Geller and Cainer

[2010] FamCA 730

FAMILY COURT OF AUSTRALIA

GELLER & CAINER [2010] FamCA 730

FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments – Just and equitable – Superannuation

Family Law Act 1975 (Cth) ss 75 & 79

In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
Hampton Court Limited and Crooks (1956-57) 97 CLR 367
Re Hodges; Shorter  v Hodges(1988) 14 NSWLR 698
Perpetual Trustee Co Ltd v Fairlie-Cunninghame; The Estate of Samuel Douglas Machattie Service Probate Division, NSW Supreme Court Suit No. 104860 of 1993
G v H (1993) FLC 92-380; 16 Fam LR 525
Jones v Dunkel (1959) 101 CLR 298
Stephens & Stephens and Ors (2007) FLC 93-336
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Robb (1994)18 Fam LR 489
In the Marriage of Dickson [1999] FamCA 278; (1999) FLC 92-843; 24 Fam LR 460
In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; (1995) FLC 92-595

APPLICANT: Ms Geller

RESPONDENT: Mr Cainer

FILE NUMBER: SYC 8564 Of 2007

DATE DELIVERED: 19 August 2010

PLACE DELIVERED: Sydney

JUDGMENT OF: Justice Loughnan

PLACE HEARD:  Sydney

HEARING DATE: 19- 23 July 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE:	Mr C. Simpson SC
SOLICITOR FOR THE APPLICANT:	Briggs & Associates Solicitors

COUNSEL FOR THE RESPONDENT 

HUSBAND:

Mr G. Richardson SC

Mr Julian Miller

SOLICITOR FOR THE RESPONDENT

Pearson Family Lawyers

Orders

1. In accordance with s.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable from the husband’s interest in the N Superannuation Fund, the husband shall cause and the trustee, R Pty. Limited shall pay to the wife or her executors, administrators, beneficiaries, heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $764,699 and make a corresponding reduction in the entitlement the husband would have had in the Fund but for these orders.

2. Order 1 shall have effect from the operative time which seven days after the date of these Orders.

3. Within twenty-eight (28) days of the date of these Orders the wife shall advise R Pty Limited in writing of a superannuation fund to which the splittable payment is to be paid.

4. The husband in his capacity as Director of the trustee of the Fund shall forthwith do all acts and things and sign all documents as may be necessary to, as soon as practicable, roll the sum representing the base amount referred to in (a) above, out of the Fund to the superannuation fund nominated by the Wife.

5. Except as otherwise provided in these orders, the husband and the wife each be declared the sole legal and beneficial owners of all items of property or resource including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 8564 of 2007

MS GELLER

Applicant

And

MR CAINER

Respondent

REASONS FOR JUDGMENT

1. When they were married in 1993, Ms Geller and Mr Cainer were 47 and 51 years of age, respectively. They separated 14 years later and seek orders for settlement of property. Although they are divorced, for convenience I will refer to them as the wife and husband.

Applications

1. The wife seeks orders in terms of a minute of orders provided to my chambers by email on 29 March 2010. She seeks:

   OBJECT OF ORDERS:

   The Applicant seeks the following Orders to the intent that in the event the Court characterises the interest of the Wife in the estate of the late [JB] as property, the property and superannuation of the parties be adjusted such that the Wife receives 40% and the Husband 60%.

   ORDER:

   1.That within forty-two (42) days from the date of these Orders the Husband pay to the Wife the sum of Four Hundred and Forty Thousand Five Hundred Dollars ($440,500) or such other amount as is necessary to give effect to the object of these Orders.

   2.RECITALS:

   A.The Husband is the sole member of the [N] Superannuation Fund (the Fund).

   B.The Husband is the sole Director and shareholder of [R] Pty. Limited, the corporate trustee of the Fund

   C.The liability for accrued member’s benefits in the Fund at 30 June 2010 was $3,328,765.

   (a) That in accordance with s.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable from the Husband’s interest in the Fund, the husband shall cause and the trustee shall pay to the Wife or her executors, administrators, beneficiaries, heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $881,600 and make a corresponding reduction in the entitlement the Husband would have had in the Fund but for these orders.

   (b)   That Order 2(a) of this Order have effect from the operative time which time is the date of this Order.

   (c)   The Wife shall within twenty-eight (28) days of the date of these Orders advise [R] in writing of a superannuation fund to which the splittable payment is to be paid.

   (d)   The Husband in his capacity as Director of the trustee of the Fund shall forthwith do all acts and things and sign all documents as may be necessary to roll the sum representing the base amount referred to in (a) above, out of the Fund to the superannuation fund nominated by the Wife.

   3.That, except as otherwise provided in these orders, the husband and the wife each be declared the sole legal and beneficial owners of all items of property or resource including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.

2. The husband seeks orders in terms incorporated in the Case Summary document provided in his case as follows:

   1.The husband by this Order releases the wife from all debts owing by her to him.

   2.The parties are solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession of each of the parties as at the date of the making of these Orders.

   3.The wife's Application pursuant to Section 79 be and is hereby dismissed.

   4.The wife pay the husband's costs of and incidental to these proceedings.

Documents read

1. The wife relied on the following documents:

Applications
Sworn	Filed
1	Amended Application for Final Orders	25.02.2010
Affidavits
1.	Affidavit of Wife	06.07.2009	06.07.2009
2.	Affidavit of Wife	24.09.2009	28.09.2009
3.	Affidavit of Wife	25.02.2010	25.02.2010
4.	Wife’s financial statement	11.12.2007	12.12.2007
5.	Wife’s financial statement	26.02.2010	01.03.2010
6.	Wife’s financial statement	14.07.2010	14.07.2010
7.	Affidavit of Associate Professor SV	12.03.2010	11.03.2010 (sic)
8.	Affidavit of Ms FT	29.04.2010	03.05.2010

1. The husband relied on the following documents:

Document	Sworn/affirmed	Filed
Financial Statement	22.02.08	25.02.08
Financial Statement	24.02.10	24.02.10
Financial Questionnaire	27.08.08	28.08.08
Affidavit of husband (+ 2 folders of Exhibits)	30.03.09	06.04.09
Affidavit of husband	11.11.09	11.11.09
Affidavit of husband	24.02.10	24.02.10
Affidavit of translator Mr MR	18.01.10	02.02.10
Affidavit of Mr G	10.02.10	19.02.10
Affidavit of Ms KN	21.02.10	25.02.10
Affidavit of S Cainer	24.02.10	24.02.10
Affidavit of Mr HE	26.02.10	04.03.10
Affidavit of Dr BR	14.04.10	14.04.10
Affidavit of Dr Q	14.04.10	14.04.10

1. The single experts evidence is:

Document	Sworn/affirmed	Filed
Affidavit of Ms WY	02.12.2009	03.12.2009
Affidavit of Mr FD	07.12.2009	07.12.2009
Affidavit of Mr FD	14.07.2010	14.07.2010
Joint Statement of Experts WY, Mr A and Ms PC	17.06.2010	Lodged 23.06.2010

Disputed facts

1. In the outline filed in the husband’s case, the following issues were identified:

   ·The condition and value of the B Road property owned by the husband at the date of cohabitation;

   ·The debts of the wife paid by the husband at the date of the marriage;

