Forkan and Forkan (No. 2)

FAMILY COURT OF AUSTRALIA

FORKAN & FORKAN (NO. 2)

[2013] FamCA 384

FAMILY LAW – PROPERTY – Settlement in relation to marriage – Where the parties were married for approximately 21 years – Where there are three children of the marriage
FAMILY LAW – PROPERTY – Determination of the parties’ matrimonial assets and liabilities – Assessment of contributions – Whether an adjustment should be made under s 75(2) of the Family Law Act 1975 (Cth) – What is a just and equitable result

Family Law Act 1975 (Cth)

APPLICANT:

Ms Forkan

RESPONDENT:

Mr Forkan

FILE NUMBER:

SYC

4160

2011

DATE DELIVERED:

31 May 2013

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Fowler J

HEARING DATE:

28 February 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Campton

SOLICITORS FOR THE APPLICANT:

Delaney Lawyers

SOLICITOR FOR THE RESPONDENT:

Mr Kerr

SOLICITORS FOR THE RESPONDENT:

Dive & Kerr, Solicitors & Conveyancers

Orders

The husband do all things and sign all documents as are necessary to pay to the wife the funds held in the parties’ controlled monies account, such funds being the balance of net sale proceeds from the sale of the property at … B Street, Suburb C, NSW.
The husband within 10 days of the date of these Orders pay to the wife the sum of $100,760.50 by way of property settlement.
The parties do all things and sign all documents necessary to cause

“D Accountants” to pay the sum of $25,000 held in its trust account in order to:
(a)firstly, pay any Capital Gains Tax payable on the sale of the property at … E Street, Suburb F, NSW and
(b) secondly, pay to the husband any balance remaining.
In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”), whenever a splittable payment becomes payable in respect of the husband’s interest in the G Super Fund (“the husband’s G superannuation fund”), the wife is entitled to a base amount representing $89,958.50 from the husband’s present entitlements in such fund and there is a corresponding reduction in the entitlement of the husband to whom the splittable payment would have been made but for these Orders.
Having being accorded procedural fairness in relation to the making of

Order 4 herein, such Order binds the Trustee of the husband’s

G superannuation fund.
The operative time for Order 4 herein is four (4) business days after the date of service of a copy of the sealed typescript of these Orders on the Trustee of the husband’s G superannuation fund.
Otherwise than as provided for in the Orders herein, each party is declared to be the sole owner of the right, title and interest in all property including superannuation currently in their name, possession or control.
In the event of a party failing for a period of 14 days to do all acts and things necessary to give validity to the Orders herein, a Registrar of the Family Court of Australia at Sydney is hereby empowered pursuant to s 106A of the Act to do all acts and things necessary in the place and stead of the defaulting party to give validity and effect to these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Forkan and Forkan (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4160 of 2011

Ms Forkan

Applicant

And

Mr Forkan

Respondent

REASONS FOR JUDGMENT

Introduction

The proceedings before the Court are proceedings in which the parties to a marriage seek orders for the alteration of their property interests.
The period of cohabitation between the husband and the wife was approximately 21 years.
There are three children of the marriage: H who is 20 years old; K who is 18 years old; and J who is 15 years old.
Since the wife left the former matrimonial home in March 2011, the children have lived with the wife and her partner, Mr A.

Background Facts

Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
The husband was born in 1957 and is currently aged 55 years.
The wife was born in 1965 and is currently aged 47 years.
In 1983 the husband married his first wife, Ms L.
In 1985 the husband and Ms L purchased a property comprising vacant land at I Street in Suburb C (“the I Street property”) for $50,000.
In around March 1989 the husband and Ms L separated.
In August 1989 the husband and the wife commenced cohabitation. The husband, in reliance on the single valuation report of Mr M, asserts that the value of the I Street property was $300,000 at that time.
In December 1989 orders were made by consent between the husband and

Ms L with respect to distribution of their property interests following the breakdown of their marriage. The effect of those orders was that, upon payment of the sum of $93,500 by the husband to Ms L, Ms L transferred to the husband all of her right, title and interest in the I Street property. The husband also retained superannuation and leave entitlements, together with a motor vehicle in his name. At around this time, the husband obtained an additional loan over the I Street property in the sum of $93,500. It therefore appears that the husband held the whole of the interest in the I Street property (then valued at $300,000) subject to, the husband deposes, a mortgage in the sum of $183,500.
In February 1992 the husband was made redundant by Company N. He received a redundancy payment of $45,991.
In March 1992 the husband gained employment with Company O.
In April 1992 the husband and the wife married.
In 1992 the wife became pregnant. She commenced a period of maternity leave from her employment in December 1992.
In November 1992 the wife received a redundancy offer from her employer which she accepted and applied towards general matrimonial purposes. The wife was unable to recollect the amount of such payment.
In February 1993 the child H was born. She is currently 20 years old.
In March 1995 the child K was born. He is currently 18 years old.
In 1995 the husband purchased a property at Suburb P (“the Suburb P property”) in his sole name for the sum of $135,000. The purchase was financed by a mortgage advance from Westpac together with $13,000 sourced from superannuation entitlements of the husband. This property was leased out over the next six years, during which time the husband says that he took responsibility for strata and leasing issues and made improvements to the outdoor area.
In 1996 and 1997, the parties undertook works to improve the I Street property. In 1996, these renovations cost $8,600 and were financed by a loan from the husband’s mother (funds which the husband asserts were subsequently repaid). In 1997 a study was added to the property at a cost of $25,000 which was borrowed from Westpac Bank.
In February 1998, the child J was born. She is currently 15 years old.
In August 2001, the parties sold the Suburb P property for $219,500.
In November 2001, the husband purchased a property at E Street in Suburb F (“the Suburb F property”) in his sole name for about $338,000. The acquisition of this property was financed by way of loans from Citibank totalling $350,000.
In May 2003, the wife commenced part-time work with a government department.
In May 2007, the parties purchased a property at B Street in Suburb C (“the B Street property”) as joint tenants for $995,000. It appears that the purchase was financed by a loan from the husband’s mother in the sum of approximately $300,000 together with a bridging loan from Bankwest in the sum of $664,930.
The B Street property was to become the parties’ new matrimonial home and they moved into this property with the children soon after settlement was reached on the purchase. The husband deposes that, in the first year of occupation, approximately $27,000 was spent on improvement works to this property. Following this, he deposes that a further $30,000 was spent on constructing a pergola (and ancillary work) in 2009. The husband asserts that he was responsible for the work done on the B Street property and that he did not receive any significant assistance from the wife.
In June 2007, the husband sold the I Street property for $675,000. The net proceeds of sale were applied to partly discharge the mortgage over the B Street property.
In October 2008, the husband’s mother passed away. The husband and the husband’s brother were named as the Executors and Trustees in their late mother’s will and Probate of this Will was granted to them in December 2008. Under his mother’s Will, the husband was entitled to receive a one-third share in her estate, which amounted to an inheritance of approximately $310,000. The husband asserts that the outstanding sum of $300,000 owing to his mother under the 2007 loan had been forgiven and he makes no reference to it impacting upon his entitlement to her estate. Counsel for the wife conceded at the hearing that the husband’s inheritance was roughly $300,000 or $310,000.
In October 2009, the husband received a termination payment in the sum of $44,525 (net) of which he claims $30,000 was used to improve the

