FONTANA & FONTANA
[2013] FamCA 548
FAMILY COURT OF AUSTRALIA
| FONTANA & FONTANA | [2013] FamCA 548 |
| FAMILY LAW – PROPERTY SETTLEMENT – Issue as to the husband’s financial disclosure – Family accounting business – Outstanding tax liabilities - Wife seeking to retain the former matrimonial home - Husband’s ill health significant factor in respect of section 75(2) of the Family Law Act 1975 (Cth) – Determination as to how certain funds will be categorised, whether as an asset or as a financial resource – Post-separation contributions as to non-superannuation and superannuation assets – Whether there should be adjustment for either contributions or section 75(2) factors. FAMILY LAW – CHILDREN – Wife seeking variation to Final Orders as to parenting made by consent in relation to the husband’s time with the child – Application to reduce the husband’s time – Schooling issue as to when the child shall commence boarding at his current school – Report prepared as to child’s wishes. |
| Family Law Act 1975 (Cth) |
| Aleksovski & Aleksovski (1996) FLC 92-705 Black & Kellner (1992) FLC 92-287 Brown & Brown (2005) 33 FLR 246 Clauson & Clauson (1995) FLC 92-595 Docters Van Leeuwen (1990) FLC 92-184 Money & Money (1994) FLC 92-485 Omancini & Omancini (2005) FLC 93-218 Pierce & Pierce (1999) FLC 92-844 Tomasetti & Tomasetti (2000) FLC 93-023 Weir & Weir (1983) FLC 92-338 Williams & Williams (1985) FLC 91-628 |
| APPLICANT: | Mr Fontana |
| RESPONDENT: | Ms Fontana |
| FILE NUMBER: | PAC | 5188 | of | 2008 |
| DATE DELIVERED: | 23 July 2013 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Collier J |
| HEARING DATES: | 14 & 15 December 2011, 10, 11, 12 and 13 September 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Druitt |
| SOLICITOR FOR THE APPLICANT: | Mr Gonzalez Gonzalez & Co |
| COUNSEL FOR THE RESPONDENT: | First Part: Ms Gillies Second Part: Self-represented Litigant |
| SOLICITOR FOR THE RESPONDENT: | First Part: Enza Ruscica Solicitors Second Part: Self-represented Litigant |
Orders as to Parenting
That I discharge all previous Orders in respect of the parties’ son C Fontana born … 1998.
That the parties have equal shared parental responsibility for the child.
That the child live with the wife.
That the child commence as a weekly boarder at S College at the commencement of first term 2014.
That for the balance of 2013, the child spend alternate weekends with the husband, from after sport on Saturday until before school on Monday, commencing on the first weekend after the resumption of school term in Terms 3 and 4.
That for the school holiday period falling between Term 3 and 4 in 2013, unless the parties otherwise agree, the child shall spend the first half of the said school holiday with the husband.
That for the school holiday period December 2013 / January 2014, and each alternate school holiday period thereafter, unless the parties otherwise agree, the child shall spend the first half of such school holiday period with the husband.
That from the year 2014 and onwards, the child shall spend time with the husband for one (1) half of each short school holiday period, being the first half in the years ending in an odd number and the second half in the years ending in an even number, unless the parties otherwise agree.
That for the December/January school holidays commencing December 2014 / January 2015, and each alternate school holiday period thereafter, unless the parties otherwise agree, the child shall spend the second half of such school holiday period with the husband.
That for the purpose of the above Orders:-
(a)The first half of short holiday periods shall mean the period commencing at 9.00 am on the day immediately after the last day of the preceding school term and concluding at 6.00 pm on the Saturday nearest the midpoint of such holidays;
(b)The second half of short holiday periods shall mean the period commencing at 9.00 am on the Saturday nearest the midpoint of such holidays and concluding at 6.00 pm on the last Sunday of such holidays, whether or not the immediately following Monday is a pupil-free day or not;
(c)For the December/January school holiday periods:-
(i)The first half shall mean the period commencing at 9.00 am on the day immediately after the last day of the preceding school term and concluding at 7.00 pm on the day marking the midpoint of such holidays; and
(ii)The second half shall mean the period commencing at 9.00 am on the day marking the midpoint of such holidays and concluding at 7.00 pm on the last Sunday of such holidays, whether or not the immediately following Monday is a pupil-free day or not.
That the parent with whom the child is not living or spending time with for the first half of any January / December school holiday period, shall spend time with the child from 7.00 pm on the 25th of December until 7.00 pm on the 26th of December.
That for the purpose of collection and return of the child to the other parent, other than to and from school, the parent whom the child is to go to shall collect the child at the commencement of each period of time and the other parent shall collect the child at the conclusion of each period.
That the wife attends to the registration process necessary to apply for and obtain entrance for the child as a weekly boarder for the years 2014 and 2015 at S College.
That in the event that the husband has spent the first week or first half of any school holiday period with the child then his next period of time shall commence on the first weekend in the next ensuing school term.
That in the event that the husband has spent the second week or second half of any school holiday period with the child then his next period of time shall commence on the second weekend in the next ensuing school term.
Orders as to Property
That within three (3) months of the date of these Orders, or such other time as the parties may in writing agree, the wife shall pay to the husband the sums of $281,214 and $8,520, together totalling the sum of $289,734.
That within three (3) months of the date of these Orders, or such other time as the parties may in writing agree, the wife shall pay, or cause to be paid, all monies necessary to obtain a discharge of mortgage and/or release of any encumbrance presently secured over both the former matrimonial home known as and situate at Suburb H, NSW, Certificate of Title Folio Identifier … (hereinafter referred to as “the property”) and the parties’ interest in the investment property known as and situate at Suburb D, NSW, Certificate of Title Folio Identifier … (hereinafter referred to as “the investment property”) so as to release the husband from any liability whatsoever in respect of any such mortgage or encumbrance.
That upon payment of the sum of monies specified in Order 1 above within the time specified, and upon the wife having discharged the mortgage and/or encumbrance secured over and/or in respect of the property and the investment property, the husband shall thereupon transfer to the wife all his right, title and interest in the property, together with his right, title and interest in the investment property. To give effect to this order, the wife shall submit to the husband, in a timely fashion, all documents required for that purpose.
That in the event that the wife does not pay the amount specified in Order 1 above to the husband within the time specified, and if she does not produce to the husband evidence of the discharge of the mortgages and encumbrances referred to in Order 2 above within the time specified then the parties shall do all things and execute all documents necessary to procure a sale of the property by private treaty at a price to be agreed between the parties, and failing agreement, at a price to be determined by the president of the New South Wales Chapter of the Australian Institute of Valuers, or his nominee, whose decision as to a selling price shall be final.
That in the event that the property has not been sold, and that is to say, is not the subject of a binding exchange of contracts, within three (3) months of the property being offered for sale by private treaty then the parties shall do all things and execute all documents necessary to procure a sale of the property by public auction.
The auctioneer for such sale shall be agreed between the parties, and failing agreement, shall be appointed by the President of the New South Wales Chapter of the Australian Institute of Valuers, or his nominee.
The reserve price at such auction shall be as agreed between the parties, and failing agreement, shall be determined by the auctioneer on the day of the auction.
That upon the sale of the property either by private treaty or public auction, the parties shall deal with and distribute the purchase monies then received in the following manner:-
(a)In payment of all agents fees and commissions including auction expenses properly incurred in such sale;
(b)In payment of all legal fees and disbursements properly incurred in such sale;
(c)In payment and satisfaction of the mortgage secured over the property;
(d)In payment of the mortgage secured over the investment property;
(e)In payment to the wife fifty and a half (50.5) percent of the amount then remaining;
(f)In payment to the husband of the balance; and
(g)The wife shall pay to the husband the sum of $8,520.
That subject to the foregoing Orders, each party shall be entitled both at law and in equity to all real property, personal property and effects, chattels, monies on investment, interests in businesses, motor vehicles and superannuation entitlements presently in the possession or control of that party.
That I otherwise dismiss all outstanding applications and cross-applications.
That I remove all matters from the Active Pending Cases List.
That all material produced on subpoena shall be returned not before fifty-six (56) days.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fontana & Fontana has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA |
FILE NUMBER: PAC5188 of 2008
| Mr Fontana |
Applicant Husband
And
| Ms Fontana |
Respondent Wife
REASONS FOR JUDGMENT
Introduction
This matter involves the parties of a long marriage of 15 years in duration and one child of that marriage.
The hearing took place over six days in two separate parts – the first being in December 2011 and the second being in September 2012. Initially, the outstanding issue for determination was property settlement of the parties’ matrimonial assets. During the first part of the hearing, the husband was cross-examined and a major aspect of the wife’s case at that time was directed to the husband’s financial disclosure, or lack thereof. The second part of the hearing was to take place in February 2012, but due to the husband’s ill-health in that intervening period, those dates were vacated, after medical evidence on behalf of the husband was produced, and the matter was put over for the hearing to resume in September 2012.
When the hearing resumed in September 2012, the wife had become self-represented. She then sought, in effect, to vary parenting Orders previously made by consent to decrease the husband’s time with the child and thereby increase her time. Another issue that arose during that part was the issue of the child boarding at school. The parenting issues became a major feature of this part of the hearing and a report was obtained to ascertain the child’s wishes.
Both parties are financial professionals. Throughout the marriage, they worked in a family professional practice. Part of the husband’s case is that the wife, towards the end of their marriage, diverted joint funds from clients into her own bank account rather than into their joint business account. The wife concedes diverting such funds and part of her case is that this was required so she could be “financially responsible” as the husband was not managing joint funds to her satisfaction.
The parties also invested in a property together with the wife’s brothers. This asset was also the subject of much evidence during the proceedings.
Between the two parts of the hearing, the husband’s health deteriorated markedly to the extent that he was hospitalised and is now undergoing dialysis for kidney failure. In the second part of the hearing, he was no longer working and was on home dialysis. Medical evidence was presented as to his condition, his life expectancy and his prospect of a kidney transplant. At that stage, the husband was in receipt of income protection insurance and had received a substantial trauma insurance payout. Part of the wife’s case, emerging from the second part of the hearing, was that such payments should be included as an asset in the parties’ pool of assets, rather than as a financial resource of the husband.
Then there is the issue of the parties’ superannuation. During the marriage, the parties established their own superannuation trust fund. Post-separation, the wife gave evidence that she salary sacrificed and made significant contributions to her own superannuation benefits. The categorisation of such contributions became a further issue requiring determination.
Brief background
The husband was born in 1964. As at the commencement of the hearing, he was 47 years of age, and he is currently 49 years of age.