   ·The net proceeds of sale of the M property in May 2003, the amount owing by the wife under the mortgage, and payment of $150,000 by the husband through R Pty Ltd to the wife on 23 May 2003;

   ·The loss suffered by the wife of valuable furniture 2 years after the marriage due to non-payment of storage costs by the husband;

   ·The value of the wife's Subaru motor vehicle at the date of marriage;

   ·The assistance and involvement of the wife in enhancing the husband's career;

   ·The assistance and involvement of the wife in obtaining the husband's damages for defamation;

   ·The assistance and involvement of the wife in devising, negotiating and obtaining for R Pty Ltd the benefit of the Deeds of Covenant and pre-emptive rights of first refusal held by R Pty Ltd in respect of the G Avenue property;

   ·The income earned by the wife during the marriage;

   ·The wife's contention she was only able to work in paid employment on an irregular and casual basis during the marriage due to the commitments of the marriage;

   ·The money and financial support provided by the husband for the benefit of the wife during cohabitation;

   ·The nature and extent of the wife's contribution in respect of the renovation and maintenance of the B Road property and the G Avenue property, including in engaging, supervising and directing trades people; and the extent of the work undertaken by the wife to prepare the B Road property and the G Avenue property for sale;

   ·Provision of funds and liability or loss incurred by the husband for the wife post separation, and application of funds by the wife, including by the husband borrowing $1.5 million at the time of purchase of the E apartment;

   ·The nature and extent of the performance of homemaking and parenting tasks by each of the parties during the marriage;

   ·The receipt by the wife of $25,000 in 2005 from the sale of 2000 shares in Autocrown and her application of those moneys;

   ·The receipt by the husband of a gift of US$350,000 on 16 April 2007 from Mr S, and the contribution by each of the parties to the gift;

   ·The use and application of funds by the husband since the separation; 

   ·Income;

   ·proceeds sale B Road;

   ·proceeds sale G Avenue;

   ·purchase T Street;

   ·purchase and renovation of the French property;

   ·the winding up of the Cainer Family Trusts;

   ·gifts by the husband to his children;

Short history

1. The wife was born in 1946 and as at the date of the hearing was 64 years of age. The husband was born in 1942 and was 68 years of age. They were married in 1993 in England and commenced living together thereafter. The parties separated under one roof on 25 April 2007 and the wife moved out of the former matrimonial home on 28 November 2007. The parties’ divorce became final on 22 May 2009.

Children

1. There are no children of the parties' relationship.

Background facts

1. The husband was born in Australia in 1942.

2. The wife was born in Australia in 1946.

3. In 1964 the husband qualified in his profession.

4. The husband established R Pty Ltd in New South Wales in March 1970.

5. The husband established the … Superannuation Fund (now known as the N Superannuation Fund).

6. The wife had a career working in government and public administration … She then had 6 years based in Europe but travelling extensively, working as an Executive Assistance …. From 1983 she worked on her own account doing consulting work undertaking reports and investigations on a freelance basis in the United Kingdom.

7. On 21 December 1985 the wife was appointed a director of a family company, Gainer Pty Ltd, now known as JB Investments Pty Limited.

8. In 1986 the husband was defamed by Z Organisation.

9. On 5 February 1986 the wife’s step-father JB made his last Will.

10. On 9 April 1987 the wife and her then partner LC purchased a property at M in Queensland, as tenants in common in equal shares for $165,000.

11. In 1987 the husband sued Z Organisation for damages for defamation.

12. In early 1988 the wife purchased a design business on the Gold Coast and thereafter traded as Geller Global.

13. On 19 May 1988 the husband purchased the property at B Road for $730,000.

14. In 1989 there was a hearing of the husband's claim for damages for defamation. He was awarded $600,000 including interest plus costs. He received $200,000 being part payment of the defamation damages. The husband subsequently invested that sum, the investment failed and the moneys were lost.

15. In 1991 the NSW Court of Appeal allowed an appeal, set aside the defamation verdicts and ordered a new trial on the question of damages.

16. In October 1991 the husband was appointed a director of U Pty Limited.

17. In October 1991 an order was made by the Supreme Court of Queensland for the appointment of trustees for the sale and for the sale and distribution of proceeds of sale of the M property, as to $20,000 to the wife and the balance to be divided equally between the wife and Mr CL.

18. In December 1991 the wife and her then partner, separated. On 11 December 1991 the wife purchased Mr CL’s share of the M property for $180,000, funded by a loan from and secured by mortgage to RCW. The mortgage was for US$140,000 (A$181,066) and was repayable on 31 July 1996 with interest of US$85,471 plus 25% of the difference between US$225,471 and a particular valuation.

19. On 12 December 1991 R Pty Limited was appointed the trustee of the … Superannuation fund (now known as the N Superannuation Fund) in place of T Pty Limited.

20. In December 1991 the wife’s step-father, JB, died. His will provides to the following effect:

    a.Executors:  WG and Mr BN

    b.Shares in JB Investments Pty Limited to be held by the Executors:

    i.to pay the income from JB Investments Pty Limited to the wife’s mother during her life,

    ii.and on her death the capital of his shares in JB Investments Pty Limited to 6 named beneficiaries, one of whom is the wife and one of whom is the wife's sister who has died,

    iii.the residue to the wife’s mother, a share in which will pass to the wife on the death of the wife’s mother in accordance with the terms of the Will of the wife's mother.

21. The husband and R Pty Limited entered into an agreement with Ms RS in respect of the ownership by Ms RS of an undivided one half share of G Avenue, providing for each party to have the right to purchase the property owned by the other – a right of first refusal.

22. In 1993 the High Court of Australia dismissed the appeal and cross-appeal in respect of the defamation damages.

23. In June 1993 R Pty Limited, as trustee for the N Superannuation Fund, bought G Avenue for $470,000 plus costs of purchase. The husband borrowed $350,000 and paid it to R ATF N Super Fund to facilitate the purchase.

24. The husband located, instructed and supervised a painter to paint G Avenue. The wife selected curtains and carpets. The husband met the costs through R Pty LTd.

25. The parties were married in July 1993 and commenced living together.

26. The husband was then an equity partner of ENN Firm. The wife owned the design business on the Gold Coast.

27. From 1993 – 1995 renovations were undertaken to the property at B Road. The parties lived at 1G Avenue for 8 months during 1994 & 1995. The husband paid rent to R Pty Ltd.

28. From 21 July 1993 to 30 June 2002 the husband provided the wife with $3,000 per month either directly or by distribution from the Cainer Family Trust No. 2.

29. In 1994 the husband was awarded $1.3 million in damages plus interest and costs on the retrial of his claims for damages for defamation. There was a further appeal.

30. In July 1994 the husband negotiated a settlement of the appeal and as a result received further payments of $610,000.

31. On 31 July 1994 the husband caused R Pty Limited to purchase the mortgage on the M property from Mr RCW for US$186,340 (A$254,042.26).

32. From 31 July 1994 to 2 May 2003 R Pty Ltd paid the rates and outgoings on the M property and the wife retained the rent.

33. The husband paid $450,000 for renovations to the B Road property. The final $140,000 of that was borrowed in 1995 and that debt was repaid from his superannuation in 2002.

