GARRICK & GARRICK

[2015] FCCA 1108

FEDERAL CIRCUIT COURT OF AUSTRALIA

GARRICK & GARRICK [2015] FCCA 1108

Catchwords:
FAMILY LAW – Parenting proceedings – child aged 14 years at time of hearing – living predominately with father – spending irregular time with mother – mother seeking time during school terms each alternate weekend from after school on the Thursday until back to school on the Monday morning, and the intervening Monday overnight and half school holidays – relationship between parents extremely poor with very little communication – consideration of “meaningful relationship” – weight to be attached to child’s wishes – alignment of child with father – consequences for child of poor relationship between parents – best interests of child.

FAMILY LAW – Alteration of property interests – a significant pool of assets – relationship of 11 years – both parties worked during the relationship – child of the wife by a previous relationship formed part of household for whole relationship – significant dispute as to value of some of the assets – dispute as to initial contributions and weight to be attributed – section 75(2) factors.

Legislation:
Family Law Act1975 (Cth) – Part VII and Part VIII

Cases cited:
Goode & Goode [2006] Fam CA 1346; (2006) 36 Fam LR 422; FLC 93-286;
Hickey & Hickey [2003] Fam CA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355
Stanford & Stanford [2012] HCA 52; (2012) 293 ALR 70 (2013) 47 FamLR 481;
In the Marriage of Clauson (1995) 18 Fam LR 693
In the Marriage of Bevan (1993) 19 Fam LR 35; (1995) FLC 92-600
In the Marriage of Ferraro (1992) 16 Fam LR 1
AJO v GRO [2005] FamCA 195; (2005) FLC 93-218; (2005) 33 Fam LR 134.
Norbis [1986] 10 Fam LR 819; FLC 91-712

Applicant: MR GARRICK

Respondent:  MS GARRICK

File Number: NCC 572 of 2012

Judgment of: Judge Coakes

Hearing dates:

10, 11 and 12 June 2014

20 October 2014
5, 6 and 7 November 2014

Date of Last Submission: 3 December 2014

Delivered at: Newcastle

Delivered on: 13 May 2015

REPRESENTATION

Counsel for the Applicant: Mr Cook

Solicitors for the Applicant: Barraclough Jones & Associates

Counsel for the Respondent: Mr Tregilgas

Solicitors for the Respondent:

Counsel for the Independent Children’s Lawyer:

Solicitors for the Independent Children’s Lawyer:

Paton Hooke Lawyers

Mr Mooney

David Winder
Winder Lawyers

ORDERS

Parenting Orders

(1)All previous parenting Orders are discharged;

(2)No later than 6.00pm Wednesday 20 May 2015, the father is to make arrangements for X to meet with the Independent Children’s Lawyer face to face and the Independent Children’s Lawyer and their counsel, Mr Mooney if so instructed, are to explain to X in the absence of the father, the meaning of the Orders as they affect him, and in particular in relation to those matters in respect of which he has a choice as to spending time with his mother and communicating with her and those matters in respect of which he does not have a choice and further, that X be told of the new possibility he has of reviving his relationship with E and is free to contact her when he is ready to do so and that X be told of the particulars of the period of imprisonment of Mr N born (omitted) 1967 and the reason for such imprisonment and the particulars of his previous convictions and that he is disqualified from holding or obtaining a driving license and driving, currently for a period of five (5) years and that such conviction arose from driving whilst his driving license was suspended, the day following such suspension;

(3)The child X born (omitted) 2000 (“X”) live with the father;

(4)The father have sole parental responsibility for X;

(5)X is to spend time and communicate with the mother at such times as are agreed between the parents and in accordance with X’s wishes, subject to Order 6 below;

(6)X spend time with the mother as follows:

(a)During 2015 and 2016, for a period of five (5) days and four (4) nights during the school holiday period applicable at the school he attends at the end of the second term (i.e. the June/July school holidays) and in accordance with X’s wishes as to which days and by agreement between the parents, but in the absence of X expressing a wish or the parents agreeing such time is to occur from 10.00am on the first Thursday of such holiday period and is to conclude at 6.00pm on the following Monday;

(b)During 2015 and 2016, for a period of eight (8) days during the school holidays at the end of each fourth term applicable at the school attended by X and as nominated by X and agreed by his parents, but in the absence of any agreement, defined as in an odd numbered year commencing at 10.00am on 24 December and concluding at 8.00pm on 1 January, and in an even numbered year to commence at 10.00am on 3 January of such holiday period and to conclude at 8.00pm on 11 January, but nothing in this order precludes X from spending any number of consecutive days broken into blocks of two or three or four or five days together totalling 8 days as nominated by him and agreed with his parents;

(c)At such other times and places and for such periods as X arranges with his mother;

(d)By telephone on every fourth Wednesday at 6.30pm commencing 27 May 2015 by X telephoning the mother’s mobile telephone number and by the mother ensuring she is available to receive such telephone call, that her mobile telephone service is not switched to a message bank or answering service, that the telephone is not otherwise engaged or being used and is situated in a position to receive telephone calls;

(7)Nothing in these Orders precludes X from spending any additional time with his mother if he so wishes or telephoning her on other occasions and in either case, the father is to facilitate such additional time and is to facilitate any telephone call X wishes to make;

(8)Except for those occasions when implementation is to take place by agreement between the parents at X’s school, implementation at all other times is to take place at the (omitted) Service Centre on the western side of the (omitted) (just south of (omitted)) and is to be effected by the parent with whom X is then living or spending time or his or her nominee known to X, delivering X to the other parent or the nominee of that parent also known to X;

(9)The Orders referred to above are varied or suspended as the case may be to ensure that:

(a)X spends the Mother’s Day weekend with his mother from 6.00pm on the Saturday of such weekend until 8.00pm on Mother’s Day;

(b)X spends the Father’s Day weekend with the father for the whole of such weekend from the conclusion of school on the Friday until his return to school on the Monday morning;

(10)The mother is restrained from:

(a)Bringing X into contact with or permitting him to be or remain in the presence of Mr N born (omitted) 1967 if Mr N has consumed or is consuming alcohol during such time or has consumed prescribed medication as a consequence of which his parenting ability is impaired;

(b)Permitting or causing X to be carried in a motor vehicle driven by Mr N (born (omitted) 1967) at any time whatsoever;

(11)Each parent is restrained from:

(a)Physically punishing X by any means including but not limited to smacking, slapping, pushing, grabbing, holding, using a slipper, spoon or any other instrument, and each parent is further restrained from either causing or permitting any other person from imposing any form of physical punishment upon X;

(b)Denigrating the other parent and members of the other parent’s families in the presence or hearing of X and by any means including text message or any other electronic means including the making of rude comments, making insulting comments, swearing at, shouting at and making any obscene gesture, or behaving in such a way that it is intended X will have a poor opinion of the other parent or think ill of the other parent, and each parent is further restrained from causing or permitting any other person from engaging in such behaviour in the presence or hearing of X;

(c)Discussing these proceedings with X other than to advise him of the effect of these Orders and by way of brief description only;

(d)Showing X any affidavit or application or Family Report or any other report including the Reasons for Judgment to X;

(12)Each parent is to notify the other parent urgently by the best available means including but not limited to telephone, text message, e-mail or instructing another person to convey such notification, in the event of any of the following occurring:

(a)X being seriously injured or falling seriously ill;

(b)X requiring urgent medical treatment from a doctor or ambulance crew;

(c)X being involved in an accident or being admitted to hospital;

(d)X requiring time off school due to an inability to attend school;

(13)The father is to keep the mother informed as to all medical, dental and other related appointments being made for X and is to notify the mother within twenty four (24) hours of such appointment being made by text message;

(14)Each parent is at liberty to obtain all relevant medical records including dental and hospital records and to consult with medical and dental practitioners and any specialists in order to obtain any information he or she may require concerning X and service of a sealed copy of these Orders upon such medical practitioner, dentist, specialist or hospital is sufficient authority for that purpose;

(15)Each parent is at liberty to obtain (at their own expense), and the father is to authorise the Principal of the school attended by X from time to time to supply to the mother (at her expense) copies of school reports, notices to parents relating to pupils, school newsletters, invitations to sporting or social events or functions, notices of and invitations to any parent/teacher interviews, and any other notices directed to parents of pupils attending such school and service of a sealed copy of these Orders on the Principal of such school is sufficient authority for that purpose;

(16)Each parent is at liberty to attend any school function involving X including sporting and social events or functions, parent/teacher interviews and any other school event to which parents are normally invited by the school;

(17)The mother is at liberty to attend any (hobby omitted) event in which X is participating;

(18)Each parent is to provide the other parent particulars of any change of residential address, landline telephone, mobile telephone number, and if applicable, any email address and within twenty four (24) hours of such change occurring;

(19)That no later than 12 June 2015, the father is to forward to the mother by email, the calendar for the remainder of the (hobby omitted) in which X is eligible to take part for the remainder of the 2015 calendar year and that within fourteen (14) days of the publication in February of each calendar year of the (hobby omitted) for which X is eligible to take part, the father is to forward such calendar to the mother by email;

(20)Both parents are to consult with a Family Dispute Resolution Practitioner at a Family Relationship Centre or elsewhere or such other Family Consultant upon whom they may agree between them to assist in:

(a)Resolving any dispute between them as to the terms and operation of these Orders;

(b)Reaching agreement about any change to be made to these Orders arising from any change to the needs or circumstances of X or the parent in the event of any dispute or disagreement arises concerning such changes;

Alteration of Property Interests

(21)That the wife is declared to be solely entitled to the property situated at Property E, being the whole of the land  in Certificate of Title folio identifier (omitted) (“the Property E property”);

(22)That the wife be liable for and pay and indemnify and keep the husband indemnified against any and all personal liability of the wife in relation to the mortgage secured against the Property E property;

(23)That within sixty (60) days of the date of these Orders the husband pay to the wife the sum of $461,734.00;

(24)That upon the payment by the husband to the wife of the monies referred to in Order 23 above, the wife do all acts and things and sign all necessary documents so as to transfer to the husband all of her right, title and interest in real property at Property B, being the whole of the land comprised in Certificate of Title folio identifier (omitted) in the state of New South Wales;

