Gallacher & Wellins
[2023] FedCFamC1F 513
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gallacher & Wellins [2023] FedCFamC1F 513
File number(s): BRC 6191 of 2022 Judgment of: BAUMANN J Date of judgment: 4 August 2023 Catchwords: FAMILY LAW – PROPERTY – Long marriage – Assessment of contributions – Gift received from the husband from his parents regarded as a contribution by the husband – How the proceeds of a trauma insurance policy should be treated – What orders are likely to achieve justice and equity to be subject of further submissions
FAMILY LAW – CHILD SUPPORT – Application for payment of child support other than for a periodic sum (for school fees) – Just and equitable and otherwise proper to make an order
Legislation: Family Law Act 1975 (Cth) ss 75, 79
Child Support Assessment Act 1989 (Cth) ss 117, 124
Cases cited: Aleksovski & Aleksovski (1996) FLC 92-705
Falcken & Weule [2019] FamCAFC 140
Gare & Farlow [2023] FedCFamC1A 98
Gosper & Gosper (1987) FLC 91-818
Gyselman & Gyselman (1992) FLC 92-279
Hickey & Hickey (2003) FLC 93-143
Stanford & Stanford (2012) 247 CLR 108
Yeates (as Executor for Yeates) and Yeates [2013] FCWA 117
Division: Division 1 First Instance Number of paragraphs: 110 Date of hearing: 12 & 13 June 2023 Place: Brisbane Counsel for the Applicant: Dr M Sayers Solicitor for the Applicant: Damien Greer Lawyers Counsel for the Respondent: Mr N McGregor Solicitor for the Respondent: Barry Nilsson Lawyers ORDERS
BRC 6191 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GALLACHER
Applicant
AND: MS WELLINS
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
4 AUGUST 2023
THE COURT ORDERS:
1.That these proceedings be adjourned for submissions, as to the form of final property adjustment orders, at 9.30am on 22 August 2023 in the Federal Circuit and Family Court of Australia (Division 1) at Sydney.
2.That both parties have leave to appear by telephone on 22 August 2023 by using the Microsoft Teams conferencing system as follows:
(a)They shall click the below link (if accessing this Order electronically) to join the Microsoft Teams conferencing system, by 9.25am on 22 August 2023; or
(b)They shall each telephone … by 9.25am on 22 August 2023;
(c)They shall each then enter the pass code …#; and
(d)Hold the line until the Court is ready to connect and proceed with the matter.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gallacher & Wellins has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
The Applicant husband, Mr Gallacher (now aged 50 years), and the Respondent wife, Ms Wellins (also nearly 50 years), separated in September 2021 after a relationship consummated by a marriage in 1998 – now nearly 25 years ago.
Whilst the parties did cohabitate for a period prior to marriage, the relationship was blessed with two sons, Mr X (now aged 19 years) and Y (soon to turn 16 years), and during the relationship the parties contributed in a myriad of diverse ways to the accumulation of legal and equitable interests, which by the time of hearing, had a value estimated to exceed $6 million.
Sadly, despite, I am satisfied, genuine attempts to resolve the equitable division of their property interests, it was necessary for a trial to be conducted in June 2023. The Reasons which follow seek to explain a result that, on the evidence, the Court determines is likely to achieve both justice and equity, as well as finality, for both parties.
PRINCIPLES
Shortly stated, but more concisely and elaborately described in the Full Court decision in Hickey & Hickey (2003) FLC 93-143, in a property settlement case, the Court must adopt a well-known four-step process, essentially:
(a)to identify the pool of assets and liabilities generally, and usually at the time of hearing;
(b)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4);
(c)to consider the factors as are relevant contained in s 75(2) of the Act; and
(d)finally, consider the ultimate analysis to determine whether the order the Court proposes to make is just and equitable to both parties.
Conscious of the statement of the High Court of Australia in Stanford & Stanford (2012) 247 CLR 108 and the need to consider s 79(2) of the Family Law Act 1975 (Cth) (“the Act”), I accept the submission of both parties that it is just and equitable to make orders in these property proceedings.
SHORT CHRONOLOGICAL BACKGROUND
Statements of fact hereafter shall be construed as findings of fact.
Both parties were born in 1973 and commenced cohabitation in 1996 before marrying in 1998. As each party acknowledge, at the time of cohabitation (both being aged 23 years) neither party had significant assets.
At paragraphs 205 to 207 of the husband’s trial affidavit, he set out details of residencies purchased and improved by the parties during the relationship, which evidence I accept, namely:
(a)in 2000 the parties purchased B Street, Suburb C for around $130,000 with the benefit of a mortgage and after renovations and painting, the property was sold in 2001 for around $200,000;
(b)in 2001 the parties purchased D Street, Suburb E for around $250,000 using the profits from the Suburb C property and a mortgage and after improvements were performed, the property was sold in 2002 for over $300,000;
(c)in 2002 the parties purchased F Street, Suburb G for around $280,000 using the profits from the sale of the Suburb E property and a mortgage after which the home was extensively renovated and improved, before being sold in 2003 for around $600,000. In 2003, the parties received a cash gift of $16,000 from the wife’s father;
(d)in 2003 the parties purchased H Street, Suburb C for around $360,000 and after completing renovations, the home was sold in 2007 for around $500,000;
(e)in 2007 the parties purchased J Street, Suburb K for $500,000 using the profits from the sale of the Suburb C property and a mortgage, and again after performing some minor improvements, the home was sold in 2012 for over $600,000;
(f)following the sale of the Suburb K property, the property at L Street, Suburb M was purchased in the sole name of the wife for around $900,000 in 2012 – again after securing mortgage finance from the N Bank. As I detail later in these Reasons, during the holding of the property (which is still retained at the time of trial) the mortgage was discharged. The husband says “the loan was in joint names…” and was purchased in the wife’s “sole name for asset protection purposes”. The husband was not seriously challenged on this assertion, and I accept his evidence, which makes some sense considering how the business interests were structured; and
(g)In 2016 the property at P Street, Suburb M was purchased for over $850,000 again in the sole name of the wife, and I accept, on the same basis as the L Street property. The husband says, and I accept, the full purchase price was borrowed – and at the trial a mortgage loan of $579,126 remains. This property was purchased as an investment and has always been used as a rental property.
These transactions reflect how, I find, the simply strategy of the parties using primarily the business cash flow has enabled them to secure, at the hearing, two properties with a nett value of approximately $2,745,000 – or about 46% of the current pool of interests.