34. In 1994 the wife worked on two design projects for clients on the Gold Coast.

35. In 1994 the husband caused the Cainer Family Trust No. 2 to be established as a vehicle through which income from the Cainer Family Trust was attributed to two defunct companies of the wife. The losses of those defunct companies had been accepted as tax losses.

36. In 1996 the wife worked on a design project in Sydney.

37. In June 1999 the B Road property was valued for the ANZ Bank at $2 million.

38. From 1 January 2000 – August 2002 the wife worked on a casual basis as an Advisor to a public official.

39. On 5 October 2001 the wife's mother made her last Will. Mr BN was appointed Executor. After specific bequests of furniture and personalty and two small monetary legacies, under that will the property at L, Brisbane is to be sold and the wife is to receive 1/6^th of the proceeds of sale, together with one half of the residue of the Estate of JB.

40. In June 2002 the husband retired as a partner of ENN Firm with a right to receive a pension of $120,000 per annum, before tax, for 5 years.  The husband also earned some income from his positions as a Company Director and Consultant.

41. On 30 June 2002 the husband caused R Pty Limited, as trustee of the Caine rFamily Trust, to distribute the capital of the Trust to his children.

42. After 30 June 2002, the Cainer Family Trust and Cainer Family Trust No. 2 ceased operating but continued to receive investment income until 30 June 2005.

43. From 30 June 2002 – 31 August 2008 the husband provided the wife with $2,500 per month.

44. From 1 July 2002 to date the husband’s consulting services were provided through R Pty Limited which contributed that income to the N Superannuation Fund.

45. From 1 July 2002 to 30 June 2005 the Cainer Family Trust which previously distributed income from the ENN service entities to the husband’s children, ceased operating. The husband caused the assets of the Cainer Family Trust to be distributed to his children.

46. From November 2002 – February 2007 the husband performed work as a consultant to an American, Mr S in relation to a dispute with the Westpac Bank.

47. On 19 May 2003 the wife sold the M property for $519,000 and after costs of sale of $11,112, the wife repaid R Pty Ltd $510,443.88. That left $108,691.43 owing by the wife under the M property mortgage. R Pty Ltd did not pursue that debt.

48. The husband says that after the M property sale settled, the wife said that it had been the only home she ever owned and that she received nothing from it. In what he describes in his affidavit as a solacium, the husband drew $150,000 from the N Super Fund and paid it to the wife. He paid tax on that drawing and it reduced his member's account.

49. In 2004 the husband arranged, supervised and met the cost of painting the exterior of the N Road property.

50. On 14 September 2005 the husband purchased 2 G Avenue, pursuant to the option to purchase held by R Pty Ltd. The husband borrowed $1.2 million from the ANZ Bank for that purchase.

1. From October 2006 to January 2007 the wife funded and arranged the construction and installation of desk and shelving in the study at the B Road property. She took the desk and shelving with her after separation.

2. On 25 April 2007 the parties separated within the former matrimonial home.

3. On 23 May 2007 R Pty Limited and the husband sold 2G Avenue for $3.56 million.

4. On settlement and after the costs of sale, $2,076,751.57 was paid to R Pty Ltd and $1,384,501.06 to the husband. From the latter sum the husband paid $1,200,000 to the ANZ Bank to discharge the G Avenue debt and he retained $184,501.06.  The money received by R Pty Ltd was paid into a term deposit held by the N Superannuation Fund and the amount retained by the husband was paid into his ANZ equity manager account. The deposit was paid into his premium cash management account.

5. On 16 April 2007 the husband received a gift of US$350,000 from Mr S. It was paid as €259,067 into the husband's French bank account and was later applied towards the purchase and renovation of a property in France.

6. On 28 May 2007 the husband and his children purchased the property in, France for €197,000 (A$374,978 at 16.11.07). On 4 June 2007 the purchase completed. The husband then renovated the property at a cost in excess of $165,000.

7. The husband’s pension payments from ENN Firm ceased on 30 June 2007.

8. From 15 August 2007 to 11 September 2007 the wife worked for CEP.

9. On 16 August 2007 the parties attempted to mediate these proceedings with the assistance of the Honourable Eric Baker.

10. On 8 November 2007 the husband borrowed $1.5 million from the ANZ Bank which he advanced to the wife to enable her to purchase E property.

11. On 28 November 2007 the wife moved out of the former matrimonial home at B Road and moved into E property.

12. On 10 December 2007 the husband sold B Road for $4.475 million. The husband received a net amount of $4,362,696.93 which he paid into his ANZ premium cash management cheque account. He repaid the $1.5 million he had borrowed to advance to the wife to enable her to purchase the E unit.

13. On 18 December 2007 the wife’s E property purchase, settled. That purchase also involved costs of purchase and stamp duty of $54,101.90.

14. On 12 December 2007 the wife commenced these proceedings by filing an Application for Final Orders for property settlement and spousal maintenance.

15. On 22 February 2008 the wife ceased to be a director of JB Investments Pty Limited.

16. The parties took part in a Case Assessment Conference on 27 February 2008.

17. On 3 March 2008 the husband purchased T Street for $2.25 million.

18. On 21 April 2008 the wife obtained a position as assistant to Ms CO for a probationary period of three months. On 21 July 2008 the wife’s employment was extended for a further three month period. That employment was further extended and the wife continues in that role as at the date of the hearing.

19. On 8 August 2008 the wife's lawyer confirmed to the husband’s solicitors that the wife had full-time employment since 21 April 2008. The wife was then receiving an annual salary of $74,516 plus an allowance of $16,550 per annum and travel allowances including partial reimbursement of her accommodation costs.

20. The husband ceased making the payments of $2,500 per month on 30 August 2008.

21. The parties’ divorce became final on 22 May 2009.

Credit and Submissions

The evidence of the witnesses

1. The only witnesses called for cross-examination were the parties, S Cainer, Ms CN and Mr FD. Although they were briefly cross-examined, the evidence of S Cainer and Ms CN was not challenged and therefore their credibility was not put at issue. Mr FD gave evidence as an expert and his credibility was not put at issue. There are some issues that fall to be determined solely by reference to the testimony of the parties. To that extent credit remains relevant:

2. The husband was a good witness. No significant error or omission was identified in his voluminous written evidence. He has a reasonable recollection of relevant events. He made concessions in favour of the wife, albeit more muted than fulsome. For example in respect of the issue of the wife’s contributions in the form of supporting him through the defamation and related litigation, it remains his case that she did not give him comfort or support. However, he conceded that she intended and tried to give that support. On the specific matters of financial detail on which he was challenged, the husband was able to adequately respond, on occasions by reference to material already in evidence in his case.

3. That is not to say that he is best placed to make an objective assessment of the respective contributions. No doubt he saw and reflects on events, through the prism of his own standards and point of view.