The wife was born in 1969. Throughout the hearing, she was 42 years of age, and she is currently 43 years of age.
The parties married and commenced cohabitation in 1993.
The parties set up a professional practice together in about July 1999, which changed names shortly after. From that time onwards and until separation, the parties continued to work together in that practice.
There is one child of the parties’ marriage - C, born in 1998. At the commencement of the hearing, he was 13 years of age. He is currently 15 years of age.
The wife gradually increased her working hours in the parties’ professional practice as the parties’ child grew older.
As to the date of separation, the wife said they separated under the one roof on 31 July 2008. The husband said it was not until late October 2008, when he said he was forced to leave the former matrimonial home. Irrespective of the exact date of separation, the parties were in a long marriage of about 15 years in duration.
Prior to the final hearing, on 28 January 2011, the parties settled all issues (at that point in time) in respect of parenting matters, entering into Final Consent Orders. Those terms provided for the parties to have equal shared parental responsibility for the child and for the child to live in almost a shared care arrangement – eight nights per fortnight with his mother and six nights per fortnight with his father. As mentioned earlier in these reasons for Judgment, in the second part of the hearing, the wife sought to vary those Orders and reduce the husband’s time with the child. An issue regarding boarding school also arose.
Parties’ documents
Throughout the hearing, the husband sought to rely upon the following documents:-
a)Further Amended Initiating Application filed 29 November 2011;
b)Affidavit of himself sworn 17 November 2011 and filed 18 November 2011 (trial affidavit);
c)Affidavit of himself sworn 7 February 2012 and filed in Court on 7 February 2012 (as to his health developments);
d)Updating affidavit of himself sworn 31 August 2012 and filed in Court on 10 September 2012;
e)Affidavit of Dr O sworn 5 September 2012 and filed in Court on 10 September 2012;
f)Financial Statement verified by affidavit sworn 28 November 2011 and filed 29 November 2011;
g)Updating Financial Statement verified by affidavit sworn 31 August 2012 and filed in Court on 10 September 2012; and
h)A proposed minute of order proposed by the husband in respect of parenting matters (handed to the Court during the second part of the hearing).
Throughout the hearing, the wife sought to rely upon the following documents:-
a)Further Amended Response filed 18 November 2011;
b)Affidavit of herself sworn and filed 18 November 2011;
c)Updating affidavit of herself sworn 26 July 2012 and filed 27 July 2012;
d)Financial Statement verified by affidavit sworn and filed 18 November 2011;
e)Updated Financial Statement verified by affidavit sworn 26 July 2012 and filed 27 July 2012;
f)A minute of order proposed by the wife to vary existing parenting Orders (handed up in Court during the second part of the hearing).
As to the parenting matters which re-emerged in issue during the second part of hearing, the parties jointly appointed Mr G to interview the child and prepare a report as to the child’s wishes. In this regard, Mr G interviewed the child on 11 September 2012 and provided a report for the Court’s assistance on 12 September 2012. His report dealt with the child’s wishes as to varying the amount of time he lives or spends with his father and the issues of when the child is to commence full time boarding at his school.
There were also a number of documents which became Exhibits before me. Following the conclusion of the hearing and during the time in which written submissions were to be prepared by the parties, the wife sought to place before the Court further tender documents. The matter was relisted in this regard on 13 November 2012. The wife made further tenders on that day and the husband was granted leave to make an application for costs arising from same.
Orders sought by the husband
The husband seeks orders in accordance with his Further Amended Initiating Application filed 29 November 2011 as to the property matters. In summary, his preference is to retain the former matrimonial home and to pay the wife a sum equivalent to half of the parties’ net pool of assets.
In the alternative, he seeks that the former matrimonial home be sold by public auction and that the sale proceeds be dispersed in a certain manner and priority. Once the auction and ancillary costs are paid, he seeks joint liabilities be paid which include business loans, GST tax liabilities incurred whilst the parties were together as well as his income tax liability up to a similar period, mortgage and overdraft facilities, he be paid a sum equivalent to 50 per cent of (a) the parties’ net equity in the Suburb D property, and (b) the rental value of the former matrimonial home from the date of separation to present. He seeks the balance then remaining be divided equally between the parties.
He seeks that the parties’ mortgage over the investment property in Suburb D be discharged and the wife take over their interest in that property. Following this, he seeks that the wife transfer to him her interest in his business H Partners.
Further, he seeks that the wife account to him all funds deprived by her from the H Partners business in the period up to 31 October 2008 and deposit any funds not yet transferred to the NAB overdraft facility or any other jointly held account before such funds are dispersed on a final basis.
Subject to the foregoing orders, he seeks the parties each retain their interest and entitlement in personal property in their possession and/or control including all shares, bank account funds and so forth in their sole names and any life insurance policies and superannuation funds in their sole names.
As to parenting matters, the husband seeks:-
(a)That the parties’ son attends weekly boarding school commencing Term 1, 2013.
(b)In the event the child remains a day student for the remainder of 2012 and for 2013, that the child spend the following time with him:-
(i)During school term, alternate weekends from after sport on Saturday to before school Monday commencing the first weekend after the commencement of school term;
(ii)Each alternate Wednesday from after school until the following day before school commencing on the second Wednesday after the start of the school term; and
(iii)For half of each school holiday period as agreed, and failing agreement, for the first half in even numbered years and the second half in odd numbered years.
(c)Upon the child commencing as a school boarder, he seeks to spend each alternate weekend with the child from after sport on Saturday to before school on Monday commencing the first weekend after the start of each school term.
Orders sought by the wife
The wife seeks orders largely in accordance with her Further Amended Response filed 18 November 2011 as to the property matters. At the conclusion of the hearing, she sought some variation to those orders, which are detailed below.
In summary, she seeks an adjustment of the parties’ property in her favour to receive, in effect, a total of 60 per cent of the asset pool.
She seeks to retain the former matrimonial home, which she has continued to reside in since separation. She seeks that the mortgage over the home be discharged or, alternatively, refinanced into her sole name. In such an event, she would indemnify the husband from all outgoings in respect of the property.
In the event she retains the home, she seeks to make a cash payment to the husband reflecting 40 per cent of the overall division of the net pool of assets, which she said is a sum of approximately $260,000, less the sum of $24,294.12 plus interest (calculated at the Supreme Court rate) from 18 May 2009 to the date of payment, relating to a Supreme Court costs order. As at 10 September 2012, that sum plus the interest that had accrued totalled $34,367. She sought that this sum be inserted into the order she sought.
In the alternative, she sought that the former matrimonial home be sold by auction. She seeks to retain exclusive occupation of the home until it is sold. Upon settlement, she seeks the sale proceeds be dispersed to pay all costs of the sale, to discharge (a) the Suburb H property home loan and (b) the Mr & Ms Fontana personal overdraft facility. The remainder of the liabilities she previously sought to be discharged were no longer sought at the conclusion of the hearing.
She sought, at the conclusion of the hearing, that the following be included in her orders sought:-
(d)That the wife remove the Suburb D mortgage being secured over the Suburb H property prior to the Suburb H property being sold; and
(e)In respect of liabilities being paid from the sale proceeds before the net balance is divided between the parties, that she be reimbursed for paying off the H Partner’s business loan in the sum of $124,936.
She was questioned whether she would reimburse the husband in respect of mortgage draw downs to the Suburb H mortgage, or rent she had not paid whilst living in the former matrimonial home since separation, which she did not agree to do.
She seeks that the net proceeds then remaining be divided to reflect a division of 60 per cent to her and 40 per cent to the husband. From the husband’s division of net sale proceeds, she seeks to be paid the sum arising from the outstanding Supreme Court costs order plus interest – now in the sum of $34,367.
As to the Suburb D property, she seeks to refinance that mortgage and release the husband from any future obligations or liabilities. She now seeks 60 days or three months, rather than one month, to undertake the refinancing. Simultaneously with the refinancing, she seeks to be declared sole owner at law and in equity to the exclusion of the husband of all and any interest the parties had in that property.
Subject to the forgoing orders, she seeks that each party retain sole possession of motor vehicles, bank account funds, personal property in their possession and/or control, superannuation entitlements, insurance policies and any shares in their sole names.
She seeks that the husband finalise the accounts of the business H Partners Pty Ltd, trading as H Partners professional practice.
She likewise seeks that the accounts of the parties’ trust Mr & Ms Fontana Family Trust be finalised and then the trust dissolved. At the conclusion of the hearing, she agreed the trust could not be dissolved, but sought that she either be excluded from anything further to do with the trust, or in the event the husband wished to continue the trust, she be excluded from being a beneficiary and director.
As to any monies owing in relation to the company or the family trust, she seeks the husband bear such liabilities and indemnify her against contributing to same.
She no longer sought an order for the H Partners Pty Ltd company to be deregistered, as it had already had been.
She sought, in essence, a guarantee that the parties would each pay half the child’s school fees. As she had not formally sought a child support departure order, and such an order could not be made in these proceedings; she was unable to pursue this order.
Finally, she sought a costs order. At the conclusion of the hearing, she clarified that the order she was seeking was that some of her costs be paid in respect of the property proceedings because of the matter being deferred in February 2012. She said she had incurred significant costs as a result in the vicinity of $10,000.
As to parenting, she sought orders in accordance with a detailed minute handed to the Court during the second part of the hearing. In essence, she sought that the previous Orders made by consent be varied to reduce the husband’s time and increase her time with the child. In this regard, she sought the child live with the husband each alternate weekend during school term and at all other times with her. She sought the child spend a three day period with his father each full week of school holidays and at times on special days.
She sought an option that in the event that either parent is unable to care for the child during their time then first offer will be made to the other parent to undertake such care.
She sought that each parent have the opportunity of having the child for extended holidays and ancillary notice requirements in this regard.
She sought the parties retain the child’s passport in alternating years.
She sought the parties only communicate via email unless there is less than 24 hours notice and in such an event telephone communication can be utilised.
She sought to be able to attend and care for the child in the event of an emergency.
She sought that the parties have “shared parental responsibility” for the child in relation to long term decisions including education, religion, health, living arrangements and so forth.
She sought a non-denigration clause, and that each party be able to attend events involving the child including sporting, school and extracurricular events. Further, she sought orders in respect of the parties keeping each other informed of certain matters and contact details.
In relation to when the child was to commence boarding school, at the conclusion of her evidence the wife said she would agree that whatever the child wished to do should prevail.
The Hearing and Evidence before me
The property hearing commenced in mid December 2011. It was initially allocated two days of hearing.