I more fully summarise the business interests below, however the business journey began with the purchase in 2004 of a business called Q Company for approximately $250,000. The wife says, and I accept, that following the purchase of this business and by around 2012, the business had developed into its current form, known as R Company, which specialises in providing services to the construction industry, both large and small.
It is not necessary to detail how the parties, often I find utilising advice from their accountants and financial advisors, created a range of interests outside of the business R Company (owned by the corporate entity S Pty Ltd – which was incorporated in 2003), save to identify, as the pool of interests set out later in these Reasons reveal, that they include:
(a)The Gallacher Family Trust – which holds the shares in S Pty Ltd;
(b)The Gallacher Property Trust; and
(c)The self-managed superannuation fund known as the Gallacher Superannuation Fund.
In 2018 the husband’s claim under a contract of insurance with T Insurance (“the trauma insurance claim”) was approved for payment. This claim related to two medical episodes suffered by the husband in 2017 and 2018. How the receipt of those funds should be treated as a contribution, is a matter of some controversy. Furthermore, on 24 June 2019, funds totalling $500,000 were received from the husband’s parents and paid into a joint account of the husband and wife.
Again, how the Court should treat that payment, in terms of a contribution, is contested.
On or about 5 September 2021, the parties finally separated and, at the final hearing, the Court heard evidence as to some events that occurred at, or shortly after separation, including:
(a)the termination of the wife’s employment with R Company, and her subsequent claims for wages and/or occupational superannuation;
(b)the use by the wife of funds accessed by the wife, the husband asserts without his consent, from company accounts;
(c)the terms of and liability for a loan made by the husband’s parents to the wife of $50,000 shortly after separation; and
(d)the employment of the husband’s new domestic partner in the business R Company, almost immediately upon the wife’s termination.
The parties have been competently represented by experienced family law firms since separation and before the husband commenced property alteration proceedings on 26 May 2022, the parties had engaged in private mediation and obtained some valuation evidence from experts.
The effort made by the parties to try and resolve the issues in dispute, although unsuccessful, were rewarded (in a sense) by a transfer to Division 1 on 30 November 2022 and a listing for a two day hearing at a Case Management Hearing conducted 10 February 2023 for a trial of two days commencing 12 June 2023.
Before the transfer, a Senior Judicial Registrar had made a number of Orders on 17 August 2022, relevantly as follows:
1.That within 7 days of these Orders, the Husband pay to the Wife the sum of $115,000 by way of partial property division.
2.That these Orders authorise for Barry Nilsson to release the funds held on behalf of both parties from the sale of the [recreational vehicle] in the amount of $5,389.80 to the Wife, by way of partial property division.
3.That the ultimate characterisation of the payments in Orders 1 and 2 is reserved to the trial Judge
[P Street, Suburb M]
4.That until further Order, an injunction is issued restraining the Respondent Wife from selling, transferring, assigning or further encumbering the property situated at [P Street, Suburb M].
5.
(a)That in relation to the property situated at [P Street, Suburb M] the Wife continue to manage the property including the Wife’s ongoing management of the current lease/tenants, receipt of rental income and management of the costs associated with that property.
(b)That the rental income from the property is to be applied to the mortgage payment and outgoings for this property with:-
(i)The Respondent Wife will be responsible for the ensuring the these payments are met; and
(ii)The Respondent Wife is to retain any surplus funds once more payments are met.
Vehicles
6.That the Husband cause for the lease repayments associated with [Motor Vehicle 1] to be paid for the benefit of the Wife.
7.That the Wife shall have the sole use of [Motor Vehicle 1] that is currently registered in the name of [S Pty Ltd].
8.That within 7 days of receipt of any registration, insurance or other documents regarding [Motor Vehicle 1], these documents shall be provided to the Wife.
Chattels
9.That within 14 days of the date of these Orders, the Wife via her solicitor will advise the Husband’s solicitor of a date and time in which the Husband’s agent can collect the following items from the Wife’s residence at [L Street, Suburb M]:
(a)[Cushions];
(b)Husband’s tools;
(c)Garage racking and shelves;
(d)[…] brush cutter;
(e)[…] Blower;
(f)Husband’s [BBQ];
(g)Fire pit;
(h)Outdoor Picnic table unit;
(i)[…] signs x 2.
(j)[…] sign;
(k)[…] display;
(l)[Vehicle parts];
(m)Mounted […] Flag;
(n)[Game equipment];
(o)Meat Tenderizer
(p)Sous Vide
(q)Vacuum Packaging Machine
(r)Meat slicer;
(s)Wok;
(t)[…] Painting;
(u)[…] mower;
(v)[…] trade certificate.
10.That, with respect to the flag pole ([…] in the ground) in which the Husband seeks to retain at [L Street, Suburb M], the Husband will provide to the Wife’s solicitor a proposed plan of how it can be removed by a third party from that property. Should the proposed plan be agreed between the parties, the Wife will then provide the Husband’s solicitor with a proposed date and time for its removal. In the event [L Street, Suburb M] is damaged in any way by the removal of the flag pole, then the Husband will be solely responsible for payment of any and all costs associated with repairing the property.
…
and then on 18 August 2022, the Senior Judicial Registrar further ordered, inter alia, that the husband’s application for sole use and occupation of the P Street property be dismissed. The trial included a continuing dispute as to who should be able to retain the P Street property.
STRUCTURES
Mr U, a chartered accountant and business valuer, was appointed as a single expert to assess the value of the parties’ interests in S Pty Ltd trading as R Company.
His opinion, as at 31 December 2022, was that based on a capitalisation of future maintainable earnings methodology, the share capital value is $902,024 which includes goodwill of $140,000. The opinion was adopted by the parties and neither party sought to cross-examine Mr U.
Although Mr U, at paragraph 39 of his report, says the husband “is the sole director and shareholder of [S Pty Ltd]”, this is not strictly correct. Although the husband is the sole director, he holds the only share in the company as trustee for the Gallacher Family Trust.
The Gallacher Family Trust was established by the husband’s parents in 1994, however in 2011, the husband’s parents, by Deed, appointed the husband as the new (and sole) trustee, although the husband’s father Mr V is the appointor. Although the Trust Deed was available, it was not produced as it is common ground that the Gallacher Family Trust is a discretionary trust with a broad range of beneficiaries. As he effectively controls the Trust, the husband has caused dividends due to the shareholder to be ultimately distributed to the beneficiaries – of which the wife has been included.
In 2007, the entities known as S Investments Pty Ltd and the Gallacher Property Trust were established. S Investments Pty Ltd is the trustee of the Trust, with the wife being the sole director of this corporate trustee.