4. The wife, like the husband, is a person of obvious intelligence and experience. However, she was a less effective witness than him. Unlike the husband, she was forced to concede that several aspects of her written testimony were wrong. For example her evidence about contracting with a Mr TR to design a garage for the parties was wrong. It is likely that she did not even mean to refer to Mr TR but to a Mr BT. Even that would have been wrong. Further, I accept that by the tender in her case of a diary note from 1993 referring to Mr JS, the builder used by the parties to renovate the B Road property and by instructing her counsel to specifically put that note to the husband in cross-examination, the wife sought to give the impression that she had some role in indentifying or retaining Mr JS. The wife conceded in her own cross-examination that she had no such role. The wife was obliged to concede that her evidence about her mother staying with her for 3 days at Easter 2009 was wrong and that she stayed for a much shorter time. The wife’s memory is not as good as that of the husband. There were many occasions when she said that she could not recall events or documents, including documents she had read quite recently.

5. The wife could not satisfactorily explain her evidence about the gift to the husband from Mr S. She qualified the written evidence with “to the best of my knowledge” but in cross-examination was forced to concede that she had no basis for any personal knowledge. Indeed that is her much of her complaint about the transaction, that she was not told. That would not be so bad but by the reference to the husband paying no income tax on the advance, she must have known or should have known that the husband would not be sanguine about the imputation of improper conduct such as tax evasion or the giving of false evidence. And so it proved. The husband brought interlocutory proceedings to have the reference struck out. That matter was determined by Watts J on 21 January 2010. His Honour struck out the offending passage but only because it was not relied on by the wife and was therefore irrelevant to the proceedings. As I understand the wife’s case on this issue, she did no more than repeat the husband’s own evidence about the transaction. Indeed on that same basis, Watts J did not find the statements of the wife to be offensive. His Honour seemed to accept the wife’s evidence that she did not intend the relevant statements to carry an allegation of fraud. That said, what possessed the wife to include this as part of her evidence? It did not illuminate a relevant matter and proved a substantial distraction.

6. Despite these problems, the thrust of the wife’s evidence was not successfully challenged. To the extent that the wife’s evidence on some issues was unreliable, I did not detect an intention in her to mislead the Court. Indeed, she was able, where the husband was not, to make unqualified concessions in his favour. Thus, when asked about the husband accompanying her to the Gold Coast when she wound up her business and told her staff that the business was closing, the wife readily agreed that the husband provided emotional support and comfort to her.

7. In short the husband was a more accurate witness of fact but less willing to give credit, than the wife. The wife was less accurate but more generous in the concessions she made. On that basis, I am not able to simply prefer the evidence of the husband to that of the wife on each issue where their testimony conflicts.

Submissions

1. The wife’s written submissions are as follows:

   Property, Liabilities and Financial Resources.

   1.The principal areas of dispute are …

   i)Sums Mr. [Cainer] (the Husband) seeks to have treated as appropriate to be added back to the property of the parties being …

   Item 27.[1]  Charges and interest re loan

   [1] Refers to Item No. in Balance Sheet.

   of $1.5M to Wife to purchase

   [E] property  $13,298

   Item 28.¹  Ms. [Geller] (the Wife) legal fees

   paid to Stuart Fowler Partners  $3,000

   Item 29.¹  Wife’s share of Mediation cost            $2,090

   Item 30.¹  Balance of funds provided by Husband

   at time of purchase of [E]

   property  $300,000

   ii)A sum the Wife seeks to have treated as appropriate to be added back being …

   Item 31.¹  Expenditures on […],

   France  $234,000

   or such other amount as is disclosed was

   expended on that property.

   iii)The treatment of the financial resource the Wife acknowledges she has by virtue of the trust created by the Will of the late [JB] (the Wife’s step-father).

   iv)Whether or not the Wife has a financial resource by virtue of her mother’s current Will providing she is to take a 1/6^th interest in her estate and if she does, the treatment of that resource.

   As to 1(i).

   2.Item 27.  The interest cost was incurred in respect of a period from November 2007 to December 2007 being between the advance and the sale of [N] Road.  Following the sale the Husband retained the sale proceeds of $4,362,696 and had the benefit of the interest derived on those until $2.25M was applied by him to his purchase of [T Street].  He thereafter retained the benefit of the balance of the proceeds.

   3.Items 28 and 29 were incurred at a time the Husband retained the bulk of the matrimonial property.  These items properly fall to be considered as post separation contributions in the same way the benefits received by the Husband from the property retained by him and to which the Wife was a contributor fall to be so considered.

   4.The sum the subject of Item 30 is acknowledged as received on account of the Wife’s entitlements.  It is now represented by

   i)The Wife’s property at [E] to the extent of the stamp duty, legal fees associated with its acquisition and other incidental costs of the Wife’s acquiring it and relocating herself there;

   ii)The Wife’s motor vehicle;

   iii)Paid legal fees which ought be brought to account on both sides.

   As to 1(ii).

   5.The sum the subject of Item 31 are the expenditures in respect of the property acquired by the Husband in France.  The amount of these cannot presently be fully identified on the existing state of the affidavit evidence.

   As to 1(iii).

   6.The nature of the Wife’s financial resource consequent upon her entitlements in the Estate of the late [JB] are described at pages 8 to 11 and pages 12 to 15 in the affidavit of the Single Expert, [Ms WY], filed 3 December 2009. 

   7.That material discloses that the sum identified in the Balance Sheet is in respect of an income stream the Wife will not receive until her mother’s death and is uncertain as to amount.

   8.The fact of the resource being in the nature of future income makes it analogous to defined superannuation benefits and like entitlements and should be treated accordingly, i.e., “the real nature” of the entitlement is to be considered rather than the value being mechanically brought to account as though it were a present sum in possession.

   As to 1(iv).

   9.The Wife’s prospective interest in her mother’s estate is advanced by the Husband as a financial resource on the basis the mother has lost testamentary capacity.  That is put on the basis of evidence which, even if accepted at its highest, does not establish a loss of testamentary capacity. 

   10.Even if the claim was made out, the fact is that any entitlement would be receivable at an uncertain future date and be uncertain as to amount.  The consequence of that would be that it should be given no weight.

   A.CONTRIBUTIONS:

   1.The Wife acknowledges the Husband made the greater initial contribution and that is to be reflected in the contribution based assessment.

   2.The primary issue in relation to those contributions is the claim that there should be brought to account the sum of $610,000 received subsequent to the marriage in respect of pre marriage defamatory statements.

   3.At the time of the marriage the Husband had a chose in action which had not matured to verdict.

   4.It is erroneous to bring to account as property at the date of marriage the full sum ultimately received on the maturity of that chose in action.

   5.In relation to the parties’ contributions during the marriage, the Husband’s evidence seeks to diminish the Wife’s contribution as homemaker and to the welfare of the family.  His retrospective perception of the marriage is not much to the point in the circumstance of the parties electing to lead the life they did for the 14 years of their marriage.

   6.It is also relevant that during the course of the marriage the Husband provided substantial financial assistance to his children.  The Husband discloses contributions totalling approximately $571,496 (additional to the provision of an interest in the property at […], France). 

   7.Those contributions were made from property to which the Wife made a contribution.  They are, as such, monies to which the Wife made indirect contribution for the benefit of the Husband’s children.

   8.In respect to the period subsequent to separation the Husband has continued to have the benefit of the bulk of the property and superannuation.

   B.OTHER FACTORS:

   1.The Husband retains a limited capacity to derive further income exercisable from time to time.  Although not likely to exceed his more recent earnings, such amount as he does derive will be additional to his capacity to draw on his superannuation entitlements and, as such, will be either wholly or substantially free of tax.