Those two days comprised only of cross-examination of the husband by the wife’s counsel, and that cross-examination did not conclude within those days. Gleaned from that cross-examination, the husband impressed me as a very poor witness. His knowledge of his own affairs, he would have me believe, is extremely poor. For a financial professional, I formed the view in those two days that he is either careless and slap dash in carrying out his professional duties, or he was endeavouring to conceal matters from me.
The matter was adjourned part-heard to resume in February 2012 for a further three days of hearing. The wife’s legal representatives were granted leave to put to the husband in cross-examination when the hearing resumed matters arising from the late production of documents by the husband.
A week before the resumption of the hearing, the husband’s solicitor sought to vacate the hearing dates because of developments regarding the husband’s health. His solicitor endeavoured to put before the Court that the husband was suffering kidney failure, had been hospitalised and was on dialysis. However, the adjournment application was dismissed upon the evidence not satisfying the Court the husband was unable to attend Court. A further adjournment application was made the day prior to the resumed hearing. Evidence was put on that the husband was also suffering congestive cardiac failure. On that occasion, the hearing dates were vacated, both parties’ costs were reserved for both that day and the vacated dates, and the matter was fixed for a further four days of hearing in September 2012.
In the months prior to the matter resuming, the wife’s solicitor ceased to act. Her counsel no longer held a direct brief during the resumed hearing. The wife continued self-represented throughout the second part of the hearing.
The wife’s updating trial affidavit raised new issues. It put back into issue the parenting arrangements for the parties’ son. The wife sought to vary the existing Orders made by consent in January 2011 to, in effect, reduce the husband’s time and increase her time with the child. Her application was not formally filed and late notice of same was given to the husband. In response, the husband too sought a variation of the parenting arrangements. Mr G was appointed to prepare a specific issues report, on short turnaround, as to the then 14 and a half year old’s wishes.
Much of the evidence in the second part of hearing dealt with the parenting matters – the child’s living arrangements and the issue of school boarding. It became a major issue as to whether the child was to commence full time boarding in 2013 when in Year 10, or in 2014 when in Year 11.
The husband’s evidence was concluded during the second part of the hearing after he was cross-examined by the wife. The husband then called two medical witnesses to put before the Court evidence as his health - a Dr O and a Dr W, the husband’s renal specialist - the latter doctor being interposed during the wife’s evidence, and not being on affidavit.
The wife was cross-examined by the husband’s counsel as to both parenting and property matters.
Mr G’s report was prepared and released to the parties on the afternoon of the fifth day of the hearing, on 12 September 2012. Neither party sought to call Mr G to cross-examine him in relation to his report.
On the final day of the hearing, the parties entered into Consent Orders as to the upcoming school holiday time in respect of their son.
The evidence was concluded and due to insufficient time and the wife’s preference to prepare written submissions rather than deliver oral submissions, I made directions for both parties to provide to me in chambers, on a strict timetable, written submissions and a minute of orders sought as to both parenting and property matters, as well as on the wife’s behalf material in respect of any costs she sought be paid by the husband in respect of the matter not proceeding in February 2012.
Following the conclusion of the evidence, the wife sought to tender additional documents. The matter was relisted mid November 2012 for this purpose and a number of bundles of documents were tendered as exhibits by the wife. The husband’s legal representatives were granted leave to reply to matters contained in Exhibit 9 (bundle of correspondence) and the wife’s costs material. The husband made an oral application for costs of the day and directions were made for the wife to then provide a memorandum as to why she should not pay the husband’s costs from that day onwards.
Parenting
As noted earlier in these reasons for Judgment, at the commencement of the second part of the hearing, the wife raised an application to vary the current parenting arrangements in place for the parties’ son, which were entered into by consent in January 2011. In effect, she sought that the husband’s time with the child be reduced from more or less a shared care arrangement to an alternate weekend arrangement, and her time thereby be increased. She sought the husband’s time also be reduced during school holidays to three day periods. She raised as a further parenting issue as to when the child should commence full time boarding at his current school. She sought that the child not commence boarding until Year 11 in 2014, and that he board Years 11 and 12 as per an agreement, which she said the parties had made in the past.
Upon such issues being raised, the husband too sought a variation to the current arrangements. He sought that the child commence as a weekly boarder in Year 10 in 2013, and that the child then spend alternating weekends with the parties, and that school holiday time be shared. The husband offered to cover the entire costs of the child commencing boarding in 2013, and sought that the parties continue to each pay half of all school fees and halve the boarding school fees for Years 11 and 12.
Both parties agreed upon the child being interviewed and a specific issues report being prepared as to the child’s wishes in relation to the two matters in dispute. Mr G was appointed to prepare such a report at short turnaround. The child was interviewed on 11 September 2012 and the report was then prepared on 12 September and released that same day.
The wife’s case
As background, in her trial affidavit sworn 18 November 2011, the wife said that at the time of the commencement of the hearing in December 2011, the parties’ son was living with his mother for eight nights per fortnight, and his father for six nights. The wife said the husband would request once every two or three months for her to look after their son (when it was the husband’s time) because of work commitments. She would generally agree, except for possibly one occasion when she was unable to change her commitments at the last minute. She said the child spends most of his holiday time when with his father at his paternal grandparents’ place.
The child was in Year 8 at S College High School when the hearing commenced, and was nearing the end of Year 9 at that same school when the hearing concluded. He is currently over half way through Year 10. He generally attends school between the hours of 8.00 am and 8.00 pm most days.
In her updating affidavit sworn 26 July 2012, the wife deposed a number of parenting matters she sought to put before the Court in support of her desire to change the parenting arrangements previously settled by consent in January 2011.
Annexure D to that affidavit, being an email sent from the child’s email address to his mother’s email address on 7 March 2012 became the subject of much cross-examination, dealt with in detail below.
In her affidavit, the wife said the parties had agreed for the child to see a child counsellor but there was difficulty in choosing a counsellor. She said after contacting about nine counsellors, she took the child to see a Mr X because she could no longer wait for the husband’s approval. She said she received an email on 27 March 2012 from a Ms Y, the school counsellor, advising that the Year 9 boarding coordinator Mr J at the school had referred the child to see her. She agreed to the child seeing Ms Y. She said the child and his father are currently having sessions with the school counsellor.
In her evidence in chief, she sought to clarify a few matters as to her version of events.
In relation to the mediation with Mr N on 7 March 2012, she said it was her understanding that it was a family counselling session, not mediation for the purpose of obtaining a section 60I certificate to then proceed back to Court to amend the parenting arrangements. Because of her misunderstanding, she arranged for the child to take the day off school. She returned the child home, rather than back to school on the day. On her way home to drop the child off, she had asked the child his reasons why he sought the parenting orders be changed; what his wishes were. She said the child had then written the email on his iPad, which became the subject of much dispute – that is, annexure D to the wife’s most recent affidavit. She said she had asked the child to write an email in his own words to express his reasons why he wished the parenting arrangements be changed. She said she received the email on her iPhone when she was in her session with Mr N. She had wanted to convey the child’s wishes; she was not trying to put the child in the middle of the parties’ dispute.
As to boarding school, she said she had never said that she wanted the child to board at the present point in time. She said the child had asked to board, to do a trial period of three weeks as a weekly boarder and return home on weekends after sporting activities. She too said the child’s main concern with boarding was whether there would be enough food available to him of a night after sport. She thought the child was enjoying the trial period and was open to him boarding. She said it was a costs issue for her and would prefer he commenced boarding in Year 11 in 2014, rather than in 2013. She said the child’s wishes were a main factor for her; she wanted him to have the social experience of boarding being that he is an only child. She thought the costs were approximately $36,000 per year for Years 10, 11 and 12.
As to the events of 30 November 2011, she said her version of events as deposed in her affidavit was correct – she collected the child from school after 5.00 pm because he had a headache and they tried to contact the husband she said no less than 10 times as he was to collect the child from school at 8.00 pm. She said they met the husband at the school at that time after being unable to contact him prior, and she dropped the child to his home later that evening. She said the child was under extreme pressure at that point in time with the stress of exams and he was having difficulties communicating with his father.
In cross-examination, she said that the child was not aware of what the parties were seeking in the Court proceedings other than that she was seeking to retain the home. She initially said she had not explained to the child why he was going to see Mr G, but then said she had explained he was going to see a child counsellor to try and resolve the child custody dispute between the parties.
She said the child has said he has to write an email to his father, arising from his contact with his school counsellor Ms Y. The wife agreed that the child has been put in a position where he has had to write an email to both parents as to his wishes.
She understood it was important for the child to have a relationship with his father; even more so now because of his father’s health. She had asked the husband to discuss his health with the child directly. She had spoken to a friend who was a psychologist about the situation. In about April or May 2012, she said she discussed the matter at home alone with the child. She did not allow the child to see the medical reports annexed to the husband’s affidavit. She said she tried to explain the situation to the child in a very gentle way, without her emotions getting in the way. The child had some knowledge of the situation but not a full understanding. The child had become aware of discussions of a kidney transplant from attending the hospital with his paternal grandmother to visit his father in about April 2012. She had told the child that his father was very sick, he had multiple complications regarding his health and that he could possibly die at any moment if he does not get the right treatment. She thought the child was too immature to understand what it all meant, but she wished to patch up the father-child relationship and encourage the child to be there as support for his father. She said it had not occurred to her that she was the wrong person to be talking to the child about his father’s health.
She was referred to Annexure F of her affidavit sworn 26 July 2012 and said she had annexed that document because it was critical of the husband to write such an email. She said it was an example of how harsh he could be on the child. She said the facts were not correct in the email. She said it was only a trail game and the child was not obliged to attend every trial game. She said they had advised the child was not going to attend because of an injury. It was put to her she was being defensive of the child in relation to this matter and she disagreed. She also disagreed that it was an example of how her parenting could improve.
She conceded she had tried to protect the child for a long time, that the husband had been domineering and would not listen to the child’s needs. She was adamant that the child was her first priority.
As to annexure D of her affidavit sworn 26 July 2012, being the much disputed email sent from the child’s email address to the wife’s email address on 7 March 2012, she understood the husband’s evidence was that he was sceptical about its authorship, but she said she had no input (with emphasis) into it. As she said earlier, she had discussed with the child on the way home in the car and wanted him to express his views and reasons in writing. She had hoped to give a voice to the child’s wishes.
She was referred to segments of that email. As to the comment that the husband buys the child “stuff”, she thought this reflected upon the parties’ different parenting attitudes. She said she tries to raise the child without being spoilt. She was asked whether she reflected and did a “reality check” on the contents of the email and she said she did not believe the child’s statement to be incorrect. She then named several expensive items the husband had purchased for the child including an iPad, a stereo and a bike. She said she was not resentful of the husband buying the child the bike, but hoped the child got good use out of it.
