interests. He will have his car (item 12), his own cash (items 8, 9 and 15), and the cash adjustment paid by the wife, collectively worth $745,928. He also has his substantial income-earning capacity upon which to rely. Upon his return to the workforce he can use his income to service substantial debt if he chooses to raise a loan and buy a home.
The orders set out at the commencement of these reasons are just and equitable.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 20 July 2017.
Associate:
Date: 20 July 2017
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
-
Injunction
0
5
1