B Street property. The husband asserts that funds from this termination payment were also used to contribute to the purchase of a VW motor vehicle (“the VW”) in January 2010 for $22,000. Similarly, the wife’s evidence is that the husband’s redundancy payment was applied to the construction of the pergola at the B Street property and to the purchase of the VW.
The husband asserts that in early 2010 he and the wife sold their Toyota vehicle to their daughter H for $10,000.
In September 2010, the husband and the wife separated but remained living under the same roof.
In November 2010, the wife paid to her sister sums totalling $34,000. The wife deposes that she received all of these funds back from her sister in separate instalments between December 2010 and January 2012. The payments from her sister were used, she says, for general living expenses and family purposes.
The wife asserts that, in December 2010, the husband drew down the sum of $200,000 from the Bankwest mortgage secured against the B Street property without the knowledge or consent of the wife. She claims that with these funds the husband did as follows:
a)paid the sum of $108,000 to Citibank in reduction of the liability over the Suburb F property and
b)
paid the remaining $92,000 to National Australia Bank (NAB). The wife says that funds paid to NAB were later used by the husband to contribute to the acquisition of a property in his sole name at

Q Street in Suburb R (“the Suburb R property”).
At the hearing, the husband’s draw down of $200,000 from the parties’ joint Bankwest loan facility was the subject of some dispute. The Court’s findings in relation to this issue and how these funds were applied is discussed in further detail below.
In February 2011, the husband purchased the Suburb R property in his sole name for the sum of $620,000. The husband deposes that the purchase was financed through a loan in the sum of $550,000 from NAB together with funds drawn down on the Bankwest loan in the sum of $95,410. This was also the subject of some dispute and will be discussed further below.
In early 2011, the wife commenced employment with the government department on a full-time basis.
In March 2011, the wife vacated the B Street property with the children. She took with her the VW and began cohabiting with Mr A in rented accommodation at Suburb S. The husband remained living in the B Street property.
In around July 2011, the husband sold the parties’ camper trailer for the sum of $15,500. He deposes that he applied the proceeds of sale in reduction of a loan facility.
In September 2011, the parties sold the B Street property for the sum of $1,078,000. They each received the sum of $213,199 from the sale proceeds by way of interim property distribution and the balance of the net sale proceeds were placed in a controlled monies account. An additional order was made transferring the VW to the wife’s sole name.
In September 2011, the husband vacated the B Street property and moved into the Suburb R property.
In August 2012 the husband was diagnosed with Type 2 Diabetes.
In November 2012, the husband sold the Suburb F property for $475,000. The evidence before the Court, as shown on the Settlement Adjustment Sheet annexed to the husband’s material, is that the proceeds of sale were distributed as follows:
a)in payment of around $668 for outstanding council and water rates
b)in payment of around $251,753 to discharge the mortgage over the property with Citibank
c)
in payment of $25,000 into the trust account of his accountant,

D Accountants, to be held for an anticipated Capital Gains Tax liability and
d)in payment of around $1,321 in conveyancing fees.
The net proceeds of sale following the above payments were around $149,415. That sum was deposited into the husband’s NAB home loan account (secured against the Suburb R property) on 21 January 2013. The net proceeds of sale did not include the purchase deposit of $42,592, which had been held by the agent. That sum was also credited to the husband’s NAB home loan account on 22 January 2013.
In January 2013, the husband was diagnosed with a form of autoimmune hepatitis, for which he says he is medicated.
The wife asserts that she became aware of the husband’s sale of the Suburb F property in February 2013, shortly prior to the hearing.

The Orders Sought

The wife, by a hand-written Minute of Order tendered at the hearing (dated

28 February 2013 and marked “Exhibit 2”), seeks the following orders:
1.That the husband forthwith do all things as are necessary to assign to the wife the balance of proceeds of sale of the home at [B Street, Suburb C] held in a controlled monies account for the parties.
2.That the husband further pay to the wife within 7 days the sum of $200,000 and that the proceedings of sale of the property units
[at E Street, Suburb F] in the husband’s control and possession be charged with sum until compliance with this order.
3.That a superannuation splitting order be made from the husband’s interest in the [G] superannuation fund in the terms of the draft order contained in Exhibit [3], and that the base amount be $100,000.
4.That the husband pay the wife’s costs.
With respect to the third order sought by the wife above, the “draft order” referred to, which is contained in Exhibit 3, reads as follows:
11.That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the husband’s interest in the [G Super Fund] (the “husband’s [G] superannuation fund”), the wife is entitled to a base amount representing $80,000.00 from the husband’s present entitlements in such fund and there is a corresponding reduction in the entitlement of the husband to whom the splittable payment would have been made but for these Orders.
Counsel for the wife at the hearing subsequently clarified the order sought by the wife and said that she was seeking a base amount of $100,000, not $80,000. Exhibit 3 also contains a number of machinery orders in relation to the superannuation splitting order, which have not been reproduced here.
The husband, by a Minute of Order dated 8 March 2013 and emailed to the Court on 8 March 2013 by the solicitor then acting for the husband, seeks the following orders:
1.That each party do all things and sign all documents necessary to cause [D Accountants] to pay the sum of $25,000 held in its Trust Account to:-
1.1pay any Capital Gains Tax payable upon the sale of
[E Street, Suburb F]; and
1.2pay to the husband and to the wife any balance in equal shares.
2.That the Husband’s [G] Superannuation fund be split in favour of the wife in the sum of $78,757.