As to the comment in that email that “he thinks that what I think is always wrong”, she did not view this as an exaggeration on the child’s behalf.
She thought the child was close to being perfect, and that he had expressed in the email (Annexure D) what was from his heart.
As to the husband’s evidence that one of the child’s concerns about boarding was that he would be worried about his mother on her own, she said she would be “absolutely devastated” if the child did not board because he was worried about her on her own. She wanted the child to put himself first but said it was just his nature to be worrying about others. She did not know what the child would be worried about leaving her on her own at home. He had only mentioned food as his sole concern in relation to boarding. She did not think the child would express such a concern about leaving her at home alone to the husband. She thought the husband was not telling the truth in this regard and was making it up.
Even though the husband had agreed to pay the entirety of the boarding fees for Year 10 (2013), the wife said her mind was still not made up. She needed some more time to think about it. She said then that her number one concern was the child, not money. She said the child had not yet made up his mind. He was enjoying the trial boarding period so far. It was put to her that she did not want to let the child go and she said she had not yet made her decision.
She gave evidence that she had not done a parenting after separation course. She said she had reflected on the position the child has been placed in, having been put in the middle of the parties’ dispute. She repeated that she had asked the child to write the email as to his wishes and said that the child had finally built up the courage to voice his wishes. She then conceded that an equally plausible explanation was that the child had written what he believed his mother wanted to hear. She agreed the purpose of the email was for it to be shown to Mr N and the husband in relation to changing the child custody arrangements.
She was aware that the child was “sad” at the time of writing the email. She spoke of his breakdown in November 2011 and him expressing a desire not to live between two houses anymore. Asked why she did not raise those matters when the hearing commenced in December 2011, she said that she wanted to settle the property matters and not antagonise the husband as she thought she would have a better chance of changing the child custody arrangements afterwards.
The wife explained that she had difficulties producing email correspondence because of a virus on her laptop.
It was put to her that the email, that was Annexure D to one of her affidavits, was a long email for a 14 year old to write. She said it was longer than his normal emails but she thought he had put a lot of time and effort into writing it. She thought it would have taken him an hour or so to write. It was put to her that the child started writing the email when still with her and she said no; she had dropped the child home at about 10.00 am on the day in question.
It was put to her that she knew what the child had written in that email was not correct in relation to the comment that his father takes no interest in what he does. She agreed that the husband does take a lot of interest in what the child does and viewed it as the child’s interpretation of events. Asked if she hesitated to use the document in the proceedings in support of her case, she said no, she had not thought about it at all. She did not think it an inaccurate perception of the child.
She conceded Mr N had made it clear that he did not want to involve the child in the mediation. She thought it would help the process; that it was appropriate. From her perspective, the meeting was to hear the child’s views. It was important the child wrote the email on that date so she could show it to Mr N so that Mr N had some information about the child’s needs, she said. He only looked at it briefly on her phone, not in any detail. She said she did explain to the child that she was going to show his email to Mr N at the meeting, then said she thought she had explained she was going to show it to both Mr N and his father.
It was put to her that she wrote the last few lines of the email and she again said that she had no input into the writing of the email.
Asked whether the child would be upset that she used the email in the Court proceedings and that his father had read it, she said she did not know. She had not thought to ask the child if she could put the document before the Court. It was put to her that she would have been more concerned about the child’s feelings had he written the email and she disagreed.
She had raised the child to tell the truth, and she believed everything the child said about his father as the literal truth. If he tells her something, she takes note of it. She was given the example of the child telling her his father had been in hospital for eight to nine weeks, which she now knew not to be true. She conceded she had misconstrued that information and had assumed it was for a continuous period. The child had told her that his father had been in hospital before Christmas, then out for Christmas and then back in; she knew this when she deposed her affidavit. She agreed the husband had instead been in hospital for a total period of about three to five weeks.
Bundles of email correspondence was produced by the wife became Exhibits B and C. The wife agreed Exhibit C contained correspondence in which she had advised the child how to cut and paste things between emails. She said she had regrets about that email correspondence; that it was being misinterpreted in Court. She agreed her email portrayed her as being very directive; she said she was giving the child “clear instructions”. She agreed to directing the child not to make the email look like it was coming from her, and conceded she was involving the child directly in the parenting dispute in this instance. She was hesitant when she gave the instructions but said she was trying to cause less pain down the track. She sought the Court not view anything untoward from her not producing the document earlier in the proceedings; her computer had a virus and if she could have produced it earlier, she said she would have.
She was asked about the parenting arrangements in place. She said the Consent Orders that the parties had entered into in January 2011, which provided six nights with the husband, had not been complied with for the whole of the year (2012). She said she had decided what was best for the child and had made arrangements that diverged from the Court Orders. The husband’s legal representatives assured the Court they would not involve the wife in any further proceedings in this regard. She again said she believed she was acting in the child’s best interests. She conceded she was wrong in delegating to her son some of her parental responsibilities.
She sought the child spend half of school holidays with his father. As to the Easter 2012 school holidays, she concedes only five days with the husband were proposed, not half. As to the dates set out in Exhibit C, she thought she had discussed them with the child and then asked the child to forward same onto his father. She said the criticisms made by the husband of her, because of her involving the child in parental decision-making, set out in his email to her dated 30 March 2012, was deserved. She thought she had not responded to the husband’s email, but conceded she should have to take the “heat out of things”. She was quick to add that she thought she had told the child she had been wrong in involving him.
As to the Apprehended Violence order proceedings, she said she did not know the outcome. The police had represented her and she had no legal fees to pay. A final Apprehended Violence Order had been granted in the Local Court in May 2009. She said she did not include the fact the Apprehended Violence Order was then appealed and dismissed in the District Court in her affidavit because she did not know about it; not because she wanted to conceal those matters from the Court.
She said her changes to the Consent Orders were in accordance with correspondence between the parties’ solicitors; not in accordance with the Orders. She conceded she did not think the husband’s solicitor responded to a letter sent by her then solicitor in this regard, but then said she thought the husband’s side was “agreeing” because they had not written back. She said the child had raised changing the parenting arrangements with her and she had told him she would have to discuss the matter in detail with his father.
She was asked about an email dated 2 February 2012 which she said was in her words – her interpretation of the child’s feelings – in relation to the comment that the child did not want to be embarrassed or bullied at school.
Asked why she had not complied with the Consent Orders until they were varied so the child had a clear schedule, she said the child really wanted the arrangements changed. She thought she had taken appropriate steps discussing the matter with her then lawyers, and trying to resolve it out of the Court system. She concedes the Orders were not however changed and that she did not get a response from the husband that there was agreement to change the Consent Orders. She had hoped father and son could have had an in-depth discussion about the matter during the counselling session. She then conceded she had unilaterally changed the arrangements prior to the counselling session. She wanted the arrangements changed before the child went back to school in 2012.
She said she tries not to involve the child in the Court proceedings; she disagreed she had involved him in this regard, or that she had given him the final say. She said she had not done exactly what the child wished, but had tried to make a fair arrangement.
She did not believe everything the husband said as being correct. She disagreed that she exaggerates what the child reports to her. She agreed that she reported to the husband concerns that the child has expressed to her as she feels their relationship (father and son) is not very strong and it relieves the child’s fears. She tries to hide from the child her dislike of the husband.
She now seeks to have the changes to the Consent Orders dealt with by the Court rather than negotiated between the parties. She was eager to see Mr G’s report as to the child’s wishes and believed it would assist resolve the parenting matters.
She was referred to email correspondence between the parties’ solicitors dated 30 January 2012 and 1 February 2012 respectively, which together became Exhibit E. In the wife’s then solicitor’s letter it was proposed on behalf of the wife, in accordance with the child’s supposed request, for the child to live with his mother during the week and his father on alternate weekends during school term and for a seven day period in each school holiday period. The husband’s solicitors’ letter in response was that the husband did not agree to change the current arrangements and his health condition to not impair his care of the child. It was put to her that her proposed arrangements would create more problems moving forward and she disagreed. She said she would agree with whatever the Court thought best. As to her one week proposal during school holidays, she thought that period of time was very appropriate for the child to spend with his father.
She agreed that special occasions including Easter and Christmas days should be equally shared between the parties.
She was unsure why the child had not told her of things relating to the husband, such as their sporting club membership. She thought the child has “compartmentalised his life” and believes he behaves differently with each parent.
It was raised that the wife had not in the past offered the care of the child to the husband when she had been unavailable to care for him. She conceded she had not complied with that Order in the past.
In the event of a medical emergency involving the husband, she said she would wish to be present with the child to assist him in his grief. She conceded the husband would not wish her present at the hospital, for example, in such an event. She said her proposal in this regard was only in the event the husband was at “death’s door” and the child was in an emotional state.
The wife said she had been heartened by current evidence that the husband’s health situation was not as dire as she had believed.
In re-examination, the wife sought to reiterate that the child had written the email that was Annexure D to her most recent affidavit, upon her request; that she had not in any way had input into its content. She agreed that whatever the child wished to do in relation to boarding in Year 10 in 2013 or Year 11 in 2014 should prevail.
She produced a bundle of email correspondence between herself and the child to the husband’s counsel at the conclusion of her evidence, which became Exhibit H. It was put to her the bundle was not a complete set of the correspondence and she said a virus on her computer had deleted information from between January and February and some from March 2012.
That concluded the wife’s evidence in relation to parenting matters.
The husband’s case
In his trial affidavit sworn 17 November 2011 when parenting matters were not yet again in issue, the husband had said that he had assisted the wife care for the child as an infant. He said both the maternal and paternal grandparents assisted care for the child when their son was between the ages of one and three years old. The child had then attended preschool two days per week from the age of three years old. He said he was involved in the child’s schooling, and the parties had agreed post-separation for the child to live with him up to six nights per fortnight. The parties had agreed upon the child being enrolled in S College for his secondary schooling and the child has been always been involving in sporting endeavours. He said he would often take the child along to visit his family – his uncles and aunts, grandparents, cousins and members of his extended family. He said his mother assisted care for the child if he had work commitments and that the child was very close to his mother. Whenever the child has wished to discuss matters in dispute between the parties post-separation, he said he had discouraged the child from talking to him about such matters. He said the wife has involved the child inappropriately in financial matters between the parties post-separation and had not given him the option of caring for the child when the wife was unable on several occasions to do so.
