Galway and Cuthbert

[2008] FamCA 269

FAMILY COURT OF AUSTRALIA

GALWAY & CUTHBERT [2008] FamCA 269

FAMILY LAW – PROPERTY SETTLEMENT – 15 years since separation – informal distributions of property between separation and hearing.

Family Law Act 1975 (Cth)

Burgoyne and Burgoyne (1978) FLC 90-467
Candlish and Pratt (1980) FLC 90-819;
Dupont and Dupont (No. 3) (1981) FLC 91-103
Woodland and Todd (2005) FLC 93-217
Norbis and Norbis (1986) FLC 91-712; (1986) 161 CLR 513
Bonnici and Bonnici (1992) FLC 92-272
McMahon and McMahon (1995) FLC 92-606
Zalewski and Zalewski (2005) FLC 93-241

APPLICANT: Ms Galway

RESPONDENT: Mr Cuthbert

FILE NUMBER: SYF 2082 of 2006

DATE DELIVERED: 18 April 2008

PLACE HEARD: Sydney

JUDGMENT OF: Moore J

HEARING DATE: 26 & 27 March 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Coulton

SOLICITOR FOR THE APPLICANT: Richardson Legal

COUNSEL FOR THE RESPONDENT: Mr Mater

SOLICITOR FOR THE RESPONDENT: Broun Abrahams Burreket

Orders

1. On or before one (1) month from the date of these orders the husband is to pay to the wife the sum of $106,500.

1. Subject to order 1 hereof, each party is entitled to retain absolutely all property of whatsoever kind presently in the possession and owned by that party.

1. The husband is to be solely responsible for payment of capital gains tax referable to the sale of the property situated in the United Kingdom. 

IT IS NOTED that publication of this judgment under the pseudonym Galway & Cuthbert is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF2082 of 2006

MS GALWAY

Applicant

And

MR CUTHBERT

Respondent

REASONS FOR JUDGMENT

[For ease and clarity of identification and to assist in later editing for anonymity, in what follows the parties will be referred to at times as ‘husband’ and ‘wife’ despite having been divorced for many years]

Proceedings

1. This is the determination of the division of property between Ms Galway (60) and Mr Cuthbert (60). 

Assets and liabilities

1. They agree about what property is available and its value.  Their assets and liabilities are set out below and I have found it convenient to arrange them according to what they each own, including their superannuation entitlements, and listing separately the sale proceeds of a property in the United Kingdom.  Their only difference on this topic is whether or not the legal fees they have paid to date should be added back to their respective assets and even that was not asserted with any vigour.  I have not done so because they have paid similar amounts - the wife has paid $76,173 and the husband $74,876 – and I see no purpose being served by including them. 

   Category A - wife’s assets

   T property   310,000

   D property   390,000

   Greater Building Society Account  50

   Fosters group Limited 1006 shares  5,241

   2001 Holden Astra Motor Vehicle   10,000

   Household contents  6,000

   Richardson Legal – Trust Account  8,041

   Add Back – Donations   10,995

   Galway Superannuation Fund   278,000

   1,018,327

   Less liabilities:

   Credit card debt   2,400

   Net:  1,015,927

   Category B - husband’s assets

   C property   600,000

   Westpac Account Number …0  1,276

   Westpac Account Number …2   18,244

   Household contents  7,000

   Shareholding in Cuthbert Investments Pty Ltd   26,360

   Broun Abrahams Burreket – Trust Account   15,000

   F Provident Fund  1,141,795

   Net:1,809,675

   Category C – UK unit

   Lloyds TSB Bank Account Number …   234,846

   Less Capital Gains Tax payable   21,810         213,036

   Total net Assets: $3,038,638

Background

1. They met in 1976 and they began living together in early 1977. The wife has a son [(42)] from a previous marriage who lived with his father and spent time with them. They married some years later in December 1985. In 1993 they separated when the wife withdrew from the family home. In mid-1997 she returned to live there for six months or so – they remained separated; their relationship was not resumed – while the home was on the market for sale. They were divorced in October 1997. Over time there were distributions of property between them by agreement, but in January 2006 the wife sought and successfully obtained leave to institute proceedings for property settlement pursuant to s 79 of the Family Law Act 1975. Those proceedings are now being brought to a conclusion.

Orders sought

1. The initial claim made by the wife in 2006 was for half of the value of the proceeds of sale of a property in the United Kingdom and half the proceeds of rental income received since 14 May 1998.  That date is proximate to the transfer of the property to the husband by his mother some months after the parties’ divorce, a development he did not inform the wife about at the time or later when they agreed to various financial distributions.  She amended her claim on the first morning of the final hearing to seek payment of $550,000 from the husband, otherwise each to retain the assets they now own.  Her counsel identified the fresh claim as equalising the value of all current assets. 

2. The husband has sought the dismissal of her claim throughout. 

Evidence

1. The evidence is not extensive though not without its complexities.  They each called witnesses: the wife relied on evidence from a medical practitioner, Dr L, who treats her for a thyroid condition; the husband called evidence from his sister, the real estate agent in England who manages the UK property; and a neurologist, Dr H, who treats him for Parkinson’s disease.  None were required for cross-examination.

Credit

1. The case they each presented threw up contention about their history and insofar as that relates to issues of any importance for present purposes it will be necessary to make findings to resolve the differences; that is to say, it will be necessary to determine which account is to be accepted and acted upon in later evaluation of their entitlements.  In aid of that task, documents from public records or created outside these proceedings are the first port of call, but nothing there throws any light on key areas of dispute.  Therefore it is necessary to examine the evidence of the parties about those topics so as to form a view about their reliability as a reporter of the history.  Submissions in closing were made by both counsel urging the adoption of the version of one over that of the other. 

2. One area of difference was the detail of property transactions undertaken over time.  Searches later made of public records [exhibit 7] demonstrated each to have been wrong in their affidavit evidence.  However, considering some of the transactions stretched back some 27 years, errors in that detail come as no surprise.  In any event, errors of that kind in those circumstances can hardly be seen as a sound credit indicator, so I draw nothing of any real moment from comparing their versions with the public records, notwithstanding Mr Mater’s accurate submission that the husband was closer to the mark more often than the wife. 

3. Mr Mater was right to submit, however, that the evidence as it unfolded developed an added dimension which supports the conclusion that on issues of core relevance the husband’s account is to be preferred where it conflicts with the wife’s and there is no corroborative support for one version of the other.  It is acknowledged against the husband that he did not disclose to the wife that the United Kingdom property had been transferred to him in 1998 [to be discussed later], his explanation being that he thought it irrelevant in light of the wife having retained the D property to which he had made a contribution.  Nonetheless, in evaluating credit this failure to tell her about it has been taken into account.  But having said that, in giving his evidence the husband was observed to be responsive, he was balanced in his attitude and expressed himself moderately, he made ready concessions about the wife’s contributions on occasions, and his version of events was not inherently improbable or unbelievable in any instance.  In my judgment, he presented as a credible witness. 

4. I am unable to make the same assessment of the wife’s evidence because, having observed her and matched her oral evidence with evidence previously given inconsistencies were highlighted, exaggerations were demonstrated, and a marked shortcoming in objectivity became apparent – all combining to compel the conclusion that the husband’s evidence should be seen as the more reliable. In her written material, where she had the opportunity for consideration and reflection before swearing to it, she gave internally inconsistent accounts of important events - for example, about what had been said to constitute the agreement with the husband’s mother about acquiring the United Kingdom property – and she also gave evidence which was later conceded to be incorrect – for example, the figure of $200,000 profit from the sale of the Hoover shares, which on her case was entirely her contribution, was amended to $100,000; and in two previous affidavits she had sworn that 6000 pounds had been advanced to the husband’s mother for her husband’s funeral before it was amended to 600 pounds.  She sheeted the latter home to her former solicitors but the sworn document was hers on both occasions and therefore her responsibility.  Of course errors can be made, but in each instance where error was identified or demonstrated, the error was not adverse to her own case – to the contrary.  It also has to be said that she gave much of her evidence in an adversarial and argumentative manner which operated to undermine the objectivity it ought to have had.  Forceful insistence on a position has its convincing qualities but can also be overvalued, as was the case here. 