3.That the wife, as against the husband, be entitled to retain as sole and beneficial owner, the following:-
3.1all bank accounts held in her name, whether solely or jointly;
3.2all superannuation entitlements held in her name with
First State Super;
3.3any motor vehicle, shares, furniture, household contents and personal effects currently in her possession or control.

4.That the husband, as against the wife, be entitled to retain as sole and beneficial owner, the following:-
4.1the property situated at [Q Street, Suburb R] in the State of New South Wales;
4.2all bank accounts held in his name, whether solely or jointly;
4.3all superannuation entitlements held in his name with National Australia Bank Limited;
4.4any motor vehicle, shares, furniture, household contents and personal effects currently in her possession or control.

5.That each party do all things and sign all documents necessary to cause the proceeds of sale of the former matrimonial home held in the Controlled Monies Account with CBA to be distributed as follows:-
5.1 to pay the sum of $94,131 to the wife.
5.2the balance such that the wife receives 45% of the net matrimonial pool; and

5.3 the balance to the husband.

Credit

Both the husband and the wife gave oral evidence at the hearing and the Court makes no adverse credit findings against either of them. In the Court’s view, both the husband and the wife were cooperative and responsive witnesses who endeavoured to answer the questions asked of them honestly and to the best of their knowledge.
During cross-examination of the husband, it became clear that there had been some non disclosure by him in relation to bonuses received through his employment. In addition, there was late disclosure by the husband in relation to the sale of the Suburb F property, which was unfortunate because some of the issues on the balance sheet could have been resolved prior to the hearing had that disclosure been made earlier.
No additional witnesses were called to give oral evidence.

The issues and applicable law

The principles governing this case are set out in the Family Law Act 1975 (Cth) (“the Act”) and this is an application made under s 79 of the Act for the alteration of the property interests as between the parties to this marriage.
The first step I must undertake in determining such an application is to identify the property of the parties or either of them available for division between them. For reasons that are outlined further below, this step was made particularly difficult in this case as a result of the inability of the parties to prepare and submit a jointly prepared balance sheet, despite being directed to do so by the Court both prior to and following the conclusion of the evidence in this matter.
Having identified the property of the parties or either of them available for division between them, I must then determine whether it is just and equitable to make an order which alters the property interests of the parties.
In the event that I find in the circumstances that an order adjusting the parties’ property interests should be made, I must assess what is a just and equitable

re-distribution of the parties’ property, having regard to the contributions made by each of the parties as described in s 79(4) of the Act.
Given the property of the parties to the marriage or either of them, I must then assess what, if any, is an appropriate alteration to their property interests which will do justice to the parties, having regard to the matters required to be taken into account under s 75(2) of the Act.
Finally, I must ask whether the conclusion reached reflects a just and equitable distribution of property between the parties.

Specific issues arising from the Balance Sheet

A balance sheet was provided at the hearing which became Exhibit 4.
At the time that Exhibit 4 was tendered, the legal representatives for the wife believed it to be an agreed balance sheet. Upon the conclusion of the hearing, however, the Court was informed that having regard to the state of the evidence a further joint balance sheet would be provided by both parties. A direction was therefore made on 28 February 2013 for the parties to provide an updated joint balance sheet. This joint balance sheet was to be provided to the Court by email from the solicitor for the wife.

On 1 March 2013, the Court was provided with a typescript of Exhibit 4 by the solicitor for the wife. The solicitor for the husband (as he was then) responded on 8 March 2013 and, in that response, provided a different version of the balance sheet. In addition, the husband’s then solicitor raised a number of issues with respect to the balance sheet that the wife’s solicitor had provided.
On 13 March 2013, the Court requested that the parties compile a jointly prepared balance sheet, as per the original direction they had been given on

10 August 2012, well before the hearing commenced.
On 20 March 2013, the husband’s then solicitor filed a Notice of Ceasing to Act. Shortly thereafter, the husband sent an email to the Court and to the wife’s solicitor in which he sought to raise further issues in relation to the balance sheet.
In light of the above issues, the matter was re-listed for mention on 11 April 2013 and the following direction was made:
1.By the close of business today, the wife’s solicitors are to provide to the husband a copy of their proposed balance sheet.
2.Within a further seven days, the husband is to complete the assertions he wishes to make in relation to the matters that are in issue and refer in particular to those parts of the evidence which he says supports his assertion.
3.The wife’s solicitors are to provide to the husband a copy of the transcript.
On 17 April 2013, the husband provided to the Court a balance sheet together with a document titled “Balance Sheet Notes”. It later transpired that neither of these documents had been jointly prepared.
On 7 May 2013, the wife’s solicitor sent a letter to the Court (copying the husband) which inter alia set out the following information:
a)the wife did not agree with the balance sheet or notes provided by the husband on 17 April 2013
b)the wife’s position immediately after the hearing and currently (that is, at the time of the letter) is that submissions were made by Counsel at the completion of the evidence and the wife has nothing further to add.
By the same letter of 7 May 2013, the wife’s solicitor responded to the issues that had been raised by the husband’s former solicitor on 8 March 2013 in relation to the Exhibit 4 version of the balance sheet.
It is clear that the directions given to the parties at the mention on 11 April 2013, which were made with the intention of resolving the issue, were not complied with. It seems unlikely that any further direction to that effect would be complied with and so the Court is left with no option but to work with the material that was tendered at the hearing and consider the issues that were subsequently aired in respect of that material.
It is therefore the Court’s intention for the purposes of its determination under step one to adopt the balance sheet which became Exhibit 4 and on which submissions were made at the conclusion of the evidence. In addition, the Court will consider the issues raised by the parties after the hearing in relation to that version of the balance sheet, namely:
a)
issues raised by the former solicitor for the husband by email dated

8 March 2013
b)issues raised in reply to the above by the solicitor for the wife by letter dated 7 May 2013
c)
issues raised in reply to the above by the husband by email dated

15 May 2013.

The Balance Sheet

The balance sheet which is the typescript of Exhibit 4 is set out below.