(25)That in the event that the husband fails to pay the sum of $461,734.00 by the due date, then the parties are to take all necessary steps and execute all necessary documents to cause the property at Property B, (Property B) to be listed for sale by private treaty and sold at the best price reasonably obtainable with a real estate agent nominated by the wife and with the wife to instruct Paton Hooke Lawyers to act on the sale of such property;

(26)That pursuant to Section 80(1) of the Family Law Act 1975, the wife be appointed trustee for the sale of Property B;

(27)In the event that Property B fails to sell by private treaty within a period of three (3) calendar months from the date upon which it is listed for sale, it is to be listed for auction at the earliest possible date at a reserve price to be determined by the wife after consultation with the real estate agent engaged to conduct the auction and at a price recommended by such agent;

(28)That upon the sale of the Property B property the net proceeds are to be paid as follows:

(a)To the (omitted) Bank the amount secured by the (omitted) overdraft;

(b)Real estate agent’s commission and advertising expenses and legal expenses of the sale;

(c)Adjustments for municipal and water board rates;

(d)To the wife or as she shall otherwise direct in writing the sum of $461,734.00 with the husband to pay interest to the wife upon such amount which as at the expiration of sixty (60) days from the date of these Orders remains unpaid and to accrue only from the expiration of such period and calculated in accordance with Section 117B of the Family Law Act 1975 and Rule 17.03 of the Family Law Rules;

(e)The balance then remaining to the husband;

(29)That until such time as the payment pursuant to Order 23 has been made by the husband to the wife, Order 3 of the Consent Orders made on 3 August 2012 remains operative to the effect that the parties’ direct (business omitted) Pty Ltd to continue to pay to the wife the amount of $1500.00 per week as salary;

(30)That until such time as the husband complies with Order 23 above, the husband is restrained from dealing with his interest in Property B, whether by way of letting, encumbering, leasing, transferring or securing any further charge or liability without the prior written consent of the wife other than or for the purpose of securing a mortgage to comply with Order 23 above;

(31)That until such time that the Property B property is transferred to the husband or sold, whichever first occurs, the husband is solely responsible for meeting all periodic mortgage payments required to be made pursuant to any mortgage secured by such real property, together with all municipal and water board rates and any other outgoings attached to such property as and when they fall due and is to maintain the property in reasonable order and good repair and condition and to keep it insured with a publicly listed insurance company for its full insurable value on the basis of replacement;

(32)That within twenty eight (28) days of the making of these Orders, the husband is to do all acts and things and sign all necessary documents so as to transfer to the wife all his right, title and interest in real property known as Property U and being the whole of the land in Certificate of Title folio identifier (omitted) in the State of New South Wales;

(33)That within twenty-eight (28) days of the making of these Orders, the husband is to do all acts and things and sign all necessary documents so as to transfer to the wife all his right, title and interest in his shareholding in (shares omitted) (“(shares omitted)”);

(34)That within twenty-eight (28) days of the making of these Orders, the husband is to do all acts and things and sign all necessary documents so as to transfer to the wife all his right, title and interest in his shareholding in (shares omitted);

(35)That the parties do all acts and things necessary to cause (business omitted) Pty Ltd within fourteen (14) days from the date of these Orders to transfer the registration (if required) and legal ownership of the Ford Territory motor vehicle with registration number (omitted) in the possession of the wife free of any encumbrance into the name of the wife including any liability for GST and any liability of the wife for fringe benefits tax in relation to the wife’s possession and use of the vehicle but excluding any stamp duty payable upon such transfer;

(36)That contemporaneously with the later of the superannuation rollover and the payment pursuant to Order 23 above and at the husband’s expense, the wife transfer to the husband or his nominee any shareholding she holds in (business omitted) Pty Ltd and resign from any office she holds in such company;

(37)That within fourteen (14) days of the date of these Orders, the wife do all acts and things and sign all necessary documents so as to transfer the loan account between the wife and (business omitted) Pty Ltd in an amount of $88,563.00 to the husband with the husband to keep the wife indemnified in relation to all taxation consequences thereof, if any;

(38)That the wife be liable for and pay and indemnify and keep the husband indemnified against any and all personal liability of the wife, past, present and future or howsoever arising including but not limited to:

(a)All income tax liabilities assessed against the wife;

(b)All credit card liability in the name of the wife;

(39)That the husband irrevocably and fully indemnify and keep the wife indemnified against any asset, debt, liability, interests, costs or outgoings of whatsoever nature and kind past, present and future and howsoever arising, including but not limited to by any reason of any office holding, shareholding and/or beneficial entitlement that she may have or previously have held (if any) in:

(a)Any loans which the husband or any entities which he controls (including but not limited to (business omitted) Pty Ltd) may have provided the wife personally or to any entities in which the wife has interests;

(b)(omitted) Bank account number (omitted) Account (omitted);

(c)(business omitted) Pty Ltd;

(d)The business entity known as (business omitted);

(e)Garrick Family Superannuation Fund;

including but not limited to any entitlements, loan accounts and/or beneficiary accounts within the aforesaid entities and any taxation assessed or herein under assessed (including Capital Gains Tax, PAYG and GST) in relation to income derived or deemed to be or have been derived from the aforesaid entities (including any interest, penalties, fines, Orders and charges) and from all proceedings, costs, claims and demands howsoever in respect thereof;

(40)That unless otherwise specified and save for the purpose of enforcing any monies due:

(a)Each party is solely entitled to the exclusion of the other to all other property (including choses in action) and superannuation entitlements in the possession of such party as at the date of these orders;

(b)Monies standing to the credit of the parties in any bank account are to be jointly divided;

(c)Insurance policies remain the sole property of the owner named thereon;

(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order; and

(e)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed;

Superannuation Fund

(41)That within twenty eight (28) days of the making of these orders the parties in their respective capacities as directors of (business omitted) Pty Ltd, the trustee of the Garrick Family Superannuation Fund (hereinafter “the trustee”), the parties do all acts and things and sign all documents necessary to transfer to a superannuation fund as nominated by the wife Property T;

(42)That within twenty-eight (28) days of the making of these Orders, the parties in their respective capacities as directors of (business omitted) Pty Ltd, the trustee of the Garrick Family Superannuation Fund (hereinafter called “the trustee”), the parties do all acts and things and sign all documents necessary to transfer to a  superannuation fund as nominated by the wife the sum of $104,786.73 with the wife to nominate her superannuation fund in writing to the husband and his solicitors within fourteen (14) days of the date of these Orders;

(43)That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 the court creates an entitlement on the part of the wife to receive the cash referred to in Order 42 and realty in Order 41 in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001;

(44)There is a corresponding reduction in the entitlement that the husband, or such other person to whom a splittable payment may be made, would have had in the fund but for these Orders;

(45)That these Orders have effect from the operative time being four (4) days after the service of these Orders on the trustee of the superannuation fund;

(46)That in accordance with Section 90MT(1)(a) of the Family Law Act 1975:

(a)Whenever a splittable payment becomes payable in respect of the husband’s interest in his (omitted) Superannuation Fund, the wife is entitled to the total amount held in the fund as at the operative time and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders;

(b)That having been afforded procedural fairness in relation to the making of these Orders, this Order binds the trustee of the (omitted) Superannuation Fund;

(c)The operative time for this Order is four (4) business days after the date of the service of the Orders on the trustee of the superannuation fund;

(47)That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Federal Circuit Court at its Newcastle Registry be appointed pursuant to Section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the Orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 572 of 2012

MR GARRICK

Applicant

And

MS GARRICK

Respondent

REASONS FOR JUDGMENT

Introduction

1.The parties lived together from early 2000 until their final separation on 8 October 2011 and having married on (omitted) 2000. An order for divorce was made on 4 March 2014.

2.There is one child of the relationship namely X who was born on (omitted) 2000 (“X”) and is now 14 years of age and was a pupil in Year 8 at (omitted) High School at the time of the hearing.

3.Living with the parties for the whole of their relationship was the wife’s child by a previous relationship namely E who was born on (omitted) 1997 (“E”) although she adopted the surname of Garrick.

4.It is common ground that E and the husband had a close relationship until separation and that E regarded the husband as her father for all intents and purposes.

The Respective Applications at the Commencement of the Hearing

Parenting

5.As to parenting, it was the father’s application as sought in his further amended application filed 22 April 2014 that he have sole parental responsibility for all decisions concerning X, that X continue to live with him and spend time with the mother one weekend per month from after school on the Friday until back to school Monday morning and continuing on a weekend when he does not have any (hobby omitted) commitments and continuing for broadly half each school holiday period with special provisions for significant occasions and a number of other practical parenting Orders including reasonable telephone communication.

6.The father’s application for parenting Orders was modified at the beginning of the hearing as found in the outline of case document filed on his behalf to shorten the time for X with the mother on one weekend a month to 6.00pm on the Sunday evening and without any proposal for time during school holidays but rather that any additional time to be spent with the mother should be by arrangement and in accordance with X’s wishes. The father volunteered to be restrained from changing X’s current school until the end of 2014 school year.

7.It was the mother’s application for parenting Orders found in her amended response filed on 8 May 2014 that the parents have equal shared parental responsibility for X, that X live with the father and spend time with her each alternate weekend from after school on the Thursday until the commencement of school the following Monday during school terms and each alternate Monday from after school until the commencement of school the following morning on the Tuesday and broadly for half school holidays and other special occasions. The mother also proposed a number of other practical parenting Orders including a restraint from punishing X by any physical means and that the proceedings not be discussed with X and a reciprocal non-denigration order.

8.At the commencement of the hearing Counsel for the Independent Children’s Lawyer indicated that as a consequence of the toxic relationship between the parents with allegations of family violence and competing allegations of deliberate alienation of the child by the other parent and given X’s age, Orders should be made to reflect X’s wishes which would have the effect of minimising the opportunity for further exposure of X to the conflict between his parents. Counsel for the Independent Children’s Lawyer, in principal, supported the recommendations made by the author of the Family Report, Ms D subject to that evidence being tested.

Alteration of Property Interests

9.As to alteration of property interests the Orders sought by each party are complex.

