Gallardo & Gallardo
[2009] FamCA 326
•1 May 2009
FAMILY COURT OF AUSTRALIA
| GALLARDO & GALLARDO | [2009] FamCA 326 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage |
| Family Law Act 1975 (Cth) ss 75(2), 79 |
| Lee Steere and Lee Steere (1985) FLC 91-626 Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693 |
| APPLICANT: | Ms Gallardo |
| RESPONDENT: | Mr Gallardo |
| FILE NUMBER: | WOC | 1321 | of | 2007 |
| DATE DELIVERED: | 1 May 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Johnston JR |
| HEARING DATE: | 5 & 6 February 2009 27 April 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Millar |
| SOLICITOR FOR THE APPLICANT: | Rita Thakur & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Campton |
| SOLICITOR FOR THE RESPONDENT: | Hansons Lawyers |
Orders
That the husband shall pay to the wife within 60 days the sum of $253 970.
That in the event that the husband fails to comply with the above order he shall forthwith do all things and sign all documents necessary to cause the property known as W property, New South Wales to be placed on the market for sale and to sell it for the best price reasonably able to be obtained.
That the husband shall do all things and sign all document necessary to cause the net proceeds of sale of the above property to be paid as follows:
(a)In payment of the costs of sale including agent’s commission, auction costs including advertising expenses and legal costs of the sale;
(b)In payment of 31.746 percent of the balance to the wife plus interest at the rate prescribed under the Family Law Rules from 60 days after the date of commencement of these orders until paid; and
(c)In payment of the balance to himself.
That in the event that the husband pays the wife at least $100 000 within 60 days he will not be liable to pay any interest pursuant to sub-paragraph 3(b) above and the said $100 000 payment shall be set off against the amount to be paid to the wife pursuant to the said sub-paragraph.
That the wife retain the Toyota CV RAV motor vehicle, registration number ….
That the wife be declared the sole owner of the shares in P Company.
That the husband retain the Toyota Hilux motor vehicle registration number …, the BMW motor vehicle registration number … and the shares in Telstra.
That subject to compliance by the parties with the above orders, each of the parties otherwise retain free from any claim by the other, all property, assets and financial resources in such party’s possession or control.
That the application of the wife for spouse maintenance is dismissed.
That all exhibits be released.
That both parties have leave to re-list these proceedings on 7 days notice in relation to the implementation of the orders.
That the above orders not commence operation until 22 May 2009.
That both parties have leave to re-list these proceedings for the purpose of further submissions about the form of the orders only at any time not later than 21 May 2009.
IT IS NOTED that publication of this judgment under the pseudonym Gallardo & Gallardo is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: WOC 1321 of 2007
| MS GALLARDO |
Applicant
And
| MR GALLARDO |
Respondent
REASONS FOR JUDGMENT
Introduction and Applications
These are proceedings for property settlement. The parties are Ms Gallardo, to whom for convenience I shall refer as “the wife”, and Mr Gallardo, to whom for convenience I shall refer as “the husband”.
The wife seeks the following orders:
1.The husband shall pay to the wife the sum of $481,114 within two months of this date.
2.In the event that the husband fails to pay the sum referred to in paragraph 1 within two months of this date, the husband shall forthwith do all things and execute all documents to cause the property to be sold by public auction within 6 weeks after the period referred to in order 1.
3.The reserve price for the auction shall be as agreed between the parties but failing agreement, they shall do all things and execute all documents to appoint the president of the Real Estate Institute of New South Wales or his nominee to determine the reserve price within 7 days of the dispute arising.
4.Upon sale, the husband shall do all things and execute all documents to cause the proceeds of sale to be paid as follows:
(a)In payment of the costs of sale including agents commission, auctioneer’s costs and legal costs of the sale;
(b)In payment of the sum of $481,114.00 together with interest at the rate prescribed by the Family Law Rules from the date of these orders to the date of payment;
(c)In payment of the balance to the husband.
5.In the event that the property is not sold at auction then the husband shall forthwith do all things and execute all documents to cause the property to be sold by private treaty within one month after the auction and to pay the proceeds of sale in accordance with order 4.