Ownership		Description	Wife/de facto partner’s value	Husband/de facto partner’s value
ASSETS
1.	J	Proceeds of sale of [B Street, Suburb C] held in controlled monies account (as at 21 January 2013)	$441,900.92	$441,900.92
2.	H	Interim distribution from proceeds of sale of [B Street, Suburb C]	$213,199
3.	W	Interim distribution from proceeds of sale of [B Street, Suburb C] (as at 15 January 2013 including interest)	$227,769.19	$213,199.00
4.	H	Net proceeds of sale of [E Street, Suburb F] (including balance deposit after commission)	$192,007.21
5.	H	Funds held by accountant in anticipation of CGT liability	$25,000.00	$25,000.00
6.	H	[Q Street, Suburb R]	$620,000.00	$620,000.00
7.	H	NAB account	$3,516.00	$427.00
8.	H	NAB account	$4,025.00	$5,632.00
9.	H	Citibank account	$4,911.00	$24,653.00
10.	H	Share portfolio (as at close of trade on 6 February 2013)	$46,247.00	$46,247.00
11.	H	Kia [motor vehicle] on the assumption the proceeds of sale of the Toyota [motor vehicle] were applied to the Kia Motor Vehicle)	$37,247.00	$37,247.00
12.	W	VW [motor vehicle]	$20,000.00	$20,000.00
13.	H	Household contents (as per email of 7 August 2012)	$10,000.00	$10,000.00
14.	H	Boat and outboard motor	$2,950.00	$Nil
15.	W	CBA account (as at 15 January 2013) (see point 3 above)
16.	W	CBA account (as at 15 January 2013)	$5,875.17

Ownership		Description	Wife/de facto partner’s value	Husband/de facto partner’s value
ASSETS
17.	W	CBA cash management Trust (as at 15 January 2013)	$279.02
18.	W	Shares	$1,864.00	$1,864.00
19.	W	Household contents acquired since separation
20.	H	Proceeds of sale of camper/trailer	$15,525.00	$Nil
21.	W	Withholding Tax held by ATO in respect of controlled monies account	$2,774.50	$2,774.50
21A.	H	Withholding Tax held by ATO in respect of controlled monies account	$2,774.50	$2,774.50
22.	W	Monies withdrawn from CBA bank account and transferred to a bank account in the name of the wife’s sister – [Ms T]	$Nil	$34,000.00
23.	W	Rental Bond (50% of total paid)	$1,520.00	$3,040.00
24.	H	Husband’s conceded Add Back	$94,131.44	$94,131.44
Total		$1,973,515.95	$1,582,890.36

ADD BACKS
24A	H	$200,000.00 withdrawn by husband from Line of Credit at separation not included by way of equity in [Suburb R] or in the husband’s Add Back concession at item 24	$130,000.00	$Nil
Total		$130,000.00	$Nil

LIABILITIES
25.	W	CBA mastercard (as at January 2013)	$3,000.00	$Nil
26.	H	[Suburb F] mortgage	$Nil	$Nil
27.	H	[Suburb R] mortgage	$550,000.00	$81,605.00
28.	H	Citibank Visa card	$3,963.00	$3,917.00
29.	H	NAB Visa card	$483.00	$80.00
30.	H	Citibank line of credit	$Nil
31.	H	CGT on sale	$23,381.00	$23,381.00
Total		$580,827.00	$108,983.00

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife/de facto partner’s value	Husband/de facto partner’s value
32.	H	[G Super Fund]	$178,475.00	$178,475.00
33.	H	NAB Superannuation	$26,167.00	$26,167.00
34.	W	First State Superannuation (as at 16 January 2013)	$24,724.83	$24,724.83
Total		$229,370.83	$229,370.83

With respect to the version of the balance sheet set out above, the solicitor for the husband as he then was, submitted as follows by email dated 8 March 2013:
·Item 19
The wife’s household contents of $10,000 has been omitted.
·Item 20
The evidence is that the proceeds of sale of the camper/trailer was paid into the line of credit.
·Item 24A
The $130,000 figure does not exist. The evidence is that, when the Husband drew down $200,000 from the facility on the former matrimonial home, $108,000 was paid directly into the line-of-credit on the [Suburb F] unit, and such equity was reflected in the sale proceeds of [Suburb F].
·Item 27
The $550,000 mortgage does not exist. The Husband has plainly paid all such funds into firstly, the [Suburb F] liability, then the [Suburb R] liability, to reduce his current mortgage to $81,605.
The superannuation splitting amount of $78,757 in favour of the Wife is calculated by $178,475 in [G Super Fund], less $18,960 pre co-habitation (annexure B Husband’s Affidavit) = $159,515. Divided by 50% = $78,757.
In response to those issues, the solicitor for the wife commented as follows in a letter dated 7 May 2013:
·Item 19
There was no evidence from either party as to the value of the furniture, furnishings and household contents.
The wife’s evidence was the husband retained all of the matrimonial furniture, furnishings and household contents at the time of separation. The wife was obliged to acquire furniture, furnishings and household contents for herself and the three (3) children in the period
post-separation. Her evidence was she spent approximately $11,000 on that.
In the circumstances, the amount was omitted from Exhibit 4.
·Item 20
The husband’s evidence was that the proceeds of sale of the camper and trailer had been paid into the line of credit (see page 81 of transcript). This was a line of credit benefiting the husband and not the wife. Accordingly, it is appropriate that this be included on the husband’s side of the Balance Sheet.
·Item 24A
The husband’s disclosure of how he applied the draw down and his conceded add-back only came to light the day or so before the Hearing. This was information peculiarly available to the husband but never previously disclosed to the wife.
The husband drew down a $200,000 facility secured against the former matrimonial home at or about the time of separation. He did so without the wife’s knowledge or consent and failed to disclose how he applied those funds, other than the general assertion prior to his disclosure that they had been used to pay down matrimonial debt. The evidence which he finally conceded was clearly at odds with his earlier assertions as to the application of those funds.
The husband himself conceded that some $94,000 of the funds he appropriated had been applied for personal use.
The balance of funds were apparently paid into a line of credit secured against the [Suburb F] property which was solely in the husband’s name. The [Suburb F] property was subsequently sold (although details of this were not disclosed to the wife until sometime after the event and only a matter of a week or so prior to the Hearing).
The wife’s position is that the $130,000 figure represents the balance of matrimonial monies over and above the $94,000 previously conceded by the husband (namely $106,000.00), together with the amount of $25,000.00 the husband applied in legal costs which he conceded in cross examination (see page 98 of the transcript), totalling $131,000.00. The figure of $130,000.00 is a rounded figure.
·Item 27
The figure of $550,000.00 was the mortgage debt secured against the [Suburb R] property, following its acquisition by the husband. Whilst the wife concedes the debt against that property may now only be some $81,000.00, the higher figure was retained in the Balance Sheet by the wife, in the absence of any evidence to confirm the husband’s position. The significant decrease of that mortgage liability was not disclosed to the wife until immediately prior to the Hearing. It is the wife’s contention that the significant decrease in debt and consequent increase in equity arose as a consequence of the application, directly or indirectly, by the husband of matrimonial monies in discharge of that debt.
In response to the above, the husband submitted as follows by email dated