5. That finding of preference for the husband’s evidence is applied in what follows of the history where statements of fact can be taken to constitute findings of fact unless the contrary is indicated. 

History

1. The husband migrated from England in 1974 and before long went into business with another person repairing motors and later appliances.  He attended courses and obtained qualifications as a technician in that field.  That was his position when he met the wife and they later established a common household in rented premises. 

2. At the time neither had any assets of any significant value – they each had a motor vehicle, some furniture, savings and the husband had his tools of trade.  In October of that year they purchased an electrical service and appliance business for $3,000.  The money came from the husband’s savings at the time but the wife had around $1,100 which was contributed to working capital of the business.  They operated the business through a company of which they were both shareholders and directors. 

3. Their evidence differs about the nature of the business initially – more particularly its connection to the manufacturer Hoover – but the husband’s evidence is accepted; that is to say, they had the Hoover service agency and while the larger appliances they sold were Hoover there were no restrictions on the brand of smaller appliances they could sell, which they did. 

4. The husband worked in the business from the outset, operating either from the shop premises or doing service work elsewhere out of hours.  He continued to work full time in the business over the years until the wife sold her interest to him and he later sold the whole business.  These developments will be noted in due course. The wife’s engagement with the business is not as straightforward.  For the first few months she had a job elsewhere and then she worked in the business in conjunction with part time work of one kind or another elsewhere.  Her wages supplemented the business income which was reinvested in stock so as to build up the business in this early period.  The wife estimates her dual role to have gone on for three to five years whereas the husband thinks it was only about a year or more.  The difference is of no particular moment because there is no suggestion they were not both putting in full time hours in one direction or the other and there is no suggestion they were not working overall towards the common goal of furthering the business they had acquired.  In any event, after a time the wife worked in the business solely and this remained the case through their separation in 1993 up until she withdrew from the business in 1999 before selling her interest to the husband in 2000.  Her exit in 1999 had been preceded by a period when they each spent time at the business premises in ways that meant their paths did not cross, so poor had their relationship by then become. 

5. On the home front, there is dispute about their roles with domestic chores up to the point of their separation.  The wife conceded the husband essentially did the garden and, while she obviously did not see it as involving much, she says he did what was necessary to maintain and clean the pool.  Beyond that, she was adamant he did no cleaning around the house or cooking, except occasional barbeques, and he only occasionally cleared away the dishes from the evening meal.  On her case, she did all of the household chores including cleaning and shopping and laundry and cooking and clearing away and she also did some of the tidying up outside in the garden.  But I am persuaded this does not sufficiently reflect the husband’s contributions around the home during these years.  As I find, he did do the garden, he assisted on occasions with shopping, he assisted on occasions with laundry, and while he readily agrees he did not cook, he invariably contributed by clearing away the dishes in the evening.  During the 1980s the family home was used on occasions as a bed and breakfast venue and while it is accepted that the wife saw mostly to the arrangements to support this, it is also accepted the husband assisted in ways he identified. 

6. The wife’s son was 11 years of age or thereabouts when they began living together in 1977 and 27 when they separated in 1993.  Nothing of any moment turns on it and nor was anything made of it in the husband’s case, but her son came and went over the years as a child, being provided for while in their household, and he spent a year living with them when he was in his early 20’s without contributing to household expenses. 

7. As well as acquiring a business together, they engaged in a number of real estate transactions. 

   (a)In August 1980 they acquired their first property, located at P, for $43,500, funded by savings and a loan of $32,000 from a bank.  It was rented out and the income used to meet mortgage repayments and outgoings.  It was sold nine years later in August 1989 for $115,000. 

   (b)At the same time they purchased a second property, located at J, for $39,000, also funded by savings and a bank loan of $33,150.  They lived in this home.  Renovations were undertaken and to that end tradesmen were employed while some work was undertaken by the parties themselves.  The husband set out what he did in paragraph 17 of his affidavit and it is accepted that the wife assisted in that by holding windows and doors while he replaced them, she helped chip off concrete from the fireplace, and she assisted with clearing away rubbish.  Neither appears to have aired any grievance at the time about one not pulling their weight overall to achieve their common purpose.  They sold the property ten years later in March 1990 for $110,000. 

   (c)In May 1983 they purchased in their joint names a property at C for $64,000.  These were premises from which they conducted the appliance business.  The money came from joint savings and a bank loan secured by mortgage registered on the title.  Renovations were undertaken and clearing done: the shop downstairs was cleared; gyprock was put on walls and ceiling and painted; windows were replaced; a counter was installed; and the upstairs area was painted. 

   (e)In February 1988 they purchased a home located at E for $325,000, funded from savings and a mortgage in favour of a bank.  They moved to live at the E home and the J property was rented.  Over several years renovations were undertaken to the Ehome, including the installation of wardrobes, the kitchen and swimming pool were both upgraded, a new porch and veranda were erected, and there was some interior painting.  Upon the sale of the P and J properties in 1989 and 1990 respectively the net sale proceeds were paid towards reduction of the mortgage debt.  Also applied towards the mortgage were the proceeds of sale of shares acquired some time earlier in Hoover, which I shall come to shortly. 

8. As well as these dealings, in 1992 they established a superannuation fund, F Provident Fund, of which they were both members.  Shares previously acquired were transferred into the Fund on the advice of their accountant and contributions were made by the business from time to time over the years to follow. 

9. There was also trading in shares and gold bullion over the years and this activity is the subject of some dispute; more particularly, surrounding the purchase and later sale for profit of shares in Hoover in the United States.  On the wife’s case, she initiated the purchase of shares and gold bullion and she was responsible for administering these investments.  As she put it ‘the husband never had anything to do with any investments of that nature’.  In particular, it is her case she initiated the purchase of the Hoover shares and became a shareholder as a strategy to uncover rumours about whether Hoover was going to ‘withdraw our agency from Australia’ and find out what they were doing.  Her reference to their business having the ‘sole agency for Hoover USA’ was not meant to be read literally and suggest they were the only servicing agent for Hoover in Australia, but that they were authorised servicing agents only for Hoover and no other manufacturer.  As it happened, for an outlay of around $10,000 they made considerable profit on the Hoover shares in 1989 or thereabouts as a result of the takeover ultimately by Chicago Pacific.  Retreating significantly from her earlier evidence that they made a profit of $200,000, in her more recent affidavit she put the amount received at $100,000.  There is no document to indicate whether or not the husband’s recollection of it being more like $50,000 is the more accurate and for present purposes it can be accepted the profit was within that range. 

10. It can also be accepted that the wife took the running on this investment and other share investments by liaising with the stockbroker engaged, familiarising herself with the market and attending to what was necessary to acquire and trade shares.  The case she asserted strongly, however, is that the husband never had anything to do with the shares dealings, she did not consult him about her decisions [though taken for their mutual benefit], he had no decision making role and he never once enquired of her what shares they owned. 