In his updating affidavit sworn 31 August 2012, the husband indicated that the parties had agreed for their son to be a boarder at S College for Years 11 and 12, and the agreement included the parties attending to half of those costs each. The husband indicated in that affidavit that he was willing to send the child along to board commencing in Year 10 in 2013 and he would be prepared to pay the whole of the additional costs of that year. He seeks that the child commence boarding in 2013, following the trial boarding program in September 2012.
The husband then gave the following evidence as to parenting matters when the matter resumed in September 2012 when being cross-examined by the wife.
He gave evidence he was not working and had just (that weekend prior) moved into a three bedroom rental house with a backyard, for which he was to pay $650 per week in rent in Suburb V. It was a six month lease with the prospect of a further six month extension. He said his son had been to the property and had his own furnished bedroom. He was getting his home dialysis machinery installed and was to undergo dialysis on Monday, Wednesday and Friday nights.
He said the child had just started a four week trial of weekly boarding. He said the child had reported he was enjoying it, that he was not too happy with the food but found it easy to study and get up early of a morning.
He said the parties had agreed the child would board during Years 11 and 12.
He had not spoken to the child about the wife’s application in regards to parenting issues.
The husband disputed that Annexure D to the wife’s affidavit sworn 26 July 2012 was written by the child. It was an email dated 4 June 2012 sent on an iPad from the child’s email address to the wife’s email address. He did not believe his son would say that he brought him too much. He said he had no spare money until he received his first income protection payment in May 2012 so did not think he had bought the child anything since early that year. He thought he had not brought the child anything of any consequence, other than some clothes, since that payment. As to the comment “he criticizes me all the time because he thinks that what I think is always wrong” in the email, he thought that could only relate to criticisms he had made for the child not doing the right thing when he did not go to a rugby match. Other than that he could only think that he tells the child to keep his room “a bit cleaner”. He did not believe the child would have said the remainder of the email. As to the comment “(he) will always criticize me and yell at me because to him everything has to be done his way”, he said he never yelled at the child. He seldom raised his voice.
He said the parties were to attend a privately-organised mediation session in March 2012 in relation to parenting issues at Court with a Mr N. He said because the wife turned up with the child, the session started late. The wife had to then take the child back to school and return alone.
He thought the child had dealt with his hospitalisation okay. The child had visited him at the hospital. He thought the child would have been intrigued by the machinery he was plugged into. They had not spoken much about it. The child had not asked a lot of questions. He had explained to the child that he was to do home dialysis. He had told the child he was hoping to get a transplant in future.
He saw very little of the child in January 2012. The child had gone skiing overseas for two weeks in January. They spent a week together during the Easter break; they had spent time with the husband’s extended family. He said the child gets along well with his cousins and is very close to the paternal grandparents.
He said that he currently sees the child every second weekend. He said he could not change this arrangement, forced upon him by the wife, because he was under cross-examination over the last nine months.
He said the child was very good at sports and was a good student. He excels in mathematics, science, metal and wood work. He said the child was also really good at a particular sport, and that he had brought them a club membership and had booked lessons for them in the school holidays. He was looking to buy relevant sports equipment.
He said the child did not talk to him much, but they enjoy good conversation. He could not understand what he saw as the child’s contradictory comments in the June 2012 email that “he won’t talk to me much” and “(h)e then complains to me that I never talk to him”.
He disputed comments in the June 2012 email that he does not buy food for weeks and that there is nothing in the fridge. He said he would shop twice a week for fresh food. He said there is always something in the fridge. They sometimes get takeaway; he disputed the child’s comment in the email that he (the child) has to go to the shops to get food.
As to comments in the email that he is unhygienic, the husband said the child does not help clean and he has cleaners come in fortnightly. He disputed that the child would use the term “fecies (sic)”, and said instead he would use the term “shit” in that context. He did not recall any faeces being left on the bathroom floor or in his bedroom.
He said that the wording of the email was just not his son’s words.
He could not comment on alleged conversations between the child and the wife as deposed in the wife’s affidavit sworn 26 July 2012 which allegedly took place between November 2011 and March 2012. He did not believe the child was seriously ill leading up to Christmas 2011. He knew the child had been collected early from school one day but did not know why he was not contactable by the wife that evening. He had collected the child from the school at 8.00 pm that day.
He said he had spent one week in hospital before Christmas 2011 and then about 10 days after that, not eight to nine weeks as purported by the wife. He had spent three days a week in hospital to start with and had started dialysis. He was initially at R Hospital and then moved to P Hospital in May 2012. The home dialysis training was offered at the P Hospital.
He does not talk to the child about the Court proceedings; he did not know if the child was aware of them.
He had never heard of a Mr X, or the child going to counselling, before he had read the wife’s affidavit the week prior. He said the wife had not asked for his permission to take the child to get such assistance. He knew of Ms Y, the school counsellor, and Mr J, the Year 9 school boarding co-ordinator. He had met with them both; the child was present when he met with the school counsellor. He had not informed Mr J as to his current health. As to the wife telling Mr J that the child was not aware of “the seriousness or possible death of his Dad”, he said that he had never been told by any doctor or nurse he was about to die.
As to the main expensive gifts he had brought for the child, he said he had given the child an iPad for Christmas 2011, a new phone recently and had taken him clothes shopping.
He was not aware of the child having any food allergies. He said the child no longer drank soft drink. The child had not discussed with him that he (the child) had given up eating cheese and had started drinking light milk.
As to the child’s main concerns commencing a boarding trial over those next few weeks, the husband said he had talked about two main concerns with the child. Those were that the child would be worried about his mother on her own and would not be happy with the food.
He agreed that he had attended the former matrimonial home on 17 October 2008 and once in about February 2011. He believed he had knocked on the front door. He did not think he had been accompanied by the child and the police to pick up a shirt on one occasion. He agreed that he had accessed the home using the child’s key at a time when the child had a football game to attend. He believed he waited at the front door and the child went inside. In any event, he did not think he needed permission to enter the home even though it was at that time the wife’s private residence.
He was asked again later in cross-examination by the wife about the parties’ meeting with Mr N for mediation on 7 March 2012. It was put to him that the wife returned at about 10.30 am after having to return the child to school. The husband said he could not recall the exact time, having said in his evidence the previous day that the meeting was scheduled for 12.00 noon. He was shown a document and agreed the meeting time was scheduled for 10.00 am. He said he was at the meeting at the scheduled time. It was put to him that the email supposedly written by the child to the wife on 7 March 2012 was transmitted at 10.56 am at a time when she would have been in the mediation. He thought the wife had not returned to the mediation until about 11.30 am and that they then had a joint session; he had started with Mr N alone without the wife prior to the joint session.
He was referred back to an incident when the child was not at school and the wife had sent the husband an email not to collect the child from school. The husband thought this was in February 2012, but then conceded it was in November 2011, shortly before end of year exams. He thought he had met with the child to collect him that night at 8.15 pm on Wednesday 30 November 2012. He said he collected the child every Wednesday at school at 8.15 pm.
At the conclusion of the hearing, the husband indicated his position was for alternate weekend and one overnight in the intervening week if the child was not to commence boarding school in 2013.
That concluded the husband’s evidence in relation to parenting matters.
Property
The husband’s case (Applicant)
The husband’s case in respect of property matters is predominantly set out in his trial affidavit sworn 17 November 2011. Issues regarding his health, relevant in relation to section 75(2) factors were set out in his updating affidavits sworn 7 February 2012 and 31 August 2012 respectively, and an affidavit of Dr O sworn 5 September 2012. Oral evidence was also given by Dr W, the husband’s renal specialist, despite the Doctor not being on affidavit or having prepared a report in the proceedings.
The husband said the parties purchased a unit in Suburb A in about 1992, to which both parties contributed about $20,000 each and they borrowed the balance of the purchase price of approximately $148,000. In cross-examination, he disagreed that the wife had contributed $10,000 to the deposit, and said he had only contributed to stamp duty and not the deposit.
The parties married and commenced cohabitation on in late 1993. He said they received a substantial amount of cash as presents, mostly from his family. He said the cash added up to $8,000 and then said it was all from his family; none was from the wife’s family.
The parties intended to move into the Suburb A unit but never did. Instead, they rented a unit in Suburb K following their marriage, he said.
Upon resigning from working at a professional practice, namely ET practice, the husband said he was repaid a sum of approximately $125,000 plus interest. He said the money was used as working capital for his new business and some may have been used on general living expenses. When asked how the amounts were repaid, he could not recall.
He commenced his own accounting practice in December 1993, initially known as Fontana Pty Ltd. The business name changed in 2001 to H Partners. He said the wife gradually commenced working in the business after the parties’ child was born in early 1998. He said that the parties ran the practice together up until the date of their separation. The income derived from the business fluctuated between $190,000 and $350,000 per year.
In 1995, he said the parties sold the Suburb A unit and purchased a property in Suburb M for $240,000, which required quite some renovations.
In his affidavit, he said the wife was diagnosed with a melanoma on her back in 1995 and underwent surgery to remove it. He said she subsequently received an insurance payout of about $200,000, which the parties used to reduce their mortgage over the Suburb M property and to purchase a second hand car amongst other things. During cross-examination, he said she never had a spot on her back and that it was on the back of the top of her arm. He agreed this was an error in his affidavit, and that he had only recalled the spot was on her arm, not her back, in the few days before the hearing commenced.
He said the parties sold the Suburb M property in 1997 for $480,000 and purchased the former matrimonial home situate at Suburb H for approximately $662,500. He said the parties borrowed approximately $400,000 from NAB to fund the purchase. The parties moved into the property and he ran his business from the home until the parties separated.
In about October/November 2003, he said the parties and the wife’s brothers Mr RR and Mr SR purchased a property together situate at Suburb D. The purchase price was approximately $620,000 and he said the property was registered in Mr SR’s name as 99 per cent owner so Mr SR could access the first home buyers stamp duty exemption. The property settled in December 2003.
He said the parties discussed the joint venture in about late 2002. It was his proposal; he thought Mr SR needed a project but could not afford to purchase a property on his own. He said his idea was that Mr SR live in the property and they renovate it. It would be a good investment opportunity and would help Mr SR out. He said the wife agreed it was a good idea and he thought Mr SR agreed later on that it was a great idea. Later on, he said Mr SR had never agreed to move into the property and had only agreed to help out with renovations on weekends and at night after work.
He said it was the wife’s idea to get her other brother Mr RR in on the joint venture so that they could purchase a more expensive property than the three of them could. He was not present when the wife had discussed the proposal with Mr RR, but recalled his wife had said to him that Mr RR had agreed to put money into the venture initially to purchase the property.