15 May 2013:
·Item 19
In all previous "Balance Sheets” up until 28 February 2013, it had been previously agreed that "Household contents” retained by both the "Wife” and the "Husband” was $10,000.00 each. Mr Hearl’s e-mail of 7 August 2012 clearly states "To avoid unnecessary cost to both parties our client (Wife) is willing to accept your client’s (Husband) value of $10,000.00 for your client’s contents”. Thus, the attendance of the independent valuer ([Mr U]) was no longer necessary.
Balance Sheet Substantiation may be confirmed by referring to the Balance Sheet prepared and agreed back in August 2012.
It is the "Wife's” evidence that the "Husband” retained all of the matrimonial furniture etc. which is a Falsehood that by repetition they believe will become the truth. The Husband would like to believe that truth and justice will continue to prevail in the matter.
·Item 20
Sale of the … Camper Trailer, funds were utilised to reduce debt on the Citibank line of credit. For this amount to be included in the Balance Sheet can only be classed as "Double Dipping”. Remembering simple basic accounting practice for every "Credit” there must be a corresponding "Debit”. Thus, the credit to the line of credit reduced debt and increased equity. In the same manner as to include the Inflatable Boat amount of $2,900.00 in the Balance sheet when the proceeds were utilised to reduce debt on the [Suburb R] Housing Loan. Balance Sheet Substantiation may be confirmed by referring to the Bank Statements evidencing the credits to the accounts.
·Item 24A
The "Husband” is not a supporter of Add-Backs as evidenced in the response below, in which Mr Hearl and his client have made "Stuff up” in an attempt to substant their claim. quote: together with the amount of $25,000.00 the husband applied in legal costs which he conceded in cross examination unquote: On the Balance Sheet if you refer to item 9 it clearly shows a substantial balance in the Citibank CMA account of some $15,783.00 after payment of Solicitors fees on 27.2.2013, this is the balance of the $25,000.00, once again a clear attempt at "Double Dipping”. Balance Sheet Substantiation may be confirmed by referring to the Bank Statement evidencing the credit to the account. Mr Hearl and his client have also omitted to mention that $62,000.00 was utilised to cover the deposit on the purchase of the [Suburb R] property. Balance Sheet Substantiation may be confirmed under item 6 on the Balance Sheet as the "Market Value” of the property includes the 10% deposit of $62,000.00. Also "Double Dipping”. A rough calculation of their attempt at "Double Dipping” on the Balance Sheet totals some $105,475.00 of current assets that don't actually exist, interesting accounting practices by Delaney Lawyers and their client.

·Item 27
No Clarification is required, whilst the "Husband” has been living within his means and paying any Creditors and crediting any hard earned savings to reduce debt on the Housing Loan and long-term gain equity and an asset for his 3 children going forward.

Findings on the balance sheet

There are a number of issues arising on the balance sheet with which I now deal.
With respect to Items 2 and 3, the evidence is that each of the husband and wife received the sum of $213,199 by way of partial property settlement following the sale of the B Street property. These sums will be removed from the balance sheet.
With respect to Item 4, the evidence before the Court is that the net sale proceeds from the sale of the Suburb F property were deposited into the husband’s NAB home loan account, thereby reducing that liability by the sum of $112,007.69. The husband’s NAB home loan account is included as a liability elsewhere on the balance sheet and, as such, Item 4 will be removed.
With respect to Item 5, the evidence before the Court is that $25,000 was paid into the trust account of the husband’s accountant in anticipation of a capital gains tax (CGT) liability arising from the sale of the Suburb F property. An email from the husband’s accountant to the husband dated 30 January 2013 (annexure “C” to the husband’s affidavit filed on 19 February 2013) states that the husband’s estimated CGT liability is $23,381. The $25,000 at Item 5 will therefore be included as an asset of the husband and the estimated CGT liability of the husband (the sum of $23,381 shown at Item 31) will also be included on the balance sheet as a liability of the husband.
With respect to Items 7, 8 and 9 the Court will adopt the figures sworn in the husband’s Financial Statement filed on 3 August 2012, given that no updating evidence was provided by the husband as to the balance of these bank accounts as at the date of trial.
As to Items 13 and 19 (household contents of the husband and wife respectively), the Court finds that there is not enough evidence before it with respect to the household contents in either of the parties’ names. Despite submissions being made with respect to these items (including references to communications which are not in evidence before the Court), there is no reliable evidence from either party from which the Court is able to make conclusive findings. If the submissions made by the parties are correct, the value of household contents would be roughly the same for each party. In the circumstances, the Court will remove these items from the balance sheet.
With respect to Item 14 (proceeds of the sale of the inflatable boat), the husband’s evidence is that these funds were used to reduce the mortgage over the Suburb R property, thereby increasing the equity in that property. The husband attested to this in his oral evidence and the Court accepts that the sum of approximately $2,950 was applied to reduce this debt. Given that the value of this property, together with the current mortgage liability over it, is accounted for elsewhere on the balance sheet, the Court will remove Item 14.
As to Item 15, no value was provided for this item by either party. At any rate the item appears to be accounted for at Item 3 (interim distribution to the wife) and will therefore be removed.
As to Items 16 and 17, the values on the wife’s side of the balance sheet do not match the values for those bank accounts expressed in her Financial Statement filed on 3 August 2012. The wife however noted in her Financial Statement as follows:
The balances of the wife’s two Commonwealth Bank Accounts … vary considerably, depending on circumstances. The balances rarely remain the same for any significant period of time.
The Court will accept the values expressed on the wife’s side of the balance sheet, as the figures have increased since August 2012 and are therefore a concession against interest.
With respect to Item 20 (the proceeds of sale of the camper trailer), the husband’s evidence was that these funds were applied to reduce the Citibank line of credit. The husband was cross-examined on this by Counsel for the wife and the Court accepts the evidence of the husband that the funds were applied to reduce debt.
With respect to Item 22, the wife deposed in her affidavit filed on 3 August 2012 that the $34,000 which she transferred from her own bank account into her sister’s bank account post separation was repaid by the sister in various instalments between 2010 and 2012. The wife also gave oral evidence that she transferred the funds because she was “hiding” the money from the husband, who did not become aware of the transfer until served with her affidavit. The Court accepts the wife’s evidence with respect to this issue and finds that the funds were utilised post separation for reasonable living expenses, the wife having the care of the parties’ three children. The item will for these reasons be removed from the balance sheet.
With respect to Item 23 (the rental bond paid by the wife), the parties dispute whether this bond was paid by the wife in full in the sum of $3,040, or in half share in the sum of $1,520. The Court accepts the evidence of the wife and will adopt her value as to this item.
As to the add backs listed at Items 24 and 24A, the Court will consider these together.
With respect to Item 24A, the wife asserts that of the $200,000 drawn down on the Bankwest mortgage (secured over the B Street property) by the husband in December 2010, $130,000 remains unaccounted for. Annexed to the wife’s affidavit filed on 3 August 2012 is a bank statement for the Bankwest account showing two debits in December 2010 which together amount to $200,000. These are:
a)a transfer of $108,000 to Citibank on 13 December 2010 and
b)a transfer of $92,000 to NAB on 14 December 2010.