11. Yet this picture of solitary endeavour is undermined not just by the objective fact that the money she used was joint money and the trading exposed them both to the risks as well as the rewards but also by aspects of her own evidence on the topic.  On more than one occasion she recounts exchanges with her husband about share transactions, asking him about the direction to be taken, for example:

    ‘I spoke to the husband and told him what the offer had been, and the husband said to me “That sounds great, I think we should take that offer” [para. 16(3)] and

    ‘I then spoke to the husband and said “We’ve had this offer to purchase the shares from a crowd in America, Chicago Pacific, and if we sell we will get $66,000 US dollars, which is about $100,000 Australian.  If we take that, we could then pay off the mortgage on the house, what do you think?’  The husband said “That sounds wonderful, go ahead.’ [para. 16(7)]. 

12. She says that in telling him about the offers received in the course of events related to the Hoover share sale she was ‘bragging’ about the profit they would make and not ‘consulting’ him.  Be that as it may, her earlier evidence does not fit that scenario. 

1. The same can be said of the gold bullion trading.  Her own evidence suggests she was not the only one involved in what occurred; for example, she describes the decision to sell and put the proceeds towards the E property mortgage in this passage of her affidavit:

   ‘…I said to the husband “Why don’t we sell the gold and put that towards the purchase of [E property], as we are not going to be able to buy it unless we come up with some money from somewhere” the husband replied “Yes, that is a good idea”.  The husband subsequently took the gold and sold it.  The husband came home with cash and said to me “I’ve sold the gold, and he gave me a cheque and I cashed it at […]” [para. 16(8)]. 

2. She adds a criticism that he brought the cash home with him but it indicates nonetheless he was consulted about the sale to which he agreed. 

3. Accordingly, in as much as the wife’s case propounds that the husband had no role in these share and bullion dealings it is not accepted.  She is to be given the credit for having taken the initiative and for having administered and monitored these dealings - including share trading for the Superannuation Fund – but not at the expense of diminishing the husband’s participation in the arrangements or by exaggerating her own role. 

4. There is another transaction which is both contentious and significant.  It is agreed they advanced money to the husband’s mother, to enable her to acquire at a discount [as a pensioner] the unit in which she lived in the United Kingdom, but almost every other aspect of the arrangement is [or was] the subject of dispute – the date, the amount advanced, the extent of the discount available on purchase, and more particularly the terms of the arrangement related to the advance.  All but the latter were resolved by the tender of a document [exhibit 8] which establishes the purchase to have occurred around March 1985 and the purchase price to be 7,400 pounds which represented a 60% discount on the market value of 18,500 pounds as at March 1985. 

5. As for the arrangement with the husband’s mother, on the husband’s case it was agreed between him and his mother, while she was visiting Australia and with the wife’s prior consent and in her presence and the presence of his step-father, that he and the wife would advance funds to her to enable her to buy the unit, she would leave the property to him in her Will, and she would ‘look after’ it in the meantime [para. 22]. 

   Disputing this, the wife dismissed outright the proposition that the husband’s mother would have said in her presence anything to the effect that she would leave the property in her Will to her son without including her, knowing she was also a contributor.  She also maintains she would never have agreed to such an arrangement because if the husband’s mother were to go into a nursing home the responsibility for her support would fall to her two children, not to her, adding she is not so generous as to have agreed to support the husband’s mother in that event.  On her case, the arrangement was according to paragraph 25 of her affidavit; that is, after many conversations with the husband’s mother and the husband words to this effect were said [emphasis added]:

   ‘I said:  “We will give you the purchase price for the unit that you’re living in England so that you can get an 85% discount on the price.  You can live in it for life until you go into a nursing home.  Upon that happening the house will then be sold and given back to [the husband] and myself.”

   The husband’s mother said: “That would be a wonderful thing to do.  I absolutely accept that the property will revert to you if I die or go into a nursing home.”

   The husband said: “I’m delighted that we can accommodate my mother and it should be a good investment for us (meaning myself and my husband). 

6. The wife returns to the topic in paragraph 30 of the same affidavit where she gives evidence about the formulation of their ‘informal property settlement’.  She says John Lucas [solicitor] spoke to her about it 6 or 7 times and she goes on to recount what she said [as she clarified, not to Mr Lucas but to the husband]:

   ‘The settlement represents a 50/50 split on the present assets available.  I’m also to get a half of the unit we purchased in England for your mother when she died.”  He said (meaning the husband): “Absolutely, that’s always been the case.”’

7. Then in the further affidavit she filed by leave on the first morning of the hearing, in elaborating on the earlier paragraph 25 she relates what she said to the husband’s mother this way: ‘We will give you the purchase price for the unit that you are living in, in England, so that you get the discount.  You can live in it for life or until you go into a nursing home.  When that happens, it can then be sold and it will then come back to [the husband] and myself”.  His mother replied signifying her acceptance ‘that the property will revert to you if I die or go into a nursing home.’ 

8. It is apparent from the first and third passages that the catalyst for the property coming to them included entry to a nursing home whereas the single catalyst identified in the second passage is death and no mention is made of entry to a nursing home.  Added to this inconsistency, there is nothing inherently improbable or unbelievable about an agreement for the property to be left to the husband in his mother’s Will even though the funds being provided were joint funds - they were in a settled relationship at the time, indicated by their marriage some months later – and nor would such an arrangement shut her out from claiming an entitlement in that event.  As I find, the husband’s evidence is the more reliable and therefore it is accepted that the property acquired with the advance was to be left to him in his mother’s Will.  However, later events did not take the course foreshadowed. 

9. First, his mother acquired the property jointly with her husband, a development the husband did not know about at the time.  The husband’s mother’s husband died in 1987 and his wife became the sole owner by survivorship.  The husband’s mother did make a Will, [exhibit 5 - dated 25 February 1994], in which she left her residence at the date of her death to her son.  But four years later and some six months after the parties’ divorce - in April 1998 – the husband’s mother transferred the property to her son’s sole name.  There is no evidence of what it was worth at the time although the Deed of transfer [exhibit 6] certifies in clause 4 that its value did not exceed 60,000 pounds.  The husband did not tell the wife of the transfer at the time – though clearly she knew about it and had a belief about the earlier arrangements with his mother.  The wife says [paragraph 31] she learned in 2005 from a relative that his mother had moved to live in a nursing home but the relative could not answer her query about what had happened to the unit, so she sought legal advice and subsequently became aware of the transfer to the husband in 1998. 

10. The husband did not sell the property after he became the registered proprietor and his mother continued to live there until early 2001 when she went into a nursing home.  From April 2001 it was rented through a local real estate agent who has provided a schedule of the rental income received over time until May 2007, the disbursements paid, and the net rental deposited to a nominated bank account.  The last totals 19,380 pounds which, absent evidence of the applicable exchange rate, counsel have guessed to amount to around $AUD40,000 [Mr Mater] or $AUD50,000 [Ms Coulton].  The unchallenged evidence of the husband’s sister, who managed her mother’s day to day affairs after she entered the nursing home, is to the effect that she was the signatory on the account to which the net rent was paid and it has all been used to supplement her mother’s living expenses or purchase items for her comfort or convenience, as more particularly set out in her affidavit.  It is accepted, therefore, that the husband has not received any of the surplus rent over those years.  It is also accepted that in early 2004 he contributed $5,000 to replace a hot water and control heating system at the unit. 

11. Finally, it remains to say that the husband’s mother passed away in September last year and the husband then sold the property for 104,000 pounds which he has invested in a bank account in the United Kingdom.  It has an agreed balance, including interest earned, of $AUD234,846.  It is not disputed that he has a capital gains tax liability in the amount stated earlier. 