6.In these orders “the property” shall mean the property known as [W property].
7.That the husband and wife be declared to have the sole right, title and interest in:
(a)Any chattels, goods, furnishings and other property which are, at the date hereof, in their possession respectively;
(b)Any moneys, shares, debentures which stand in their sole name respectively at the date hereof.
8.That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
9.Liberty to apply in relation to the implementation of these orders on 7 days notice.
The husband seeks the following orders:
1.That the wife forthwith do all acts and things to transfer to the husband all her right title and interest in the property known as [W property] in the state of New South Wales, being the whole of the land in folio identifier Lot […] DP […].
2.That the wife retain the Toyota CV RAV motor vehicle, registration number […].
3. That the wife be declared the sole owner of the shares in [P Company].
4.That the husband pay to the wife the sum of $100,000 within 14 days from the date of these orders.
5.That the husband retain the Toyota Hilux motor vehicle, registration number […]. the BMW […] motor vehicle, registration number […]. and the shares in Telstra.
6.That subject to compliance by the parties with the above Orders hereof, each of the parties otherwise retain free from any claim by the other, all property, assets and financial resources in such parties possession or control as at the date of the making of these Orders.
7. That the application of the wife for spouse maintenance be dismissed
8. That the wife pay the husband’s costs of and incidental to his response.
Background
The husband was born in June 1962 and he is therefore 46 years of age. The wife was born in September 1970 and she is therefore 38 years of age. The parties married in May 1993 and they separated on 28 September 2007. There are two children of the marriage namely S born in August 1994 who is therefore 14 years of age and G born in January 1996 who is therefore 13 years of age.
The parties met in 1990. The husband had been married previously and he had a property settlement with his former wife in September 1992. Shortly after this the parties became engaged to be married.
The husband’s property settlement included a block of land at P, New South Wales. The husband had commenced construction of a home on the land before he had separated from his previous wife. At the time of property settlement the construction consisted of a built up concrete slab on the land. After the property settlement the husband resumed the building project as an owner builder. There is an issue about whether the wife in these proceedings assisted the husband in the project. I shall refer to this again below.
So at the time of the parties’ marriage the husband’s property consisted of this property with a house constructed to something more than lock –up stage, a one third interest in a property at O, New South Wales, which had been given to the husband by his parents in 1990 as a tenant in common in equal shares with his 2 siblings, a Toyota Celica motor vehicle, a Toyota utility and $15 000 savings. He also had an interest in the State Superannuation Scheme of which he had been a member since 1988. The husband had no liabilities.
At the time of marriage the wife’s property consisted of $25 000. There is an issue about what the $25 000 was spent on. I shall refer to this again below. There is no issue that it was spent either on the home or for household purposes.
The wife was working at a shop. The husband was working as a public servant.
Upon their marriage the parties lived with the husband’s parents for a few months to enable their home to be completed. Then they moved in.
In October 1994 the husband purchased two home units at A for $165 000. He borrowed $175 000 on mortgage from the St George Bank to cover the purchase price and associated expenses. The husband and his father subsequently painted the units, repaired the roof and built new fences. On one occasion the wife’s father assisted him with repairs to a fence. The properties were rented out.
In 1994 the husband purchased a 1989 Toyota motor vehicle for $25 000 funded from savings.
In 1996 the wife commenced working part time at the F Club.
In August 1998 the husband purchased 440 P Company shares in the wife’s name.
In September 1999 the parties opened savings accounts for each of the children using a total of $19 372 from the husband’s Credit Union account.
In May 2000 the husband purchased 5000 shares in Telstra 2 in the wife’s name.
At approximately this time the husband sustained an injury at work. He subsequently received payment of $23 500 for his injuries, which he received in October 2004.
In December 2002 the parties purchased a Toyota RAV4 motor vehicle for the wife for $35 000.
In December 2003 the parties purchased in the husband’s name a property at W, New South Wales for $395 000. The entirety of the required funds were borrowed.