   2.Considerations of the Husband’s financial position must recognise that a significant part of the property held by and to be retained by him is held in his self-managed superannuation fund.  The taxation benefits both in relation to fund earnings and also drawings make those entitlements significantly more valuable than an equivalent sum held by a like aged individual outside the superannuation fund.

   3.The Wife has negligible prospects of employment beyond [August 2010].

   4.The Wife will thereafter be in receipt of no income and there will be a significant disparity in the income, property and financial resources of each.

   5.Absent an adjustment which recognises those matters, she will have to look to the Husband for spousal maintenance.

   6.An adjustment is also necessary to recognise the standard of living of the parties during the marriage and what is reasonable having regard to the Husband’s current and likely future standard of living.

1. By way of oral submissions in the wife’s case it argued that the contributions were in the proportions 65% by the husband and 35% by the wife. It is submitted that there should be an adjustment from that position in the range 5%  - 7.5% with movement within the range depending on the findings I made on the pool and as to contributions. If all of the propositions as to the pool and as to contributions put on the wife’s part were accepted, the argument is that the adjustment should be 5%. Thus the wife seeks a 70% distribution with most of the adjustment to be made, coming in the form of a splitting order.

2. It is argued for the wife that the pool of assets has a value of about $8,587,730.

3. The written submissions on behalf of the husband are:

   1.1.Asset pool

   There is an issue as to the following values as shown on the Balance Sheet:

   At the date of marriage on 21 July 1993:

Owner	Item	Wife's Value	Husband's Value	Reference
1	Husband	[B Road]	900,000	1,000,000	Affidavit of [Mr FD] sworn 07.12.09 H3#81-84 W2#
7	Husband	ANZ premium cash management cheque account BSB […] Acc […]318	31,477	H3#6.2
9	Husband	MLC life insurance policy - surrender value	4,367	H1#53 Exh7
16	Wife	Subaru	18,000	6,000	H1#59, H3#80 W1#25(h)
17	Husband	Mitsubishi Magna	7,000	H1#9
19	Husband	Mortgage over [N Road]	-350,000	0	H1#85 see Item 7
22	Wife	Loan from [S Geller]	0	-57,500	H3#20.2 Exh12
23	Wife	Amounts owing to [JB Investments] Pty Ltd	0	NK	H1#43; H3#12-26 (background)
26	Wife	Residual interest (subject to a life interest to her mother) in Estate of [JB], the assets of which are shares in [JB Investments] Pty Ltd	101,820	101,820	Affidavit of [Ms WY] sworn 02.12.09
27	Wife	Financial support from [JB] Pty Ltd	NK	H1#43; H3#12-26
29	Husband	[N] Superannuation Fund	732,294	766,517	Affidavit of [Ms WY] sworn 02.12.09 Valued at $732,294 including the value of the Fund's investment in [1G Avenue] and its right of first refusal to purchase [2 G Avenue] at $490,777.  Affidavit of [Mr FD] sworn 07.12.09 valued [1 G] Avenue as at 21.07.93 at $525,000, therefore Ms [WY’s] value must be adjusted by $34,223 to $766,517 The value of the right of first refusal remains in issue

Current property:

Owner	Item	Wife's Value	Husband's Value	Reference
Assets
7	Husband	Société Generale livret A account in France […] 44 balance 06.01.10 €15,062.70	21,725	21,725	Bank statement served 13.07.10
8	Husband	Funds in Pearson Family Lawyers' Trust Account	101,284	79,477	Bank statement served 01.07.10.  Updated by costs disclosure 13.07.10.  Wife disputes amount
12	Wife	Shares with Capital Reconstruction	0	0
Add Backs
25	Husband	Paid legal fees	155,021	155,021	Costs Memo at 13.07.10.
26	Wife	Paid legal fees	193,092	193,092	Costs Memo
27	Wife	Charges and interest re loan of $1.5m to wife to purchase [E] property	0	13,298	H1#153 Exh37
28	Wife	Wife's legal fees paid to Stuart Fowler Partners	0	3,000	H1#150 Exh36
29	Wife	Wife's share of mediation cost	0	2,090	H1#150 Exh36
30	Wife	Balance of funds provided by husband at time of purchase [E] property	0	300,000	H1#153 Exh37
31	Husband	Expenditures on […], France as contended by wife	234,000	216,310	H1#146
Financial Resources
39	Wife	Interest as beneficiary of her mother's Will	0	208,333	W1#99-104 H1#124-137; H3#132-133

1.2.Contributions

1.2.1.In general terms the husband contends there is no warrant for any adjustment being made to the parties’ present financial positions having regard to:

1.2.1.1.the husband's initial contributions;

1.2.1.2.the contributions of each of the parties during the 14 years of cohabitation; and

1.2.1.3.the post-separation contributions of each of the parties;

and that the Court need guard in this case against arriving at a result which is solely derived by the application of percentage assessments to the net assets, an approach which the husband contends is not warranted on the evidence (see for example [P v P] (Appeal No.WA3 of 2002 – 22 November 2002, unreported).

1.2.2.The husband made three entirely unmatched substantial and overwhelming contributions:

1.2.2.1.the significant wealth that he held at the commencement of cohabitation, which included his interest in the [ENN] partnership which produced significant income;

1.2.2.2.the substantial damages he was awarded prior to the marriage, which was the subject of further litigation and was settled with the damages paid in the first year of the marriage;

1.2.2.3.the gift from Mr [S] which he received in the last year of the marriage. 

It is a somewhat unique feature of this case that the entirety of the wealth of the parties sprang from the three identified sources.

1.2.3.The husband’s pre-relationship contributions, coupled with the damages and gift, were the platforms enabling the acquisition of subsequent property during the course of the marriage.  The “time value of money” promotes the conclusion that the present pool of property available for distribution has been a product of the introduction of property by the husband and those later injected by him. 

1.2.4.The present pool of property is almost solely a function of the direct contributions of the husband - not the product of “the fruits of the relationship”.

1.2.5.The husband would enjoy the benefit of the current pool of property irrespective of the fact of the marriage and the circumstances of cohabitation between he and the wife.

1.2.6.The wife made no financial contributions either directly or indirectly to the maintenance or improvements of the property contained within the pool.

1.2.7.At best, the wife made insignificant contributions of a non-financial nature, but at the same time received substantial financial and non financial benefits from the relationship.

1.2.8.There were no children of the relationship.

1.2.9.The day to day household tasks for the parties such as cleaning and the like were undertaken by the housekeeper paid for by the husband, and were otherwise performed at least equally by the husband and the wife.

1.2.10.The husband met all the day to day living expenses of the wife during the relationship. He paid all of the costs in maintaining the real property held by the wife.

1.2.11.The husband contends that many of the considerations of the Family Court as to “more traditional relationships” involving the care of children are not applicable in the circumstances of this case.  The dynamic of this relationship enables a clear disparity in the respective contributions of the parties to be identified.  The length of the relationship does not impact on the justice to be administered in making a finding as to contributions.  As noted by Justice Guest (sitting as part of the Full Court of paragraph 1-7) in [P v P][2],

[2] WA3 of 2002 - 22 November 2002

The expression of an award in percentage terms may bring about an unjust and inequitable result, and in doing so offend the very mandate expressed in Section 79(2) of the Act.