12. There are two further issues about arrangements with the husband’s mother not yet mentioned.  The first relates to the purchase of British Gas shares on privatisation of the industry in the United Kingdom towards the end of 1986.  It is common ground they gave the husband’s mother money to buy shares in British Gas but there is dispute about the amount advanced and the terms on which it was advanced. The husband says his mother was given 300 pounds and there was no question the shares were to be for anyone other than her.  The wife says his mother was given 3,000 pounds, taken from an account they had in Birmingham which the husband’s mother was authorised to operate, and the shares were to be held by her on their behalf. 

13. As for the circumstances in which money was advanced, the wife says she was present at the husband’s mother’s home in Birmingham in January 1986 when the intention to privatise British Gas was announced [her passport confirms her presence in the United Kingdom then] and notice was given of the opportunity for users and pensioners to acquire shares at a favourable price on the float.  She recommended the purchase to the husband’s mother who, she says, would no more have dreamt of purchasing shares than falling off the Harbour Bridge.  Probably she did recommend it. 

14. As for the amount advanced, exhibit 13 indicates shares were offered at 135p on privatisation but there is no indication from anywhere of the number of shares bought and so the price per share is no help in resolving that.  Absent any other source, it comes down to the assessment of reliability and therefore it is accepted 300 pounds was advanced. 

15. As for the related arrangement, the wife contends the shares were to be held for her [the wife] and the husband and not acquired on the husband’s mother’s own behalf.  As she put it at one point, the husband’s mother had never purchased a share before and she had no money to pay for her husband’s funeral.  The funeral was the following year, but the point of the argument is clear enough.  Even so, her evidence about the arrangement has the hallmarks of reconstruction.  First, it may be of relatively minor moment to observe that the husband’s mother was the person eligible to subscribe for British Gas shares and not either or both the wife and the husband.  More significantly, there are no indicia anywhere signifying any beneficial entitlement to or interest in the shares she acquired.  That is to say, there is nothing anywhere to indicate the parties jointly, or even the wife of her own volition though she dealt with other shares over the years, sought from the husband’s mother during the many years after the shares were acquired any accounting for them, or queried their activity, or made any enquiry of dividend yields, or of dividends received by the husband’s mother.  Nor, it may be observed, did the British Gas shares merit a mention when the wife gave evidence about the ‘informal property settlement’ as related in paragraph 30 of her affidavit, despite the reference specifically to her being entitled to half of the United Kingdom unit on his mother’s death over and above the ‘50/50 split on the present assets available.’ 

16. The wife’s case on the issue has not been established.  The finding is that they advanced to the husband’s mother around the end of 1986 from joint funds the sum of 300 pounds to enable her to buy shares in British Gas. 

17. The second issue relates to an advance to the husband’s mother to pay for her husband’s funeral in 1987.  The wife retreated from her earlier evidence given on more than one occasion that the sum provided was 6000 pounds and at the hearing she put it at 600 pounds.  This is in contrast to the 300 pounds nominated by the husband though in his oral evidence he was unsure of the amount and thought it might have been 300 – 500 pounds.  The difference in their evidence is of no great significance; they advanced several hundred pounds for the purpose. 

18. This brings events to early 1993 when the wife indicated she wished to separate.  At the time they owned the business operated through the company of which they were both directors and shareholders; the C premises from which the business operated; the home at E; they had their entitlements in the privately managed Superannuation Fund; they had their interest in the unit in which the husband’s mother resided according to the arrangement struck some eight years earlier; and they owned chattels including motor vehicles.  They also had a significant sum of cash kept in a safe at the home; the wife removed half of it – around $26,000 – and left the other half for the husband.  Despite their separation, as mentioned earlier, they both remained working in the business and they both continued to draw $650 per week from the business. 

19. Around the time they separated and in March 1993 a unit was purchased in the wife’s sole name in D for $179,000.  In her account of this development in her affidavit, the wife explains she was looking at rented premises to move into but decided to buy a place to live in after she had inspected rental properties [‘horrific condition’] and had become aware of the rent being asked.  She approached the husband and told him it would be cheaper to buy a unit than to rent and that she had found a property.  She asked him: ‘Would it be alright for me to buy a unit.  I have no money.”  He said: “I’ll advance you the money for the purchase price.  (sic) I need you to guarantee the loan.” (sic) I will pay the mortgage repayments.”’ 

20. As it happens, the bank advanced $180,000 and the loan was supported at the bank’s request by a personal guarantee from the husband [she agrees the loan would not have been extended but for his guarantee] and by collateral security taken over the jointly owned C property.  The loan repayments amounted to $389 per week and obviously there were other payments referable to ownership. 

21. On the husband’s case, it was agreed they would acquire a property in which she would live but it would be in joint names and constitute an investment for both of them.  He believed it was purchased in joint names and he did not learn it had been registered in her sole name for some months after the purchase was settled.  He agreed to pay, and he did pay, $250 per week towards the mortgage repayments for the next 4 years until 1997 when the wife moved back to the E home, in circumstances to be discussed shortly, and the D unit was rented.  The wife’s case is that the D property was always intended to be her property, he never paid any of the mortgage instalments, and nor did he make any other financial contribution to the property. 

22. There are no documents to shed light on one position or the other.  The husband readily agreed he had signed bank documents related to the financial arrangements, but it is not improbable or inherently implausible that he would not have noticed that only the wife’s name was used in them - other financial transactions such as shares and the like had been left within her domain in the past.  As he put it in paragraph 11 of his affidavit [exhibit 11] because of the long hours he was working he left all the paper work to his wife in relation to the business and the purchase of the D unit.  It can also be observed that there was no quid pro quo in his favour to recognise that their assets were being used [and on his case money directly applied] solely for the wife’s benefit as she contends was the case.  Nor was there any distribution between them of any of their property at that point [apart from half the cash in the safe] or for some years to come. The husband’s evidence about what the arrangement was is accepted. 

23. Between the time of purchase and her return to the E home in 1997, the wife undertook renovations to the D unit which included some work on the bathroom, a dressing room was built, an alarm system installed, floors sanded and French doors installed.  She estimates the cost to have been between $10,000 and $12,000.  The proposition having been put to her in cross-examination that the funds came from the business, she denied it and it was not pursued further.  It is unlikely she had all that much left over from her weekly drawings after contributing to the mortgage instalments and paying the rates and so on as well as her living expenses, but she did have her share of the cash taken from the safe.  It is accepted, therefore, that she did pay for the renovations from funds she had available. 

24. After she returned to the E home the D property was rented.  There is no indication what was done with the rent, but as this is the time the husband ceased paying the $250 per week it is inferred the rent was put towards the mortgage repayments and other costs related to the property. 

25. Her return to the home was not a reconciliation; they lived separately and apart for the six months or so until the end of the year when the home was sold.  What was behind the move is contentious.  The wife attributes her return to the need for the house to be cleaned up and prepared for sale since it was in a ‘filthy and terrible state’ while the husband had lived there alone. The husband, on the other hand, says she asked if she could return because she was scared of staying at the D unit where she believed there had been an intruder, possibly her ex-boyfriend, which he elaborated.  The wife dismisses this, she denies having any concerns about her security and counters by pointing to the alarm system installed at the unit.  However, the husband’s account is not only the more reliable but also plausible.  His description of what occurred, including what he said about the footprint on the wall, was convincing in its detail and nothing about his evidence on the point gave the impression of being a concoction.  Moreover, it is apparent their relations during the time she lived back at the home were cordial at the very least – the wife arranged a 50^th birthday party for him – and that seems unlikely to have been so if she had the attitude then that her return was necessary to clean up the filth he had created in the house. 