In March 2004 the former matrimonial home at P was sold for $580 000. The net proceeds of sale were $549 552. The mortgage on the W home was then discharged. The W property consisted of three units. Initially the parties lived in the rear unit and rented the other two units out.
In 2005 the parties had the W land cleared and a new home was built there. The husband arranged the construction as owner builder. He undertook a considerable amount of the physical work himself.
In 2005 the parties purchased in the wife’s name an Audi Quatro motor vehicle for $72 000. This was funded by trading in the Toyota RAV 4 motor vehicle for $35 000 and paying the balance from savings.
Also in 2005 the husband suffered serious injuries when he was attacked by two men one of whom struck him with a metal bar. I shall refer to this again below.
In 2006 the husband went on sick leave.
In January 2007 the wife informed the husband that she regarded the marriage to be at an end. The parties decided to purchase a home for the wife and children to reside in.
To facilitate this, the home units at A were sold for $440 000. In September 2007 the parties purchased in the wife’s name the property at B for $425 000. The wife and the children took occupancy of this property in October 2007.
In February 2008 the husband resigned from the public service on medical grounds. In March 2008 he received a net payment of $244 050 and a cash payment of $57 268. Shortly after receiving this latter payment the husband received a second payment in the same amount of $57 268. I shall refer to this again below. The husband used these monies to pay out the mortgages on the W and B properties.
In May 2008 the husband purchased a 1999 BMW motor vehicle for $30 000 using money from his IMB account.
The Applicable Law
Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.
Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
There is a long-standing preferred approach to the determination of an application brought pursuant to the provisions of s 79. This involves four inter-related steps. Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.
Property available for division
To their credit the parties were able to resolve the differences between them about the values of the items of available property. The available property is therefore represented in the list of items below.
But there are differences between the parties in terms of what each of them say the Court should accept as current liabilities.
The first of these matters in issue is an alleged debt by the husband to the Westpac Banking Corporation of $57 268. At around the time that the husband received his payout from the public service, he also received a sum of $57 268.13 by way of payment in respect of accrued sick leave and long service leave. Those monies were received into his IMB account which was the loan account in respect of the mortgage. So the effect of that was to reduce the mortgage by that amount. A few days later the public service deposited into the husband’s IMB savings account a further sum of $57 268.13. The husband then informed the public service that they had double paid him in respect of the accrued sick leave and long service leave. Apparently the second deposit was a consequence of a bank error by Westpac Banking Corporation. Westpac has informed the husband that in the event that he fails to repay the second payment of $57 268.13 then they propose to commence recovery proceedings against him to recover this amount.
It was submitted on behalf of the wife that Westpac have been so slow to act in respect of this matter that it would be doubtful whether in fact they will be taking enforcement action. It was submitted further on behalf of the wife that even if the Court found that this was an enforceable liability, that the first deposit of $57 268.13 should be added back into the pool of available property as against the husband. It was submitted that this would be on the basis that the husband has not made a proper disclosure to the wife in respect of how he has disposed of these funds.
I must say I am unpersuaded by any of these submissions on behalf of the wife. Firstly, there can be no question on any reasonable consideration of the evidence that this liability by the husband to Westpac exists. So that the real matter for consideration becomes whether it would be reasonable to add back the $57 268.13. Again I am unpersuaded by this submission. As it was pointed out by learned counsel for the husband, the husband has allowed an amount of $36 518 to be added back to the pool of available property to take account of this matter. That, in my view, is where this matter rests.
The husband alleged that there are outstanding liabilities to three creditors arising from products and materials supplied for the purposes of completion of the construction of the former matrimonial home at W. These were an amount of $2200 to a Windows company, $1500 to a Tiler and an amount of $8500 to a Fabrication company. In respect of the Windows company liability it is said that the Court should not accept the husband’s word on this, the husband’s allegation in this regard being the only evidence concerning the statement of payment of this liability. In relation to the husband’s assertion that he has not paid the Fabrication company liability, this liability was in respect of a custom built sliding gate which the husband ordered for installation at the former matrimonial home. He said that in fact the gate had been delivered but it was simply lying at the property and had not been installed. Learned counsel for the wife made a similar submission as in relation to the Windows company liability. But in addition learned counsel for the wife submitted that if the Court regarded the $8500 as being an outstanding liability to the husband then it should also bring this amount in on the husband’s side of the available property as property available to him. This was said to be on the basis that the valuer who valued the former matrimonial home at W did not take into account in that valuation the value of the gate.