The husband and wife own one share each in the corporate trustee and are joint appointors. Although a copy of the Trust Deed was not produced to the Court, the husband says, and I accept, that the primary beneficiaries are the husband and wife and their children. As the wife is the sole director, she is in effect the current controller of the Gallacher Property Trust. The Property Trust is the registered owner of a commercial unit at W Street, Suburb Z which is the subject of a lease to AA Pty Ltd from early 2023 for two years at a base rent of around $3,500 per month.
In 2013, the parties decided to establish a self-managed superannuation fund (“SMSF”), called the Gallacher Super Fund of which S Super Pty Ltd is the trustee. The parties are joint directors and shareholders of this Trustee and both are members of the Fund. The major investments of the Fund are two industrial units at BB Street, Town CC, being:
(a)1 BB Street, acquired in 2015 which is the business premises occupied by R Company, which has an obligation to pay rent to the SMSF; and
(b)2 BB Street, acquired in 2019 (a smaller unit) used initially for storage of stock etc, but since 2022, the property has been sub-leased and occupied by an unrelated business.
POOL
As Exhibit 2 reveals, and with the benefit of single expert reports, many of the major items which constituted the pool of interests were agreed – both as to identity and value.
The following matters in dispute are the subject of the findings now made:
(a)Considering the period that has elapsed since separation, and the very modest bank accounts identified (totalling $7,646) in a pool of interests of approximately $6 million, I ignore the current bank accounts;
(b)I accept the husband’s evidence that there is no current value in the entities DD Pty Ltd and EE Pty Ltd;
(c)I do not include in the pool of interests, Motor Vehicle 2. I accept the intention, at the time of acquisition in 2020, when the parties were still an intact couple (or at least more amicable), that the car was to be for the use of the parties’ son Mr X. The arrangement was for Mr X to repay 50% of the costs of acquisition. The wife says it was registered in the husband’s name as Mr X was only 16 years at the time. At paragraph 187, the wife says by September 2021, all but $462.50 had been repaid by Mr X (and that balance was discharged by him undertaking additional jobs around the home). The husband could not adequately explain why, in his email of 17 December 2021, he refers to the car as Mr X’s car, but then by 13 April 2022 in an email to the wife he asserts the car “is legally in my name. It is something you may wish to purchase as part of the settlement”.
Frankly, the husband’s contention to include the vehicle is petty and does him little credit – even though I accept his current estrangement from Mr X is painful for him. It would be just and equitable for Motor Vehicle 2 to be transferred to the wife – who I accept will transfer it to Mr X. As Mr X is not a party to these proceedings, that is the best way to proceed. It would not be just and equitable to attribute any value to either the husband or wife for Motor Vehicle 2.
(d)I see no injustice to either party in ignoring current personal credit card liabilities ($9,619 for the wife; $13,786 for the husband) where it is not suggested, or established, that any of these balances were a joint liability in existence at separation. Certainly it seems that, to accumulate reward points, the husband utilises his FF Finance card to pay many discretionary expenses – which he says he then pays on a monthly basis;
(e)The wife accepted an offer of a loan made by the husband’s parents, after the husband terminated her employment with R Company in September 2021. At paragraphs 137 to 142 of the wife’s trial affidavit, she gave evidence that she felt she had no alternative “but to accept their offer”; intended to pay the money back when she was able to do so and, because she had no financial support from the husband from October 2021 to February 2022 (which I accept), she used the funds received to:
meet expenses associated with the [L Street] property, the [P Street] property, property at [W Street, Suburb Z], and my day to day living expenses and the children’s expenses.
At least some of the post separation expenses are detailed at paragraph 136 totalling $40,744.26. Ms GG, at paragraph 7 of her affidavit, broadly confirms the wife’s evidence pertaining to the loan of $50,000, and asserted the husband was not a part of any discussions in relation to this loan.
I am satisfied that although the wife has the personal liability to repay the loan, it should be regarded as a liability in assessing the pool of assets and liabilities because:
(i)if the husband had not so quickly denied the wife’s access to funds, as he did, it was likely the wife would have had the necessary funds to support herself, the children and various property expenses in that initial post separation period;
(ii)the wife used the funds substantially, I find, to pay expenses relating to the properties – and as a such the husband benefited from that contribution; and
(iii)In my assessment, it is more transparent to bring the debt into account, rather than to regard it as a unilateral post separation contribution by the wife.
Although the wife says the husband should accept responsibility for repayment of the loan, I do not agree. She made the arrangement with the parents and she should meet the debt – although taken into account. The parents are not parties to the proceedings.
(f)By final submissions, I did not understand Dr Sayers for the husband to continue to press for inclusion of an alleged notional “additional tax payable in respect of Director’s loans form [S Pty Ltd]”. In any event, I would not include any debt. Whilst I accept that the husband, as the sole director of the company, may have a director’s loan liability, and that seeking to remove that asset from the balance sheet will only occur through repayment of the loan by the husband, the evidence of Mr HH (the company accountant) at paragraph 84 of his affidavit adopts loan balances not accepted by the wife;
(g)The reasons are simply because, other than by an audit, it is frankly impossible to know how the sole director of the company S Pty Ltd (the husband) chooses to account for personal payments made by the company. The wife has no entitlement to direct how he does so. For example, although the orders of the Senior Judicial Registrar required the husband to pay to the wife the sum of $115,000 “by way of partial property division”, it appears the husband paid the funds out of the company in some way. It is described by Mr HH as an “unallocated partial property settlement” and forms part of the total estimated loan of $445,662.40, upon which balance additional tax will be payable by the director under Division 7A requirements. The basis for accepting the debt and any liability at a level of $98,045 has not been established with sufficient certainty so as to allow it to crystallise, as the husband initially contended as a liability in the balance sheet. It is s matter which can be taken into account under s 75(2)(o) in my view.
In my view, the “add backs”, although a matter of discretion and an exception to the general proposition that the Court assesses interests at the date of the trial, were agreed to and I adopt that agreement. I am comfortable in characterising the payment of $115,000 received by the wife as a partial property payment.
SELF-MANAGED SUPERANNUATION BENEFITS
The last financials for the SMSF at 30 June 2021 showed nett assets available to pay member benefits were $946,441.78. It is noted that for the 2020 and 2021 financial years a lump sum employer contribution of $50,000 (for both members) was received. This sum, in such a fixed amount, does not suggest that the husband and wife (as members) caused their “employer” R Company to pay superannuation at the minimum statutory levels prescribed but rather at the highest deductible level. The member’s statements for the year ended 30 June 2021 show the same receipt of an employer contribution – $25,000 per annum for each member.