10.The application by the husband in his further amended application filed 22 April 2014 sought Orders which can be summarised as enabling the husband to retain the company (business omitted) Pty Ltd and with the wife to transfer her interest to him for that purpose, that the wife transfer to him her interest in the former matrimonial home at Property B and that the wife transfer to him her interest in some vacant land of a little more than six hectares at Property U and with the wife to retain her home acquired after separation at Property E. The husband would assume liability for mortgage securities relating to the business and the company and will transfer his interest in some shares with (shares omitted) and (shares omitted) to the wife with each to keep personalty in their respective possessions.

11.The husband also proposed an effective dismantling of the Garrick Family Superannuation Fund, a self-managed superannuation fund the assets of which comprise vacant land at Property T, commercial premises at Property M from which the (omitted) business is conducted and cash of a little more than $100,000.00 but with a liability to the (omitted) Bank of a little more than $450,000.00. The husband propose that the wife receive as part of the property settlement and by way of a superannuation split the Property T property and the cash assets of the fund.

12.The parties have separate superannuation benefits with (omitted) Super amounting together to about $50,000.00 and the whole of which the husband proposed be transferred to the wife.

13.In summary, the wife sought Orders in her amended response filed 8 May 2014 that she retain the property at Property E and assume responsibility for the mortgage secured by that property, that the husband pay her $800,000.00 and in default that the properties at Property B and vacant land at Property U be sold to meet such payment, and that until paid such monies the wife continue to be paid $1,500.00 by (business omitted) Pty Ltd.

14.The wife also proposed a dismantling of the Garrick Family Superannuation Fund to be implemented by the sale of the land at Property T with the proceeds of sale to be retained in trust with there ultimately to be a payment to the wife by way of a splitting order in the sum of $427,279.00 and to be transferred to a superannuation fund of her choice.

15.The wife proposed further that she transfer her interest in (business omitted) Pty Ltd to the husband upon the company transferring a vehicle to her and with the husband to indemnify the wife against all loans including those of the company and the superannuation fund.

16.This remained the wife’s application at the commencement of the hearing.

The Respective Applications at the Conclusion of the Hearing

Parenting

17.At the conclusion of the hearing the Independent Children’s Lawyer proposed Orders[1] that X live with the father and that he have sole parental responsibility for X and that X spend time and communicate with the mother at such times as are agreed and in accordance with X’s wishes but subject to the father endeavouring to facilitate and so far as he could ensure that X spend time with the mother for not less than one weekend per month from after school on Friday until 6.00pm on Sunday and on a weekend when he was not engaged in (hobby omitted) and with further periods of at least four consecutive nights during each school holiday period and communication by telephone and with X to telephone his mother at least once a week and spend additional time and communicate with his mother at any other time that X may request.

[1] See Exhibit J5

18.Put simply the proposed time was not compulsory, taking place only if X wanted to do so.

19.The Independent Children’s Lawyer proposed a number of practical parenting Orders but in particular that the mother be restrained from permitting X to remain in the presence of her partner Mr N unless such contact was at all times supervised by a responsible adult and that X not be carried in a vehicle driven by Mr N at any time.

20.The Independent Children’s Lawyer proposed a number of other practical parenting Orders to which the mother did not object.

21.The father supported the Orders proposed by the Independent Children’s Lawyer which was similar in some respects to the husband’s proposed minute of order as to parenting[2] save that the father proposed one compulsory weekend per month and any further time if X wanted to do so.

[2] See Exhibit J4

22.At the conclusion of the hearing, the mother sought Orders as proposed by her at the beginning of the hearing.

Alteration of Property Interests

23.The Orders sought by the husband were little different from those proposed by him at the beginning save that rather than the asset in the Garrick Family Superannuation Fund comprising the land at Property T be sold and the proceeds be made available to the wife as a splitting order, that such land be transferred to the wife as part of a splitting order together with the cash component of the Superannuation Fund[3].

[3] See Exhibit J4.

24.The wife proposed the same Orders as sought by her at the beginning of the hearing subject to some refinement in relation to the Superannuation Fund namely that she receive 50% of the value of the Superannuation Fund as set out in the special purpose accounts to be prepared for the fund with such amount to be transferred to a fund nominated by her and that the wife transfer her loan account between her and (business omitted) Pty Ltd to the husband with an indemnity by the husband in relation to any taxation consequence.

25.It is fair to say that it had become clear by the end of the hearing that there were a number of complications to be considered in relation to both the company and the superannuation fund should various transfers be considered and especially having regard to capital gains tax and other taxation liabilities.

Background

26.The father was 42 years of age at the time of the hearing and remains as a director of and is employed in the day to day operations of the company (business omitted) Pty Ltd where his role comprises (omitted), used in the (omitted) industry, overseeing staff including two apprentices, (omitted) and his capacity as an approved (omitted) allied with the ownership of the (business omitted) operated by him. The husband’s original training skills are as a (omitted).

27.The wife is 53 years of age and is not currently employed.

28.The parties commenced their relationship and lived together from early 2000, were married on (omitted) 2000, separated on 8 October 2011 with an order for a divorce being made on 4 March 2014 to become effective in one month.

29.The only child of the relationship is the child X but during the course of the relationship the wife’s child by a previous relationship, E born (omitted) 1997 (“E”) lived with both parties until separation and thereafter with the mother.

30.The husband has re-partnered with Ms A with cohabitation commencing in (omitted) of 2014. There is one child of the relationship between the husband and Ms A namely Y born (omitted) 2014 (‘Y”).

31.Ms A has two children by a previous relationship namely A who was born on (omitted) 2001 and who is now 13 years of age and was in year 7 at (omitted) High School at the time of hearing.  A lives with the husband and Ms A. Ms A’s other daughter B was born on (omitted) 2003 and is now 11 years of age and lives with her father and goes to school in Sydney but both children spend time with each other and see both parents under a flexible arrangement.

32.X attends (omitted) High School in (omitted) and was in year 8 during 2014.  It is common ground that he has a particular interest in (hobby omitted) and takes part in such activity at a competition level and shows significant promise as a (hobby omitted) at local and state level.

33.It emerged toward the end of the hearing that the mother has formed a close relationship with Mr N who also gave evidence and to whom she is now engaged with a proposal to marry in the near future. They are currently spending time together at the mother’s home at Property E.

34.The mother has three children by previous relationships namely C who is now aged over 30 years and has her own children living in the (omitted) district and D, 33 years of age and also living in the (omitted) district and E who is now 18 years of age.  E has recently completed year 12 at (omitted) High School and anticipates taking up tertiary education, possibly at University in 2015.

35.It is common ground that E regarded the father as her psychological father and called him “Dad”. It is unfortunate that they are now estranged. It is common ground that E had not spent any time with her biological father, Mr J since about 2002.

36.The following is a chronology of significant events about which the parties are not in disagreement on the material filed or consequent upon the evidence given during the course of the hearing.

DATE

DESCRIPTION OF EVENT

(omitted) 1960

Date of birth of wife now 54 years of age.

(omitted) 1972

Date of birth of husband now 43 years of age.

1994/1995

Husband purchases property at Property D for $70,000.00 funded as to $6,000.00 - $7,000.00 from sale of car and mortgage to (omitted) Bank for the balance.

January 1997

Husband purchases business of (business omitted) from Ms J at purchase price of $130,000.00 funded by a loan from the (omitted) Bank for $135,000.00 secured over husband’s mother’s home at (omitted). Husband also obtains an overdraft facility of $20,000.00 from (omitted) Bank to operate business from rented premises at Property B.

(omitted) 1997

Date of birth of E, child of the relationship between the wife and Mr J.

1998

Wife separates from Mr J.

December 1999 or January 2000 or March 2000

At the time of cohabitation the wife is a single parent in receipt of sole parent’s benefit and the husband is a self-employed (omitted). The parties lived together at the wife’s home at Property A in which the wife has an interest of a one half share together with her former defacto partner Mr J. Husband owns property at Property D, subject to a mortgage and the business known as (business omitted).

(omitted) 2000

Date of marriage.

(omitted) 2000

Date of birth of X, the only child of the relationship.

24 August 2000

(omitted) Bank advises amount secured under mortgage secured by husband’s mother’s property at (omitted) is $105,000.00.

May 2001

Wife settles property proceedings with Mr J in District Court of NSW with home at Property A transferred to wife and later into the names of the husband and wife jointly probably worth then about $210,000.00 subject to a mortgage of about $60,000.00.

August 2001

Husband and wife borrow $161,000.00 from the (omitted) Bank secured over Property A applied in part as to payment of $50,000.00 to Mr J, the wife’s legal costs of $20,000.00 and discharge of the existing mortgage. Husband asserts he paid the wife’s legal costs of $20,000.00 from the working capital of the business.

November 2001/January 2002

Parties purchase a disused (business omitted) and land at Property M at a cost of $175,219.00 intending to operate the business from such premises and rearranging financial facilities to the (omitted) Bank secured by a combination of business loan, security over the husband’s mother’s property in (omitted), a (omitted) Bank account and other facilities provided by the (omitted) Bank secured by Property M.

April/May 2002

Parties engage their builder to construct a workshop for the future operation of the business at Property M at a cost of $257,560 financed with the assistance of loans from the (omitted) Bank with a consequent restructuring of existing loans.

May 2002

Husband sells property at Property D for $95,000.00 and discharges mortgage loan of about $78,000.00.

July 2002

The business is transferred to and operates from the new premises at Property M with the husband and wife forming a partnership as equal partners to operate the business called “(omitted business)”.

Mid 2003

The parties purchase jointly vacant land at Property U having an area of 6.07 hectares at a cost of $85,000.00 and upon which a home may be constructed consequent upon approval by the Land and Environment Court on 24 February 2010 following an appeal from the decision by the (omitted) City Council to refuse a development application.

Parties also purchase as joint tenants vacant land at Property B at a cost of $73,000.00 and upon which the matrimonial home is subsequently constructed.

Parties borrow $165,300.00 from the (omitted) Bank secured by mortgage over both parcels of land.

28 February 2003

The company (business omitted) Pty Ltd (“the company”) is incorporated with both the husband and the wife as directors. Husband holds one “A” class share and one ordinary class share; Wife holds one “B” class share and one ordinary share.