I must say I am unpersuaded by any of these submissions. I do not have the view that the husband has paid these creditors and I am not persuaded that he has simply made up his evidence in this regard. So far as the gate is concerned I am not persuaded that this should be added back into the pool against the husband. This is because I have the view that common sense dictates that to simply install a sliding gate would have little, if any, effect on the overall value of the valuable property.
The remaining alleged liability is that alleged by the husband to the effect that he owes his mother the sum of $6000. There is no issue that the husband’s mother provided the parties with $6000 for the purpose of funding the cost of purchasing blinds and possibly curtains. I must say I am not persuaded that this is an enforceable liability in the sense that I could be satisfied that the husband’s mother would take enforcement action in respect of this matter. The wife said that these sums were a gift to the husband and the wife. I propose to deal with this $6000 as a contribution which has come in on the husband’s side of the ledger, as it were.
Accordingly, the property available for division between the parties is as follows:
| Assets | $ | |
| 1. W property | 800,000 | |
| 2. Husband’s 5,000 Telstra Shares | 16,400 | |
| 3. Husband’s Credit Union Account | 12 | |
| 4. Husband’s 1989 Toyota 4 Runner | 3,900 | |
| 5. Husband’s 1999 BMW | 30,000 | |
| 6. Husband’s IMB A/C | 4,950 | |
| 7. Husband’s Household Contents | 3,225 | |
| 8. Husband’s interest in O property | 173,000 | |
| 9. Husband’s Paid Legal fees | 33,865 | |
| 10. Husband’s Add back | 36,518 | |
| 11. Husband’s Superannuation proceeds | 240,000 | |
| 12. Wife’s property at B | 425,000 | |
| 13. Wife’s 440 P Company Shares | 369 | |
| 14. Wife’s 2008 Toyota RAV | 25,000 | |
| 15. Wife’s CBA A/C …4 | 1,162 | |
| 16. Wife’s CBA A/C …3 | 1,235 | |
| 17. Wife’s CBA trust accounts | 12,010 | |
| 18. Wife’s Household Contents | 5,875 | |
| 19. Wife’s Paid Legal fees | 1,878 | |
| 20. Wife’s Add back | 27,848 | |
| 21. Wife’s Club Plus superannuation | 3,800 | |
| 22. Wife’s Advance Retirement Savings superannuation | 7,000 | |
| ____________ | ||
| Total | $1,853,047 | |
| Liabilities | $ | |
| 1. Husband’s ATO liability | 52,372 | |
| 2. Husband’s Debt to Westpac | 57,268 | |
| 3. Husbands’ Debt to Windows company | 2,200 | |
| 4. Husband’s Debt to Tiler company | 1,500 | |
| 5. Husband’s debt to Fabrication company | 8,500 | |
| 6. Wife’s debt to Centrelink | 3,200 | |
| 7. Wife’s Domayne Furniture | 2,900 | |
| __________ | ||
| Total | $127,940 | |
| Net Surplus Property | $1,725,107 | |
Contributions
As indicated above, at the commencement of the marriage the husband owned his property at P, New South Wales. There is an issue between the parties about the extent to which the construction of the home which the husband built on this land had progressed at the time that the parties married. The parties gave very different accounts of this.
On the one hand the husband said that the wife made no input into the construction of the home. The husband said that at the time of the marriage the home was completed and that the parties moved into the home upon their marriage.