There was disagreement between the parties at the hearing as to the purpose of the purchase of the Suburb D property. Counsel for the husband indicated that they would not, however, draw a negative inference from the wife not calling her brother to give evidence on this issue.
He said the parties had discussed with the wife’s brothers in about January 2003 as to the progress of renovations on the property. He said that Mr SR had opted out of the project and that the parties then had concerns about the financial risk of the project and whether to sell the property. He said the wife was against selling it and sought to proceed on renovating the property themselves so as not to loose money on the venture.
Between 2004 and 2007, the husband said he undertook and completed renovations on the Suburb D property.
In about 2005, he said the parties paid approximately $200,000 off the mortgage over the former matrimonial home when they had borrowed monies for renovating the Suburb D property. The liability for the home loan, he said, was secured on the Suburb D property and interest on that loan was tax deductible for the parties.
He understood that the parties no longer owed Mr RR in relation to the Suburb D property and that debt had been paid by the wife.
In about 2007, the husband said he noticed that there was less money going into the business account and he had less money to pay for general expenses.
In about March 2008, the husband said he became aware that the wife had been directing her clients to pay invoices into a separate account that she had opened up with ANZ in 2006 in her sole name, rather than into the joint business account and trust account with NAB that he operated. He said she refused to pay any of the money back into the office account, and from this point onwards, the marriage became strained.
He disagreed that the parties separated under the one roof on 31 July 2008 as contended by the wife. He said the date of separation was 25 October 2008, when he was forced to leave the former matrimonial home. He said the police attended upon the home and served him with a Provisional Apprehended Violence Order. He said he was given only two hours to pack his things and leave the home; he took only a sports bag of clothing.
Since that date, he said the wife has had sole use and occupancy of the former matrimonial home to his exclusion. He said he has had no access to joint monies since that date; the wife cancelled credit cards and cheque books remained in the home. He said most of his business records were at the home, and denied a large number of the documents were at a Suburb A office.
He said the home mortgage was approximately $20,000 as at the date of separation. He said there have been no repayments since separation, and the wife had about $80,000 of joint funds in her ANZ account at that time which she refused to deposit back into the parties’ joint business account.
He said it cost him approximately $6,000 to set up a new home for himself; he had to purchase second hand furniture, pay for a rental bond and rent in advance. He said he paid these expenses from his income and had to also borrow money from his parents.
At the time of separation, he said the wife commenced her own accounting practice known as H Services and took approximately 30 per cent of their clients from their joint business with her.
On 28 October 2008, he said he was able to attend on the former matrimonial home by agreement to collect some of his personal items including clothing, computers and work-related items. He said he did not have anywhere to store business records or other personal items at that time because he was living in temporary accommodation.
He said that at some point after separation, his solicitors had contacted the wife’s then solicitors to arrange for him to collect some of his personal items and business records from the former matrimonial home. He said his request was refused.
From about November 2008, the husband rented a two bedroom unit. He borrowed approximately $6,000 from his parents to assist him financially, which he said is still outstanding. At that time, his rent was approximately $480 or $490 per week.
In about June 2009, he said he was convicted of assault and indecent assault perpetrated upon the wife (which he denied), and a Final Apprehended Violence Order was made against him. He successfully appealed the Orders made in the Local Court and the convictions and Apprehended Violence Order were dismissed in the District Court. He said he incurred substantial costs of $18,000 in defending those proceedings.
Also in about 2009, the husband commenced proceedings in the Supreme Court to wind up his company because of the outstanding GST debt. He agreed a costs Order had been made against him in the sum of approximately $24,000 in the wife’s favour and that interest had been accruing since May 2009 – the sum would now be in the vicinity of $30,000. He said that the parties’ solicitors had agreed the costs order be paid out of the final property division.
He said the corporate trustee of H Partners Pty Ltd was deregistered in about October 2010. He had not disclosed this to the wife, despite her being a co-director and shareholder of the trust. He later said it was deregistered in about mid 2010.
He said several Orders were made on 28 January 2011 in this Court. Firstly, the parties settled their parenting dispute by consent and entered into Final Orders for a shared care arrangement for their child. An order was also made permitting him to attend upon the former matrimonial home the following month to collect personal items and business documents left in the home at separation.
As at the commencement of the hearing, he said the balance owing on the home mortgage was approximately $90,000. He said this was because the wife had instructed the bank to transfer funds from the joint account without his knowledge and she had added a joint overdraft to the mortgage that the parties had held with NAB.
His rent, at that time, was approximately $465 per week.
He was cross-examined extensively in relation to his financial statement. He said it was his signature on the document, that it was accurate as far as he was aware and that he understood it was imperative to be accurate about such information.
In the document he said his income was approximately $2,500 per week. He said this included monies he received from his business trust. This was not differentiated on the document and not evidenced from inspecting same. He said his expenditure was also approximately $2,500 per week.
He had included that he was paying $700 per week in income tax. This was not the case; he was not paying his income tax. He said he would be spending more than the expenditure set out in his financial statement. He could not answer why he had not shown a greater expenditure. He said he had no money left at the end of each week in his bank account, which is why he said his income and expenditure was equal. He included the GST tax liability in his statement.
Issue was raised as to the husband’s financial disclosure. He denied being flippant in relation to his disclosure. A letter and notice to produce dated 11 November 2011 sent by the wife’s solicitor to the husband’s solicitor was tendered as Exhibit 1. Wife’s counsel said the notice had only been complied with the first morning of the hearing when a box of documents had been handed to the wife. The husband said he had only seen the notice on the morning of Monday 12 December, that being two days before the commencement of the hearing and one month after the letter and notice were issued.
He also was made to provide personal bank account statements for the period August 2010 to date, as such documents the wife’s counsel said had not been produced despite repeated requests by her instructing solicitor on the wife’s behalf over the last two years.
As to the business trust, he said monies he earned from the trust were paid into his personal account and that the trust did not necessarily need to have its own bank account.
He was asked about shares he held in a B Group, otherwise known as B. He said he became involved in the group in 1998 and left it in about 2008 upon selling his shares. He said it may have taken up to 12 months to get his funds back. He thought he was paid in two instalments, the first approximately $8,000 to $10,000 and then the balance, totalling $15,155.91. He said those funds were used to meet general living expenses. He said the monies were deposited into his bank account, but could not identify the deposits from his statements. He later said that the $15,155 figure was in fact the number of shares he had and not the value of his shares. He said units were worth $1.20 each and so the figure was 20 per cent too light. On the second day, following wife’s counsel inspecting documents he had produced the day before, it was put to him that $23,000 had been deposited into his bank account in two instalments in February 2011. He agreed his oral evidence prior as well as what was set out on his financial statement had been incorrect in this regard.
He said he had only operated one personal bank account since 2008, a NAB account. He said he had no credit card debts.
He seeks to retain the former matrimonial home. In that event, he said he did not think he would have to take over the mortgage. He said it should be paid out of the property settlement, then said the wife should pay the $120,000 home mortgage and he pay the $124,000 business mortgage.
In relation to the parties’ productivity working in their business, he denied the wife did far more work and earned more fees. He recalled that the wife had done an analysis of the business for one year, but not for three years.
In about 2003, the parties entered into the arrangement with the wife’s brothers that resulted in the purchase of the Suburb D property. The parties exposed themselves to a mortgage liability in respect of that property.
It is the husband’s assertion that he carried out considerable renovation works in respect of that property, working at weekends. I am satisfied that the husband did work on that property, and I am satisfied that the wife also performed work on that property, but to a lesser extent than the husband.
In about 2005, the parties, in the course of a transaction that I do not understand, borrowed the sum of approximately $200,000. Those funds were purportedly utilised for renovation of the Suburb D property. I am satisfied, however, the amount was applied to the reduction of the Suburb H mortgage, with the borrowing, however, secured on the Suburb D property. It appears that there was thus some tax benefits to the parties.
The parties separated under the one roof on 31 July 2008. I accept the wife’s evidence in this regard.
The husband left the former matrimonial home in circumstances which arose out of a complaint by the wife for an Apprehended Violence order. The husband said, and in this respect I accept that which he asserts, that he was given a short period of time in which to leave the home. The significance of this is that the wife has remained in the home since separation. It appears from the available evidence that the wife has not only not paid mortgage instalments in respect of the home loan, but has increased it by combining it with other borrowings. The end result is that the wife has had the benefit of comfortable accommodation at no apparent cost to her since the parties separated. The husband has been required to rent property to accommodate himself and the parties’ son, when his son has stayed with him.
I indicated earlier in these reasons for Judgment that I was not prepared to make any mathematical adjustment by adding any sum to the pool of assets in respect of this situation.
However, I am clearly satisfied that the fact of the wife’s occupation of the home and non-payment of the mortgage is a factor that weighs in the husband’s favour as to contribution.
I am satisfied that the wife paid out an amount of approximately $124,000 to extinguish a business debt of the parties.
I am satisfied that the wife did receive money from clients that should have been paid to the partnership accounts, as a result of her directing clients to use an alternative form of payment.
I am satisfied that the wife was the party primarily responsible for the role of homemaker and parent within this marriage. I am satisfied that her contribution in this respect clearly outweighed that of the husband. I am satisfied that, until the later stages of the marriage, she, as did the husband, contributed their income for the benefit of the marriage.
The question then is:- how do I balance these contributions, acknowledging they are of many different kinds and made at different points or stages during the marital relationship. I was referred by counsel for the husband to the decision of the Full Court of the Family Court of Australia of Brown & Brown[7]. I was particularly taken to paragraph 81 where the following statement appears:-
The exercise of balance contributions, as the trial Judge recognised, is not an accounting exercise, nor does a long term marriage lead to a presumption of equality of contribution.
[7] (2005) 33 FLR 246
I am satisfied that this present case involves a marriage that, particularly having regard to the fact that the parties have a child, is a long marriage. However, it is clear that I must not make any presumption of equality, but, as I have said, I must endeavour to weigh the contributions as best I can. I am also clearly not required to attribute percentages and figures to each individual matter of contribution, which each of the parties seem, at various parts of their submissions, to suggest that I should do.
The wife clearly introduced funds to enable the purchase of the Suburb A unit at the very commencement of the marriage. The wife further contributed the whole of her trauma payout in the amount of $200,000 to reduce the mortgage debt on the Suburb M property. These two contributions were made at the commencement, or very soon thereafter, of the parties’ relationship.
The Full Court of the Family Court of Australia in the matter of Pierce & Pierce[8] dealt with the issue of initial contributions and how they were effected by that which occurred subsequently. After making reference to the decision of Money & Money[9], their Honours went on to say:-
In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, [in this case of the wife], regard must be had to the use made by the parties of that contribution.