26. As I find, her return to the E property had nothing to do with the state of the home.  Rather, the husband had kept in a clean and tidy state as he maintains, he had it well presented for sale by auction at Easter of that year and when it did not sell at auction it was presented to potential purchasers thereafter in a clean and tidy state.  The wife did contribute to the presentation of the property for sale during those months and it is accepted she arranged for the back fence to be removed and replaced and a new carport to be erected. 

27. In December 1997 the E property was sold for $815,000.  The sale proceeds were distributed by agreement equally between them; they each received in the order of just under $400,000. 

28. Shortly thereafter, in January 1998, the wife purchased a unit in R for $440,000.  The total cost taking account of stamp duty and so on was $455,000.  Apart from the money she received from the E property sale, she says she had savings of $15,000 to put towards the purchase and she borrowed $40,000.  The property was rented. 

29. For his part, the husband moved to live at the C premises for a short time and in February 1998 he purchased a property in G for $455,000.  He borrowed $75,000 from a bank and the balance came from the E property sale proceeds he received. 

1. Having each acquired a home with their share of the sale proceeds of their jointly owned home, there was the D unit which was rented, they had the C property from which the business operated, and they also had the business in which they both continued to work and draw the same amount.  But that changed the following year when the wife left the business.  For some time beforehand it seems there had been a downward spiral in their relations, evident from the fact they had for some time avoided crossing the path of the other by spending different times at the business.  Having achieved an apparently amicable separation in 1993 and divorce in October 1997, sharing the jointly owned home for some months before and after their divorce and agreeing to the distribution of its sale proceeds, the cause of the rift is not identified.  Whether or not the husband’s relationship with his current partner from 1998 played a part is speculative and of no practical consequence; the fact is their relationship had deteriorated by the time the wife left the business in 1999.  She did not then return to paid work of any kind; she lived on income derived from assets available to her and on her capital. 

2. The following year, 2000, the husband and his partner began living together, initially at his G property.  They remained there until 2002, the year the husband was diagnosed with Parkinson’s disease, and they moved then to live in his partner’s home at Y.  He rented the G home until he sold it last year. 

3. That same year, 2000, on the wife’s initiative they agreed the husband would buy out her share of the business for $25,000, being half of the agreed value.  On payment of the agreed amount she transferred to him her share in the company and resigned as a director.  At the time she also received a transfer of the Range Rover motor vehicle which she estimates to have been worth between $10,000 and $15,000. 

4. In November 2000 she borrowed $275,000 from a bank on the security of her R property to purchase a property in W for $260,000 [exhibit 7]; hence the newly acquired property was unencumbered. 

5. The following year, 2001, they agreed the husband would acquire her interest in the C property.  In May 2001 he paid her $165,000, being one half of the agreed value and he paid costs of around $4,600 for stamp duty.  To make the payment he took out a bank loan on the security of his property in G.  That same year he renovated the C property at an estimated cost of $50,000, which includes his estimate of labour by him and by his employees in the business.  He also supervised the work.  The upstairs part of the building was turned into a self contained flat: a kitchen was installed, the bathroom renovated, cupboards were built, there was electrical re-wiring and painting was done.  The downstairs area was re-carpeted, an air conditioner was installed, there was painting and re-wiring done.  The roof was replaced, rear fencing erected, and the driveway was concreted and sealed. 

6. From the funds she received for her interest in the business and the C property, the wife paid $101,600 approximately to discharge the mortgage over the D property and after paying a credit card debt she was left with about $58,000. 

7. In 2002 it was agreed that the wife’s superannuation entitlement would be rolled out of the self managed fund into a fund of her choosing.  Her entitlement as at 30 June 2002 amounted to $254,102 and this was taken via a cash distribution rolled into her own fund, the Galway Superannuation Fund.  The husband’s member’s entitlement was represented by shares and the accounts as at 30 June 2002 reflect a higher entitlement of $314,271 [exhibit 12].  He attributes the disparity in their entitlements to the wife’s retirement from the business in 1999 from which point no further superannuation contributions were made on her behalf whereas he had kept working and did contribute to superannuation.  The wife has not made any contributions to her fund since the 2002 rollover and she has withdrawn about $46,000 to pay towards the legal costs she has incurred for these proceedings. 

8. The wife agrees what they did with the superannuation was with her agreement, but she is aggrieved now that in rolling out her entitlement she received the cash invested while the husband retained the shares.  She says this was the result of what she now regards as incorrect professional advice to the effect that the shares had to be retained in the fund.  She says the shares held by the fund were a good investment.  She agrees she knew what they were since she was the one making the decisions about the shares.  To the proposition that she could have used the cash to purchase shares similar to those in the fund portfolio she says she was in poor health, she was unable to concentrate, and she had lost touch with those whom she had dealt with in share transactions at an earlier time.  As Dr L’s evidence reflects, she did have some health issues in 2002, yet she was bound to concede that during the latter part of 2002, when she had the opportunity to re-invest the cash in shares, she sold her W property, she sold her R property, she purchased her property at T, and she moved to live at T.  Her explanation that her health prevented her converting the cash to shares when she was able to make so many other important decisions and act on them during this period impresses as a reconstruction long after the event. 

9. Taking up these 2002 events, in September and October of that year the wife sold her R property for $565,000 and her W property for $369,000 and in December she purchased a residence in T for $385,000.  She used the net proceeds of sale from the two first mentioned properties and she has lived there since.  It now has an agreed value of $310,000 which is considerably less than she paid for it five year ago.  But she expressed an optimistic outlook for the longer term that the drop in value will turn around, calling it a ‘progressive little area’ which will ‘take off again’ and the operative buyers market is a ‘little hiccup’.  The D property remains rented. 

10. In her last affidavit [paragraph 2] the wife said that after the sale of the R and W properties and the purchase of T home she had approximately $203,000 left.  She added that she had spent that money on ‘improvements and renovations to her home, purchasing furniture and appliances, building a pergola and other improvements’ and she had made some charitable donations.  It had also gone on living expenses and legal fees.  She set out some of the outlays identified in Schedule B to her affidavit which come to a total of $151,980. 

11. She was taken to a source and application of funds exercise from the time she received half share of the business and the C property.  It was put to her, and she agreed, that she had these funds over time:

    Balance available from half share of
    C property and business after payment of mortgage           58,000
    Net proceeds sale W  351,000
    Net proceeds sale R    303,000
    Total [approx.]:  712,000
    Less
    Purchase price and cost of purchase T property               397,000
    Balance  315,000

12. As for the application of those funds, the answer lies in part in Schedule B which accounts for almost $152,000 and includes the purchase of furniture and improvements to the home at T.  After that is deducted there is $163,000 to account for.  A further $36,000 has been paid in legal fees and $8,000 is held by her solicitors in their trust account [exhibit 3], leaving a balance of $119,000.  Her evidence is that the balance available has been spent on living expenses which she agreed includes three holidays she had taken to Brisbane. 

13. In June 2007 the husband sold the G property for $735,000 and after discharge of the mortgage and paying the costs of sale he received $584,441.  Of this he paid $500,000 into his superannuation fund and the remaining $84,000 approximately he deposited to his bank account.  At the same time, in June 2007, he sold the business for $60,000.  The purchaser rented the downstairs proportion of the property [the shop] for $350 per week on a short term lease.  The sale agreement obliged the husband to work for the new owner without pay for sixty days.  He has not been in paid work since. 

14. The evidence of the state of the parties’ health has some bearing on the history up to the present time as well as the evaluation of the future under relevant s 75(2) factors and it will be convenient to turn to that now. 