On the other hand the wife said that she was involved in the planning process for the home, that with the husband she met regularly with the builder, that she and the husband chose the bricks for the home, that she was involved in choosing the kitchen, that she chose the colour scheme for the interior of the home, that she helped move bricks from where they were delivered at the front of the home, that she regularly tidied up the construction site with the husband while building was in progress and that she and her sisters scraped off excess cement from the glass windows after the bricklayers had completed the bricklaying. The wife also said that the home was not completed at the time of the parties’ marriage and that she and the husband lived with the husband’s parents for about four months after their honeymoon to enable the home to be completed. The wife said that after they were married she and the husband went regularly to the construction site and continued working on the home. The wife said that she arranged for the wardrobes to be fitted, that her father helped her and the husband to clean the house and that they did general work on the construction site. She said her father helped move bricks, he dug holes for plants, he supervised labourers during the day and that he did rockery work.
The husband denied all these assertions by the wife with the exception that he said she did some cleaning up on the day that they moved in and he conceded that her father had dug some holes for plants.
The wife said that at the date of the marriage the house was not complete but was at lock up stage. She said the tiling had not been done and the bathrooms had not been completed.
The wife’s father said that about two weeks prior to the wedding he worked on the construction for five days with the husband’s late father. He said that they undertook formwork and then laid steel and concrete to form the main stairs in the residence. The wife’s father said that the parties lived with the husband’s parents for approximately six months after they were married. He said that when they returned from their honeymoon he worked at the home to complete the gyprocking of the downstairs ceiling. He said at this stage none of the tiles had been laid. He also said that in approximately June 1993 with his brother he worked five days including completing the steps to the front of the house and a walkway. He said that they also completed an upstairs balcony.
The wife’s sister said that the wife undertook some cleaning work and that she assisted by helping the wife cleaning some windows.
As indicated above, there was also an issue about $25 000 contributed by the wife just before the marriage. The wife said in her affidavit that her mother had saved $25 000 for her and that she gave this amount to the husband by way of a lump sum cash payment in October or November 1992 saying they could use this money for the house.
The wife’s mother said that the wife started working when she was 15 years old and she collected regular amounts of money from the wife and she saved it for the wife. The wife’s mother said that by the time of the wife’s engagement she had collected $20 000 from her. The wife’s mother said that in approximately early January 1993 the wife asked her for her money because she needed it to give to the husband to help with the building. The wife’s mother said that she gave the wife her $20 000 and an extra $5000 as a gift from her husband and herself.
The husband said in his affidavit that the wife contributed the $25 000 to their joint purposes being furniture and curtains for the house.
The wife was cross-examined about this matter and conceded that there was a difference of a few months between her version of when she said she gave the money to the husband and when her mother said she gave her the money. So in this regard the wife’s version might be less safe to rely on than that of the husband.
But whether the $25 000 was put towards construction of the home or the purchase of blinds and curtains makes no difference in terms of relevance to the case. This is because, in my view, there is no forensic difference whether the wife’s direct financial contribution went towards the construction of the home or to the furnishings in it.
What should the Court make of this evidence? The view that I have formed is that the house was completed by the time of the parties’ marriage, at least so far as the structural work was concerned. On any version there remained tiling, a very small amount of gyprocking and probably many finishing tasks which would have taken some time to complete.
Both the wife and her father said that the parties lived for a short time with the husband’s parents after they were married. I prefer this to the husband’s version that they did not live with his parents. But in any event, in my view, it matters little which version is accepted because the relevant matters are the extent of the contributions by each of the parties. The husband said that the wife only did a bit of cleaning up on the home. I accept that the wife did some cleaning up work and I give her the benefit of the doubt in relation to moving some bricks. She has put on independent evidence of contributions made by her father. No doubt these are important contributions, but in the context of the overall construction of the home the overwhelming contributions in respect of this home have been made by the husband. This is both in terms of the financial contributions and the direct physical work involved. In my view, the wife can be attributed with only a very minor contribution in respect of this home.
As also indicated above, at the time of the parties’ marriage the husband also owned his one-third interest in his property at O, his Toyota motor vehicle and his interest in the State Superannuation Scheme. There was an issue about whether he had $15 000 savings at the time. I am prepared to give him the benefit of the doubt on this.
I have referred above to the history of acquisition of assets and to the working history of the husband. The wife has also worked through most of the marriage, even when the children were quite young.