[8] (1999) FLC 92-844
[9] (1994) FLC 92-485
I am satisfied that the wife’s initial contributions were of importance because they enabled the parties to obtain their first property and, thereafter, to reduce the indebtedness of the parties on a second property. Use was made of the proceeds of sale of both those properties directly and indirectly when the parties came to acquire the former matrimonial home.
I balance that thereafter against the contribution of each of the parties whilst they worked in and about the practice, up to about the time of separation.
I am satisfied that the wife made a contribution that outweighed that of the husband in the performance of duties as homemaker and parent.
I am satisfied that the wife remaining in possession of the former matrimonial home after separation, in the manner in which she did, is something that I should take into account in the husband’s favour.
I am satisfied that I must give weight to the fact of the husband’s trauma insurance claim bringing funds into the marriage. I am not prepared to accept that the wife, in effect, made an equal contribution to this sum of money. Whilst I accept that the premiums were paid from joint funds, this is not a case, in my view, identical with superannuation where it is the attaining of an age that usually has the superannuation fall in. In this case, the monies arose as a result of very significant illness suffered by the husband. Accordingly, that is a contribution on the husband’s part.
The wife, as I have said, has tried to put before me material in her written submissions that was never put to the husband during the hearing, as it ought to have been. The purpose of that was to suggest that the husband had monies that could be in some way mathematically ascertained and, thus, included in the pool of assets.
I am of the opinion, however, that the husband did not make a full and proper disclosure of his financial position. As I have said earlier, there is some doubt in my mind as to whether this was purely deliberate, or whether it was in some way affected by the husband’s physical condition. I am therefore of the view that I can be satisfied, comfortably, that the husband has not made proper and complete disclosure as required of him. Having come to that decision, I am satisfied, having regard to cases such as Black & Kellner[10] and Weir & Weir[11], that I should not be unduly cautious in accepting the evidence of the other party. That does not lead me to find that I am able to award a specific percentage under this hearing. However, it does enable me to view the wife’s situation more favourably than would otherwise be the case.
[10] (1992) FLC 92-287
[11] (1983) FLC 92-338
I have come to the conclusion that the contributions of the parties are such that the wife has made a slightly greater contribution to the pool of assets than has the husband.
The wife contends that I should recognise her as having contributed 60 per cent, and the husband 40 per cent, of the pool of assets. It is submitted on the husband’s behalf that if I include his trauma payout then contributions should favour him 60 to 62 per cent.
My view is that the appropriate adjustment is one that acknowledges the wife’s contribution as being some 4 per cent greater than that of the husband. That is achieved by finding that the wife’s contribution made to the assets of the parties is 52 per cent and the husband’s contribution thereto 48 per cent.
I turn then to the matters that I must consider pursuant to section 75(2) of the Act.
Section 75(2) factors
I take into account the age and state of health of the parties (subparagraph (a)). The husband is now aged 49 years and the wife 43 years of age.
The husband’s health is clearly problematic. I have endeavoured to read the material produced concerning his health. I am satisfied that he is, at present and for the foreseeable future, dependent upon dialysis, three times weekly. He is, as I understand it, eligible to be on the kidney transplant waiting list. There is not suggestion that there is any prospect of a live donor kidney becoming available. That means, as I understand it, that he will be dependent upon a cadaver kidney, which can be appropriately matched to him, becoming available. The wait for such a kidney can be five years. I am told that his eligibility date is the date of his first dialysis, which occurred in January 2012.
It is, on the material that I have read, clear that if the husband does not obtain a successful transplant, then his life expectancy will be very considerably shortened. I am unable, on the material available to me, to put any realistic figure on his life expectancy from this point. If he obtains a transplant, which is successful, then his life expectancy would be at least doubled.
In addition to renal failure, the husband suffers from diabetes, which in the past, has clearly not been adequately managed. Indeed, Doctors sound the warning that unless the husband manages his diabetes properly, and regardless of what occurs in respect of his kidney difficulties, his life will be substantially shortened. I am satisfied on what I have read that if the husband does manage his medical conditions satisfactorily, that is by dealing with his diabetes and undergoing dialysis on a regular basis, he will be in a position to enjoy a reasonable quality of life. I am unable, however, to make an educated guess, let alone a finding, of what his life expectancy will be in this situation.
In the event of a successful transplant, and again conditional upon him managing his diabetes, his quality of life must improve. Once again, I can make no finding as to how long he is likely to live, except to say it will be longer, by a significant margin, than if he does not receive a transplant.
I have no evidence before me that the wife suffers from any present medical condition or ill health that I would need take into account.
The next matter I must take into account is the income, property and financial resources of the parties, and their physical and mental capacity for appropriate gainful employment (subparagraph (b)).
I have dealt at some length under the previous heading with the husband’s medical condition. I am satisfied that whilst he remains on dialysis, and provided he manages his diabetes, he has the ability to work in his profession, although to a considerably limited extent. I am satisfied that upon a successful kidney transplant, with the condition that he continues to properly monitor and manage his diabetes, that his capacity to work would be improved.
I have evidence before me that the husband has income protection insurance, which in the event that he is unable to work, will pay him $12,500 per month net. That equates to an annual net income of $150,000. I am satisfied that the husband’s capacity for work is significantly restricted by his health. I am satisfied that this is not a case where the husband has an unexercised or unutilised capacity.
The wife clearly has, since separation, been successful as a businesswoman in her own professional right. Her net income for the last tax year of which I am concerned was in excess of $200,000. I am not aware that the wife has any capacity that would lead me to believe that her real income should be greater than that disclosed.
It would appear therefore that the wife’s position is, at present, superior to that of the husband so far as income is concerned.
Subparagraph (c) deals with either party having the care or control of a child of the marriage. The parties’ only child is now some 15 years of age. By the orders that I have outlined earlier in these reasons for Judgment, I propose that, until he commences as a day boarder at S College in the commencement of Term 1, 2014, he will spend alternate weekends and one evening each fortnight with his father and the balance of his time with his mother. Once he starts as a weekly boarder then his weekend and holiday time is to be divided between his parents. Thus, the wife will have the primary responsibility for the balance of this year, and, indeed, has done so for some time now, notwithstanding the Consent Orders made in this matter at the beginning of 2011.
I am not made particularly aware of any child support situation in respect of these parents. It appears that their son’s school fees have been met by them jointly, and nothing in the material that I have read would indicate to me that there is to be any change in that situation.
As to the commitments of the parties to support themselves and others (subparagraph (d)), is of some small importance in this case. The husband’s proposal is that the property be sold, that being the former matrimonial home. That would mean that on his proposal, or indeed the wife’s proposal that she retain the home, the husband would have to rehouse himself whether in purchased or rented accommodation.
The wife’s proposal that she acquire the husband’s interest in the former matrimonial home would leave her in possession of the home. It would, however, mean that she would be responsible for payment of the mortgage on the property, and she would need to either refinance that obligation, or, at the very least, indemnify the husband in respect of it.
Having regard to the income of each of the parties that I have found to be applicable, I am satisfied that both of the parties can attend to their accommodation and other living needs within the incomes that I have found.
So far as the responsibilities of the parties to support any other person (subparagraph (e)), neither party has, on the evidence available to me, an obligation to support other person. This, of course, in no way detracts from the findings that I have already made concerning the parties’ son.
I am not satisfied that the duration of the marriage has had any effect on the income earning capacity of either of the parties (subparagraph (k)). Indeed, the wife has, as the marriage has progressed, become more and more capable of earning a significant income from her professional skills.
I am satisfied that neither party is cohabiting with any other person (subparagraph (m)).
I am not made specifically aware of any child support assessment that I would need take into account under subparagraph (na).
As I have already said, in this case, I am not satisfied that the husband has been completely open, frank and truthful with the Court as to his financial affairs. Accordingly, I am satisfied that this is a matter that I should also take into account in respect of the adjustments required to be made under subparagraph 75(2)(o) of the Act.
Having regard to the decision of Tomasetti & Tomasetti[12], I am satisfied that the preferred approach is to deal with the section 75(2) factors collectively and as a cumulative process.
[12] (2000) FLC 93-023
The wife’s income is apparently greater than that of the husband. However, I am satisfied that the income derived by the husband either from work, his income insurance or possibly a combination of both, is such that he will have a reasonable lifestyle. I am not able to make any adjustment for the difference in the incomes of the parties on the evidence before me.
I am satisfied that the husband’s needs, whether he has a transplant or not, are likely to subsist for a shorter time than are the wife’s needs. With some regret, this is a matter that I must take into account in the wife’s favour. The wife, I am satisfied, whether or not the child attends boarding school, will be the parent principally responsible for his welfare. I am satisfied that the wife will be the parent providing more and more for the ongoing needs of the child as the husband’s health, unfortunately, deteriorates. I am satisfied that an adjustment is required, in these circumstances, in the wife’s favour. I am satisfied that the wife should receive an additional 4.5 per cent of the asset pool in this regard.
The wife, I am satisfied, will, whether or not the child attends boarding school, be the parent principally involved in his welfare. I have therefore come to the conclusion that no adjustment pursuant to these factors is required.
Thus, the non-superannuation assets of the parties will be divided as to 56.5 per cent to the wife and 43.5 per cent to the husband. Thus, the wife is to receive 13 per cent more of the non-superannuation asset pool of the parties than is the husband.
I then turn to deal with the superannuation pool of assets.
Superannuation
It seems to me that the wife has made a significant improvement to her financial position post separation. I do not propose to revisit the matters that I have dealt with in respect of the non-superannuation pool in any detail. I am satisfied that the wife has made the greater contribution to the superannuation pool. The amount, notwithstanding the increase post-separation, is modest.
I am satisfied that I can find the wife’s contribution is some 10 per cent greater than that of the husband. That would mean that, based on contribution, the wife would have 55 per cent of the pool and the husband 45 per cent.
I propose to make no further adjustment to the superannuation pool contributions by virtue of section 75(2) of the Act. The wife will therefore have an entitlement to 55 per cent of the superannuation pool of assets.
At paragraphs 472, 473 and 474, I have dealt with the value of the superannuation assets of the parties and determined it to be $120, 610.02. If the wife is found to have an entitlement to 55 per cent of that amount, a figure of $66,335.51 is produced. The wife holds the sum of $79,256 in her three superannuation funds. The difference between the amount she actually holds and her entitlement is the sum of $12,920.49.
The amounts of superannuation held by each of the parties are, indeed, modest. I do not propose to make orders for the splitting of any superannuation entitlements to achieve the appropriate adjustments to the parties’ superannuation holdings. What I will do is order that the wife should pay to the husband an amount of $12,920.50 (rounded) to adjust their respective superannuation entitlements.