At Cohabitation

1.2.12.At the date of marriage on 21 July 1993 the husband had net assets of $1,774,601 and superannuation of $1,291,517, being $3,066,118 which is equivalent to 39% of the current total net assets excluding the wife's financial resources being her interest in 2 estates [Balance Sheet]

1.2.13.At the date of marriage on 21 July 1993 the wife had net assets of $118,500 and financial resources in the form of her interest in the Estate of [JB] of $101,820 [Balance Sheet]

1.2.14.At the time of cohabitation the husband paid wife's debts of $34,637.21 and paid out the residual in respect of the wife's Nissan motor vehicle of $8,000, being a total of $42,637.21

1.2.15.The husband contends the value of the wife's Subaru motor vehicle is of limited relevance due to its minimal nature and its replacement by another vehicle at the cost of the husband.

1.2.16.The husband's initial contributions:

·in so far as he used the funds of [R] Pty Limited to acquire the mortgage over the wife's [M] property, maintained the property and enabled him to make a payment of $150,000 to the wife from the proceeds of sale;

·in so far as he was a partner in [ENN Firm] and later received a pension from [ENN Firm] until 30 June 2005, was until then almost the sole source of income for the parties over the relationship and provided the income from which the husband financially supported the wife and maintained, improved and acquired properties;

·in the form of his reputation, qualifications and experience [in his profession] enabled him to earn income through [R] Pty Limited from 1 July 2001, which was from then almost the sole source of income for the parties over the relationship and until 30 August 2008 when he learned of the wife's employment, provided the income from which the husband financially supported the wife and maintained, improved and acquired properties;

·the [B] Road property (sold since separation) which was financially maintained and improved by the husband and provided accommodation for the parties for most of the relationship provided the platform for the acquisition by the husband of his apartment and the wife's apartment acquired since separation;

·the husband's superannuation, including the application of the Fund's resources to acquire, maintain and improve the [G] Avenue properties, provided the platform for the current value of the Fund;

·in so far as the husband negotiated and obtained for [R] Pty Ltd the benefit of the Deeds of Covenant and pre-emptive rights of first refusal held by [R] Pty Ltd in respect of the [G] Avenue property, and contends the wife made no contribution thereto;

·At the time of cohabitation the husband paid wife's debts of $34,637.21 and paid out the residual in respect of the wife's Nissan motor vehicle of $8,000, being a total of $42,637.21

During Cohabitation

1.2.17.The husband made the almost sole financial contribution during the relationship by means of:

·the balance of his defamation award of $610,000 in July 1994;

·his interest in [ENN Firm], including his personal exertion earnings and distributions through the service entity to the Trusts;

·his personal exertion earnings and income to [R] Pty Limited through his consulting work;

·the gift from Mr [S];

·the appreciation in value of his superannuation fund; and

·the improvement of the properties owned by the husband and the superannuation fund, including by generating the income necessary to acquire, maintain and develop the [G] Avenue properties.

1.2.18.The husband contends the income earned by the wife during the marriage has been overstated, and in that regard the husband relies on the wife's income tax returns.

1.2.19.The husband made a financial and non-financial contribution to the wife in relation to the wife's property at [M] by:

1.2.19.1.causing [R] Pty Ltd to purchase the mortgage on the wife's property at [M] for $254,042.26, releasing the wife from her liability to the original mortgagee;

1.2.19.2.causing [R] Pty Ltd to pay the rates and other expenses in respect of that property and for the wife to retain the small rental from 31 July 1994 until its sale in May 2003;

1.2.19.3.investigating the sub-division potential of the property and negotiating the sale of the property;

1.2.19.4.causing [R Pty Ltd] not to seek repayment from the wife of the balance due under the mortgage of $108,691.43;

1.2.19.5.drawing down $150,000 from [R] Pty Limited from the [N] Superannuation Fund and paying tax on that amount, and paying the $150,000 to the wife.

1.2.20.The husband met the wife's expenses during the marriage and until 30 August 2008 when he learned of the wife's employment, including her accommodation, living expenses, motor vehicle expenses, travel and personal expenses.

1.2.21.The husband caused The [Cainer] Family Trust No. 2 to be established as a vehicle through which he caused income to be distributed to the wife from the service entity associated with [ENN Firm].

1.2.22.The husband contends the wife overstates her non-financial contributions in assisting the husband with the entertaining of friends, contacts and acquaintances, but in any event they were not greater than those of the husband, were for the wife's own social benefit, and did not enhance the husband's professional standing or income.

1.2.23.The assistance and involvement of the wife in obtaining the husband's damages for defamation is disputed by the husband, but, taken at their highest, were of a minimal nature and were essentially confined to accompanying him to Court and general discussions. 

1.2.24.During the marriage the wife made some contributions of a non-financial nature however the husband contends these were incidental to her occupation and use from time to time of various properties owned by the husband (for example her presence at each of [B] Road and [G] Avenue when tradespersons undertook renovation or maintenance work).

1.2.25.The husband paid $450,000 in respect of the renovations to the property at [B] Road. 

1.2.26.The husband negotiated and maintained the right of first refusal in respect of the [G] Avenue property, which enabled the husband and the [N] Superannuation Fund to sell the 2 apartments as a whole property at an increased value.

1.2.27.The husband disputes:

1.2.27.1.the nature and extent of the wife's contribution in respect of the renovation and maintenance of the [B] Road property and the [G] Avenue property, which he contends were confined to the wife assisting with the renovations by selecting colours for paint, carpets, blinds and obtaining a trade discount on the purchase of carpets;

1.2.27.2.the extent of the work undertaken by the wife to prepare the [B] Road property and the [G] Avenue property for sale which he contends are overstated.

1.2.28.The husband contends the wife overstates her contributions as a homemaker.   The wife's contributions in assisting with watering plants, arranging flowers, the supervision of the housekeeper, builders, packing and moving properties while they were renovated, were minimal and performed while the wife was not otherwise in employment.

1.2.29.The husband employed a housekeeper/cleaner 1 to 2 days per week, who performed the majority of household tasks during the marriage.

1.2.30.The husband provided the wife with the benefit of overseas and other travel, including accompanying but not assisting him when he travelled in connection with his work.

1.2.31.The husband contends the wife overstates her contributions as a parent to his children, neither of whom lived on a full-time basis with the parties, one of whom was aged 17 and the other 18 at the date of the marriage.

Post-separation

1.2.32.The husband contends that an assessment of contribution in the 3 years since separation favours the husband to a considerable extent.  In particular, the husband has made a substantial financial contribution as follows:

·borrowing to advance $1.5m to the wife to enable her to purchase her current apartment, with a balance of about $300,000 utilised by the wife for her own purposes;

·incurring costs of $13,298 in respect of this advance and since losing interest on his potential investment of the capital sum;

·meeting in the first instance legal fees and mediation fees on behalf of the wife of $5,090 prior to the commencement of these proceedings for which he is to be reimbursed in the property settlement; 

·providing the wife with $2,500 per month by way of an advance on her property settlement from the date of separation until 30 August 2008 when he learned of the wife's employment, being a total amount of $40,000 for a period of 16 months;

·continuing to meet the expenses associated with the [B] Road property until settlement of the sale, and the costs of sale;

·continuing to meet the wife's health insurance until the time of their divorce

1.2.33.The husband contends his use and application of funds since the separation has been reasonable and not a matter warranting any adjustment in the wife's favour or to the net pool of property for division.