15. As already mentioned, in 2002 the husband was diagnosed with Parkinson’s disease.  Since then he has been under medical specialist care and regularly attended clinics, initially at … and later at C.  His symptoms have progressively worsened and he is unable to do the technical work requiring fine motor skills previously undertaken in the business.  He describes a reduced capacity to cope with stresses and says he suffers from anxiety and fatigue which also affects his speech.  He says he is not employable and he will not be seeking employment in the future.  None of this is put in contest. 

16. The unchallenged evidence of his treating neurologist, Dr H, supports it.  In his report of 20 June 2007 he gave an account of the history, including the detection of symptoms of tremor in his hand and leg initially in 1998 and diagnosis in 2002, as well as subsequent treatment.  Seen by Dr H in October 2006, the husband reported increasing difficulty with manual tasks and by February 2007 he was trying to sell his business.  He noted Parkinson’s to be characterised by a slowing of physical activities, particularly manual dexterity, further compromised by tremor and increased limb rigidity.  He noted fatigue to be a common complaint and anxiety has a particularly potent adverse impact.  He noted the husband, at that time, to be developing motor fluctuations and commented that his declining speech and social skills are other relevant factors.  He said he is no longer realistically employable.  As for prognosis, he noted Parkinson’s to be a neurodegenerative disorder that is inexorably progressive though the rate of deterioration is quite variable.  Cognitive deterioration is a common feature and the appearance of anxiety and some depression noted in 2002 is a relatively poor marker in the husband and suggests this will impact adversely on his ability to look after himself and manage the disease.  He is already on maximum dose of one medication and average dose of the other.  A minority of patients are candidates for surgical intervention but this is expensive.  He concluded his report by noting that as the husband’s ability to care for himself slowly declines, he will likely have an increased requirement for appropriate housing and assistance with activities of daily living and many older people with Parkinson’s will require admission to hostel or nursing home placement earlier than would otherwise have been anticipated. 

17. Turning to the evidence of the wife’s health, she says in her August 2007 affidavit that she suffered from a thyroid problem since before the separation and she is still undergoing treatment for it.  She attached to the affidavit a letter from Dr L whom she identified as her treating endocrinologist.  The letter is dated 2 August 2007 and addressed ‘to whom it may concern’.  It certifies that the wife is suffering from a low thyroid condition confirmed on blood tests and clinical measurement.  He notes she is currently under new management and the protocol will take another 12 months to settle in.  In the meantime she is not able to return to employment until further notice.  It concludes by setting out current medications. 

18. This was followed up by an affidavit from Dr L attaching a further letter dated 18 March 2008 addressed to the wife’s solicitor providing more information.  In it he notes the wife first consulted him in February 2007.  He reports her relating that her thyroid problems were first investigated when she was aged 54 years.  It can be interpolated here that as she was born in March 1948, this would place initial investigation in 2002 which compels contrast with her statement in her affidavit that she suffered from a thyroid problem since before separation which was in 1993.  In any event, she reported to Dr L presenting to doctors with weight loss and high thyroid activity, treatment with suppressive therapy was followed by thyroid hormone supplementation, and she next presented to the Royal North Shore Hospital for her first radioactive iodine therapy aged 55 years [ie 2003] and a second treatment aged 57 [2005], all the time remaining on thyroid hormone replacement.  She attended a number of practitioners with various doses of thyroid hormones and supplements complaining of digestive problems, anxiety, panic attacks, hair loss, dry skin and minimal tolerance to exercise.  Despite two lots of radioactive iodine designed to eliminate thyroid tissues, he says she still has a sizeable thyroid gland as of 2007.  After canvassing more general matters related to the condition and its treatment, his summary of her fluctuating thyroid condition is that she was born with the autoimmune thyroid disease known as Hashimoto’s Disease, adding that under severe stress this condition can manifest itself as high thyroid condition followed usually by extended periods of low thyroid function requiring hormone supplementation.  Besides her thyroid condition, she also has exocrine pancreatic insufficiency, a known association with thyroid disease.  He concludes by saying

    ‘[The wife] has a genetically inheritable condition called Hashimoto’s Disease.  Her management has been less than ideal and her response to various thyroid hormones are (sic) extremely delicate.  She also suffers from pancreatic insufficiency which reduces her ability (sic) digest food, nourish her body and recover from physical exercise.  Recovery from her condition is likely to be slow and progressive and she is not safe to return to the workforce.’

19. It is not suggested in the case put by either party that the other has the capacity for future employment and that is accepted as appropriate having regard to considerations related to current health, future prognosis and age. 

20. The husband’s income, set out in his recent financial statement, is $560 per week from the rent of the C premises and interest on deposits at bank amounting to $10 per week.  His partner had recently undertaken some part time work earning $48 per week.  In her recent financial statement the wife put her income at $365 per week, being $340 per week from the D property and the remainder coming from dividends and bank interest. 

Evaluation of contributions

1. In this case the assessment of contributions is somewhat complicated by reason of the long period that has elapsed since separation, the subsequent history and the informal property distributions that occurred between 1999 and 2002.  Before coming to that more directly, it seems to me two areas attract some preliminary comment. 

2. The first relates to the approach to be taken to the past informal financial distributions on a 50/50 basis.  Earlier cases of Burgoyne (1978) FLC 90-467, Candlish and Pratt (1980) FLC 90-819, and Dupont (no 3) (1981) FLC 91-103 remain good law, confirmed by the more recent decision of the Full Court in Woodland and Todd (2005) FLC 93-217 [per Finn, May, O’Reilly JJ] where the facts involved a relatively long separation before the hearing and earlier informal agreement distributing property between the parties. The principles are captured in these passages from the joint judgment:

   ‘38. Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the Court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made.  There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force.  The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing. 
   39. In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment.  A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time.  However, and perhaps more significantly, it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.’ 

3. The second matter is the approach more suited to the evaluation of contributions in circumstances such as those presented in this case; that is to say, whether it should be by reference to their individual assets (asset by asset) or total assets (global) or via some other approach.  The ultimate authority on the topic is the High Court decision of Norbis and Norbis (1986) 161 CLR 513, (1986) FLC 91-712 which includes these passages from the joint judgment of Mason and Deane JJ at p. 75,168:

   ‘Although it is natural to assess financial contributions under sec. 79(4) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of the parties’ property or to some part of that property.  For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis.  Which of the two approaches is the more convenient will depend on the circumstances of the particular case.  However, there is much to be said for the view that in most cases the global approach is the more convenient.  It follows that the Full Court is quite entitled to prescribe that approach as a guideline in order to promote uniformity of approach within the Court.  In saying this we are not to be understood as denying the legitimacy of the trial Judge’s ascertainment in the first instance of the financial contributions of the parties by reference to particular assets.  It is difficult to conceive how the trial Judge in many cases could otherwise take account of such contributions as he is required to by sec. 79(4)(a) of the Act. 

   ….

   Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases.  The Family Court has rightly criticised the practice of giving over-zealous attention to the ascertainment of the parties’ contributions, and we take this opportunity of expressing our unqualified agreement with that criticism, noting at the same time that the ascertainment of the parties’ financial contributions necessarily entails reference to particular assets in the manner already indicated.

   It has not been suggested that there is any fundamental difference between the two competing approaches which we have considered, in the sense that one will yield more just and equitable entitlements than the other.  The general preference which has been expressed for the global approach is not by reason of any notion that it is the only approach authorised by the Act, but by reason of considerations of convenience.  Accordingly, quite apart from the fact that its status as a prescribed approach is that of a guideline and not that of a principle of law, the applications of the asset-by-asset approach does not of itself amount to an error of law.