1 March 2003

The company purchases the (omitted) business from the partnership and pays rent to the partnership for the continued use of the premises at Property M.

2006

Construction of home at Property B is commenced with the assistance of a bridging loan from the (omitted) Bank secured in part by a loan over Property A.

July 2006

The home at Property B is occupied by the family having moved from Property A.

August 2006

The Property A property is sold for $376,000.00 of which $364,000.00 was applied toward repaying the bridging loan for the construction of Property B and other liabilities.

Concurrently with these transactions there was a consolidation of borrowings from the (omitted) Bank with a new loan facility of $388,000.00.

4 February 2008

The parties establish a self-managed superannuation fund called “Garrick Family Superannuation Fund” with the company as trustee.  The sole beneficiaries of the fund are the husband and the wife.

The initial funding of the superannuation fund comprised equal contributions by the husband and wife, each of $52,610.00 drawn from the business account with an additional sum of $39,339.00 contributed by the husband from his existing superannuation fund with (omitted).

12 March 2008

The Garrick Family Superannuation Fund in the name of its trustee purchased Property T with a combined purchased price of $130,000.00 using liquid funds from the superannuation fund.

Mid 2009

The parties purchase a unit at Property I (also known as (omitted)) at a cost of $350,000.00 intended as an investment property and funded by a deposit paid from the (omitted) loan account and the balance by way of an interest only loan from the (omitted) Bank secured by the partnership owned property at Property M.

This property is occupied by the wife after separation until she purchases a property at Property E.

Late 2010 /early 2011

Garrick Family Superannuation Fund purchases the business premises at Property M from the partnership for $750,000.00 plus GST of $75,000.00, a total of $825,000.00 funded by a loan from the (omitted) Bank for $487,500.00, a concessional contribution from the partnership business of $75.000.00 and non concessional contribution from the business of $151,077.00.

The company pays rent to the Superannuation Fund of an amount of $62,600.00 per annum pursuant to the current lease which commenced on 28/2/11 and expires on 28/2/16.

There is a (omitted business) shop attached to the Property M premises which pays rent to the Superannuation Fund.

The proceeds of sale were applied to discharge the loans obtained from the (omitted) Bank for the purchase and shed constructions, the loans for Property B and Property U and the construction of the home and temporary overdraft with the superannuation contribution for the husband of $75,988.36 and a superannuation contribution for the wife of $75,988.37.

8 October 2011

Parties separate. Husband remains at Property B and wife moves to property at Property I .

2012

Partnership of (business omitted) ceased trading.

6 March 2012

Husband files application for alteration of property interests and parenting Orders.

5 June 2012

Wife files response for alteration of property interests and parenting Orders.

September 2012

Wife purchases property at Property E at a cost of $410,000.00 secured by a mortgage to the (omitted) Bank for $355,000.00. The wife applies $66,000.00 towards the purchase from monies paid to her by the company pursuant to order made 3 August 2012.

7 March 2013

Property at Property I sold for $390,000.00 with a surplus of $176.31 after discharge of the mortgage to the (omitted) Bank, costs of sale and Body Corporate liabilities

4 March 2014

Order made for Divorce

Existing Orders

37.Interim property Orders were made on 3 August 2012 as follows and which remain operative:

1.The parties will cause (business omitted) Pty Ltd to pay to the Wife $85,000.00 as she directs within 7 days of the date hereof.

2.After 5.00pm on Friday 10 August 2012 the Wife is restrained from entering the premises known as Property M in the State of New South Wales.

3.From the first pay period after 10 August 2012 the parties shall direct (business omitted) Pty Ltd to pay to the Wife a salary in the amount of $1,500.00 per week being the sole amount that the Wife receives from the Company.

4.At 5.00pm on Friday 10 August 2012 the Wife shall surrender to the Husband all credit cards, cheque books and/or debit cards by which the Wife previously accessed the Company’s or parties’ accounts.

5.From 5.00pm on Friday 10 August 2012 the Wife is restrained from withdrawing any sums of money from the parties’ joint accounts or the Company’s accounts other than the amount specified in Order 3 of these Orders.

6.Until the Wife vacates the property known as Property I, she will be responsible for payment of all outgoings except the mortgage for that property.

7.Upon the Wife vacating the property at Property I, the Wife is at liberty to take therefrom all furniture and household effects.

8.That upon the Wife vacating the property at Property I, the Wife and the Husband do all acts and things necessary to sell the property for the best possible price.

9.Ms S be retained to value the parties’ interest in (business omitted) Pty Ltd and the parties’ interest in the Garrick Family Superannuation Fund.

10.That the parties will retain (omitted) Real Estate at (omitted) or (omitted) Real Estate to obtain a market appraisal of the parties’ interest in any item of real estate.

38.Interim Orders were made on 4 June 2013 at the conclusion of a hearing and which remain operative:

1.The father and the mother have equal shared parental responsibility for X born (omitted) 2000 (“X”).

2.The parents are to consult each other in relation to any long term issue in relation to X and are to make a genuine effort to come to a joint decision about issues concerning his care, welfare and development of a long term nature which include (but are not limited to) issues of that nature about:

a)His education both current and future;

b)His religious and cultural upbringing;

c)His health;

d)His name;

e)Changes to living arrangements for him that make it significantly more difficult for him to spend time with either parent.

3.Each parent is to have sole parental responsibility for making decisions about X’s day to day care, welfare and development whilst he is in his or her care respectively.

4.X is to live with the father at all times other than those when he is spending time with the mother.

5.X spend time and communicate with the mother as follows:

a)From today 4 June 2013 until the commencement of school on Tuesday 11 June 2013;

b)During school terms each alternate weekend from after school on the Thursday until the commencement of school the following Monday, commencing Thursday 20 June 2013;

c)Each alternate Monday from after school until the commencement of school the next day, Tuesday and commencing 17 June 2013;

d)For the first half of each school holiday period applicable at X’s school at the end of Terms 2 and 3 in 2013 and Term 1 in 2014 commencing from the conclusion of school on the last day of the school term until 12.00 noon on the second Sunday of the school holiday period;

e)For the second half of the Christmas/New Year school holiday period 2013 commencing on the Sunday at 12.00 noon which is the midpoint or closest to the mid-point in the holiday period and concluding at 12.00 noon on the Sunday which immediately precedes the commencement of the first school term in 2014;

f)From 2.00pm on Christmas Eve until 2.00pm on Christmas Day;

g)As otherwise agreed between the parties;

h)The mother communicate with X by telephone:

i)Each Tuesday at 7.00pm on X’s mobile telephone number which the father will ensure is turned on and answered;

ii)As requested by X.

i)The father to communicate with X by telephone;

iii)Each Sunday X is with the mother at 7.30pm on X’s mobile telephone number which the mother will ensure is turned on and answered;

iv)As requested by X.

j)Telephone communication is to be effected by calls to X’s mobile phone number (omitted).

6.The periods during which during X is living with each parent in accordance with the preceding orders is suspended insofar as it is necessary or is varied to ensure that X:

a)Is living with his mother on Mother’s Day weekend from the conclusion of school on the Friday of such weekend until the commencement of school on the Monday immediately following such weekend;

b)Is living with his father on the Father’s Day weekend from the conclusion of school on the Friday of such weekend until the commencement of school on the Monday immediately following such weekend.

7.Except for those occasions when implementation is to take place at X’s school, implementation at all other times is to take place at the (omitted) Service Centre on the Western side of the (omitted) (just South of (omitted)) and to be effected by the parent with whom the child then is delivering the child to the other parent.

8.Each parent is restrained from physically punishing X by any physical means including but not limited to smacking, slapping, pushing, grabbing, holding, using a slipper, spoon or any other instrument and each parent is further restrained from causing or permitting any other person from imposing any physical form of punishment upon X.

9.Each parent is restrained from denigrating the other parent in the presence or hearing of X including making rude comments, making insulting comments, swearing at, shouting out and making obscene gestures and each parent is further restrained from causing or permitting any other person from engaging in such behaviour in the presence of X.

10.Each parent is to advise the other parent as soon as possible by the best available means in the event of any of the following occurring:

a)X being seriously injured or falling seriously ill;

b)X requiring urgent medical treatment from a Doctor or Ambulance crew;

c)X being involved in an accident or admitted to hospital.

d)X requiring time off school due to an inability to attend school;

11.Each parent is to keep the other informed in relation to all medical, dental or other related appointments being made for X and is to notify the other parent within twenty four (24) hours of such appointments being made by text message in the absence of the communication book being able to be used.

12.The parents are to use a communication book for communication of essential matters concerning X between each other including but not limited to:

a)Medication;

b)School events;

c)Medical appointments;

d)(hobby omitted) activities; and

e)Any other matter affecting X’s day to day welfare and management.

13.Both parents are restrained from discussing these proceedings with X other than the orders made today and by way of brief description only and in particular each parent is restrained from questioning X as to his wishes, and activities while spending time with the other parent and each parent is further restrained from causing or permitting any other person from questioning X as to his wishes other than the Independent Children’s lawyer.

14.Each parent is restrained from enrolling X in any school activity to occur during the evening of the school week when X is due to be with the other parent and is further restrained from enrolling X in any school or extra-curricular activity to occur on a weekend or holiday period when X is due to be living with the other parent pursuant to these orders without first discussing the proposed activity and possible enrolment with the other parent with a view to reaching an agreement with such enrolment and not to occur unless both parents agree.

15.Each parent is at liberty to obtain all relevant medical records including dental and hospital records and to consult with medical and dental practitioners and any specialist in order to obtain any information he or she may require concerning X and service of a sealed copy of these orders upon such medical practitioner, dentist, specialist or hospital is sufficient authority for that purpose.

16.Each parent is to authorise the Principal of the school attended by X from time to time to supply to the other parent copies of school reports, notices relating to pupils at (omitted) High School, school newsletters, invitations to sporting or social events or functions, notices of and invitations to any parent teacher interviews and any other notices directed to parents of pupils attending such school and service of a sealed copy of these orders on the Principal of such school is sufficient authority for that purpose.

17.During those times when X is spending time with the mother pursuant to these orders the mother is to ensure X attends any (hobby omitted) activity within a radius of 160 kilometres of the main Post Office at (omitted) and to the extent that it is necessary may require the father to assist with the transport of any equipment necessary for such activity.