1.2.34.The husband contends to the extent the husband has made gifts to children they:

1.2.34.1.were minimal and were made during the marriage on the winding up of the Trust established prior to the date of marriage and of which the children were beneficiaries;

1.2.34.2.are taken into account as part of the husband's current assets to the extent they were applied towards the purchase of the French property, the whole value of which is agreed to be included as the husband's asset for the purpose of the proceedings.

On the basis of the above, it will be submitted that contributions should be assessed such that no adjustment is warranted to the parties’ present circumstances.

1.3.Section 75(2) factors

The relevant factors are:

(a)the age and state of health of each of the parties;

Both the husband and the wife are of retirement age – the husband being 68 and the wife being 64

Each of the husband and the wife is in poor health, but their health does not presently preclude them from earning some income.  Both have had surgery for cancer in 2009, the husband has had surgery to his shoulder and has restriction in movement in his shoulder and knee: [W3#35-41; H3#3.1-3.3; [Professor SV], [Dr BR] & [Dr Q[]

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

The husband's weekly income and pension is $2,892 and his expenses $2,012:  [H FS2]

The wife's weekly income is $1,809 and her expenses $859:  [W FS2]

The wife contends her present income earning capacity is uncertain:  [W1#4, 17; W3#28-34].  The evidence is that the wife has been in full-time employment since 21 April 2008:  [H1#119, ExH36]

The husband contends both parties have limited future earning capacity, due to their respective ages and states of health and not by virtue of any circumstance related to the marriage. 

The husband further contends the wife has during and by the marriage significantly improved her financial position, and the marriage has not diminished the wife's capacity for appropriate gainful employment.

The wife has an additional financial resource, in so far as she could sell her apartment, purchase a less expensive apartment which is still sufficient for her needs, and invest the balance to provide her with income.

The extent and value of the wife's interest as a beneficiary of the Estate of the late [JB], subject to the life interest of her mother: [W1#25(a)-(d); H1#94-103; H3#127-131; Joint Statement of Experts]

The value of the wife's interest as a beneficiary of the Estate of her mother, including the testamentary capacity of the wife's mother and value of the assets and liabilities of the wife's mother which the husband contends to be not less than $208,333:  [W1#99-104; H1#124-137; H3#132-133; husband's tender letter dated 10 March 2010 from Paltos & Company]

Financial support provided to the wife by [JB] Investments Pty Ltd:  [H1#43; H3#12-26]

(d)commitments of each of the parties that are necessary to enable the party to support himself or herself;

See (b) above.

(f)the eligibility of either party for a pension, allowance or benefit under 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;

The husband's entitlement to a pension under the [N] Superannuation Fund is included in his income:  [H FS2]

The wife may have no present entitlement to a pension, and her superannuation entitlements are minimal:  [W FS2]

(g)where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;

Each of the parties has a comfortable but not lavish lifestyle.

Each of the parties continues to live in apartments in the Eastern Suburbs of Sydney.

The husband contends that given his age, his future ability to create new wealth is limited and cannot be a significant factor.  In contrast, the wife will receive the benefit of her inheritance from the Estates of [JB] and ultimately of her mother, which have not been taken into account as assets for division in the property settlement and are equivalent to 10% of the current total net assets.

The husband further contends the wife has during and by the marriage significantly improved her lifestyle, compared to that which she had at the date of the marriage.

The wife also has the option of selling the [E] apartment and moving to comfortable but slightly more modest accommodation still in the Eastern Suburbs of Sydney, and having available to her additional funds for her support until she receives her inheritances. The overseas travel undertaken by the husband since separation has been combined with his work and/or involved staying at the French property at not significantly greater expense than if the husband were living in Sydney:  [W1#19; H1#149; H3#56-59; CBK#28; SMC#35]

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

The effect of the wife's Amended Application is that she would receive assets and superannuation equivalent to 45% of the total net assets and superannuation and would retain her financial resources which are equivalent to a further 10% of the total net assets and superannuation.

The husband's superannuation entitlements have been identified as part of the net assets and on the wife’s application, she will take 35% of the husband's entitlements of approximately $1,154,064 based on the single expert valuation as at 30 June 2008 and $1,096,351 on the balance sheet at 30 June 2009.

The effect of the Orders sought by the husband is that the wife would receive assets and superannuation equivalent to 23% of the total net assets and superannuation and would retain her financial resources (the remainderman interest is probably better understood as an interest in property, but addressed in a separate category and in this way the distinction matters little) which are equivalent to a further 10% of the total net assets and superannuation.

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

Whilst there will likely be a disparity in the parties’ financial positions following the contribution assessment, such disparity is likely to recognise the superior contributions of the husband and does not, of itself, call for any adjustment in favour of the wife.

The wife cannot justify a section 75(2) adjustment on the ground of wealth disparity in the circumstances of this case. An even greater wealth disparity existed at the start of this relationship and that will impact on the contribution assessment.

On the basis of the above, and notwithstanding the contribution finding contended for, it is submitted that no adjustment pursuant to section 75(2) is warranted.  This position is not static.  If the wife achieves a higher contribution finding, as she seeks, then the availability to her of assets and resources not otherwise included in the pool may warrant an adjustment in favour of the husband.

1.4.Section 79(2)

1.4.1.The husband contends that the outcome sought by him is both just and equitable and consistent with authority.

1.4.2.The husband contends that the wife’s contribution based entitlement should be determined to be $1,500,000, which she has already received.

1.4.3.No factors within Section 75(2) favour either party so as to permit any adjustment from the contribution findings.

1. The thrust of the husband’s case is that some assets should be left to one side in the assessment of contributions and adjustments. In particular the husband would leave to one side the French property acquired with the gift from Mr S and the wife’s interest in the Estate of JB. I was told that the net pool he contends for is $8,178,531 but was not taken through the arithmetic. To that reduced pool, the balance the contributions are said to favour the husband in the proportions 80% to 20% by the wife. It is submitted for the husband that there should be no adjustment under section 75(2). It is submitted that the proper result overall is that the parties should retain what they have, with no further adjustment.

1. Ms KN was 18 years of age when the parties married and S was 17. Therefore the scope for contributions to children was limited. At the commencement of the marriage the husband did most of the cooking. I have already found that the wife made the main homemaker contributions, even at the commencement of the marriage. It is an agreed fact that the wife undertook household tasks. From time to time the husband’s son and daughter benefited from those contributions.

(p)      the terms of any financial agreement that is binding on the parties.

1. There was no binding agreement made between the parties.

Section 79(4)(f)

1. There are no relevant orders made under the Family Law Act 1975.

Section 79(4)(g)

1. There is no child support.

Conclusion

1. The wife seeks an adjustment of 5% – 7.5%  under section 75(2). The husband argues that there should be no adjustment. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:

ØA division of property in the proportions warranted by contributions alone would mean a division of the pool as to about $6.1 million to the husband and $2.5 million to the wife;

ØOf the wife’s assets her interest in the Estate is affected by her mother’s life interest;

ØThe husband has a substantially greater income and income earning capacity than the wife. Of the parties, only husband has made any significant provision for a self funded retirement;

ØBecause her income is largely from paid employment, the fact of the compromised health of the wife is of greater import on her livelihood than the husband’s health issues are on his; and

ØFor a short period, the wife made contributions to the husband’s children.