1. Since then decisions of the Full Court have discussed the more appropriate approach in different circumstances though not detracting from the legitimacy of the trial judge assessing contributions through one approach or the other.  Two examples: Bonnici and Bonnici (1992) FLC 92-272 discussed the impact of substantial assets (an inheritance) coming into the husband’s hands shortly prior to the end of the marriage and at p. 79,020 saw considerably difficulties in the global approach taken by the trial judge, though nothing wrong with it had it been explained, but the task would have been simpler if approached on an asset by asset basis; and McMahon and McMahon (1995) FLC 92-606 considered the approach to be taken in a six year relationship where the parties [who had no children] had completely separated their financial affairs two years prior to separation and at p. 82,043 said the particular circumstances made an asset by asset approach preferable to a global approach, notwithstanding the remarks of Mason and Deane JJ in Norbis that in most cases the global approach is more convenient. 

2. More recently Zalewski (2005) FLC 93-241 involved a long separation prior to the hearing as well as an earlier informal distribution of assets. Amongst other things, in her judgment Finn J said of the trial judge’s assessment of contributions:

   ‘41. Although in assessing the parties’ contributions, his Honour did distinguish between the parties’ pre-separation and post-separation contributions, he adopted what, in my view, was essentially a global approach to the parties’ contributions to their property.  He was certainly entitled to do this and I do not understand it to have been suggested that his approach led to any error on his part. 

   42. It is my impression that there are currently coming before the Court a significant number of cases in which the period between the parties’ separation and the hearing of their property settlement proceedings is substantial.  The delay seems often to arise, at least in part, because the parties have initially reached some form of informal (or even formal) settlement from which one party later resiles (often for good reason).  In these long separation periods, the parties will usually have built up substantial new assets or incurred substantial liabilities.  In an endeavour to satisfy the parties that any orders which are eventually made by the Court in these somewhat complicated cases are just and equitable, it can, in my view, be very useful for Judges to assess contributions to property on an asset by asset basis.

   43. In so saying I do not intend any criticism of the trial Judge in this case.  Indeed, a relatively clear picture of the history of the parties’ assets is presented in his reasons for judgment.  I have made the comment which I have, only because of the opportunity to do so which this case provides, involving as it does, a long separation period, an earlier informal agreement, and the development of significant assets by one party post-separation.’

3. In that same case, it is apparent from their joint judgment that the majority, Coleman and Boland JJ, saw no error in the trial judge’s approach [global] or evaluation of contributions. 

4. Of course, whichever approach is used, the objective is to arrive at a just and equitable outcome.  In this case I have set out the parties’ current net assets in categories of assets, being what they each own and control, including their superannuation entitlements, and another for the United Kingdom property which has recently been sold.  I have done so having regard to the long period since their separation, the later distribution of most of their assets, and the many years they have made financial decisions independently of the other. 

5. I see the evaluation of the parties’ contributions best undertaken at three different stages: (i) when they separated, (ii) when they agreed to informal settlements between 1997 and 2002, and (iii) now at the time of hearing. 

6. Their relationship as partners subsisted for about 16 years between 1977 and 1993, their marriage having taken place in 1985 half way during their time together.  There was some minimal disparity in their initial assets, of no importance now, but the husband did bring to the relationship his skills and experience in the area they were to found their business shortly after they began living together.  Over those 16 years each can be taken to have worked hard, for most of the time in the business itself, and they clearly prospered as a result.  They bought and sold properties at P and J for gain and put the sale proceeds into the home they acquired at E five years before their separation.  They also acquired the freehold premises at C from which they conducted the business and the year prior to separation they established a self managed superannuation fund.  The wife took the running on investments in shares and bullion, she had responsibilities on the home front, and she gave some assistance with renovations to property they acquired.  But this activity occurred when the husband was working long hours in the business and also contributing on other fronts, such as assisting with chores around the home, giving his support to their investments, and taking the greater role with renovations.  Considered overall, there is nothing in the history of these earlier years that would tip the balance in one direction or the other to cause their contributions to be seen as anything other than approximating equality. 

7. Of course what they also did during this period, not mentioned in what has just been said, was to advance monies to the husband’s mother but that can be put to one side for the moment and I shall come to it later. 

8. It is now 15 years or so since they separated, a period not much less than the time they spent together.  Looking first to the period until they arrived at financial settlements, on separation they each took half of the available cash and they both continued to work in the business for another six years until 1999.  At the point of their separation the D unit was acquired and the wife lived there for the next 4 ½ years or thereabouts until mid-1997.  While she occupied that property, the husband occupied the E home and he paid the outgoings related to it.  They each contributed to the debt taken on to address their situation as it had evolved: the husband by guaranteeing the bank loan and contributing directly financially to the loan repayments; the wife by contributing directly financially to the loan repayments and the other charges related to ownership as well as contributing some of her money towards renovations; and both provided the C property as further security to the bank.  As the rent from the D property appears to have been paid towards the mortgage repayments, and nothing has been said about the costs of the property after it was rented, it can be taken that the property from that point was self sufficient.  During the six months or so they both lived in the E home they were on agreeable terms, they marketed the home for sale [at a considerable gain on what they had paid for it in nearly 10 years earlier], and they both continued to work in the business. 

9. Apart from the cash at separation, the equal split of the sale proceeds of their home after it was sold at the end of 1997 and after they had been divorced for a couple of months was the first split of capital.  They both continued to operate the business, they still held the C property from which it operated, and the D property was rented.  With the money they received and a relatively small bank loan they each acquired their own home for around the same price: the wife in R and the husband in G.  There is nothing in any of the history to this point that would tip the scales away from equality of contribution. 

10. The developments to follow were the wife’s exit from the business in 1999, her sale of her interest in the business to the husband in 2000, her sale of her interest in the C property to him in 2001, and the ‘split’ of their superannuation entitlements in 2002. 

11. Not having sought paid work after 1999, the wife made no further contributions to her superannuation before she received her entitlement three years later.  She did not do any of the repair work undertaken by the business, but she obviously had a deal of other skills developed over the previous 22 years they had operated it.  Dr L’s evidence suggests she first sought attention for thyroid problems in 2002 and so her health does not explain why she did not seek employment after she left the business in 1999.  Putting that aside, she obviously lived off the capital which was available to her in 1999 – there is no evidence of what savings she had when she exited the business – and from what she was paid for her interests in 2000 and 2001.  Having seemingly divided up all of their assets – apart from their interest in the unit in the United Kingdom – she used the capital received partly to discharge the mortgage on the D property, paying out over $101,000.  At that point she plainly saw herself as entitled to the D property registered in her name and she has acted accordingly since.  What it was worth at the time is not the subject of evidence – it now has an agreed value of $390,000 – but clearly the mortgage had been reduced by around $80,000 when she discharged it.  It is reasonable in the circumstances to infer that there was some equity in it by this stage and it is not unlikely the equity was at least $80,000.  Otherwise she used the funds as she determined.  During those three years the husband continued to work by operating the business he had acquired in full and so his contributions to superannuation grew, reflected in the disparity of the ‘split’ in 2002.  That was a disparity of around $62,000. 

12. The disparity in the superannuation split favouring the husband and the equity in the D property being taken by the wife, it is my assessment what they did with their assets between 1999 and 2002 was a just and equitable distribution of their assets – again putting aside their arrangements with the husband’s mother.  It reflected their contributions to that point and what is known of their circumstances relevant to any s 75(2) adjustment.  On the latter, As Dr H’s evidence shows, the husband was trying to get out of the business following the diagnosis of Parkinson’s disease and though only aged 55 years, his future would be determined by the course of his illness and at some point he would be relying on his capital for his future needs rather than generating further income from work.  For her part, the wife was at the point of seeking medical attention for her thyroid condition, as noted by Dr L, and though she was only 54 years of age it is reasonable from that point to see her as having an impaired capacity to generate income from work and therefore would be reliant on capital to provide for her needs. 