The husband in cross-examination was asked about “the $200,000 that [he] took out of the home facility”. He gave evidence that from these funds the sum of $93,410 was applied to the purchase of the Suburb R property (the sum of $23,410 for stamp duty and the sum of $70,000 as a contribution to the purchase price). The Suburb R property was acquired for the sum of $620,000 with a $550,000 loan from NAB. It seems likely therefore that the $92,000 transfer to NAB in December 2010 was, as the husband’s evidence suggests, used to complete and pay stamp duty on that purchase.
This leaves the sum of $108,000 which, on the evidence, was transferred to a Citibank account on 14 December 2010. The husband submitted that this sum was applied in reduction of the Citibank line of credit which was then secured over the Suburb F property. The utilisation of funds in this manner should not in the Court’s view warrant the sum being added back. Applying funds to reduce the mortgage over the Suburb F property increased the husband’s equity in that property, which was sold in 2012. The net proceeds of sale were applied in reduction of the debt over the Suburb R property, the value of which is reflected elsewhere on the balance sheet.
The wife however asserts that the husband utilised funds from the Citibank line of credit for his own benefit post separation. This claim is in part conceded by the husband in the add back listed at Item 24. During oral evidence, the husband conceded that the sum of $94,000 should be added back against him, which sum he said accounts for:
a)$23,000 which was used to pay stamp duty on the purchase of the Suburb R property and
b)$37,000 which was used to pay his legal costs.
The Court is unsure of what the remainder of the husband’s conceded add back of $94,000 is said to constitute. As to the payment of stamp duty on the Suburb R property, that amount has already been accounted for in the $92,000 that was drawn down on the Bankwest mortgage and paid into a NAB account in December 2010. At any rate, the payment of stamp duty would not be included as an add back, as it was a contribution to property which is otherwise accounted for in the balance sheet.
With respect to the wife’s submissions in relation to Item 24A, the Court finds that the wife’s claim is not substantiated by evidence on which the Court is able to make any conclusive findings. Based on the available evidence, the Court intends to include as an add back only the funds said by the husband to have been paid from the Citibank line of credit on his legal fees. The husband confirmed in cross-examination that his paid legal fees from that source totalled $37,000.
With respect to the credit card liabilities of the parties (Items 25, 28 and 29), there is no evidence before the Court as to the current value of these supposed debts. There being no evidence on which the Court is able to make conclusive findings, these items will be removed for each of the parties but taken into account in the Court’s consideration of s 75(2) factors as liabilities of the parties.
The mortgage liability listed at Item 26 was discharged upon sale of the Suburb F property and so this item has been removed.
As to Item 27, the Court accepts the husband’s value for this liability based on a statement of his NAB home loan account for the period from 10 August 2012 to 8 February 2013, which is annexed to his affidavit filed on 19 February 2013. That statement shows that the closing balance for that liability was $81,604.91.
I find the assets and liabilities of the parties are as follows:

Assets	($)
Proceeds of sale of B Street, Suburb C, held in controlled monies account (as at 21 January 2013) (joint)	441,901
Funds held by accountant in anticipation of CGT liability (h)	25,000
Q Street, Suburb R (h)	620,000
NAB account (ending 55) (h)	3,516
NAB account (ending 94) (h)	4,025
Citibank account (h)	4,911
Share portfolio (as at close of trade on 6 February 2013) (h)	46,247
Kia motor vehicle (h)	37,247
VW motor vehicle (w)	20,000
CBA account (as at 15 January 2013) (w)	5,875
CBA cash management trust (as at 15 January 2013) (w)	279
Shares (w)	1,864
Withholding tax held by ATO in respect of controlled monies account (h)	2,775
Withholding tax held by ATO in respect of controlled monies account (w)	2,775
Rental Bond (50% of total paid) (w)	1,520
Add backs
Husband’s legal costs add back (h)	37,000
Total assets (incl. add backs)	$1,254,935
Liabilities	$)
Suburb R mortgage (h)	81,605
CGT on sale (h)	23,381
Total liabilities	$104,986
Superannuation
G Super Fund (h)	178,475
NAB superannuation (h)	26,167
First State superannuation (as at 16 January 2013) (w)	24,725
Total superannuation	$229,367
Total net assets (incl. add backs and superannuation):	$1,379,316

Whether the parties’ property interests should be altered

The wife and the husband were married for some years but are now separated. The consortium vitae is at an end. The mutuality that was attendant between the parties during their marriage including fiscal unity and co-operation no longer exists. There will be no common use of property.
The parties have no agreement as to how their assets should be held having regard to these events. The arrangements made for the ownership of property are not just ones for the purposes of the husband and wife upon breakdown of their marriage.
In the circumstances, I find that it is just and equitable to make an order adjusting the property interests of the parties, including their interests in superannuation.