I infer from these records and finalised statements that the parties, when organising their tax affairs each year, made a decision of how much employer contributions could be paid and then the employer received the tax benefit of claiming the total $50,000 contribution, which the parties took equally into the SMSF as a member benefit. On this basis, it is somewhat artificial to seek to calculate for both husband and the wife, what might be employer superannuation contribution obligations prescribed by statute, just because the parties separated during the 2021/2022 tax year. I do not support the wife’s contention to do so.
The parties’ member benefits as at 30 June 2021, represented a percentage of the total nett assets as follows:
Husband
$481,376.71
(50.86%)
Wife
$465,065.07
(49.14%)
$946,441.78
Doing the best the Court can on agreed current assets, arising from Exhibit 2, I calculate the approximate current nett assets available to pay benefits as approximately $1,517,376, calculated as follows (excluding liabilities which are unknown):
Plant and equipment
$8,547
Real estate properties
- 2 BB Street
- 1 BB Street
$1,410,000
Bank accounts (totalling)
$98,829
$1,517,376
Using the same percentage entitlements as reflected in the 2021 financial returns, for the pool of interests, I calculate the approximate member benefits of the parties in the SMSF at the time of the hearing to be:
Husband
$771,737
(50.86%)
Wife
$745,639
(49.14%)
$1,517,376
Significant negotiations and attention in the parties’ affidavits and submissions was directed to the allegation that:
(a)the business R Company had not paid all the rental it was required to pay the SMSF under tenancy arrangements for occupying the property at 1 BB Street;
(b)Although the wife claimed the arrears amounted to approximately $106,296 (a figure not seriously challenged by the husband), I find insufficient documentation was produced to enable the Court to calculate what sum might be legally enforceable; and
(c)despite negotiations involving, it seems, three different partners in the one accountancy firm historically retained by the business, the husband and wife were unable to agree whether or not it was commercially proper for a reduction in alleged rental of arrears be given by the SMSF to the (not really arm’s length) business operated by the husband.
After final submissions, I have come to the conclusion that the Court does not need to determine what amount, if any, should be attributed to alleged unpaid rentals, at least because:
(a)any payment due by the business (and therefore a liability) would be offset by the credit to the balance sheet for the SMSF (although strictly different entities);
(b)in circumstances where, at the time of the trial, the parties agreed the SMSF was a complying fund, any difficulties that arise from the rental issue post June 2021 will be an issue for the husband and he accepts that responsibility;
(c)that the issue is a matter ultimately for the husband, arises from the agreed position of the parties that the SMSF will “roll over” the property at 2 BB Street, Town CC (at a figure of $410,000) as an in specie part of the wife’s entitlement, with any remaining benefit after rolling out that asset being “split” to the husband who will then become (at least initially) the only member of the fund;
(d)this practical and agreed outcome (which the parties both acknowledged can be achieved but will require some further consideration and perhaps some accounting advice as to the form of order) would enable the husband in the future to totally control the SMSF – the major asset then being preserved, namely 1 BB Street, Town CC, which is the site from which the business (which the husband will retain) operates; and
(e)for the wife to be able to “roll over” her full notional member benefit as calculated by the Court, would have required 1 BB Street, Town CC to be sold and converted to cash – an outcome neither party sensibly regarded as just and equitable.
For these reasons, I find the interests of the parties to be as summarised and set out in Appendix One to these Reasons. I adopt a one pool approach.
CONTRIBUTIONS
Final submissions reflected that the parties agreed that I would assess the parties’ financial and non-financial (both direct and indirect) contributions as equal to separation save for the following matters:
(a)The wife’s receipt of $16,000 in 2003 from her father;
(b)The receipt of $738,727.69 by way of the insurance payment; and
(c)The payment received of $500,000.
I deal with the latter two issues now.
Insurance payout
On the evidence I find that:
(a)there is no clarity of who the owner/s of the policy were although it related to the husband’s health, and the letter attached to the husband’s trial affidavit (filed 25 May 2023) dated 1 June 2018 was addressed to him only;
(b)there is dispute as to who paid the premium and, if in fact, as the wife alleges, she maintained the policy against the husband’s wish. The husband denies that was the case;
(c)the likely beneficiary for what appears to be a type of “Keyman Insurance” was meant to be the business primarily or at least the parties.
(d)it is reasonable to infer the benefit, if received, would in many circumstances be used to meet medical expenses; possible rehabilitation expenses and perhaps income support for a period for the person insured – either for the business to employ another person to replace the “keyman”, or to support the insured who, as in this case, was the primary earner for the family;
(e)in the fortunate circumstances that arose after the unfortunate two medical episodes in 2018 and 2019, the husband’s incapacity for work did not extend beyond a couple of weeks. There is no evidence of extensive medical or rehabilitation costs being incurred; and
(f)The husband (at paragraph 220 of his affidavit) says, and I accept, the funds were applied to:
(i)pay off the mortgage secured against the L Street property;
(ii)purchase and install a new kitchen for the L Street property; and
(iii)pay for a family holiday to the United States of America for two weeks
On these findings and the evidence, the issue for determination is whether the receipt of the sum of $738,727 should be considered as a contribution made solely by the husband or, as the wife contends, a joint contribution.
Aware of decisions such as Aleksovski & Aleksovski (1996) FLC 92-705 which stands as authority for the principle that in most circumstances where a party receives a personal injuries award or other compensation for a personal loss, the funds received should be assessed as a contribution by the injured party, Counsel for the husband took up the challenge to identify an authority that may involve a case where the benefit received, is as here, is the proceeds of a policy of insurance such that it should be treated in the same way.
He referred me to the decision of Chief Judge Thackray in Yeates (as Executor for Yeates) and Yeates [2013] FCWA 117. My analysis of that single judge decision is that:
(a)the learned Chief Judge identified the parties lived together for nearly 16 years; the husband was diagnosed with cancer two months after separation and died just over a year later;
(b)as a result of the husband’s illness and subsequent death, monies were paid out under insurance and superannuation policies which had been funded during the marriage. The wife had originally been the nominated beneficiary of the policies, but post separation the husband nominated his adult son as the sole beneficiary, who was also the sole beneficiary of the husband’s Will. The son essentially received all of the proceeds of the policies, and the wife sought to set aside the nomination and wanted almost all of the insurance and superannuation to be taken into account as joint property in the s 79 proceedings, the husband had commenced before his death;
(c)during their relationship, acting on the advice of their financial planners, the husband and wife had built up superannuation and took out life/trauma policies with a number of companies having nominated the other as the beneficiary. His Honour found that the period between separation and his death, the husband rearranged his financial affairs “in a way far removed from the plans developed when the marriage was intact”;
(d)at paragraphs168 to 205, his Honour discussed the different contribution issues that arose in relation to the insurance monies, and referred to a number of authorities before deciding on the quite unusual and complex facts of the case he was determining, that the contributions to the remaining insurance monies should be assessed at 75% by the husband and 25% by the wife.
The facts in Yeates (supra) are clearly quite different than those in this case. The decision in Yeates was considered in the Full Court decision about another Western Australian case, reported as Falcken & Weule [2019] FamCAFC 140 (Strickland, Aldridge and O‘Brien JJ). In this case, the primary judge had determined that a disability insurance payment to the wife “quite late in the marriage” should be regarded as a significant contribution of the wife, although the adjustment in the wife’s favour was not mathematically as large as the actual funds received – which was about 13% of the value of the pool.
In dismissing the husband’s appeal and contention that the disability insurance payment to the wife should have been treated as a joint contribution, the Full Court identified at [33] that:
Ultimately, however, the husband’s challenge is to the weight that the primary judge gave to the significant contributions he made by caring for the family after the wife’s stroke on the one hand, and the wife’s contribution of the disability insurance payment on the other hand…
I cannot ignore that the funds paid under the contract of insurance arose because of a decision made as an intact couple at a time when the marriage was happy, to provide some protection and security for the other party and/or the business in the event a claim was possible under the terms of insurance. The events occurring to permit a claim to be made and a payment approved all occurred some years before separation. Luckily, the funds were not required for the husband’s long term support or rehabilitation. Robustly, he returned to work within a week or so.
The parties, having received what in many respects might be regarded as a “windfall”, used the funds as jointly agreed towards the acquisition and maintenance of joint interests – and moved on.
I assess, in the circumstances of this case, that it is just and equitable to treat the receipt of the proceeds of the trauma insurance policy as a contribution by the husband, but with an indirect contribution by the wife to that contribution, even though it was only the husband who suffered the medical episodes and little of the funds were paid for medical care or income support.
Payment received from the husband’s parents of $500,000
The husband says the funds received should be treated as a contribution made by him, whilst the wife contends the contribution should be treated as a joint contribution.
It is not in doubt that the funds paid were a gift, and no repayment by the beneficiary of the gift was intended or, since separation, has been demanded. In my view, it is important to consider the evidence of the intentions of the persons making the gift at the time.
Unlike some cases where, as here, the payment was made during a period when a couple are an intact couple, the character of the gift is said to change to a “loan”. However the clear, and I accept compelling evidence of Ms GG (who was the subject of cross-examination), is that:
(a)on 24 June 2019, the sum of $500,000 was paid to a joint account in the joint names of the husband and wife;
(b)similar payments or benefits were made to the husband’s brothers Mr JJ and Mr KK;
(c)no discussions as to the gift took place with the wife; and
(d)the intention of the gifts “were to benefit each of our sons equally” and that while we know that “[Mr Gallacher] and [Mr JJ’s] wives would also benefit from that money, it was [Mr V] intention that it would be used for his boys as his legacy”.
Ms GG denied that there were two cheques drawn, as the wife claims – one for the wife and one for the husband. She acknowledged that her husband (who has suffered dementia for a number of years) was initially of the view that funds should be deposited into a protected account such as superannuation, but they were ultimately deposited to a joint account at the husband’s direction, with the wife providing particulars of the account.
The husband confirmed his father’s initial desire was for the funds to be deposited into a superannuation fund, however he says, and I accept, that he persuaded his father that it could be more usefully used by being available now.
Although the wife asserts that two separate cheques were drawn, no corroboration was provided to support this claim.
I am satisfied, on the evidence, the gift of $500,000 was intended to be for the benefit of the husband and that, for purely practical purposes, was deposited into a joint account. It should be treated as a contribution made solely by the husband.
The direct evidence of Ms GG reinforces not only the presumption that flows from the principles in Gosper & Gosper (1987) FLC 91-818, but the evidence from the wife does not rebut either the direct evidence of the donor of the gift (supported by her son) or the general presumption.
Counsel for the wife, Mr McGregor, says that the period between separation in September 2021 and the trial – a period of less than two years – required discrete consideration. Whilst it is often the case that some transparency in analysis is offered by “breaking up” periods of the relationship into sections for assessment, when the exercise of discretion involves a holistic assessment from start to finish, there is a risk that events of more recent occurrence can be given greater weight than the myriad of other diverse financial and non-financial contributions made, in this case during a relationship spanning from 1996 to 2023 – a period of 27 years.
When the parties accept they started with little by way of assets when they commenced cohabitation each at the age of 23 years, and worked hard in their joint endeavour:
(a)the husband the main breadwinner and business developer assisted at all times by the wife; and
(b)the wife as primary homemaker and parent, often working in the business, but focused on the family with assistance from the husband,
the receipt of the insurance funds and the receipt in June 2019 of the contribution of $500,000 by the husband (from his parents’ gift) are factors which must be taken into account. The gift was received late in the relationship.
Whilst it is true that some of the actions of the husband at the time of separation appear to me to have a harsh and even vindictive flavour, sadly when relationships end some reactions are less than appropriate. The husband is pained by the loss of his relationship with Mr X and Y; the wife is somewhat embittered by the husband’s immediate decisions to not only commence a relationship with a former friend of both parties, but to effectively allow his new partner Ms LL to “replace” the wife in the administrative roles in the business and to use company funds to buy her jewellery.
The husband has, since separation, continued to enjoy the fruits of the business – but he is the one working full-time in it, and has, I accept, worked hard to maintain and preserve the business during difficult times in the building industry – such difficulties acknowledged by the single expert Mr U in his report.
Because of the lack of opportunity for the husband to be involved with the children, the wife was exclusively engaged in the necessary financial and emotional support of the boys (save for the payment of child support by the husband). I accept the wife continued to meet solely private school fees.
I assess the respective contribution based entitlements to be 55% to the husband and 45% to the wife – a differential of 10% in a pool of approximately $6 million – or $600,000.
SECTION 75(2) FACTORS
The parties are of a similar age, and I find both have a similar physical capacity to engage in employment. Neither party adduced in a probative way independent medical evidence – which in some way was surprising when one considers the possible long term effects of the husband’s two medical episodes. However, I find the earning capacity and income of the husband is superior – in the region of $150,000 per annum plus benefits, compared to around $65,000 per annum for the wife. The husband has a tertiary qualification and the wife has no formal qualifications.