1. These matters all support an adjustment in favour of the wife.

2. It is not the role of the non-contribution elements of paragraph s 79(4) to equalise or balance the parties’ financial circumstances. For example, it has been said in relation to s 79(4)(e) that the provision does not invite a process of social engineering[28]; and In Mallett, above, at Fam LR 472, Wilson J said that:

   “The objective of the section is not to equalise the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so…”

   [28] In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; [1995] FLC 92-595 at 81,912.

3. I was referred by learned senior counsel for the husband to the decision in In the Marriage of Dickson (above). There the Full Court said:

   50.In our view, the failure by the trial Judge to make any adjustment to take into account the provisions of s.79(4)(e) amounted to an appealable error.  This was a case in which the disparity of the financial position of the parties once allocations had been made for contributions, considered together with prospective matters, including the age of the parties and a standard of living that in all circumstances was reasonable, was such that it demanded a further adjustment.  To leave the wife in a position of having three times as much capital as the husband and a much greater earning capacity would be unjust and inequitable in all of the circumstances of the case.  Whilst it was appropriate to give great weight to the disparity of contributions, these other considerations should have reflected themselves in the overall result.

   51.In our view, it is appropriate that we re-exercise the trial Judge’s discretion in respect of this error.  Ultimately the discretion we re-exercise is that which leads to the final order, namely the amount of property to be settled upon each of the parties.  Whether that discretion is re-exercised by means of a re-evaluation of the entire case or merely by looking at the last step in the process is a matter of some conjecture.  We think ultimately, however, that whichever path we took to approach this task, the end result would be the same.  In this case, given that the mistake is identifiable and relates only to the last step in the process identified in In the Marriage of Pastrikos  (1980) FLC 90-897; 6 Fam LR 497, In the Marriage of Lee Steere (1985) FLC 91-626; 10 Fam LR 431, and In the Marriage of Davut and Raif (1994) FLC 92-503; 18 Fam LR 237, it is convenient that we merely re-evaluate the s.79(4)(e) adjustment to arrive at what we consider to be a just and equitable result rather than to carry out our own assessment of s.79(4)(a), (b) and (c) issues and then determine whether a s.79(4)(e) adjustment would be appropriate.

   52.In our view, the just and equitable outcome of this case is that the wife retain 70% of the assets and the husband 30%. Whilst a s.79(4)(c) (sic) adjustment of only 5% may seem hardly to justify our interference with his Honour’s exercise of discretion, in the context of this case such an adjustment is significant.  It will increase the husband’s entitlement to $1,971,770, an increase of $328,630 whilst at the same time decreasing the wife's entitlement by that sum.  That will produce an overall reduction in the disparity between their capital positions of almost $660,000. 

4. In my view an adjustment is warranted and a proper adjustment would be 5%. Neither of the parties argued that the adjustment be undertaken asset by asset. In the context of this case 5% represents $435,224. That is a substantial sum and will cause a difference between the parties in the ultimate settlement of twice that amount.

Just and Equitable

1. The net assets have a value of $8,704,484. A division in the proportions 34.36% to the wife and 65.64% to the husband would leave them with about $2,990,861 and $5,713,623 respectively.

2. The wife seeks that I order a split of the husband’s superannuation. The husband was silent on this issue.

3. Here there is no disadvantage to assets being in the form of superannuation. Indeed there may be taxation advantages. Whether there are advantages or disadvantages, it can be unfair to leave one party with a disproportionate superannuation interest and the other with a disproportionate part of the non-superannuation assets.

4. The wife seeks that a substantial component of any adjustment between the parties is in the form of superannuation. During the course of submissions I suggested to learned senior counsel for the wife that a sensible approach would be to make an adjustment of superannuation and non-superannuation assets in the same proportions. As it transpires, that approach is not practical as the wife already has a greater proportion of non-superannuation assets than the outcome of the above findings would allow. It is not practicable for her to make a payment to the husband. Therefore the division of assets will require a superannuation split leading to the wife having proportionately more superannuation than non-superannuation interests.

5. The wife has or has had the benefit of, the following non-superannuation assets:

ASSETS	VALUE
E property  - W	$1,200,000
NAB cheque account BSB … account …513 – W	$5,696
NAB Term Deposit …056 – W	$8,000
Shares in public companies and investments – W	$23,339
Jewellery, clothing, furs – W	$25,000
Trade in allowance for Nissan on 2007 Mercedes Benz motor vehicle – W	$4,000
Wife’s interest in the estate of the late JB – W	$580,875
Add-Back – paid legal fees – W	$53,809
Add-Back – charges and interest re loan of $1.5M – W	$13,298
Add-Back – legal fees paid to former solicitor, Fowler – W	$3,000
Add-Back – share of mediation costs – W	$2,090
Add-Back – balance of additional $300,000 advanced to wife in November 2007 – W	$244,708
Add-Back – advance by the husband of $2,500 a month from 25 April 2007 to 31 August 2008  - W	$40,000
Total Gross Assets	$2,203,815.00

1. If she is to receive a share of property of the order of $2,990,861, the wife should have $787,046 in the form of superannuation. The wife has the following superannuation interests:

ASSETS	VALUE
Wife’s PSSap superannuation – W	$22,347
Total	$22,347.00

1. In order to bring her to 34.36% overall, there should be a splitting order in respect of the husband’s fund, with a base amount of $764,699. That would leave the husband with the balance of his superannuation (an interest of the order of $2,564,066) and having or having had the benefit of, the following non-superannuation assets:

ASSETS	VALUE
Property in France – H	$374,978
T Street – H	$2,250,000
ANZ premium cash management cheque account BSB … Acc …318 – H	$14
Société Generale releve de compte sur livret account in France …795 40 balance 29.04.10 €3,726,80 – H	$5,375
Société Generale releve de compte account in France 30003 …455 06 balance 04.06.10 €5,390,81 (working account includes French Visa direct debit) – H	$7,776
Société Generale livret A account in France …311 44 balance 06.01.10 €15,062.70 – H	$21,725
Funds in Pearson Family Lawyers' Trust Account – H	$79,477
MLC life insurance policy - surrender value – H	$13,949
Sogelife life insurance policy …412 – H	$15,256
2 shares in R Pty Ltd – H	$16,141
Loan account with R Pty Ltd – H	$17,665
BMW motor vehicle – H	$26,200
Add-Back – paid legal fees - H	$155,021
Add-Back – husband’s expenditure on renovations to property in France – H	$165,980
Total Gross Assets	$3,149,557.00

Conclusion under Section 79

1. Significant contributions were made by each of the parties. They acquired assets and supported each other. In the course of about 14 years of cohabitation and since, the parties shared the work of the marriage in different ways. The husband made a far greater contribution than the wife. The orders I propose will effect a just and equitable settlement of their property.

I certify that the preceding two hundred and eighty one (281) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan.

Associate: 

Date: 19 August 2010