Section 79(4) contributions

Initial Contributions

The husband came into the relationship with an interest in the I Street property, which at the time was held jointly with his former wife. The resolution of his divorce proceedings with his former wife in December 1989 left the husband with net assets of $156,310.
The wife says that she entered the marriage with her motor vehicle, savings, personalty and V Super Fund, however, the value of those items are not quantified by the wife. The husband deposed that the wife’s motor vehicle was worth approximately $2,000 and that her superannuation benefits amounted to approximately $5,000.
It is conceded by the wife that the husband’s initial contribution was superior to hers.

Contributions to date of separation

At the commencement of cohabitation in August 1989, the husband was employed as a department manager by Company N. The wife was also employed by Company N, in a clerical role.
In December 1991 the husband was made redundant by Company N and received a net termination payment of close to $46,000. The husband asserts that he applied the full amount to the reduction of the mortgage over the I Street property. Throughout the marriage, the husband was employed by a number of different companies. He was made redundant from one of these positions (in 2002) and received a payout upon leaving another position (in 2009). The Court accepts the evidence of the husband that, throughout the relationship, such sums as he earned and received by reason of redundancies were applied to the needs of the parties and to their matrimonial investments.
The wife left her employment with Company N in November 1992 after she was made redundant. She received a payout and similarly to the husband asserts that such funds were applied to matrimonial purposes. The wife did not return to work until May 2003, after each of three children had commenced school. She worked part-time with a government department until around February 2011, at which point she commenced working full-time. Similarly to the husband, the wife asserts and the Court accepts that she applied the money that she earned to the benefit of the parties to the marriage.
There is no doubt that the employment income of the husband was greater than that of the wife for the majority of the relationship and there is little doubt that his employment income will remain greater than hers. He was the primary income earner during the relationship.
The husband it seems clear was also in control of the parties’ finances during the relationship. He took responsibility for meeting mortgage repayments and other financial obligations and also for the acquisition and sale of investment properties.
In 2009, the husband also received the sum of around $300,000 as a beneficiary under his late mother’s estate. The wife concedes that this was a solid contribution on the husband’s part during the relationship.
Both parties assert that they applied themselves to the conservation and improvement of the properties acquired during the marriage. The wife asserts that she was primarily responsible for “the maintenance and upkeep of the several matrimonial homes, including cleaning, organisation and day to day maintenance”. She also asserts that she was actively involved in acquiring furniture and household contents but concedes that gardening duties were shared.
With respect to the improvement works undertaken at the B Street property (which included the construction of a pergola, the installation of a rainwater tank and built-in wardrobe, painting work and the construction of a study), the wife says that she assisted the husband. The husband by contrast deposes that he received no significant assistance from the wife and that he was responsible for inter alia:
a)selecting and liaising with tradespeople
b)undertaking the painting work himself
c)selecting fixtures and fittings and
d)supervising construction.
It seems clear that the wife was the primary homemaker and carer for the children during the relationship. She deposes that she was primarily responsible for inter alia:
a)feeding, clothing and caring for the children
b)arranging medical and dental appointments for the children
c)organising the children’s attendance at day care and schooling and
d)attending parent teacher interviews, school, sporting and other extra curricular activities.
With respect to the wife’s role as primary homemaker and parent, the husband asserts that, subject to the exigencies of his employment, he also made a contribution in this respect. There is some issue as to the extent of that contribution but certainly the Court finds that it was not equal to the contribution of the wife.

Contributions post separation

Since separation, the wife has been primarily responsible for the children and this seems to be common ground. Despite the two older children being of adult age, the wife asserts that they remain living with her and that she continues to support them emotionally and in part financially.
The wife asserts that her partner, Mr A, has contributed to rent and other household expenses “on occasion”. She says that their outgoings are paid in an “ad hoc manner”, subject to their financial position at the time expenses fall due.
In December 2010 the husband withdrew the sum of $200,000 from the parties’ mortgage account with Bankwest. The husband in his evidence has given an account of that withdrawal and some of its application, which has been discussed above. In particular, the sum of $37,000 has been added back against the husband on the balance sheet, following a concession by him that that amount was used by him post separation for his benefit.
Also in issue is the sum of $34,000 which was said to be transferred by the wife to her sister at around the time of separation. As discussed above, the Court accepts the evidence of the wife that such sums as were transferred to her sister were repaid and utilised by the wife over time for the purposes alleged.
The husband deposes as follows in relation to financial outgoings in the post separation period:
Since separation, I have applied the rental income from the [Suburb F] Unit to pay for the mortgage repayments and I have met any shortfall from my income. I also paid all strata levies, rates, utilities and maintenance costs.
From March 2011 until September 2011, the husband had sole occupation of the B Street property. The wife lived in rental accommodation with the children and Mr A.
In March 2011, the husband purchased the Suburb R property which is valued at around $620,000 and which has a current mortgage of just over $80,000. He did not move into that property until September 2011.
In July 2011, the husband sold a camper trailer for $15,500 and applied the proceeds of sale to reduction of debt that is now part of the asset pool.
In September 2011, the B Street property was sold. The wife asserts that she was responsible for liaising with the selling agent with respect to inspections and viewings prior to the sale.
The husband has been assessed to pay child support. His child support payments have been the subject of considerable applications made by the husband, in the words of the wife, in an attempt to avoid his obligations and, in the words of the husband, to have lawful determinations made pursuant to the Act.
Whatever view on this is accepted, the fact is that the parties have in this area been in high conflict and the dispute is continuing. The wife infers that, on the history, the Court could not otherwise than assume that such dispute will continue. That indeed seems likely, unless there is a clear change in approach to the question of child support by each of them and perhaps some stability in the husband’s financial position.