Costs
The wife, as I have said, seeks that I make an order that the husband pay to her, as part of these proceedings, an amount of costs arising from Supreme Court proceedings. I do not propose to do so. The husband will be in receipt of funds as a result of my Orders. It will then be a matter for the wife to take such steps as she sees fit.
The wife has also sought that I make an order for $4,400 for Ms Gillies, who was her counsel in the first part of the hearing and in January and February of 2012, when the matter was to have come back before the Court. The husband was unwell at this time. The matter was adjourned on this basis, although not without difficulty, as the husband’s solicitor on the first application for adjournment was not able to satisfy the Court that there were proper medical grounds for so doing.
I do not want to prolong this matter by leaving something undetermined that I can properly determine. In the circumstances of the case, I would consider it to be appropriate that the husband pay in respect of the amounts charged by the wife’s counsel the brief fee for the day set aside but not able to proceed with, which I would assess at $4,000 with GST at $400, for an amount totalling $4,400. I will order that to be paid from the husband’s entitlement to the wife.
I do not propose to make any order for the wife to be reimbursed for the cost of subpoenas issued for the conduct of the hearing.
How then do I achieve that which I propose?
How then is this to be achieved?
The former matrimonial home is clearly the principle asset of these parties. The husband contends that the property should be sold. The wife asserts that she should have, at least, an opportunity to acquire the husband’s interest in the property. I am satisfied that the wife, who has been in possession of the property, however that occurred, for a considerable period of time, should be given a reasonable opportunity to acquire the husband’s interest in the property at an appropriate figure. If the property is transferred pursuant to orders of this Court then no stamp duty is payable. No agent’s fees will be incurred. This would represent a saving to the parties.
Further, I am satisfied that it is necessary to deal with the parties’ interest in the investment property. I must confess that I have never completely understood how this arrangement was ever allowed to come into existence whereby the parties claim a one half interest in the property in a situation where they do not appear on title, yet claim that they are liable for the entirety of the mortgage secured over the property. Indeed, at least part of the amount currently secured by that mortgage was clearly used to pay down debt in respect of the mortgage secured over the former matrimonial home. However, as that is what they seem to agree upon, I have formed the view that the husband should execute a document whereby he transfers and assigns to the wife his interest in that property. Simultaneously, the wife will be required to discharge the existing mortgage over the investment property so as to release the husband from any liability.
I am satisfied that the wife would need obtain significant borrowings to put the orders that I propose to make into effect. She would have the home, which she would be required to refinance so as to release the husband from any liability. She would have the parties’ share/interest in the investment property, again with liability for the entirety of the mortgage. She would keep her other items including bank accounts, motor vehicle and superannuation, and would be liable for the debt to Mr and Mrs FR in the sum of $20,000. She would need to indemnify the husband in respect of that debt.
Then dealing firstly with the situation whereby the wife acquires the husband’s interest in the former matrimonial home, the result would be as follows.
I have determined a figure of the non-superannuation assets in the sum of $1,726,663.09. If the wife is to receive 56.5 per cent pursuant to my Orders, represented by an amount that I round at $975,564. She already has in her possession the following:-
Shares $1,778.25
Motor vehicle $9,000
Bank account $75,000
Monies retained $73,000
Subtotal $158,778.25
The wife is to be responsible for the loan to Mr and Mrs FR in the sum of $20,000, which means that an amount of $138,778.25 is produced. When that amount is deducted from her percentage entitlement, the following figures apply:-
Percentage entitlement $975,564
Less $138,778.25
Subtotal $836,785.75
I will round that figure to $836,786. Therefore, the amount required to satisfy the wife’s entitlement is that figure of $836,786.
If the wife receives and becomes responsible for the former matrimonial home and the investment property, the figures are these:-
Home $1,200,000
Less mortgage $104,000
Net value of home $1,096,000
- - -
Investment property $550,000
Less encumbrance $528,000
Net value of investment $22,000
Thus, a total net value of both parcels of real estate is $1,118,000. When one deducts from that her percentage entitlement, the following figures are produced:-
Total net value of real estate $1,118,000
Less entitlement $836,786
Subtotal $281,214
Therefore the amount the wife would require to obtain former matrimonial home and the parties’ interests in the investment property is the sum of $281,214.
On this basis, the wife would have:-
Home $1,200,000
Investment property $550,000
Her shares $1,778.25
Her motor vehicle $9,000
Her bank account $75,000
Her other bank account $73,000
Subtotal $1,908,778.25
From that amount, she must pay:-
Mortgage on former matrimonial home $104,000
Mortgage on investment properties $528,000
Loan to Mr and Mrs FR $20,000
Amount required to be paid to husband $281,214
Subtotal $933,214
Taking that figure from what the wife has produces a figure of $975,564.25, which I will round to $975,564.
The husband’s entitlement at 43.5 per cent of the pool I have determined of non-superannuation assets is $751,098. The husband will then have to satisfy his entitlement:-
Amount paid by the wife $281,214
Tower Blue investment monies $23,885.71
Balance of trauma insurance $393,000
Work in progress and debtors $40,000
Tax credit (Mr Z) $13,000
Subtotal $751,099 (rounded)
In the event that the wife is unable to pay the sum specified and to refinance the mortgages, then it will be necessary for a sale of the property to be effected. In that case, I am satisfied that it is appropriate that the mortgage over the former matrimonial home and the investment property should both be paid at settlement from the sale price of the former matrimonial home. I am not satisfied that there is any other way in which the matter could be properly finalised. I am not satisfied that there is any prospect of the investment property being sold, either in whole or as to the parties’ shares only, so as to provide funds to discharge the mortgage over that property. Further, I am not satisfied that it would be appropriate for the wife to indemnify the husband in respect of that debt. Accordingly, both mortgages will be discharged on sale so as to release the husband from further liability.
I am satisfied that a proper time for a sale by private treaty to be effected is three months from the date of these orders. I will, of course, make an order that the parties can, if they so agree, extend that time. If, at the end of such time, there is no binding exchange of contracts, then I propose to order a sale by public auction. I will make further orders to provide for the appointment of an auctioneer and for the setting of a reserve price in the event that an auction is required.
In the event of a sale of the former matrimonial home, the figures would be as follows:-
Sale of former matrimonial home $1,200,000
( Payout mortgage on home ($104,000)
( Payout mortgage on investment ($528,000)
Less Total of mortgages to be discharged $632,000
Subtotal$568,000
Thus, the assets then available for distribution would be as follows:-
Net proceeds of sale of home $568,000
Investment property $550,000
Assets
Wife’s shares $1,778.25
Husband’s work in progress $40,000
Wife’s motor vehicle $9,000
Husband’s tax credit $13,000
Wife’s bank savings $75,000
Wife’s bank savings $73,000
Husband’s Tower Blue $23,885.71
Ribbon investment
Subtotal$235,663.96
Husband’s trauma insurance $393,000
Subtotal$1,746,663,96
Less FR loan $20,000
Total$1,726,664 (rounded)
The wife is entitled to 56.5 per cent, again producing a figure of $975,565. She has in her possession the items totalling a value of $158,778 (rounded). She remains liable for the FR loan in the sum of $20,000. Thus, to be deducted from her entitlement is the amount of $836,786 (rounded). She will retain, by the orders I propose, the investment property interest, which with a value of $550,000, means that she requires from the proceeds of sale, on these figures, the sum of $286,786 (rounded).
In that event, she would have the following from the proceeds of sale:-
Entitlement for proceeds of sale of home $286,786
Investment property $550,000
Her possessions $138,778
Total $975,564
The husband has a percentage entitlement of 43.5 per cent. That is a figure of $751,099 (rounded). He already has the following in his possession:-
Tower Blue investment monies $23,885.71
Work in progress $40,000
Taxation credit (Mr Z) $13,000
Trauma insurance payout $393,000
Total $469,885 (rounded)
When that figure is taken from his percentage entitlement, a figure of $281,214, is required to achieve his percentage entitlement.
However, in the event of a sale, I do not propose to award to each of the parties a sum of money, but rather, a percentage of the proceeds of sale. I am satisfied that this is an appropriate and proper course having regard to decisions such as Docters Van Leeuwen (1990) FLC 92-184. In that case, their Honour’s said “each case has to be considered on its own individual merits... generally it is preferable to make orders which give to each party a percentage of the current value of the property rather than a fixed amount...”.
Therefore, I propose to order that on a sale of the property, the proceeds arrived at after payment of expenses and discharge of both mortgages, be achieved by allocating percentages to each party. The wife is entitled to $286,786. That figure, as a percentage of the sale price of $568,000 is 50.5 per cent.
It follows that the husband will receive 49.5 per cent of the net proceeds in the event of a sale.
As I have indicated, I propose to deal also with the superannuation aspect of the matter by allocating to the husband an amount to adjust the percentage entitlements. However, from that amount, I will deduct the sum of $4,400 that I have determined that the husband must pay in respect of the wife’s costs thrown away.
Thus, the amount payable by the wife is as follows:-
Wife’s superannuation entitlement adjustment $12,920.50
LessCosts thrown away by husband $4,400
Subtotal$8,520.50
That in the event of the wife paying out the husband, the above amount which I will round at $8,520, is to be paid in addition to the sum of $281,214, for a total of $289,734.
That in the event that the property is sold, I will order that the wife pay to the husband from the amount she receives, the sum of $8,520.
Just and Equitable
The fourth step of the process I am undertaking requires me to, having reached a result, determine whether that result is in all the circumstances just and equitable. In this case, I am satisfied that whether it be in the event of the wife acquiring the husband’s interests, or the former matrimonial home being side, and in either case the husband being released from debt, that with the assets both real and notional that I have attributed to both parties, a proper, just and equitable result is achieved. I am satisfied that no further or other adjustment is required.
The end result as to the non-superannuation pool of assets is the wife is to receive 13 per cent more of the pool of assets than is the husband. When I look at this in monetary, rather than percentage terms, in accordance with the decision of Clauson & Clauson[13], the wife is to receive $224,466 more than is the husband from the non-superannuation pool of assets. However, the wife is to pay to the husband for adjustment of superannuation entitlements and costs the sum of $8,520.
[13] (1995) FLC 92-595
I am satisfied that no further adjustment is required to do justice to the parties.
The orders that I then make in respect of property matters are set out at the forefront of these reasons for Judgment.
I certify that the preceding five hundred and eighty-eight (588) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier delivered on 23 July 2013.
Associate:
Date: 23 July 2013
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Consent
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Constructive Trust
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