As indicated above, the husband received a compensation payment of $23 500 in November 2004. In February 2008 the husband received an after tax payment of $244 050. He also received the payment for sick leave and long service leave referred to above. As indicated above, the husband used much of this money to pay out mortgages on the W and B properties.
As indicated above the husband’s mother provided $6000 to the parties for the purpose of purchasing window coverings. I shall regard this as a contribution on behalf of the husband.
Accordingly, the overwhelming financial contributions have been made by the husband.
On the other hand the wife has made the overwhelming contribution to the welfare of the family constituted by the parties and their two children. This was the way that the parties arranged their responsibilities. Although the wife was the primary carer for the children, the husband assisted in this regard and he also gave some assistance to the wife in respect of some of the household tasks.
There are very different submissions on behalf of each of the parties about the assessment which the Court should make about the parties’ contributions overall. It is submitted on behalf of the wife that the contributions should be assessed overall 60 percent in favour of the husband. On the other hand, there is a very strong submission on behalf of the husband to the effect that the Court should find that his contributions overall have been 70 percent.
There is no question that because of the very significant contributions, financial and otherwise, by the husband particularly at the outset of the marriage the findings about contributions must fall in his favour. It is said on behalf of the husband that the Court in undertaking this task should not lose sight of the significance of the initial contributions. It was observed that the home at P was sold for net proceeds of $549 552 and that this was the springboard for the acquisition of the other properties. It was also submitted that the property at O in which the husband has the one-third interest as tenants in common with his siblings has never changed in its nature and that the wife would be unable to demonstrate any contribution to this. It was observed that this interest represents approximately 10 percent of the property available for division between the parties. It was also submitted that the husband accrued a benefit in the superannuation fund from his five year long membership prior to the time of the parties’ marriage and that he had accrued a credit towards his long service leave for the five years prior to marriage.
I accept these observations by learned counsel for the husband but of course the wife has also made very important contributions since the commencement of the parties’ marriage. Accordingly, recognition has to be given to all of the contributions including those initial contributions by the husband.
At the end of the day, in my view, the contributions overall have been 38 percent by the wife and 62 percent by the husband.
s 75(2) matters
The husband is 46 years of age and there are some real limitations in terms of his health. As indicated above, he was released on health grounds from the New South Wales Public Service in February 2008. There was no medical evidence in proper form before the Court to set out the current state of his health. But in the past he has been diagnosed as having been suffering from post traumatic stress disorder. As indicated above, in 2000 the husband suffered an injury at work. He was assessed as having suffered a 20 percent loss of his right arm at or above the level of the elbow and compensated for this. By April 2003 his condition was said to have stabilised. In any event he was able to continue working in his capacity as a supervisor for some years after this time. In May 2005 the husband suffered a most distressing incident which involved actual physical injuries to him. In short, he was attacked by two men and one inflicted serious injuries on him using a metal bar. Clearly not only did the husband suffer from serious physical injuries but there were also serious psychological consequences. In mid-2007 the husband was accepted by the New South Wales Public Service as being permanently unfit for the full range of the duties of his position and he was granted a partial and permanent disability benefit. For the purposes of his application for this benefit he was diagnosed as suffering from Post Traumatic Stress Disorder and Chronic Pain Syndrome.
It was submitted on behalf of the wife that the Court should be cautious about accepting this as evidence of the husband’s current condition. This was on the basis that the husband has been in receipt of ongoing treatment both from a psychiatrist and from his medical practitioner, yet no evidence was put by such experts in relation to his current state of health.
In addition, the wife engaged a private detective to undertake surveillance of the husband particularly in relation to his attendance at the gymnasium owned and operated by his brother. The private detective, Mr C filmed the husband on a number of occasions during July and August 2008 in attendance at the gymnasium. From my viewing of this film, it showed the husband in attendance at the gymnasium, it depicted him showing the private detective some of the gymnasium equipment, it also depicted him at the reception desk and at the computer.