18.The Independent Children’s Lawyer, Mr Winder is to explain to X the orders made today and outline to him the reason for such orders and when they are to take effect insofar as moving from his mother’s home to his father’s home is concerned and to be effect by the mother causing X to telephone Mr Winder on (omitted) at 4.00 pm on 5 June 2013 and with the mother to absent herself from the place or telephone instrument X is using for that purpose and to ensure that he is given privacy and that the telephone call is not recorded or otherwise put on a loudspeaker facility.

27.If he has not already done so the father is to enrol in, attend and complete a “Parenting after Separation” course with Interrelate or Relationships Australia by 30 September 2013.

39.

Some further interim property Orders were made by consent on

16 December 2013.

1.In their respective capacities as directors of (business omitted) Pty Ltd, the trustee of the Garrick Family Superannuation Fund (hereinafter “the Trustee”), the parties do all acts and things and sign all documents necessary to sell the property situate and known as Property T, in the State of New South Wales and the following provisions shall apply:

1.1The parties will immediately list the property for sale by private treaty with such agent as the parties agree to appoint, and in default of agreement as to agent within fourteen (14) days after this Order comes into effect, with such agent as the President of the Real Estate Institute of New South Wales appoints, the costs of and incidental to such appointment to be borne by the Trustee as and when same fall due.

1.2The parties will list the property for sale at a price as agreed between them and failing agreement at a price determined by a licenced valuer appointed by the President of the Australian Property Institute the costs of an incidental to such appointment to be borne by the Trustee as and when same fall due.

1.3The parties will each cooperate in every way with the appointed agent including but not limited to:

1.3.1Allowing inspection of the property at all reasonable times requested by the agent;

1.3.2Doing or saying nothing to hinder or prevent a sale being effected;

1.3.3Ensuring that the property is in a neat and clean condition at the time of inspection by the agents and prospective purchasers; and

1.3.4Signing all documents requested by the agents in relation to the listing for sale of the property except a contract or agreement for sale which has not been authorised by the parties’ Solicitors;

1.4The parties will each execute a Contract for Sale in the form prepared by the Solicitors having the conduct of the sale at a price agreed upon by the parties or, in the absence of any agreement, at or above the price nominated by the valuer pursuant to paragraph 1.2;

1.5The respondent’s Solicitor will have the primary conduct of the sale on behalf of both parties provided that the Applicant’s Solicitor will be entitled to independently advise and represent the Applicant in respect of the sale and all matters arising thereon and any costs properly payable to the Applicant’s Solicitor will be and form part of the legal costs of sale and be deducted from the proceeds;

1.6Neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the property or to any commission;

1.7The party not in possession will be entitled, upon reasonable notice, to enter and view the state of repair of the property once per fortnight;

1.8In the event that the property remains unsold for a period of three (3) months from the date upon which it was first listed for sale, the following will apply:

1.8.1The parties will list the property for sale by public auction with such agent as the parties agree to appoint and in default of agreement as to agent, with such agent as the President of the Real Estate Institute of New South Wales appoints, the costs of and incidental to such appointment to be borne by the Trustee;

1.8.2The reserve price for the purpose of such auction will be such as the parties agree upon or failing agreement will be the price nominated as a fair market value by a licensed valuer appointed by the President of the Australian Property Institute. The costs of such valuation will be borne by the Trustee;

1.8.3In the event that the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the property at a price which is not more than 10% below the reserve price;

1.8.4If the property remains unsold, the parties will do all acts and things and sign all documents necessary to immediately relist the property for sale by public auction again, on a date nominated by the agent and at such auction there will be no reserve price.

1.9On settlement of the sale of property the proceeds of sale be paid in the following manner and priority:

1.9.1All costs and expenses of sale including legal costs and disbursements, agent’s commission, valuer’s fees and auction;

1.9.2The amounts required to pay all municipal and water rates outstanding with respect to the property; and

1.9.3The balance then remaining to an interest bearing account in the name of the Trustee.

2.Unless otherwise agreed within 21 days of the date hereof, Mr H of (omitted) Valuations be appointed as a single expert to value the following which are in the husband’s possession or control:

2.1The tractor;

2.2The Suzuki motor bike;

2.3Jet skis;

2.4(omitted) Boat;

2.5(omitted) Boat;

2.64 (hobby omitted);

2.7 2 (omitted) trailers;

2.8A (omitted) trailer;

2.9 (omitted) Ride On Mower; and

2.10The following furniture and chattels:

2.10.1in and at the former matrimonial home at Property I; and

2.10.2in and at Property E.

3.For the purposes of implementing Order 2, within 21 days of the date of orders the Solicitor for the wife provide to the Solicitor for the husband a joint letter of instructions to Mr H who shall then forward that letter to Mr H, and thereafter the husband and the wife each make the property in order 2 available for inspections by Mr H.

4.Unless the value of the jewellery in the wife’s possession is agreed within 21 days of the date of these orders, within 28 days of the date hereof the husband nominate in writing the names of two suitably qualifies persons to value jewellery, located within a 170 kilometre radius of (omitted), providing to the wife the qualifications, costs and contact details of those persons and within a further 14 days the wife nominate that valuer to whom she will take the jewellery; thereafter within 14 days the Solicitors for the husband provide to the Solicitor for the wife make the jewellery available for inspection by that valuer.

5.Unless otherwise agreed between the parties within 21 days of the date hereof a single expert real property valuer be appointed to value the property situate and known as Property U,) in the State of New South Wales.

6.For the purpose of implementing Order 5 the wife nominates 3 qualified real property valuers within 35 days of the date hereof and within a further 14 days the husband choose which valuer is to carry out the valuation of Property U, in the State of New South Wales, and notify the Solicitor for the wife; within 7 days thereafter the Solicitor for the wife shall prepare a joint letter of instructions to the real property valuer and forward that letter to the Solicitor for the husband who shall forthwith forward that letter to the real property valuer.

7.The parties each pay one half of the costs of the valuers referred to in order 2 to 6 inclusive.

40.At the conclusion of the hearing on 7 November 2014, I made the following Orders:

1.The matter is adjourned to a date to be advised for the delivery of a reserved judgment.

2.Pending delivery of the reasons for judgment each parent is restrained from talking to X about any aspect of the hearing including evidence given and submissions made by the Independent Children’s Lawyer and each party and any other aspect of the evidence and each parent is further restrained from causing or permitting any other person from discussing any aspect of these proceedings with X.

3.The Independent Children’s Lawyer is to prepare an assessment of costs and a basis for such costs to be served on each party by 21 November 2014.

NOTATION:

A. The wife does not intend to enforce the parenting orders made 4 June 2013 in relation to X spending time with and communicating with her.

The Evidence

41.In the husband’s case I read the following documents:

a)     His affidavit sworn 27 May and eFiled 27 May 2014.

b)    Affidavit of the husband’s partner Ms A sworn 23 May and eFiled 27 May 2014.

c)    The affidavit of his father, Mr P sworn 16 May and eFiled 27 May 2014.

d)    His financial statement sworn 27 May and eFiled 27 May 2014.

e)    Affidavit of Ms N, a valuer sworn 4 June and eFiled 5 June 2014 as to jewellery.

f)     Affidavit of Mr H, a valuer sworn 28 May and eFiled 29 May 2014 as to valuation of household furnishings and assets and other personal property of the parties.

g)    His affidavit sworn 15 October 2014 and eFiled 16 October 2014.

h)    Affidavit of Ms T, Accountant for (business omitted) Pty Ltd sworn 9 October 2014 and eFiled 14 October 2014.

42.In the wife’s case I read the following documents:

a)    Her affidavit sworn 28 May and eFiled 28 May 2014.

b)   Her financial statement sworn 28 May and eFiled 28 May 2014.

c)   Her affidavit sworn 19 September 2014 and eFiled 24 September 2014.

43.I also read at the request of Counsel for the parties the following additional affidavits as to valuation:

a)    Affidavit of Ms S, a Chartered Accountant as to the valuation of (business omitted) Pty Ltd sworn 26 May and eFiled 27 May 2014.

b)   Affidavit of Mr A, a valuer sworn and eFiled 5 June 2014 as to the value of realty at Property U.

44.I also had the benefit of a Family Report prepared by Ms D, a Family Consultant attached to the Newcastle Registry published on 28 October 2013 following interviews on 22 October 2013 and admitted into evidence by consent. I also read in conjunction with such report as suggested by Ms D the Child Inclusive Conference Memorandum of Ms D of 31 May 2012.[4]

[4] Paragraph 26 of the Family Report.

45.There were the following exhibits:

W1 – 3 pages of a tax invoice from (business omitted) Pty Ltd to (business omitted) reproduced on 13/8/12 for $568.18 due 7/8/12 together with 2 pages from a (omitted) Bank transaction account evidencing payments of $250.00 and $318.18.

W2 – husband’s financial statement filed 6/3/12 6 pages, 1 and 7 items number 43.

W3 – husband’s affidavit sworn 2/8/12 page 1, page 6 paragraph 39(f) and 11.

W4 – a letter of 12/3/2001 from (business omitted) Pty Ltd to (omitted) Pty Ltd in relation to the wife’s work.

W5 – Financial statements for the Garrick Superannuation Fund for the 1/7/12 to 30/6/13 and showing wife’s entitlement of $393,864.00 and the husband’s entitlement of $427,278.00.

W6 – bundle of documents of 22/4/14 from the Child Support Agency and assessment for Child Support for X.

W7 – COPS record of 3 pages of incident on 10/6/07 Property B.

W8 – Copy of a Certificate from the Family Relationships Centre (omitted) of 13 December 2011 certifying the mother’s attendances at a three hour (omitted) Seminar.

H1 – Certificate dated 12 September 2013 of the husband attending six sessions of Parents not Partners Course conducted by Interrelate.

J1 – Valuation Report by Ms S dated 15 October 2014.

H2 – Letters dated 2 August 2001, 30 January 2002, 26 and 27 July 2006 and 2 August 2006 relating to various securities and borrowings by the husband and the wife.

H3 – A copy of the affidavit of Ms T, Accountant sworn 5 November 2014.

ICL1 – A copy of Final ADVO made at Taree Local Court on 21 June 2010 for a period of 2 years with the mother and the child E as the protected persons and the father as the defendant.

J1 – Report of Ms S, Chartered Accountant of 16 October 2014 as to update value of (business omitted) Pty Ltd.

J2 – working balance sheet for the purposes of the hearing.

J3 – draft minutes of proposed Orders sought by wife in relation to alteration of property interests.

J4 – draft minutes of proposed Orders sought by husband as to parenting and alteration of property interests.

J5 – draft minutes of proposed Orders sought by the Independent Children’s Lawyer as to parenting.

J6 – Report from Ms S supported by affidavit sworn 3 November 2014 as to liability for capital gains tax, stamp duty and income tax/GST and calculation of capital gains tax on sale of Property T, and other potential liabilities.

J7 – financial statements for the 2013/2014 financial year for the Garrick Family Superannuation Fund.

J8 – Aide memoir summarising contributions to Garrick Family Superannuation Fund from 2008 until 2014 inclusive.

46.I also had the benefit of observing and listening to the father and his father give evidence together with Mr H, the valuer, both in chief and in cross examination. Similarly I had the benefit of observing and listening to the mother and her partner Mr N give evidence both in chief and in cross examination.

47.Ms D also gave evidence in person and was cross examined.

48.I also listened very carefully and had the benefit of constructive submissions made by Mr Mooney, Mr Tregilgas and Mr Cook. At the end of the evidence and submissions there were some matters in relation to the company which required further clarification. On 3 December 2014 I received and have taken into account written submissions made by Mr Tregilgas on behalf of the wife dated 28 November 2014.

The Issues

Parenting proceedings

49.Ms D in the Family Report correctly identified in my view the primary issues identified by the parties and in dispute between them as follows:

a)With whom X should live and how much time he should spend with the other parent.

b)Whether family violence occurred as alleged by the mother, the nature of such family violence, the extent to which such violence occurred given the father’s denial and to the extent to which X and E were exposed to such violence and the risk of conflict continuing between the parents.

c)Whether the father abused alcohol as alleged by the mother and denied by the father and the extent to which X was exposed to such inappropriate use of alcohol if at all.

d)Whether either parent is willing to encourage and is able to facilitate X’s relationship with the other parent given that each parent believes that the other parent has actively tried to align X to influence him as to reject the other parent.

50.Ms D also identified as issues and in my view, accurately the following matters:

a)Whether the parents are able to cooperate with parenting of X particularly if the parents should have equal shared parental responsibility for the long term decisions.

b)The extent to which X and E are estranged from each other and whether the relationship between them can be repaired.

Alteration of Property Interests

51.It seems to me the issues are these:

a)Whether the totality of the assets should be considered on a global basis as contended by the wife or whether the business of (business omitted) Pty Ltd should be treated as a separate entity from the other assets as contended by the husband.

b)As an underlay to the issues below, the determination of the value of assets and liabilities where those matters are in dispute.

c)What are the contributions both financial and non-financial and as homemaker and parent made by each of the parties at the time of cohabitation, and during the relationship to the date of final separation and the weight to be attached to such contributions.

d)What are the contributions from the date of final separation until the time of the hearing and the weight to be attached to such contributions.

e)What are the relevant Section 75(2) factors, if any, and what adjustments are required, if any, in favour of either party.

The Relevant Law as to Parenting Proceedings

52.I must have regard to Part VII of the Family Law Act, and the significant sections are, and to which I must have regard, section 60CA, which provides:

“In deciding whether to make a particular parenting order in relation to a child, the Court must regard the best interests of the child as the paramount consideration.”

53.I must then consider, in determining a child’s best interests, the matters set out in section 60CC, and there are two primary considerations:

(a)     The benefit to the child of having a meaningful relationship with both of the child’s parents.

(b)     The need to protect the child from physical or psychological harm, from being subjected to or exposed to abuse, neglect or family violence.

54.There are a number of additional considerations in section 60CC(3) to which I must have regard insofar as they are relevant.  I must also have regard to section 60B, which sets out the objects of Part VII and the principles underlying those objects, and I must have regard to section 61DA, which provides for a presumption of equal shared parental responsibility when a parenting order is made, save that the presumption does not apply when there are reasonable grounds to believe there has been abuse of the child or family violence.  The presumption may also be rebutted if there is evidence to satisfy the Court that it would not be in the best interests of the child for the child’s parents to have equally shared parental responsibility for the child.

55.The relevance of the presumption of equal shared parental responsibility, when it does apply or is found to apply, is that the Court is then obliged to consider making an order if it is consistent with the best interests of the child and reasonably practicable for the child to spend equal time with each of the parents.  If equal time is not in the best interests of the child or reasonably practicable, the Court must go on to consider making an order if it is consistent with the best interests of the child and reasonably practicable for the child to spend substantial and significant time with each of the parents.  (See subsection 65DAA of the Act). 

56.It seems to me there is a shift toward the Court being required to consider in a much more practical manner how a child’s development can be nurtured and promoted by being exposed to and enjoying in a beneficial sense all the aspects of living with each parent, and it seems to me that this requires, where it is appropriate, an involvement in the whole of the ordinary household routine applicable in each parent’s home and if it is in the child’s best interests. (See the Full Court decision in Goode & Goode).

The Relevant Law as to Alteration of Property Interests

57.Section 79(1)(a) provides that in property settlement proceedings the Court may make such order as it considers appropriate in the case of proceedings with respect to the property of the parties to the marriage or either of them by altering the interests of the parties to the marriage in the property.

58.Section 79(2) provides that the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

59.Section 79(4) provides that in considering what order (if any) should be made in property settlement proceedings the Court should take into account a number of matters which are prescribed in this section and is also required to take into account the matters referred to in sub section 75(2) insofar as they are relevant.

60.The recent High Court decision of Stanford & Stanford[5] has raised a number of issues but emphasises the importance of the provisions of Section 79(2), namely that the Court is restrained from making an order under Section 79 unless it is satisfied in all the circumstances, it is just and equitable to make the order.

[5] Stanford & Stanford [2012] HCA 52; (2012) 293 ALR 70 (2013) 47 FamLR 481.

61.I am satisfied within the meaning of Stanford[6] that consequent upon the ending of the relationship between the husband and the wife it is just and equitable to consider making Orders for alteration of their property interests.

[6] ibid

62.Historically, the court’s approach to determining property disputes is well established.  In Hickey & Hickey[7] the Full Court of the Family Court of Australia described the approach in the following terms:

“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of section 79.  That approach involves four interrelated steps.  Firstly, the court should make findings as to the identity and the 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 section 79(4)(a), (b) and (c) and to 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 sections 79(4)(d), (e), (f), and (g) (“the other factors”) including because of section 79(4)(e) the matters referred to in section 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 determine and resolve what order is just and equitable in all the circumstances of the case.”

[7] [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355.

63.The addition of Part VIIIB to the Act provides for a superannuation interest to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause under Section 4 of the Act.[8] The Court is therefore enabled to make Orders with respect to superannuation interests.

[8] See Section 90MC of the Act.

64.The Full Court’s decision in the matter of Coghlan[9] suggested some practical implications for the treatment of superannuation interests. As a consequence of the decision the Court has discretion to treat the superannuation assets of the parties as part and parcel of the other property and in this case it is appropriate that I do that. There is no good reason on the material before me to consider the superannuation as a separate asset and that, in my view, is especially applicable where there are relatively few other assets to be considered.

[9] [2005] FamCA 429; (2005) 33 FamLR 414.

65.It was not submitted by either Mr Cook for the husband or Mr Tregilgas for the wife that the superannuation interests should be considered as separate assets.

The Evidence of the Witnesses and Credit

66.It is the evidence of the wife which calls for closer scrutiny.

67.Mr Cook, Counsel for the husband cross examined the wife as to an oblique reference in the Family Report of Ms D[10] which reads as follows:

“X said that he really likes his father’s partner and feels comfortable with her. He also likes her two girls. He said that his mother’s partner is “Okay” but that they haven’t really had a lot to do with one another and that the mother tends to be very “secretive” about her partner and he doesn’t really know a lot about him, such as where he lives or what his surname is. He said that he is not quite sure why this is but thinks that it may be because his mother does not want his father to know that sort of information.”

[10] Paragraph 92 of the Family Report

68.The mother had made no reference at all in her affidavits to her partner, did not mention to Ms D that she had a partner although it transpired during the course of the hearing on the fourth day, 5 November 2014 that he accompanied her to Court.

69.Once Mr Cook had acquainted the wife with paragraph 92 of the Family Report and read a portion to her, and before having any opportunity to ask a question the wife volunteered as follows:

“Yes, I read that about X, what X said.  X does know Mr N’s surname. X does know where Mr N comes from, and I am not secretive at all. I don’t know why he would say that.”

70.In response to questions, the mother told Mr Cook that she had been in a relationship with Mr N for about twelve months and said that he sometimes stays overnight at her home but he had been working away. The wife told the Court that he had variously worked as a (occupation omitted) for (employer omitted) and then (employer omitted) but was doing nothing at the moment.

71.The wife said that Mr N lived with his parents in (omitted), that he is 47 years of age, and that he has a son R aged ten years who lives with his mother in (omitted) from whom he is separated. She said that Mr N had not worked for the last nine or twelve months and when asked why said:

“I think because there isn’t a position. (employer omitted) changed hands and, yes, he lost his position after a restructure.”

72.Mr Cook continued his cross examination of the wife about other matters.

73.A little way into the resumed hearing on 6 November 2014 and concluding the cross examination of the wife by Mr Cook and Mr Mooney, Counsel for the Independent Children’s Lawyer Mr Tregilgas indicated that there would be no re-examination but then informed the Court that following a conference with his client he had been given some evidence by her in relation to Mr N which was clearly appropriate the Court be told, namely that Mr N had just come out of gaol where he had spent time for nine months in relation to a charge of high range PCA the details of which were not known.

74.Leave was granted to Mr Tregilgas to reopen the wife’s case and leave was sought to adduce oral evidence from Mr N, which was granted, and indicated that the wife would probably ask for an order that the issue of Mr N’s recent circumstances not be made available by either parties to X.

75.The wife gave evidence in chief concerning Mr N as to her knowledge he was arrested for a high range PCA on either 3 or 4 February 2014 but knew little about the circumstances of his arrest except that she thought it was at (omitted) and that she had not seen him a week or two prior to his arrest and was subsequently told something about the circumstances by his Solicitor, a Mr M in (omitted). The wife recalled that there was no collision but that he was arrested, did not know the time of day and thought he received a prison sentence for about nine months or at least that was the period he spent in the Correctional Centre.

76.When asked about her knowledge about previous convictions for offences she thought they related just to drink driving and that he had not been to prison before and that she visited him at (omitted) Correctional Centre during his custodial period.

77.The wife said that he was released from prison on 31 October 2014, a few days previously and that she had been visiting him on a weekly or fortnightly basis during the period of imprisonment.

78.The wife described Mr N and X getting on really well with Mr N taking X fishing a couple of times and to the beach and playing games at home and also doing some family activities with R.

79.The wife said that Mr N is on parole for three months following discharge from prison and that one of his conditions is that he not consume alcohol.

80.I am satisfied from the wife’s evidence in response to some questions that her relationship with Mr N is serious, that she is in love with him, that they are planning to live together that they have talked about it and that they became engaged on (omitted) 2014 when he came home from prison but that a marriage date had not been set. The wife proposes that they move in to live together and about which they have talked but following a period of settling in for him whilst he gets his life back to normal and which she hoped would happen sooner rather than later.

81.The wife said that there were no issues in relation to domestic violence with Mr N.

82.When cross examined by Mr Cook, the wife conceded that she knew the previous day about all of the matters about which she had just given evidence and when it was suggested to her that she had tried to avoid revealing such information she said:

“I wasn’t trying to avoid it, Mr Cook. I was just uncomfortable with it.”

83.The wife was somewhat vague when she was asked questions about her knowledge of Mr N’s previous convictions and past history of motoring offences and left me with the impression that she was being deliberately vague.  I find it implausible that she would not have made further enquiry of him especially when she admitted their relationship was romantic before he went to prison following their meeting at (employer omitted) when she went there with her eldest daughter to (omitted) and subsequently met R and his mother Ms M.

84.It is not as if the mother has not had several previous relationships which, for one reason or another have broken down, and to embark upon a further relationship at the age of 53 years may suggest that some prudent enquires would be appropriate to avoid the possibility of yet another broken relationship.

85.The mother had tried to avoid answering questions about an occasion in January 2014 when Mr N had collapsed and was taken by ambulance to hospital, but eventually disclosed he had an adverse reaction to some medication, Valium but did not disclose it was as a consequence of Mr N consuming alcohol, about which he later gave evidence.

433.The evidence does not establish that the wife has a responsibility to support Mr N. At the time of the hearing they were not living together although they were engaged and proposed to marry at some future date.

(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

(i)any law of the Commonwealth, of a State or Territory or of another country; or

(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party; and

434.Neither party is currently eligible for any pension benefit or allowance nor superannuation benefit and neither receives any such benefit.

(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

435.It is likely that given the net asset pool both parties will maintain a reasonable standard of living.

(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

436.On the evidence of the value of assets, there is ample security to meet existing liabilities to mortgagees.

(l)the need to protect a party who wishes to continue that party's role as a parent; and

437.The husband will be the virtual sole carer of X but it is not part of his case that such role affects his ability to continue to earn an income and manage the company business.

(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

438.The husband is cohabiting with Ms A to whom I have referred above as to having some assets from which she is able to make a contribution to their joint relationship.

439.The wife is about to enter into a relationship of cohabitation with Mr N but there is no evidence before me as to their financial circumstances. Mr N has previously worked in a (employer omitted) and a (employer omitted) and I infer he has employment skills subject to him being able to travel to and from a place of employment given he does not have a driving license.

(n)the terms of any order made or proposed to be made under section 79 in relation to:

(i)    the property of the parties; or

440.The value of the property for division between the parties is $2,315,171.50 and I will refer shortly to the consequences of various approaches open to me in relation to the division of such property and the consequence or otherwise of taxation liabilities.

(na)any child support under the Child Support (Assessment) Act 1989that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

441.At the time of the hearing there was a current child support assessment requiring the mother to pay $374.67 per month for the support of X. And it is likely as a consequence of Final Orders in these proceedings such child support assessment will change and depending upon the wife’s then circumstances.

(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

442.The husband has made a contribution to the support of E and to which I have referred earlier in these reasons.

Section 79(4)(f)

443.On the evidence before me there are no other orders which have been made affecting the parties or their child other than those to which I have already referred.

Section 79(4)(g)

444.There is evidence before me of the child support assessment[48] pursuant to which the wife is currently required to pay child support for X and to which I have referred above.

[48] Exhibit W6.

Conclusion

445.When I come to weigh the matters in Section 79(4) I find initially on the evidence before me there may be a small percentage adjustment in favour of the wife. It is submitted on behalf of the wife that she should receive a 5% adjustment. Counsel for the husband submits on the other hand that the husband should receive a further 10% adjustment pursuant to Section 75(2) factors thus warranting a division in favour of the husband of 75% and the consequent division to the wife of 25%. I do not accept the submissions of Mr Cook in that respect.

446.The adjustment in favour of the wife may arise from the manner in which the assets are distributed and the possible inference of a taxation liability.

447.In coming to a preliminary conclusion that an adjustment may be warranted in favour of the wife flows from a significant disparity in earning capacity. To some extent, that is offset in favour of the husband by the virtual sole responsibility he will have for the care of X and his upbringing and the financial cost which it entails but with the assistance of Ms A insofar as concerns the actual day to day parenting role.

Taxation Implications

448.The Order sought by the husband in relation to alteration of property interests[49] requires the transfer by the wife to him of her shareholding in the company, her transfer to him of her interest in the jointly owned former matrimonial home at Property B and the vacant land at Property U to which attaches a DA approval which is not yet expired.

[49] See Exhibit J4.

449.The husband also proposes that the parties as directors of the superannuation fund transfer to the wife the unsold vacant land at Property T, listed for sale together at $470,000.00 but which have not been sold and about which there is no evidence of value or any enquiry. The husband also proposes to transfer to the wife the cash component of the superannuation fund in an amount of $104,786.73.

450.The husband also proposes that the wife receive his (omitted) superannuation fund with a current value of $15,343.00.

451.Whilst it was asserted briefly by the husband during the course of his evidence that it was intended the land at Property U be preserved for X, such application, wisely, was not pursued. There was no evidence to support his contention there was an agreement between the parties that this should occur.

452.If the husband were to succeed with his application, he would receive net property to the value of $1,352,219.72 plus the residue of the superannuation fund valued at $294,758.05, a total of $1,646,978.00 which represents approximately 71% of the total net available property of $2,315,171.50.

453.Under the husband’s proposal, the wife receives 29% to the value of $701,212.21 of which $470,000 comprises the value of the Property T land.

454.The wife’s proposal as to alteration of property interests is found in her ‘Draft Minute of Proposed Order’.[50] It is not in dispute that the wife would retain her interest in the Property E property and she asked that the husband pay her $800,000.00 with the sale of Property B and Property U in default of payment. The wife asks that until such payment is made she continue to receive $1500.00 per week from the company in accordance with the existing Order.

[50] See Exhibit J3.

455.In relation to the superannuation fund, the wife seeks an Order that the trustees sell the vacant land at Property T, with the balance of the proceeds of sale to be placed in trust and that the accountants for the parties, (omitted), prepare special purpose accounts and if relevant, taxation returns for the Garrick Family Superannuation Fund with appropriate returns to be lodged immediately. The wife proposes that the fund then transfer to her 50% of the value of the fund as set out in the special purpose accounts and with the property at Property M to be included at a value of $750,000.00.

456.In short, the wife seeks an equal disbursement of the superannuation fund.

457.The wife seeks the transfer of the Ford Territory motor car owned by the company to her which is not in dispute and that she transfer her share in the company to the husband upon completion of all payments and transfers. The wife also seeks a transfer of the loan account in her name with the company in an amount of $88,563.00 to the husband and with the husband to provide the wife with the appropriate indemnities in relation to the company and its liabilities.

458.If the wife were to succeed with her application it would result in her receiving a total of $1,259,803.98 or thereabouts, which is the equivalent of 54.4% of the net value of the assets.

459.Ms S was asked by the lawyers for the parties to provide answers to agreed questions in the event of certain Orders being made and the consequent possible liability for taxation or otherwise.[51]

[51] See Exhibit J6

460.In summary, the transfer by the wife to the husband of her “ordinary” “B” class shares to the husband will not result in any capital gains tax payable by the wife or the husband at the time of transfer but the husband may be liable for tax on his ultimate disposal of the shares, the value of which cannot presently be determined. Similarly, no stamp duty is payable upon such a transfer and there are no income tax or GST consequences as a result of the transfer of shares by the wife to the husband.

461.As to the payment of $85,000.00 pursuant to the Orders of 3 August 2012 and which it is common ground is in fact a payment to the wife of $74,604.00, Ms S was asked of the taxation consequences of the receipt of such payment. Ms S refers at length to the consequences and refers also to her report as to the valuation of the company[52] to the difficulty which arises as to the non-characterisation of the payment as between a loan advance, dividend or otherwise. In particular, Ms S refers to the Australian Taxation Office Taxation Ruling TR2014/5 of 31 July 2014 to the effect that the tax office reversed its decision in respect of the taxation effective Orders made in Family Law Proceedings which involve payments from private companies and that the protection previously provided is no longer available, and for the advance of $85,000.00 not to be treated as a deemed dividend, then the exemption available to Section 109N would have to be satisfied. Ms S sets out that exemption in detail and concludes that if the sum of $85,000.00 is deemed a dividend then the wife would be liable to pay income tax, including Medicare levy in an amount of $15,571.00.

[52] See Exhibit J1.

462.Ms S was asked to advise as to any taxation consequences of the transfer of the loan account to the husband in accordance with the Orders sought by the wife. This refers to the wife’s obligation to pay the company $88,563.00. Ms S advises that there would be no taxation consequences should the wife’s loan account balance be transferred to the husband but a new complying loan agreement between the husband and the company must be put in place simultaneously with the transfer of the balance to the husband. Ms S also refers to an assumption that a complying loan agreement is currently in place.