Conclusion based on contribution

There was a suggestion that the Court should deal with the property of the parties in two pools namely a superannuation pool and a non superannuation pool. The Court declines that invitation but has taken into account the differential nature of contributions to different parts of the pool of property.
All in all the Court assesses the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of the parties to the marriage or either of them, to the date of trial and to the welfare of the family particularly in the role of homemaker and parent to be as to the wife 40 per centum and as to the husband 60 per centum.

Section 75(2) considerations

The husband is aged 55 and the wife is aged 47.
The wife is in good health.
The husband in his latest affidavit provided a series of doctor’s certificates, one of which (dated 22 January 2013) stated that the husband was suffering from “autoimmune chronic active hepatitis with underlying Type II diabetes mellitus”.
Despite being unwell and taking some weeks’ leave earlier this year as a result, the husband is apparently fit to resume work and there is no acceptable evidence which suggests that he will otherwise not be able to continue to work full-time.
The significantly unequal earning capacities of these parties now and for the foreseeable future, together with the significant difference between them as to capital based on the contribution determinations discussed above, means that the wife will be placed in an inferior position to the husband financially.
The husband’s earning capacity is superior to that of the wife and that is no doubt something which has developed and improved during the various positions that he held during the marriage. He would not have been able to develop that experience during the course of the marriage but for the fact that the wife fulfilled her role during the course of the marriage as the primary homemaker and primary carer for the children.
The wife will have the ongoing primary care of the children for a time. Although they are or will soon become of adult age, it appears they will continue to be primarily in her care for some time and it is not unreasonable to assume that this will adversely affect her financial position as she fulfils that continuing role as carer.
The wife has re-partnered with Mr A, who did not give evidence at the hearing. The financial arrangements between the wife and Mr A appear to be ad hoc and there is not enough evidence before the Court to enable it to conclude that the wife’s partnership with Mr A has improved or will improve her financial situation in any measure.
The wife since March 2011 has lived in rented premises, while the husband had the benefit of the B Street property until September 2011, after which time he moved into the Suburb R property.
The husband has had the benefit of the use of the assets of the marriage post separation except as to the sum of $34,000 taken by the wife and earlier referred to. It is noted, however, that the expenditure of this sum on general living and household expenses has been accounted for by the wife.
The parties each hold credit cards in their names. As discussed above, the Court declined to include any credit card liabilities of the parties on the balance sheet owing to a lack of up-to-date evidence from which it could make conclusive findings. Based on the values that were expressed on the parties’ respective sides of the balance sheet reproduced above, any credit card debts that were owing at the date of trial would have been roughly equal and, at any rate, not large enough to warrant an adjustment under s 75(2).
It is asserted by the wife, inter alia, that the Court should take into account the failure of the husband to disclose the bonuses received from his work. Until cross-examination at trial, there was a clear non disclosure of these amounts by the husband.
The husband is employed in the financial industry and has been involved in successful property development with the assistance of loans from companies by which he has been employed. This has been historically a financial resource of the husband and in the Court’s view it appears likely to continue to be so in the future.
The husband conceded that an allowance should be made in favour of the wife in the sum of 5 per centum of the pool. The Court does not agree that this is sufficient having regard to the matters referred to above.
If one converted that percentage to a dollar sum the amount would be approximately $68,966, an amount not even equal to the differential earning capacities of the parties in one financial year.
The Court has come to the conclusion that the wife’s inferior position should be recognised by the adjustment referred to below.

Conclusion on section 75(2)

For all the reasons referred to above the entitlement of the wife should in the Court’s view be increased by 10 per centum.

Overall division of assets

The above determination will see the wife receive 50 per centum of the parties’ net assets and the husband receive 50 per centum of the parties’ net assets.

Just and equitable

The division of assets would see the wife receive $689,658 worth of net assets and the husband receive $689,658 worth of net assets.
With respect to the parties’ superannuation entitlements, the wife seeks an order that she be entitled to a base amount in the sum of $100,000 whenever a splittable payment becomes payable in the husband’s interest in the G superannuation fund. Were the order sought by the wife made, she would hold more in superannuation entitlements than the husband. Rather than make the order sought by the wife, the Court proposes to make a splitting order in the terms set out above, which will have the effect of equalising the parties’ superannuation entitlements at this time.
In the circumstances of this case the Court determines that result to be just and equitable.

Orders which should be made

I propose orders which will give effect to the following division.
The wife will receive:

Assets	($)
Proceeds of sale of B Street, Suburb C, held in controlled monies account (as at 21 January 2013)	441,901.00
Payment from husband as property settlement	100,760.50
VW motor vehicle	20,000.00
CBA account (as at 15 January 2013)	5,875.00
CBA cash management trust (as at 15 January 2013)	279.00
Shares TLS (as at close of trade on 6 February 2013)	1,864.00
Withholding tax held by ATO in respect of controlled monies account	2,775.00
Rental Bond (50% of total paid)	1,520.00
First State superannuation (as at 16 January 2013)	24,725.00
Splittable payment from husband’s G superannuation entitlement	89,958.50
Total net assets (incl. superannuation)	$689,658.00

The husband will receive:

Assets	($)
Q Street, Suburb R	620,000.00
NAB account (ending 55)	3,516.00
NAB account (ending 94)	4,025.00
Citibank account	4,911.00
Share portfolio (as at close of trade on 6 February 2013)	46,247.00
Kia motor vehicle	37,247.00
Funds held by accountant in anticipation of CGT liability	25,000.00
Withholding tax held by ATO in respect of controlled monies account	2,775.00
Add back against husband for paid legal fees	37,000.00
NAB superannuation	26,167.00
G Super Fund after a splittable payment is made to the wife	88,516.50
Total assets (incl. add backs and superannuation)	$895,404.50
Liabilities
Suburb R mortgage	81,605.00
CGT on sale	23,381.00
Payment to wife as property settlement	100,760.50
Total liabilities	$205,746.50
Total net assets (incl. add backs and superannuation)	$689,658.00

I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 31 May 2013.

Associate:

Date: 31 May 2013

[2013] FamCA 384

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