This was the basis of a submission on behalf of the wife that whatever the husband asserts his ongoing injuries to be they have not prevented him from attending at the gymnasium and apparently working at the gymnasium. This was denied by the husband who said that as part of his rehabilitation following his injuries he regularly attends the gymnasium usually from 6:30 am and undertakes a program of exercises. He said that he often uses the computer at the gymnasium and will occasionally speak to clients of the gymnasium. He said that this contribution by him to the gymnasium is one which has been ongoing. He said that the gymnasium has always struggled and that various members of his family have helped out at the gymnasium. He said that he was doing nothing more than that and that in fact at all times when he was at the gymnasium his brother’s partner, who is the manager, would have also been in attendance at the gymnasium.
In respect of this matter I must say that I have some doubts about the veracity of what the husband is saying. It would have been a simple matter for him to tender evidence in the proceedings from his brother and his brother’s partner to corroborate his version of his capacity in attending the gymnasium. But in any event whether or not the husband may be in receipt of regular payments for his contributions at the gymnasium, in my view what this evidence is significant for is that it indicates that the husband has the capacity to be able to undertake at least some limited work of this nature.
As also indicated above, the husband successfully applied to his superannuation fund to pay out to him his benefits in the superannuation fund on the basis of partial and permanent invalidity. Over the strong objection of learned counsel for the wife I admitted into the evidence a confidential medical report on the incapacity asserted by the husband for the purposes of this application. This report was by a Dr V. Amongst other matters included in the report, Dr V reported that in his opinion the husband was still able to be employed in some form of paid occupation and gave as an example office work perhaps involving the use of a computer.
The conclusion that I arrive at in relation to all of this is that clearly the husband has been unable to work in his previous full-time capacity. But he has not put any evidence before the Court to suggest that he would not be able to work in some other capacity such as the type of work involved in operating the gymnasium or some form of clerical work which, in the opinion of Dr V, he would be able to do. The husband’s income is $532 per week which he receives from the worker’s compensation insurer.
On the other hand the wife is 46 years of age and in good health. Her income is approximately $500 per week which she earns from her two long-standing part-time jobs. On all present indications the wife should be able to work in these occupations for the foreseeable future.
The wife has the major responsibility for the ongoing care and support of the parties’ two teenage children including their financial support. On all present indications she will continue to have this responsibility until each of the children attains adulthood or becomes self-supporting. This is because of the circumstances of the husband. He has been paying child support in the amount of approximately $42 per week which is modest by any standards. The husband has spent little time with the children since the parties’ separation. His relationship with G appears to have broken down completely. This would appear to add to the submission that it is more likely than not that the wife will have almost the entirety of not only the financial support of these children but the actual physical care of them without much assistance from the husband.
It is also relevant to take into consideration that on a contributions basis, the husband will enjoy property of a significantly greater value than that being enjoyed by the wife in this regard.
I also note that the wife’s mother has provided considerable assistance in terms of caring for the children to permit the wife to undertake the responsibilities of her paid employment.
The remaining relevant matter is that the husband has a financial resource in the form of a personal injury claim which he has made in respect of the physical injury he suffered when he was struck during the serious incident in May 2005 referred to above. His personal injury solicitor Mr Trevor Wells has received an offer in the amount of $6250 by way of settling this claim. The husband has not yet instructed the solicitor whether he would wish to accept such an offer. There was some criticism directed at the husband by the wife suggesting that the husband has simply gone slow in respect of his claim so that he could have these family law proceedings completed before having to elect whether to resolve the personal injuries claim or not. In any event, having heard the evidence of Mr Wells, in my view the Court should regard this matter as a financial resource that the husband has. It appears that the low point would be that he would receive $6250 less whatever legal costs would be involved. The high point is unclear to me. But my overall perception about the matter is that whatever money might be forthcoming to the husband in respect of this matter it will be modest, certainly in the context of the overall value of the property of the parties in these proceedings. I simply take this into account at this point of my consideration of the relevant matters.