13. As for the period between 2002 and now, the husband initially put work and money into improving the C property after he bought the wife’s share.  It now has an agreed value of $600,000 and it is the sole source of his income apart from some small bank interest.  Last year he sold the business for $60,000 and he also sold his home at G that he had acquired nine years earlier with his share of the sale proceeds from the E property and he did so at a price reflecting a considerable gain [$735,000] from which he netted over $584,000.  After investing $500,000 into his superannuation he deposited the balance to his bank account but the latter has since been eroded, no doubt by reason of legal costs he has paid.  

14. The wife, on the other hand, has undertaken a series of transactions with the funds available to her and her situation has not developed in the same upward direction as the husband’s.  She sold the R property she had acquired with her half share of the sale proceeds from the E property at a gain back towards the end of 2002 when and she also sold the W property she had bought only two years previously, also at a gain.  She bought her current residence at T and spent some money improving it, but her position has declined since she realised the R and W properties, partly because what she paid for her home at T is more than its current value and partly because she has used the balance of funds available to her for purposes other than being invested in property of some kind such as savings, shares or superannuation. 

15. Examined from this standpoint, the parties should be seen as having dealt independently with what they each received up to 2002 in a manner that matched lifestyle or other choices without reference to the other.  Neither could be said to have made a contribution to these decisions or to the property acquired by the other as a result.  Therefore I am satisfied that the property they each now own, which flows from those independent decisions, reflects their contributions to the present time save for considerations related to their advances to the husband’s mother which I shall deal with now. 

16. Having advanced 7,400 pounds in 1985 for the purpose of buying the United Kingdom unit which was to come to the husband on his mother’s death, had the property not been transferred to him in 1998 he would have become entitled to it – and the wife to her share – late last year when his mother passed away. Having since sold it and invested the proceeds in an interest bearing deposit, what has been yielded as the fruit of the arrangement is the sum set out in Category C. In another forum the situation would be relatively straightforward, but here there is an obligation to assess contributions of the kind referred to in s 79(4) and that gives rise to some complications.

17. While the sale at 104,000 pounds in 2007 represents a sound capital gain on an investment of 7,400 pounds in 1985 in anyone’s language, had they invested the money in real estate in more usual circumstances, here or in the United Kingdom, it would be reasonable to have expected the investment to have generated some return over the years.  As it is, while they made a gain on the capital they invested, they did not get a return because the unit was occupied by the husband’s mother as her home until 2001 and thereafter the rent was applied for her benefit until her death.  Not to be forgotten in considering the absence of a return, the money they provided bought the unit for 40% of its value and not full value. 

18. As far as the parties’ contributions are concerned, the lack of return on money they invested, whatever it might have been, weighs in the wife’s favour since the property was acquired to benefit the husband’s mother during her lifetime and did benefit her until she passed away late last year.  Also to be weighed in her favour are the advances they made to the husband’s mother in 1986 [for the British Gas shares] and in 1987 [for her husband’s funeral] of at least 600 pounds and possibly more.  However, a counter-balancing consideration is the fact that the husband’s mother was entitled to a 60% discount on its value, quantified at 11,100 pounds in 1985, yet full value has now been realised and the consequent benefit should be put on the husband’s side of the scales. 

19. Assessment of their contributions, these general considerations balanced one against the other, does not and cannot lend itself to a mathematical outcome, which the Full Court has cautioned against many times in any event.  But in my view their contributions would be recognised by an equal distribution now of the net amount available after allowing for payment of capital gains tax.

20. To summarise, referable to the assets in categories A and B set out earlier, I make these findings:

    ·their contributions to the date of their separation approximate equality;

    ·their contributions to the date of distribution of the sale proceeds of their home in 1997 approximate equality;

    ·their contributions to the date of the wife’s departure from the business in 1999 approximate equality;

    ·their contributions to the date they informally brought about division of their interests in the business, the C property, the wife paying out the D property from what she received for her interests and thereafter dealing with that property as her own, and their ‘split’ of their superannuation entitlements approximate equality;

    ·what they did up to 2002 represented a just and equitable distribution of their property having regard to contributions and any relevant s 75(2) factors so far as they evidence reveals them to have been at the time;

    ·neither has made any contributions to the property each has acquired since the distribution of 2002, by reason of decisions made independently of the other about what they received. 

21. Also by way of summary, I find they contributed equally to what is available after payment of capital gains tax from the investment in the United Kingdom unit. 

22. Those findings would entitle the wife to be paid the sum of $106,518 from the funds held by the husband in the Lloyds bank account.  When added to her current assets of $1,015,927, she would retain assets worth in total $1,122,445.  The husband would retain his current assets worth $1,809,675 and after receiving his half share of the net funds invested he would have total assets worth $1,916,193. 

Section 75(2) factors

1. It remains to consider whether any adjustment should be made to the contributions assessment by reason of any relevant factors set out in s 75(2) which in this case are few. 

2. At the age of 60 years and suffering from Parkinson’s disease, the husband will not return to paid work and he will have to look to his capital for his future needs.  Also aged 60 years, the wife has thyroid problems for which she receives treatment but she must also be seen as not returning to the workforce in the future and also reliant on her capital to meet her future needs.  Each has superannuation entitlement, but given their ages and the superannuation assets being invested in self managed funds there has been no need to separate these entitlements from other assets or see their availability differently.  Neither has any responsibility to support any other person. 

3. Apart from these considerations, which favour neither party, there are two other factors of relevance: one is the fact that the husband is living with a partner in her home and thus has whatever support that provides; the other is the fact that the husband has assets worth about $800,000 more than the wife by reason of the contribution assessment [see paragraphs (b), (m) and/or (n)].  In the normal run of case these two factors might be thought to warrant an adjustment in the wife’s favour, but this is not the normal run of case.  The ultimate objective is to arrive at a just and equitable outcome and in the circumstances of this case it is my view that would not be achieved by making any adjustment to the contributions assessment.  The factors supporting this relate to the effluxion of time, the independence of decision making about their distributed assets over many years, and examination of what each now has available to meet their likely future needs [see paragraph (o)].  More particularly:

   (i)They are where they are now after a separation 15 years ago, a divorce 10 ½ years ago, and it is 6 years since they distributed the last of the assets then available. 

   (ii)Throughout the series of informal arrangements, they each made decisions independently of the other about what they would do with what they each received. 

   (iii)As it happens, since his diagnosis the husband and his partner have moved to live in her home at Y and he has sold his home in G.  Most of what he received from the sale, half a million dollars, was invested in his superannuation fund which is now his major asset.  Otherwise he retains one investment property, C property which is CGT affected if sold and provides him with his income, and otherwise he has some relatively modest savings, shares, and chattels. 

   (iv)Not having a partner who is able to accommodate her, the wife lives in the unencumbered home she acquired and improved and it is not reflected in her superannuation entitlement.  Otherwise she also retains one investment property, D property which is CGT affected if sold and provides her with her income, and she also has some relatively modest shares and chattels. 

   (v)To what they now have they will each receive half of the cash (net) invested from the sale of the United Kingdom unit. 

1. I am satisfied orders to the effect indicated will bring about a just and equitable outcome. 

Form of orders

1. The orders necessary are uncomplicated.  They will provide for each to retain what they now have and for the husband to pay (say) $106,500 to the wife which can be done on or before a month from the date of the orders. 

I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date: