GAYLE & GAYLE
[2012] FMCAfam 54
•23 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GAYLE & GAYLE | [2012] FMCAfam 54 |
| FAMILY LAW – Property adjustment – valuation of minority shareholding – assessment of contributions. |
| Family Law Act 1975, ss.75(2), 79(4) |
| In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Clauson (1995) FLC 92-595 Russell v Russell (1999) FLC 92-877 In the Marriage of Hickey (2003) 30 Fam LR 355 Coghlan v Coghlan (2005) FLC 13-220 |
| Applicant: | MS GAYLE |
| Respondent: | MR GAYLE |
| File Number: | BRC 9668 of 2009 |
| Judgment of: | Jarrett FM |
| Hearing date: | 20 December 2010 |
| Date of Last Submission: | 20 December 2010 |
| Delivered at: | Brisbane |
| Delivered on: | 23 January 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr North SC |
| Solicitors for the Applicant: | Charles Cooper Lawyers |
| Counsel for the Respondent: | Ms Hawkshaw |
| Solicitors for the Respondent: | Pathway Legal Services |
ORDERS
By 4.00pm on 22 February, 2012:
(a)The wife and husband shall sign all necessary documents and do all necessary things to transfer to the husband the wife’s interest in the property situated at Property T, Queensland (the Property) at the husband’s expense;
(b)Both parties shall sign all necessary documents and do all necessary things to enable the husband to refinance into his sole name the mortgage with ANZ (account number (omitted)) that is secured by the Property at the husband’s expense;
(c)The husband shall sign all necessary documents and do all necessary things to obtain a release for the wife of the guarantee she has provided for the husband’s ANZ business loan (A/C No. (omitted));
(d)The husband shall pay to the wife, care of Charles Cooper Lawyers Trust Account the sum of $121,570 by way of bank cheque;
(e)The husband shall pay the GE Finance debt that is in joint names and both parties shall sign all necessary documents to close that account, or he shall take such other steps as may be necessary to have the wife released from liability under that account.
In the event that the husband is unable to comply with any part of order 1 above:
(a)The husband and wife shall sign all necessary documents and do all necessary things to place the Property on the market for sale with a real estate agent as agreed to between the parties and in the event that they cannot;
(b)The listing price of the Property will be as agreed and failing agreement the husband and wife shall obtain one market appraisal each and the listing price shall be the average of those market appraisals;
(c)The property shall be listed for sale within thirty five (35) days of the date of these orders;
(d)In the event that the property is not sold by way of private treaty within 8 weeks of it being on the market then it shall be auctioned and sold. The auction shall take place within four(4) weeks after the period for which the property is listed for sale by private treaty expires;
(e)Upon the sale of the Property the proceeds of sale shall be applied as follows:
(i)repayment of the liability owing to ANZ that is secured by the Property;
(ii)payment of the cost of sale including legal fees of the sale, real estate’s commission and auctioneer’s fees (if any);
(iii)payment of any council rates owing;
(iv)payment to the wife of the amount of $121,570 by way of cleared funds care of Charles Cooper Lawyers Trust Account);
(v)repayment of the business loan owing to ANZ (if unsecured and not repaid pursuant to order (2)(e)(1) hereof);
(vi)the balance shall be paid to the husband.
Pending settlement of this matter the husband shall continue to meet the mortgage repayments to the ANZ for account number (omitted) (being the former matrimonial home) and the loan repayments for the ANZ business loan (A/c No. (omitted)) and shall indemnify the wife in relation to these loans.
Both parties are restrained from re-drawing any funds from either the mortgage account or the business loan account until settlement of this matter.
The husband shall pay, and indemnify the wife in relation to all monies owing or which may become owing in respect to the former matrimonial home including but not limited to the insurance, rates, and maintenance.
Save as referred to elsewhere in these orders, the husband shall retain all other assets in his possession and control particularly:
(a)his shares in (omitted) & (omitted);
(b)the proceeds of his bank accounts;
(c)his superannuation;
(d)the furniture and household effects in his possession.
The husband shall indemnify the wife for any liability in his name or any liability associated with any asset or financial resource he is retaining.
The wife shall retain to the exclusion of the husband all assets in her possession including but not limited to:
(a)her Holden Astra motor vehicle;
(b)the proceeds of her banks accounts;
(c)her superannuation;
(d)her jewellery and (omitted);
(e)the settlement sum she is to receive pursuant to this order; and
(f)the furniture and household effects in her possession.
The wife shall indemnify the husband in relation to any loans any loans or liabilities associated with any assets she is retaining.
Save as referred to elsewhere in these orders, each party retain and be responsible for any liability in their name and particularly their credit card accounts and shall indemnify the other party in relation to such debts.
IT IS NOTED that publication of this judgment under the pseudonym Gayle & Gayle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 9668 of 2009
| MS GAYLE |
Applicant
And
| MR GAYLE |
Respondent
REASONS FOR JUDGMENT
This is an application for an application for property adjustment under s.79 of the Family Law Act 1975.
Ms Gayle and Mr Gayle commenced their relationship in or about March, 2001. They began cohabitation on or about (omitted), 2001 along with Ms Gayle’s two children from her previous marriage. They married in (omitted), 2005.
After an earlier period of separation of about 6 months, the parties separated for the final time in late April, 2009. Their relationship was of 8 years duration. Their marriage was of about 3 and one half years duration. They were divorced by a divorce order pronounced on 6 July, 2010. For ease of reference, however and without intending to be in any way disrespectful, I shall in these reasons refer to the parties as Mr and Ms Gayle respectively.
The parties cannot agree on how their property ought to be divided between them now that their marriage relationship has come to an end.
The Law
The law in relation to property adjustment is relatively settled insofar as married couples are concerned. The approach to the determination of an application under s.79 of the Act is well established by authorities such as In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595; In the Marriage of Hickey (2003) 30 Fam LR 355 and Coghlan v Coghlan (2005) Fam LR 414. Generally speaking there are four stages to the proper consideration of an application for property adjustment.
Firstly, I must identify the property, liabilities, and financial resources of the parties at the time of the hearing. Secondly, I must evaluate the parties’ contributions as defined by s.79(4) of the Act with particular reference to those matters listed in s.79(4)(a), (b) and (c). Thirdly, I must evaluate the matters to which my attention is directed by s.79(4)(d) to s.79(4)(g), and in particular, s.75(2) of the Act insofar as any of those matters are relevant. Finally, I must be satisfied in all the circumstances that it is just and equitable to make the order that I propose to make. It is the justice and equity of the actual orders proposed to be made that I must consider: Russell v Russell (1999) FLC 92-877.
The preferred approach is to deal with the superannuation assets and the non-superannuation assets separately and to apply the four step process set out above to each class of assets. Neither party suggested in this case, however, that it was appropriate to treat the superannuation and non-superannuation assets separately. Both parties were content for the Court to approach the matter on the basis that there was one pool of assets which included both superannuation and non-superannuation assets.
The Assets and Liabilities
I find that the parties have the following assets, liabilities and financial resources as a t the date of the trial:
| Assets: | ||
| Property T | $525,000.00 | |
| (omitted) Toyota Landcruiser (H) | $10,000.00 | |
| (omitted) Holden Astra (W) | $8,000.00 | |
| Cash at bank (W) | $900.57 | |
| Cash at bank (H) | $2,700.00 | |
| Money taken by H | $12,000.00 | |
| (omitted) and (omitted) (H) | $162,680.00 | |
| Jet Ski (H) | $5,900.00 | |
| Camping Trailer and Equip (H) | $24,000.00 | |
| Windsurfing Gear and trailer (H) | $5,500.00 | |
| Fish Tank & accessories (H) | $2,900.00 | |
| Workshop Equip (H) | $2,455.00 | |
| Jewellery & (omitted) (W) | $13,405.00 | $775,440.57 |
| Less: | Home Mortgage | $312,952.00 |
| Business Loan | $131,207.00 | |
| Jet Ski Loan | $3,500.00 | |
| GE Credit Line | $1,136.79 | $448,795.79 |
| Superannuation: | ||
| Sunsuper (H) | $96,108.04 | |
| MLC (W) | $42,037.88 | $138,145.92 |
| Total Net Assets and Superannuation: | $464,790.70 | |
Save for the matters the subject of comment below, the assets, liabilities and their values that appear in the above table are agreed. In respect of the issues concerning the identification and valuation of those matters not agreed, I make the following observations and findings.
The parties disagreed about the value of the camping trailer and equipment that is in the position of Mr Gayle. There are two valuations in respect of the camper trailer. One of them values the camper trailer alone while the other values the camper trailer and its equipment. Annexure “SEG-3” to Ms Gayle’s affidavit filed on 16 December, 2010 values the camper trailer and equipment at $24,000. Although hearsay evidence, the valuation was not the subject of objection and the maker of the opinion set out in that document was not required for cross-examination. I am content to rely upon it. I find that the value of the camper trailer and equipment is $24,000.
Ms Gayle alleges that Mr Gayle. has a (omitted) watch in his possession. There is no dispute between the parties that Mr Gayle. has in the past owned a (omitted) watch, although he claims that it was lost. An insurance claim in respect of that loss and Mr Gayle. received about $5,000 in respect of that claim. He said in cross examination that the sum so received was spent on living expenses and the payment of school fees for Ms Gayle’s children. Ms Gayle, however, gave evidence that at the time of separation. When she was looking in the safe in the parties’ former matrimonial home, she saw the watch. Mr Gayle denied still having it when cross-examined. I am not satisfied, on the balance of probabilities, that he still has the watch. I have excluded it from the asset table.
There is no dispute between the parties that following separation Mr Gayle removed $12,000 from the parties’ home mortgage account. Some of the money was used to pay Mr Gayle’s legal fees and some was used to pay his credit card expenses. In submissions, Ms Gayle’s counsel argued that the funds used by Mr Gayle ought to be added back to the pool because they were spent on post separation expenses of a personal nature. He argued that Ms Gayle ought not be responsible for them. I accept that submission and I have added that sum back to the pool of assets.
There was a significant dispute between the parties about the value of Mr Gayle’s shareholding in (omitted) and (omitted).
The evidence reveals that (omitted) and (omitted) is a company controlled by Mr Gayle’s brother Mr A. Mr A is the sole director of the company. In March, 2004 Mr Gayle purchased 250 ordinary shares of the 1000 ordinary shares on issue in the Company. The shares were purchased for $150,000, which was borrowed from the ANZ Bank and secured by way of mortgage against the former matrimonial home. Ms Gayle was required to give a personal guarantee in respect of that loan and did so.
In June, 2008 and before the parties’ first separation, Mr Gayle received a payment from the company of $30,000 gross ($19,808 after tax) by way of bonus. Mr Gayle says that his brother wanted to pay him a dividend as recognition for his work and to assist he and Ms Gayle.
Soon after the payment was received the parties separated, but Mr Gayle did not know at the time he received the payment that separation was a short term possibility.
Mr C is the accountant for (omitted) and (omitted). He swore an affidavit that was relied upon by Mr Gayle in these proceedings. Although some of his evidence was ruled inadmissible, he was not cross-examined about the balance of his evidence. Mr C. deposes that:
a)he was approached by Mr A in June 2008 for advice as to how to pay a dividend of $30,000 to Mr Gayle.
b)he gave Mr A advice that in order to pay Mr Gayle a dividend without paying an identical dividend to himself, different classes of shares would be necessary to be issued and allotted in the Company;
c)Mr A was nonetheless determined to pay the dividend to Mr Gayle in the 2008 financial year and so it was paid by way of a lump sum bonus and recorded as wages and salary on Mr Gayle’s group certificate;
d)on 19 August, 2008 he met with Mr A, who advised him that he had signed a contract to purchase a new boat. Mr A sought advice on how to pay for the boat with the assistance of funds from the company;
e)Mr A and Mr C., decided that Mr A's purpose could be achieved by payment of a dividend to him, but to avoid the necessity to pay a similar dividend to Mr Gayle the allotment of different classes of shares as they had previously discussed in June 2008 needed to be accomplished;
f)Mr Cooper was instructed to proceed with the issue and allotment of the new shares;
g)Mr A was issued 750 A class shares and Mr Gayle was issued 250 B class shares;
h)at no time in the discussions about the payment of dividends and changes to the share structure between Mr A and Mr C. was there mention of a marital split between Mr Gayle and Ms Gayle.
Mr A did not give evidence in the proceedings.
The change in the share structure of (omitted) and (omitted) affected the value of Mr Gayle’s shareholding in the company. Mr B, Chartered Accountant, was appointed a single expert for the purposes of valuing Mr Gayle’s shares in the company. He was asked to value the shares on the basis that the share restructure had not occurred and on the basis of the current share structure. Mr B. concluded that without the issue of the A and B class shares, Mr Gayle’s 250 ordinary shares were worth $203,350.00. However, having regard to the issue of the A and B class shares, the value of Mr Gayle’s interest in the Company was reduced to $162,680.00. The reason given by Mr B. for the reduction in value was that the different class of shares enabled the sole director Mr A to effectively control and direct the payment of dividends to the exclusion of the holder of the minority interest. Mr B.’s opinions were not challenged. I accept them.
Ms Gayle argues that given the exquisite timing of the change in the share structure of the company, I should infer that it was carried out so as to reduce the value of Mr Gayle’s holdings in the Company. Mr Gayle denies the allegation and says that the change was carried out by his brother for his own purposes.
I decline to make the finding contended for by Ms Gayle. Mr C.’s evidence makes it clear that it was his advice to Mr A that the share structure in the company needed to be changed to permit the payment of a dividend to a single shareholder. It was not Mr A’s idea. Moreover, there does not seem to be any suggestion of any discussion between Mr A and Mr C. about the effect that the change in the share structure might have on the value of the interests of the equity holders in the company.
I find that the value of Mr Gayle’s share holding in (omitted) and (omitted) is $162,680.
The final issue that needs to be dealt with is a claim by Ms Gayle. that a loan to her from (omitted) in the sum of $63,653 59.
(omitted) is a company owned and controlled by Mr S. He is the sole director and shareholder. Mr S. is Ms Gayle’s employer and her life partner. They live together (along with Ms Gayle’s children) in Mr S.’s home.
Ms Gayle swears that since the separation, she has had to borrow funds from (omitted) to “assist with my living costs and other expenses”. The total that she owes (omitted) is $136,414 77 but the difference between that sum and what she claims in these proceedings is the amount she has spent on legal costs. She argues that the amount spent on legal costs should not be included in the liability.
I have no doubt that (omitted) advanced to Ms Gayle the funds as she claims. There is no written loan agreement between she and (omitted) but the evidence from Mr S. is that he considers it a loan. Mr S.’s evidence in cross examination was that there were no terms as to repayment and that repayment depended upon the outcome in these proceedings. His evidence in cross-examination tended to weaken the position that he deposed to in his affidavit that the funds would have to be repaid in any event.
Those considerations are, however, not relevant. Ms Gayle argued that Mr Gayle’s personal expenses, post separation, ought not to be brought to account in these proceedings and for that reason the $12,000 drawn by him from the parties’ mortgage should be “added back” to the pool of assets. I have accepted that argument. Given that, it is difficult to see how the amount expended by her on her own living expenses post separation (such as school fees, replacement costs of furniture and chattels after separation from Mr Gayle and day-to-day living costs) should be brought to account. Ironically, Mr Gayle argued that one of the bases upon which I should reject this claim is the same reason Ms Gayle argued against the inclusion of his expenses which he argued should be included.
There is a significant inconsistency in Ms Gayle’s argument. Given the approach that I have taken towards Mr Gayle’s use of the $12,000 drawn by him from the mortgage on the former matrimonial home, I decline to bring to account in these proceedings the sum advanced to Ms Gayle. by (omitted).
Section 79(4)(a) – 79(4)(c)
Neither party suggested that I should adopt a “two pools” approach as suggested by the Full Court in Coghlan v Coghlan (2005) FLC 13-220 whereby superannuation is considered separately. Both parties seemed content to approach the matter on the basis that both superannuation and non-superannuation assets be dealt with together.
I find that at the commencement of the parties’ relationship Ms Gayle owned the following property:
a.Furniture and household effects which Ms Gayle estimates to have a value of $60,000 and Mr Gayle a value of $10,000. Neither, however, purports to have any expertise as to valuation of such chattels, and so their evidence in that regard is of little, if no, value;
b.Superannuation worth at least $3,000.00;
c.A (omitted) Toyota Landcruiser (omitted) subject to a personal loan with Westpac Bank of about $26,000.00;
d.Cash in her bank accounts of at least $1,800.00.
I find that at the commencement of the parties’ relationship Mr Gayle owned the following property:
a.A property situated at Property K, which in September, 2001 had a value of $98,000 and a debt in respect of it of $61,966.38;
b.An investment property at Property C, which in September, 2001 had a value of $190,000 and a debt in respect of it of $166,982.47;
c.Household furniture and effects (in respect of which there is unqualified evidence of Mr Gayle that they were worth $10,000);
d.A credit card debt of about $7,000.00
e.Superannuation valued at approximate value of $30,000.00; and
f.A (omitted) Toyota Landcruiser.
Thus, Ms Gayle had property and superannuation worth about $5,000 together with her furniture and motor vehicle with a debt in respect of it. Mr Gayle had property with a net value of about $59,000, some furniture, superannuation, a credit card debt and a motor vehicle.
When they commenced their relationship Ms Gayle worked as a (omitted) earning about $38,000 per annum gross. She also received $14,957.16 per annum in child support from her former husband. She and her two children were living in rented accommodation.
At the same time Mr Gayle was working for his brother Mr A in the latter’s company (omitted) and (omitted). He was earning about $40,000 per annum. He was also receiving rent from his investment property that was applied against the loan on that property.
In September, 2001 the parties contracted to purchase a property situated at Property D, Queensland. The contract completed in December, 2001. The parties jointly borrowed $201,235.76 to fund the purchase price of $179,000 and associated costs. Of that sum, I find that Mr Gayle used $7,000 to payout the credit card liability that he had at that time.
By September, 2001 the parties had established a joint bank account with ANZ Bank and each was depositing their income to that account. I accept Ms Gayle’s evidence that in September, 2001 she assisted Mr Gayle to refinance the borrowings in respect of both of his real properties. His investment property at Property C was refinanced from an interest only basis to a principal and interest loan of $166,000. Thereafter repayments on the refinanced loans, together with the outgoings, such as rates, were made from the parties’ joint account. No doubt the rental received from that property was also used to assist make repayments.
The parties moved into the Property D property in December, 2002. At that time Mr and Ms Gayle cleaned up the Property K property (with the assistance of others) ready for occupation by a tenant. They did the same again in early March, 2003. I accept that they did work in the garden, cleaned the property and did some painting. There is a dispute between the parties about what each did on those occasions, but a resolution of that dispute will not assist a resolution of this case.
Ms Gayle deposes that whilst living in the Property D property the parties met the mortgage repayments from their joint account. They undertook some improvements to the property including:
a)replacing the carpet with tiles;
b)Fitting security screens;
c)Painted the house externally;
d)Significant landscaping; and
e)Building a garden shed.
Again, the parties are in dispute about who did what, with neither prepared to give the other much, if any, credit for the work that they did. Again, it is unnecessary to sort out the minutiae of this dispute. I am satisfied by the evidence that both assisted in maintaining and improving the property.
In December, 2002 Mr Gayle sold the investment property at Property C. On the affidavits filed by them the parties are in dispute concerning the use to which the funds liberated by that sale were put. However, in cross-examination Mr Gayle accepted that Ms Gayle’s evidence about the disposition of these funds was probably accurate. After the payment of the mortgage of some $162,647.42, the proceeds were disbursed as follows:
a.$6,270.00 to the Real Estate Commission;
b.$81.31 (omitted) City Council;
c.$41,001.27 was deposited into the parties’ joint ANZ one account and was used to purchase some household goods and $28,100.00 was used to pay the husband’s credit card liability over a period of three months.
Although Mr Gayle deposes that he used the proceeds to pay Ms Gayle’s approximately $30,000.00 debt then existing in respect of her motor vehicle and $10,000.00 on her legal fees it seems that the funds were disbursed as suggested by Ms Gayle. However, Ms Gayle conceded in cross-examination that in the first two years of the parties living together Mr Gayle did pay out the loan over her vehicle and $10,000 towards a legal bill that she had accumulated. The funds used to pay those amounts, I find on the balance of probabilities, came from the parties’ joint account into which the balance of the proceeds of sale of Property C had been paid.
In May, 2003 Mr Gayle sold his Property C property for $218,000.00. Mr Gayle accepted in cross-examination Ms Gayle’s account of how the funds received from that sale were disbursed. Ms Gayle deposes at paragraph 52 of her most recent affidavit that the proceeds of sale of this property were disbursed as follows:
a)$53.82 (omitted) City Council;
b)$60,611.73 to repay the mortgage with ANZ secured by the property;
c)$155,523.84 was deposited into the joint ANZ one account and used in the following manner;
i)$17,404.78 to repay a debt to Westpac;
ii)$105,050.53 was used towards the purchase of the former matrimonial home situated at Property T;
iii)$22,200.00 was used to clear Mr Gayle’s ANZ Credit Card accumulated between May and July 2003;
iv)The balance was used for improvement to the Property T property.
In about July 2003 the parties sold the Property D property for $299,000.00. Ms Gayle deposes at paragraph 60 of her affidavit of 3 December 2010 that the proceeds of sale of this property were used in the following manner:
a)Real Estate commission E$8,717.50;
b)$662.79 to the (omitted) City Council;
c)About $192,197.13 in repayment of the mortgage secured by the Property D property;
d)The balance of $96,524.89 was deposited into the parties joint account;
Mr Gayle accepted this reconciliation in cross-examination. He also accepted that he purchased a jet ski using the funds in the joint bank account and he used $77,000 to clear debts on his credit cards over a three month period.
The parties settled the purchase of what they describe as their former matrimonial home situated at Property T, Queensland in June, 2003 for $385,000.00. This purchase was funded by:
a)a $1,000.00 initial deposit taken from the parties joint account;
b)the balance of deposit of $9,000.00 from the same account;
c)$105,050.53 from the proceeds of sale of the Property K property; and
d)a mortgage from the ANZ Bank for the balance (around $270,000.00).
Both parties seem to agree that significant improvements, funded from the joint account, were made to the property. According to the valuation undertaken by (omitted), the improvements made to the house have increased the value of the house significantly (subject to the structural soundness of the improvements). Mr Gayle:
a)Removed an internal wall;
b)Installed a walk through area;
c)Removed a door and sealed off a room; and
d)Re-tiled.
Ms Gayle sets out the improvements she and Mr Gayle undertook in her affidavit at paragraph 68. I accept her evidence.
On or about March 2004 Mr Gayle purchased ¼ of the shares (250 shares) in (omitted) and (omitted) for $150,000.00. This was funded from an amount borrowed from the ANZ Bank and secured over the parties jointly owned property. Ms Gayle gave a personal guarantee to assist to secure the funding.
Repayments of that loan (made on an interest only basis) have been made from the joint account.
As set out above, Mr Gayle received a dividend on or about 20 June, 2008 from (omitted) and (omitted) of $19,808 (net of tax).
Between 2005 and 2007 the parties obtained several loans from the ANZ Bank for various purposes. The repayments were always made from the parties’ joint account, or by drawing down on the home loan secured over the former matrimonial home.
Both parties were gainfully employed throughout their relationship. After the share purchase in March, 2004 Mr Gayle’s income increased, although I accept that he remained employed on a base salary of about $1,000 per week and was remunerated by commission above that sum.
Ms Gayle was largely responsible for running the parties’ household, which included her two children. According to his evidence in cross-examination Mr Gayle was away from the family home for employment purposes on average about 10 days in each month. While he was away, he met his travelling expenses from his credit card. His expenses, however were always fully reimbursed by deposits to the parties’ joint account. Thus, whilst Ms Gayle goes to great pains in her affidavit to point out the amount transferred by Mr Gayle from the joint account to his credit card from time to time, quite disingenuously in my view, does not depose to the reimbursement of the travelling expenses or the amounts received to the joint account to cover those matters.
Following separation, Mr Gayle remained in the Property T property and Ms Gayle moved to rented accommodation. She subsequently moved to live with Mr S.. In Mr S.’s household she pays no rent but meets the cost of food and groceries.
Conclusions – contributions
Mr Gayle clearly had a superior financial position to Ms Gayle at the commencement of their relationship. The equity that he had in his properties increased between September, 2001 and when they were sold. There is no evidence that the increase was due to anything other than a rise in the market.
Ms Gayle contributed to the conservation of those properties in an indirect financial way by becoming a co-borrower in respect of the refinancing of each property.
The parties pooled their income and their resources for their mutual benefit. Mr Gayle, no doubt, made some contributions to the care of Ms Gayle’s children – it seems to be the case that their school fees were paid from the joint account to which he contributed.
Mr Gayle argues that I should view the parties’ contribution based assessment in his favour by 40% - that is I should find contributions are 70% to him and 30% to Ms Gayle.
Ms Gayle submits that I should find contributions favour Mr Gayle by only 20% - that is I should find contributions are 60% to him and 40% to Ms Gayle.
The current asset pool includes the equity from Property K property of a little over $105,000, or about one quarter of the nett pool. The balance of the pool can be seen as the product of the joint efforts of the parties, each making financial and non-financial contributions in their own way over the life of their relationship.
The contributions of the shares in (omitted) should be seen as a joint contribution. Although those shares come from Mr Gayle’s family, they were purchased at full value using jointly borrowed funds. In those circumstances, both parties having contributed to the purchase price, each should be seen as making the contribution to the acquisition of the shares (cf. Calverley v Green (1984) 155 CLR 242 at 251).
In my assessment, the parties’ contributions should be seen as argued for by Ms Gayle. Such an assessment takes account of the initial contributions of Mr Gayle as reflected in the current asset pool. It reflects his other contributions of both a direct and indirect financial nature. It also properly values, in my view, the contributions by Ms Gayle including the important indirect financial contributions by her and her contributions as a homemaker (although I pay no attention to her role as a parent).
I find that Mr Gayle’s contribution based entitlement is 60% and Ms Gayle’s contribution based entitlement is 40% of the pool as found by me.
Section 79(4)(d) – 79(4)(g)
Neither party suggested that an adjustment for any of the matters set out in ss.79(4)(d) – 79(4)(g) was appropriate. I agree with those submissions.
Senior Counsel for Ms Gayle suggested that neither party could lay claim to any particular consideration under those sections, although I might take note that Mr Gayle has improved his earning capacity by reason of his shareholding which was contributed to by Ms Gayle.
I do not consider, however, that the improvement to Mr Gayle’s earning capacity has much to do with the purchase of the shares in (omitted), but as he said, more to do with the facts that he had increased his client base and therefore his commissions.
Further, I have not lost sight of the fact that Ms Gayle has the care and control of her two children from her previous relationship, but I note her evidence that she has always received child support from their father (although varying in amount from time to time). She also has the debt alleged to be owed to (omitted), the repayment of which is to some extent dependent upon these proceedings.
Justice, equity and the orders
On my assessment Ms Gayle is entitled to $185,916.28 and Mr Gayle the balance of $278,874.42.
Ms Gayle has the following assets in her possession:
(omitted) Holden Astra (W) $8,000.00 Cash at bank (W) $900.57 Jewellery & (omitted) (W) $13,405.00 MLC (W) $42,037.88 $64,343.45
To make up her entitlement, Mr Gayle should pay her $121,572.83, which I will round to $121,570.
The parties are not in dispute as to the form of order to be made. Orders sought by Mr Gayle, but reflecting the above payment are, for the reasons given above, just and equitable.
I make the orders set out at the commencement of these reasons.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Date: 23 January 2012
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