In relation to the future income earning capacity of the parties, I do not accept the thrust of the submission on behalf of the wife that the husband would be found to have a more significant income earning capacity than the wife. In my view on the basis of all the material currently before the Court the husband’s income earning capacity is fairly similar to that of the wife. As was submitted by learned counsel on his behalf, either he would continue to receive the weekly compensation at the level which he is currently receiving or if he was to work it would be unlikely that he would be able to earn income at a much higher rate than what he is currently being provided by the compensation. I am not sure that I entirely agree with this. However when one considers that the wife is still working in a part time capacity, and in circumstances where really there is no valid reason for her not to be able to undertake full-time work, at the end of the day in my view the likelihood is that they will continue to receive income at similar rates.
Where there is a significant difference between the parties is in the responsibility that the wife has for the primary care and financing of the children. This is, and will continue to be for some years yet, a considerable burden to her and will be met with an appropriate set off of available property to recognise the importance and the real cost of this to her both in financial terms and also in the physical effort involved.
As was the case with submissions about the overall assessment which the Court should make about contributions, the submissions in relation to the appropriate percentage set off on account of s 75(2) matters were very divergent. On the one hand it was submitted on behalf of the husband that the set off in favour of the wife should be 5 percent of the available property. On the other hand, it was submitted on behalf of the wife that the appropriate set off should be 15 percent.
As I indicated to learned counsel for the wife during submissions about this matter, it is important to consider the effect of the percentage set off in money terms bearing in mind the difference this would represent between the outcomes for each of the parties. In my view, 15 percent would be much too great a difference.
In my view, taking account of all the relevant s 75(2) matters to achieve a just and equitable order the set off of available property should be 6 percent in favour of the wife.
Conclusion and fourth step
The wife is to have 44 percent of the property available for division between the parties. This is property with a value of $759 047 (44 percent of $1 725 107 = 759 047).
The wife has the following property:
| $ | |
| 1. B property | 425,000 |
| 2. 440 P Company Shares | 369 |
| 3. 2008 Toyota RAV | 25,000 |
| 4. CBA A/C …4 | 1,162 |
| 5. CBA A/C …3 | 1,235 |
| 6. CBA trust accounts | 12,010 |
| 7. Household contents | 5,875 |
| 8. Paid legal fees | 1,878 |
| 9. Add back | 27,848 |
| 10. Club Plus | 3,800 |
| 11. Advance Retirement Savings | 7,000 |
| ___________ | |
| Total | $511,177 |
But the wife has the following liabilities:
$
1. Centrelink
3,200
2. Domayne Furniture
2,900
_______
Total
$6,100
Accordingly, the wife has net property with a value of $505 077.
To achieve property with a value of $759 047 the wife will require a payment of $253 970 ($759 047 - $505 077 = $253 970).
On the other hand the husband is to have 56 percent of the property available for division. This is property with a value of $966 060 (56 percent of $1 725 107 = $966 060).
The husband has the following property:
$
1. W property
800,000
2. Telstra Shares
16,400
3. Credit Union Account
12
4. 1989 Toyota 4 Runner
3,900
5. 1999 BMW
30,000
6. IMB account
4,950
7. Household contents
3,225
8. Interest in O property
173,000
9. Paid legal fees
33,865
10. Add back
36,518
11. Superannuation proceeds
240,000
____________
Total
$1,341,870
But the husband also has the following liabilities:
$
8. Australian Taxation Office
52,372
9. Westpac Banking Corporation
57,268
10. Windows company
2,200
11. Tiler company
1,500
12. Fabrication company
8,500
__________
Total
$121,840
Accordingly, the husband has net property with a value of $1 220 030 ($1 341 870 - $121 840 = $1 220 030). To achieve property with a value of $966 060 the husband would need to pay the wife $253 970 ($1 220 030 - $966 060 = $253 970).
Orders to reflect this would not affect the income-earning capacity of either party. But it is unlikely that the husband will be able to pay the wife in accordance with these orders without selling his W home. Even if he has to do this, there is sufficient equity in the home to enable him to be able to purchase another home in which to reside. I propose to provide an incentive under the orders for him to pay a sum of money to the wife and to produce the balance required by selling the home.
On the other hand, the wife will be able to continue to live in her home. She will have a substantial sum of money to assist her to meet the living costs of herself and the children.
I certify that the preceding ninety-two (92) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.
Associate:
Date: 1 May 2009
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Injunction
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Appeal
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