Each will have a share of the property pool that, depending on how they choose to use their share, could continue to allow them to grow their assets and generate income.
To the extent it was argued by the husband’s Counsel that, where the value of the business the husband will retain is based on nett maintainable earnings, it could amount to a “double counting” to consider his earning capacity, I reject that submission.
Recently in Gare & Farlow [2023] FedCFamC1A 98 (at [68] – [70]), Austin J (sitting as the Full Court) articulated, in that case, why such a submission should not be accepted, saying, inter alia, that:
When taking into account the parties’ respective future income-earning capacity for the purpose of s 79(4)(e) and s 75(2) of the Act, it would have been oddly inconsistent to ignore the wife’s likely future income and pretend she would have none just because her future income was a co-efficient in the equation used to value the business.
I agree with this statement.
As earlier referred to, there could be some tax consequences for the husband arising from how any Division 7A loans are dealt with by distributions of income through the Trust. I also take this into account under s 79(2)(o).
Y has just over two and a half years of school to complete (although he turns 18 years in 2025) and I accept although the husband will pay child support as assessed or ordered, the mother will bear a greater share of Y’s financial and emotional needs. He has some challenges in the autism area, and may not complete secondary education – continuing as now to pursue a vocational qualification, which may lead him more into practical trades or vocations rather than tertiary studies.
I do not ignore that the wife also continues to support Mr X, who is now an adult, and as such the wife has no legal duty to support him. I accept she will do so, but the level of his needs and capacity to support himself is quite unclear on the evidence.
The adjustment to the contribution based entitlements for the relevant s 75(2) factors must be considered with an eye to the reality of such an adjustment. The most significant factor that compels an adjustment in the wife’s favour is the income differential between the parties – with the husband likely to earn at least double what the wife can earn.
In a purely mathematical sense, if the nett difference between the parties is say $75,000 per annum (taking into account business benefits the husband will be able to access relating to his car and mobile phone at least), then even a working life of another 10 years each would represent a $750,000 gross income deferential.
Considering all these factors, I regard a 7% differential for the s 75(2) factors – approximately $420,000 as appropriate – meaning an adjustment in the wife’s favour of 3.5%
JUSTICE AND EQUITY
On the basis of the above analysis, a division of the pool as to 48.5% to the wife and 51.5% to the husband, depending on the orders made, may achieve justice and equity for both parties. As authority makes clear, it is the effect of the orders and not the mere percentages which must satisfy the requirement of achieving justice and equity for both parties.
The broad competing proposals of what items in the property pool each party wished to obtain or retain, as identified in their respective case outlines, were:
(a)the husband seeks to retain or adjust the interests as identified in his case outline filed 5 June 2023, namely:
(i)his interests in the business and the Gallacher Family Trust, with the right to provide each party (as a Trust beneficiary) with $180,000 income from a dividend from the business received by the Gallacher Family Trust, which I understand is to be used to repay the likely loan accounts outstanding in the balance sheet of the business entity S Pty Ltd, so as to deal with an Division 7A issues to 30 June 2023. The husband offers the wife an indemnity for any income tax the wife may incur as a result of the distribution of income to her in this way;
(ii)in respect of the Gallacher Family Trust, the husband wishes to retain the Family Trust property interests to the exclusion of the wife, with the husband offering indemnities to the wife;
(iii)as I understand proposed orders 13 to 25 (although somewhat unclearly drawn as Mr McGregor asserted), the husband would agree to the wife “rolling out” of the SMSF fund the property at 2 BB Street, Town CC (at a value of $410,000) as an “in specie transfer”. As already referred to in these Reasons, with the assessed wife’s member benefit being $745,639, in the absence of a splitting order in the husband’s favour for the balance of the wife’s entitlement, she would only be able to achieve the possibility of a cash “roll out” by the property owned by the SMSF at 1 BB Street being sold and converted to a cash asset. That is not what I understand the husband seeks to achieve;
(iv)the husband agrees the wife can retain the unencumbered real property at L Street and various other items in the balance sheet. He seeks to retain a number of smaller items in the balance sheet, including a piece recreational equipment and, in particular, the tennis racquet;
(v)the husband seeks that the wife transfer her interest in the P Street property to him, with the husband refinancing or otherwise satisfying the current secured mortgage over that property; and
(vi)at proposed order 29, the husband accepts that, on his proposed orders, a cash payment to the wife may be required “to achieve an overall division of the net assets, liabilities and superannuation of 60% to the Applicant Husband and 40% to the Respondent Wife”. The husband, like the wife, has provided no evidence as to his capacity to borrow whatever funds made be necessary.
(b)the wife seeks to retain or adjust the interests (as identified in her case outline filed 6 June 2023), namely:
(i)the husband retain the business R Company and the Gallacher Family Trust;
(ii)that the wife, as controller of the Gallacher Property Trust, cause the property at W Street, Suburb Z to be sold and after payment of various expenses (detailed at proposed order 10), the nett funds be distributed such that the wife will retain 62.5% and the husband will retain 37.5% of the “overall nett property pool of the parties”;
(iii)the wife shall, within 60 days of settlement of the Suburb Z property, refinance or discharge the secured mortgage over the P Street property, with the intention of the wife retaining her ownership of that property;
(iv)the wife will retain the L Street property;
(v)the wife will return Motor Vehicle 1 to the business;
(vi)in effect, so far as the SMSF is concerned, the wife will “role out” of the Fund the property at 2 BB Street, Town CC at a value of $410,000, with any remaining balance in her member account in the SMSF to be “split” 100% to the husband;
(vii)Motor Vehicle 2 be transferred to the wife, and the piece of recreational equipment be retained by the wife;
(viii)the husband shall provide the full indemnities as to tax; and
(ix)the wife, additional to property adjustment orders, seeks orders for child support departure and a periodic spouse maintenance order for $1,000 (nett) per week for a period of 30 months.
Although broadly the parties agree on “who keeps what”, the issue hotly contested is whether the wife retains the rental investment property at P Street, Suburb M or whether the Court should order the wife transfer the property to the husband, with him being responsible for the discharge of the mortgage.
The competing arguments advanced in respect of the P Street property are essentially:
(a)the wife says she has always been the owner of the property; sees it as a good investment and is prepared to sell the Suburb Z property to facilitate her keeping the P Street property. She clearly sees the sale as necessary to fund the discharge of the mortgage and any payment to the husband. Furthermore, the wife is concerned that if the husband (and his new partner) live in the property, he will be living close to where she will continue to live with the children – which at least makes her feel uncomfortable; and
(b)the husband says that he wishes to secure the property as he would like to live in the area and he regards it as a good investment. He says he has the capacity, if he secures the property, to satisfy/refinance the mortgage without having to sell anything. He says the wife’s concerns about him living closer to her has no merit and is disingenuous because of how there are able to travel without passing each other’s homes.