463.Ms S was then asked as to what the taxation consequences would be for the parties if such loan account of $88,563.00 was forgiven and responded that it would be treated as a dividend received by the wife. Ms S assessed the wife’s income as to any income tax liability in such circumstances including Medicare levy as $15,571.00 for the 2015 financial year.

464.When asked what the taxation consequences if the loan amounts were treated as dividends rather than loans to the parties, Ms S then confirmed that the taxation liability would be in the order of $15,571.00.

465.In relation to the possible transfer to the wife from the superannuation fund of the Property T property, Ms S was asked whether the calculation performed by Ms T, the company accountant for capital gains tax was accurate. Ms S was also asked whether there would be a liability if transfer of such land to the wife was deferred until after she attained the age of 55 years.

466.Ms S confirmed the correctness of the methodology adopted by Ms T in calculating the capital gains tax which she had assessed at $26,347.00,[53] but qualified such confirmation on the premise that Ms S had not been able to confirm the cost base adopted by Ms T. Ms S was able to obtain access to some other material as to the cost base of the Property T property, and concluded ultimately that any discrepancy between the cost base would be immaterial.

[53] See paragraph 5 of the affidavit of Ms T filed 14 October 2014.

467.As to the possible transfer of the Property T land to the wife upon reaching the age of 55 years, Ms S confirmed that the relevant age was 56 years about which Ms T had given similar evidence in her affidavit sworn 5 November 2014.[54] Ms T had confirmed that upon attaining the age of 56 years and provided she had met conditions of release as set out by Ms T, then the capital gains tax on the Property T property would be nil if not disposed of until after the wife attains the age of 56 years. One of the conditions to which Ms T refers is the wife having reached the age of 56 years and being retired or reaches the same age and begins a “transition to retirement” pension.

[54] Exhibit H3.

468.Ms S explains the meaning of retirement for a member under the age of 60 years but who has attained the age of 56 years when the arrangement under which the member was gainfully employed ceases and the trustee of the fund is reasonably satisfied that the member does not intend to be gainfully employed for at least 10 hours per week in the future.

469.Given this evidence, I conclude that if Property T is transferred to the wife as a consequence of the Orders in these proceedings then capital gains tax is payable, but if it is transferred to the wife’s superannuation fund then the liability for capital gains tax is not triggered.  It will be open to the wife to utilise the value of this land without capital gains tax liability when she reaches the age of 56 years. 

470.Given the provisions of Section 81 and the duty which the court has, as far as practicable, to make Orders which will finally determine the financial relationship between the parties and avoid further proceedings between them, it seems to me that it is not a viable proposition to consider any transaction in relation to the Property T property taking place after 2 August 2016 when the wife obtains the age of 56 years or being deferred to such date.

471.As to the transfer by the company of the Ford Territory motor vehicle to the wife, I have referred to this earlier given that Ms S has been unable to provide an estimate of the tax consequences but Ms S points out that the transfer of the vehicle may result in GST consequences to the company for the reasons which she gives in detail.

472.Insofar as the supplementary submissions from Mr Tregilgas are concerned I am not compelled to change my conclusion that the Ford Territory and Nissan Navara were not included in the valuation by Ms S. I therefore decline to add the value of such vehicles to the company.

473.Insofar as the wife’s loan account with the company is concerned I accept the submission made by Mr Tregilgas that certain items of expenditure should not be added back.

474.As to the submission in relation to the possible liability for capital gains tax on Property U, I am not compelled to a view that it is a liability to be taken into account for the reason that it is far from certain such liability may accrue to the wife. My reasoning is that the liability for capital gains tax will not be triggered until such time as the wife deals with such land and then only to be assessed as part of her overall income. Given that it is quite possible the wife will have no income or income below the taxable threshold, it is quite feasible on the balance of probabilities that she will not be liable for any capital gains tax and I therefore do not bring it into account.

475.As to the husband’s leave entitlements, I note this may be considered an asset or financial resource of the husband in addition to the value of the company as referred to by Ms S in paragraph 2.11 on page 6 of exhibit J1. I have taken this into account in my overall assessment of contributions and do not consider it necessary to be brought in by way of additional value to the company. I note that Ms S refers to it as “may be considered” as opposed to a compulsory addition.

Final Conclusion

476.I am satisfied within the meaning of Stanford & Stanford that it is just and equitable to divide the property of the parties.

477.The particular difficulty faced in this case is endeavouring to achieve an outcome which is not only just and equitable but fair to both parties, enables each of them to retain their respective homes if possible and avoids the compulsory sale of any particular asset to bring about such a result and nullifies any possible liability for taxation.

478.When I come to weigh the matters in Section 79(4) including in particular Section 75(2), I find on the whole of the evidence that it is appropriate to divide the net property equally between the parties and that there be no further adjustment. In that regard, I note carefully the submissions made by Mr Tregilgas that the wife in fact receive a small percentage adjustment in her favour.  But I decline to do so.  It is not warranted.  The wife will have the benefit of a cash payment of $461,734.00 and a superannuation fund of $389,129.73.

479.It seems to me that it is equitable for each of the parties to receive one of the lots at Property T. It is clear from the respective applications that neither of the parties want such land and it is therefore an equitable outcome in the absence of any other assets which can be divided appropriately.

480.I note that while the husband would prefer to retain the land at Property U, it seems to me that should be transferred to the wife, together with the (shares omitted) and (omitted) shares owned by the husband.

481.The wife will be required to transfer to the husband her loan account with the company which will not attract any taxation for the reasons given by Ms S.

482.The division which I propose to put into place enables the husband to retain the business and, through the superannuation fund, the land upon which the business premises are constructed. It will be necessary for the husband to borrow monies to pay out the wife but I am satisfied he has sufficient equity in Property B to borrow the required amount, subject of course to his present personal financial circumstances.

483.It would be prudent for both parties to see their respective accountants with these Orders to consider the taxation implications.

Division of Property

484.The non-superannuation fund assets have a net value of $1,396,283.72.

485.It follows that for an equal division of such assets, each party is to receive $698,141.86.

486.The superannuation fund has a value of $918,887.78.

487.If follows that for an equal division of the superannuation assets an adjustment to each party is required of $459,443.89.

488.This results in each party receiving net assets with a total value of $1,157,585.75.

489.The husband and wife have together the assets described in paragraph 314 above, subject to the liabilities as shown.

490.The superannuation funds can be divided in favour of the wife as follows, and to be transferred to her nominated superannuation fund:

Property T	$	235,000.00
Cash	$	104,786.73
(omitted) Fund (Wife)	$	34,000.00
(omitted) Fund (Husband	$	15,343.00
Total	$	389,129.73

491.Upon such division, the husband will retain the following in the superannuation fund:

Property T	$	235,000.00
Balance of the superannuation fund represented by Property M less the instalment warrant	$	294,758.05
Total	$	529,758.05

492.Division of the non-superannuation assets in favour of the wife will be as follows:

Net equity in Property E	$	55,000.00
Ford Territory	$	18,550.00
Jewellery	$	3,016.85
Shares in (omitted)	$	4,296.24
Furniture and Furnishings	$	8,060.00
Subtotal	$	88,923.09
Land at Property U to be transferred to the wife	$	210,000.00
Transfer of husband’s shares in (shares omitted)	$	3,220.63
Transfer of husband’s shares in (omitted)	$	4,578.00
Subtotal	$	217,798.63
Total	306,721.72

493.The husband will retain the following property subject to the parties loan accounts with the company:

Net equity in Property B	$	590,546.00
Tractor	$	18,750.00
(omitted) Boat	$	12,250.00
(omitted) Boat	$	29,000.00
(hobby omitted)	$	3,700.00
Ride-on Mower	$	1,500.00
Furniture and Furnishings	$	9,130.00
Suzuki Motorcycle	$	4,500.00
The Company	$	563,000.00
Subtotal	$	1,232,376.00
Less:
Husband’s loan account with the company	$	(54,251.00)
Wife’s loan account with the company	$	(88,563.00)
Subtotal	$	(142,814.00)
Total	$	1,089,562.00

494.The amount required to be paid by the husband to the wife to bring about an equal division is as follows:

Wife requires adjustments of assets in her favour to the value of $1,157,585.75 achieved as follows:

Realty and Personalty retained by wife (paragraph 490 above)		$		88,923.09
Realty and shares transferred to wife (as per paragraph  490 above)			$	217,798.63
Superannuation funds retained by wife (as per paragraph 488 above)			$	389,129.73
Subtotal		$	695,851.45
Add:
Payment by husband to wife			$	461,734.30
Total		$	1,157,585.75

495.The wife receives therefore the following:

Real estate and property as described above	$	306,721.72
Payment from husband	$	461,734.30
Superannuation fund assets to be retained by wife	$	389,129.73
Total	$	1,157,585.75

496.After payment to the wife of $461,734.30, the husband will retain the following property:

Personalty, real estate and company (Paragraph 491 above)	$	1,089,562.00
Less payment to wife (Paragraph 489 above)	$	(461,734.30)
Subtotal	$	627,827.70
Plus assets in superannuation fund	$	529,758.05
Total	$	1,157,585.75

497.I propose to allow the husband sixty (60) days to obtain either approval for a loan or the monies to pay the wife, failing which, and in default of payment, the property at Property B is to be sold to realise the necessary funds.

498.During the course of submissions Mr Cook told me that the husband had some borrowing capacity although there was no evidence adduced in his case of the extent of such capacity.

499.I have given further consideration to the division of property referred to above and conclude that in my evaluation of all the factors in Section 79(4)(a) to (g), the division of property which I propose is just and equitable and does not require any further adjustment.

500.I will round off the amount payable to the wife by the husband at $461,734.00.

501.Until such time as the wife receives the cash payment of $461,734.00, it is appropriate that she continue to receive the sum of $1500.00 per week from the company pursuant to the Orders made on 3 August 2012, but upon payment such Order is discharged.

502.For these reasons I make the following Orders.

I certify that the preceding five hundred and two (502) paragraphs are a true copy of the reasons for judgment of Judge Coakes.

Date:  13 May 2015