Georgeson and Georgeson

[2019] FamCA 379

FAMILY COURT OF AUSTRALIA

GEORGESON & GEORGESON [2019] FamCA 379

FAMILY LAW – PROPERTY SETTLEMENT – where final orders are made on an undefended basis – where the wife is an Australian citizen – where the husband was born in the United States of America – where the husband is not living in Australia –  where an overall division of the property pool results in a 72.5/27.5 percent split in favour of the wife – where orders are made for the sale of the parties’ real property located in the United States of America – where the wife has solely borne the cost of properly bringing the parties’ financial dispute to a conclusion - where the legal costs of the wife are to be paid out of the proceeds of sale – where the husband has remained silent in the proceedings and has not attended Court or filed any documents – where the husband has been successfully served with the wife’s documents – where property acquired by the wife post-separation by means of an inheritance is omitted from the asset pool – where the discretion of the Court is exercised when considering the treatment of a post-separation inheritance – where the post-separation property acquired by the wife is treated as a financial resource – where there is an adjustment made in favour of the husband to reflect this – where the extent of the adjustment is hard to make when the assets and liabilities of the husband are undisclosed by him – where there is a disparity in income which requires an adjustment in favour of the wife – where whilst the financial contributions of the husband were greater the parties’ contributions can be considered equal where throughout the marriage the wife moved to accommodate the husband’s career – where the husband possesses a substantial pension plan that significantly outweighs the superannuation of the wife – where in the circumstances it is just and equitable to make an adjustment to interests in property.

Family Law Act 1975 (Cth), ss 75, 79

Bevan & Bevan [2013] FLC 93-545

Stanford & Stanford (2012) 247 CLR 108
Calvin & McTier [2017] FLC 93-785

APPLICANT: Ms Georgeson

RESPONDENT: Mr Georgeson

FILE NUMBER: NCC 3578 of 2018

DATE DELIVERED: 13 June 2019

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 23 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Levick

SOLICITOR FOR THE APPLICANT: Tonkin Drysdale Partners

COUNSEL FOR THE RESPONDENT: Not Applicable

SOLICITOR FOR THE RESPONDENT: Not Applicable

Orders

1. That within six (6) weeks from the date of these orders the wife shall do all things necessary and execute all necessary documents to cause the property known as D Street, D Area, F Town, State C …, United States of America to be offered for sale at a price determined by the wife and the net proceeds of sale be disbursed as follows:

   1.1In payment of all expenses of the sale of the property including agent’s commission and legal expenses of the sale;

   1.2In discharge of any debts, taxes and other liabilities associated with the D Area property;

   1.3To the wife the sum of AU$15,615; being the legal costs of the wife in these proceedings;

   1.4The net proceeds remaining to be paid in the ratio 60% to the wife/40% to the husband.

2. Unless otherwise specified in these orders and except for the purpose of enforcing the payment of any money due under these or any subsequent orders:

   2.1Each party shall be solely entitled to the exclusion of the other party to all property (including choses-in-action) in the possession of such party as at this date;

   2.2Money standing to the credit of either party in any bank account shall become the property of that party;

   2.3Each party shall hereby forego any claim to any superannuation benefits belonging to or earned by the other party;

   2.4All insurance policies shall become the sole property of the beneficiary named thereunder;

   2.5Each party shall be solely liable for, and shall indemnify the other party against, any liability encumbering any item of property to which that party is entitled pursuant to these orders.

3. That in the event of either party refusing or neglecting to sign, within seven (7) days of a written request to do so by the other, any documents necessary to implement the terms of these orders, the Registrar of the Family Court of Australia at Newcastle or any court officer appointed in his or her stead is empowered to execute such document(s) on behalf of the parties or either of them pursuant to s 106A of the Family Law Act 1975.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Georgeson & Georgeson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC 3578 of 2018

Ms Georgeson

Applicant

And

Mr Georgeson

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application by Ms Georgeson (“the wife”) for adjustment of interests in the matrimonial property of herself and Mr Georgeson (“the husband”).

2. The application was filed on 15 November 2018 and was subsequently amended on 10 April 2019.

3. From date of application to date of hearing on 23 May 2019 the husband has remained silent. He has not attended Court on any occasion in person or by a legal representative. He has not filed any document in response.

4. There was some early correspondence between the solicitor for the wife and the husband but that had ceased by 8 October 2018.

5. I am satisfied that the husband has been served by email with all relevant documents, including those relied on for what became an undefended hearing before me on 23 May 2019.[1]

   [1] Affidavit of the wife filed 5/03/2019 and Exhibit 2

The Parties

1. The parties are aged 49 and 53 years respectively. The wife is Australian, the husband was born in the United States of America.