Frankly, none of the arguments advanced by either party are totally convincing or determinative. My sense is that each party primarily wishes to obtain the P Street property because they both know how desperately the other party seeks it. The husband cannot be properly restrained from buying a home anywhere in Suburb M (he currently rents some distance away) if that is what he chooses to do. The wife, if she has cash (rather than retains the P Street property), can invest the funds as she may desire – either in another rental property or in other investments that generate an income.
Of course, as mentioned during the hearing, it would be open to the Court to make orders to sell the property at P Street (allowing the parties to bid to purchase the property at a public auction), but expenses will be incurred in that process (for example agents costs, commissions etc) and as Mr HH opined, a capital gains tax liability of approximately $71,146 could arise (depending on the wife’s income). Similarly, if the Gallacher Property Trust is to be sold, a modest capital gains tax of $14,476 might be incurred (although a contribution of $30,000 to superannuation would reduce the capital gains tax payable to nil), according to Mr HH.
With these issues in mind, and looking at two scenarios, depending on who may retain the P Street property, a division of the interests could occur as follows based on a notional split of 51.5% to the husband and 48.5% to the wife, would see the following distributions:
Scenario A – where the wife retains the P Street property
The wife’s 48.5% share of the nett pool of $6,005,138 amounts to $2,912,492 made up approximately as follows:
L Street, Suburb M
$2,100,000
P Street, Suburb M
$1,225,000
Motor Vehicle 2
Nil value
Furniture
$11,675
Superannuation
-
SMSF
$410,000
-
Superannuation Fund 2
$3,874
Add back
-
Partial property distribution
$115,000
-
Recreational vehicle
$5,389
$3,870,938
Less
-
N Bank mortgage
$579,126
-
Loan from Mr V & Ms GG
$50,000
-
Tax liability
$10,345
$639,471
$3,231,467
Less payment due to the husband (which the wife could need to finance)
$318,975
Balance
$2,912,492
On this scenario, the husband’s 51.5% share of the nett pool of $6,005,138 amounts to $3,092,646 made up approximately as follows:
S Pty Ltd and the Gallacher Family Trust
$902,024
Gallacher Property Trust
$710,091
Recreational equipment
$4,500
Furniture
$4,680
Superannuation
-
Member benefit
$771,737
-
Split of the wife’s SMSF benefit
$335,639
$1,107,376
Add back
-
Motor Vehicle 3
$45,000
Plus payment from the wife
$318,975
$3,092,646
On this basis, the wife would need potentially to borrow/refinance debts and liabilities including the payment due to the husband of $318,975, of approximately $960,000. The wife provided no evidence to the Court about her capacity to do so, noting that, on this scenario she would not have available the nett income of the Suburb Z property owned by the Gallacher Property Trust. Although the wife sought to retain the Gallacher Property Trust asset, if she did so, her borrowings would have to significantly increase as a result.
Scenario B – the husband retains the P Street property
The husband’s share of $3,092,646 could be made up approximately as follows:
P Street, Suburb M
$1,225,000
S Pty Ltd and the Gallacher Family Trust
$902,024
Recreational equipment
$4,500
Furniture
$4,680
Superannuation
-
SMSF member benefit
$771,737
-
Split of the wife’s SMSF benefit
$335,639
$1,107,376
$3,243,580
Add back
-
Motor Vehicle 3
$45,000
$3,288,580
Less
-
N Bank mortgage
$579,126
$2,709,454
Plus payment from the wife
$383,192
$3,092,646
On this scenario, the wife’s share of $2,912,492 could be made up approximately as follows:
L Street, Suburb M
$2,100,000
Motor Vehicle 2
Nil value
Furniture
$11,675
Superannuation
-
SMSF
$410,000
-
Superannuation Fund 2
$3,874
Gallacher Property Trust
$710,091
Add back
-
Partial property distribution
$115,000
-
Recreational vehicle
$5,389
$3,356,029
Less
-
Loan from Mr V & Ms GG
$50,000
-
Tax liability
$10,345
$60,345
$3,295,684
Less payment due to the husband
$383,192
Balance
$2,912,492
On this scenario, the wife would have the proceeds of the Gallacher Property Trust sale of its property and she would be able to meet the payment due to the husband and pay her debts, whilst retaining the major asset (the former family home free of a mortgage), and have a superannuation interest of approximately $413,874 and a modest amount of cash.
The husband would be able to retain the P Street property, his business interests and superannuation, with most of the debt over the P Street property discharged by the payment the wife makes to the husband from the proceeds of the Suburb Z property.
ANALYSIS
There are, of course, other scenarios not advanced to the Court – for example, if the wife wished to retain the P Street property and the husband retained all the wife’s interest in SMSF (that is the wife does not “roll out” the property held by the Fund known at 2 BB Street) and this would mean rather than pay the husband approximately $318,975, the husband (if he retained all the assets of the SMSF), would be required to pay the wife only approximately $91,000.
I accept that any of these scenarios identified are capable of meeting the “just and equitable’ criteria, although they have different consequences for the parties. It seems to me that if the wife is so committed to retaining the P Street property, which I am prepared to order, she will need to either borrow extensively or relinquish her member benefit in the SMSF.
If the wife is not able to achieve the borrowings necessary, then by the adjustment set out in scenario B, she would increase her superannuation; sell the Suburb Z property; retain her family home and have some modest cash available.
In looking at the different scenarios, it becomes apparent that the agreed position for the wife to retain the family home – which represents by value over 1/3 of the nett assets – creates a dilemma, although clearly that is, on the evidence, a higher priority than to retain the P Street property.
I also accept, when the parties’ assessments of their share of the pool of assets set out in their case outlines (the husband says 60%/40% in his favour; the wife says 62.5% to 37.5% in her favour) are so different from that found by the Court, the distribution of assets can be difficult even to negotiate.
In these circumstances, I have decided to take further oral/written submissions as to the parties’ positions on the various scenarios identified in these Reasons.
Although the Court is prepared to delivered Reasons now in respect of the wife’s claim for a child support departure order (and does so), until the effect of the property adjustment orders is assessed, the Court is not able to finalise Reasons for, and any order relating to, spouse maintenance as claimed by the wife.
The wife is required to overcome the threshold established by s 72 of the Act – namely she is unable to support herself adequately. I do not, of course, ignore the primary argument advanced by the husband that even if the wife is found to be unable to support herself adequately, he is not reasonably able to financially support the wife.
Naturally, the effect of the alteration of the property interests is likely to have some effect on his capacity to pay.
For these reasons, whilst I will now deliver Reasons in relation to the wife’s application for child support departure, I will reserve my decision in respect of any orders for spouse maintenance until I have decided, quickly after further submissions it is anticipated, the property adjustment orders which will achieve justice and equity.
CHILD SUPPORT DEPARTURE APPLICATION
I regard it as proper to consider the wife’s application for child support departure before the wife’s claim for spouse maintenance.
The wife raised a child support departure issue in her amended Response filed 22 May 2023, and in her case outline refined the order she seeks as follows:
45.That the Court declares it is satisfied pursuant to section 123 of the Child Support (Assessment) Act 1989 (Cth) that it would be in the interests of the parties for the Court to consider whether a Departure Order should be made in relation to the child, [Y] born […] 2007.
46.That pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth), the Husband pay to the Wife child support for [Y] as follows:
(a)Child support as assessed by Services Australia – Child Support; and
(b)50% [Y’s] school private school fees paid by the Mother since separation in the amount of $13,700; and then
(c)100% of the [Y’s] private school fees and levies associated with his attendance at [MM School] (or other private school as agreed by the parties in writing) until he concludes grade 12 and as invoiced by the school.
Whilst I am satisfied that leave under s 123 of the Child Support (Assessment) Act 1989 (Cth) (“Child Support Assessment Act”) should be given so as to enliven this Court’s child support jurisdiction, I am not satisfied that leave should be given in respect of the period since separation, including the claim for a contribution to the fees paid by the wife since separation. It was open to the wife to bring such an application much earlier than one month before the trial. I have taken the wife’s payments into account when I earlier considered post separation contributions.
As to future private school fees and levies associated with the attendance of Y at MM School, the principles to be applied are long standing (see Gyselman & Gyselman (1992) FLC 92-279). Under s 124 of the Child Support Assessment Act, the Court is required to be satisfied that:
(a)a carer is entitled to child support;
(b)it is just and equitable as regards the child, the carer entitled to child support and the liable parents (s 124(1)(b)(i)); and
(c)otherwise proper (s 124(1)(b)(ii)),
to make an order that the liable parent (the father/husband in this case) provide child support other than in the form of periodic payments.
At paragraphs 321 to 335 of her trial affidavit, the wife deposes that:
(a)the husband is essentially assessed to pay child support in the amount of $1,577.17 per month ($362 per week);
(b)during the marriage the parents made a joint decision that their children would attend a private school, with both children commencing at MM School, from 2014. Whilst Mr X finished in 2021, Y is only in grade 10 and is not expected to complete his secondary schooling until the end of 2025;
(c)the wife was aware, since January 2022, that the husband asserted he could not afford to contribute to school fees for Y; and
(d)at paragraph 334, the wife estimated the fees to the end of 2025 to be $43,277.55 –or approximately $17,311 per annum – which spread over 52 weeks amounts to approximately $330 per week.
The husband maintains he cannot afford to pay or even contribute to Y’s school fees. Furthermore, in cross examination when pressed, he indicated he is not satisfied attending a private school now creates any benefits for Y, who is in any event exploring through the school curriculum, a school-based or facilitated trade activity. Of course, when Y finishes school the parents’ obligation to pay school fees ceases. I also note Y will turn 18 years in 2025.
I am satisfied that the wife has established that the parents did agree to support private schooling for their sons.
Parents are required to contribute to the financial support of their children equitably. It is not necessary to order that the husband pay child support as assessed administratively as, if he does not do so, normal enforcement processes will commence.
I am satisfied that the parents are able to contribute to the additional school fees to privately school Y considering their income, earning capacity and share of property they are likely to retain after the s 79 property orders are put into effect.
Considering the matters set out in s 117(4), (6), (7) and (7A), I am satisfied it would be just and equitable to make an order for departure.
Furthermore, considering the matters set out in s 117(5), I am satisfied it would be otherwise proper to make the order I propose.
I will make an order that commencing term three of 2023 school year, the parents shall contribute to the school fees and levies associated with the attendance of Y at MM School, until he concludes his secondary education in the proportions of:
(a)50% by the husband; and
(b)50% of the wife.
I regard the apportionment as appropriate considering the administrative assessment liability raised against the husband and some of the other expenses she says she meets for Y (but not the adult child Mr X) detailed as paragraph 335.
FURTHER HEARING
As the order at the commencement of these Reasons makes clear, the matter is listed for further submissions as to the term of the property adjustment orders at 9.30am on 22 August 2023.
In taking this approach, I do not wish to be seen not to be aware of the sensible guidance offered by the Full Court in recent decisions about the duty of a trial judge to make orders, rather than to effectively leave it to the parties. However, for the reasons I have articulated, I am satisfied it is proper in this case to adopt the process I have.
I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated:4 August 2023
APPENDIX ONE
POOL
ASSETS
Ownership
Description
Value
Wife
L Street, Suburb M
$2,100,000
Wife
P Street, Suburb M
$1,225,000
Husband (controller)
S Pty Ltd and the Gallacher Family Trust
$902,024
Wife (controller)
Gallacher Property Trust
$710,091
Joint
Recreational equipment
$4,500
Husband
Motor Vehicle 2
No value attributable
Husband
Furniture (including engagement ring for Ms LL)
$4,680
Wife
Furniture
$11,675
GROSS ASSETS
$4,957,970
LIABILITIES
Joint
N Bank mortgage over P Street, Suburb M
$579,126
Wife
Loan from Mr V & Ms GG
$50,000
Wife
Tax liability
$10,345
LIABILITIES
$639,471
SUPERANNUATION
Husband
Estimated member benefit Gallacher Superannuation Fund
$771,737
Wife
Estimated member benefit Gallacher Superannuation Fund
$745,639
Wife
Superannuation Fund 2
$3,874
SUB TOTAL SUPERANNUATION
$1,521,250
ADD BACKS
Husband
Motor Vehicle 3
$45,000
Wife
Recreational vehicle
$5,389
Wife
Partial property distribution
$115,000
$165,389
BALANCE SHEET SUMMARY (for both parties)
Gross assets
$4,957,970
Less liabilities
$639,471
$4,318,499
Plus superannuation interests
$1,521,250
Plus add backs
$165,389
$6,005,138
0
4
0