2. They met in 1994 in Country H and began living together in 1996. They were married in 1998 in Country N.

3. The parties separated in July 2015 and have not reconciled. There is no evidence before me of divorce.

4. There were no children of the marriage.

5. The wife is living in Suburb P, a suburb of Sydney.

6. The husband is probably living and working in Country J.

The Evidence

1. The documents relied on in respect of the application were as follows: 

   The Applicant wife

   (a)Amended Initiating Application filed 10/04/2019;

   (b)Affidavit of the wife filed 10/04/2019;

   (c)Affidavit of the wife filed 10/05/2019.

Approach to alteration of interests in property

1. In considering applications for alteration of property interests and transfer of property the Court must:

   (i)Identify the existing legal and equitable interests of the parties in property;[2]

   (ii)Consider whether it would be just and equitable in the particular circumstances to make an alteration;

   (iii)

   If an alteration should be made, to consider the matters contained in

   
   

   ss 79(4) and 75(2) of the Family Law Act 1975 (Cth) in coming to an adjustment; and

   (iv)Analyse and consider whether the adjustment under consideration would be just and equitable.

   [2] Stanford & Stanford (2012) 247 CLR 108; Bevan & Bevan [2013] FLC 93-545

1. Identify the assets and liabilities of the parties

1. The parties’ assets are set out in the  balance sheet prepared by the wife:[3]

   [3] Exhibit 1, pages 13-14

O’ship			Description		Wife’s value	H’band value
ASSETS
1	W		Real Estate – G Street, Suburb Q, NSW, total value $612,500, albeit calculated on a 1/3 share as per note.		$204,167	$
2	W		Real Estate – D Street, D Area, F Town, State C …, United States of America - $209,000		$298,870	$
3	W		Motor vehicle 1		$16,000	$
4	W		R Bank account, BSB …, Account No. …18		$3,000	$
5	W		Household contents and jewellery		$20,000
6	J		Joint bank account in the USA		$NK	$
7	H		Unknown assets, unknown locations		$NK
Total			$542,037 plus NK	$
ADDBACKS
$
Total			$	$
LIABILITIES
8		W	taxes owing on Item 1 – 2019, $990		$1,416	$
9		W	taxes owing on Item 1 – 2018, $4,956		$7,087	$
10		NK	Other liabilities – NK – referred to by the husband as “non-bank/investment account liabilities” incurred during the marriage		$NK
11		W	Personal loan, N Finance		$12,000
Total			$20,503 plus NK	$
SUPERANNUATION
Member			Name of Fund	Type of Interest	Wife’s value	H’band value
12		W	T Super	Accumulation	$85,228	$
13		H	Not Known	Not Known	$NK	$
FINANCIAL RESOUCES
O’ship			Description		Wife’s value	H’band value
$	$
Total			$	$

Analysis of and amendments to Balance Sheet

Item 1

1. The property of the wife at Suburb Q was inherited by her from her maternal great uncle in 2016 when Probate was granted.

2. The total of the inheritance in August 2016 was $422,928.[4]

   [4] Tender Bundle of Wife filed 10/04/2019, page 11

3. The value of the Suburb Q property was determined for this hearing by an averaging of market appraisals obtained as $612,000. A value of $204,167 was included in the Balance Sheet.[5] The reason put forward was that it is the current intention of the wife to “share it [Suburb Q] equally” with her mother and sister.

   [5] Exhibit 1, pages 13-14

4. Without doubting that the wife has that present intention it is not in my view a proper basis for including a figure other than the full assessed value.

5. The authority in Calvin[6] confirms that a trial judge in considering a post separation inheritance by the parties may exercise a discretion as to how to approach that property. The Court may include the inheritance in the pool or treat it as a financial resource in the hands of the wife who is the beneficiary. The wife acquired the property 12 months after separation.

   [6] Calvin & McTier [2017] FLC 93-785

6. In this case there is no evidence of the husband having contributed to any extent to the property inherited by the wife.

7. On the contrary but for a family falling out in the later years of the wife’s great uncle, the property inherited by the wife would have been a beneficial gift to the wife, her sister and mother.

8. On that basis the property should not in my view be included in the asset pool but brought into consideration as an adjusting factor.

9. This is especially so, when the assets of the husband, if any, have been acquired in the four years since separation are unknown to the wife.

10. Item 1 is omitted.

Item 2 – the D property

1. In 1995 the parties began living in the USA and stayed for about 18 months. The wife was not permitted to work.

2. The husband borrowed $30,000 which was used for renovations on the D property. The renovations were structural not merely decorative.[7]  The wife made the curtains and cushions and, together with the husband’s parents, painted externally.

   [7] Affidavit of the wife filed 10/04/2019, par 16

3. When the parties moved away from USA the D property remained vacant. The property is in a gated community with by-laws which prohibit owners leasing.

4. Taxes and expenses in respect of the property were paid from the joint account.

5. In 2012 the D property was transferred by the husband into the name of the wife.

6. Outstanding tax was an issue and US$266,000 was paid to the Internal Revenue Service (“IRS”) at that time from the parties’ joint account. The sum of $30,000 was borrowed from the wife’s parents and it is uncertain whether that sum was repaid.

7. The husband’s parents wish to keep the D property in their family.

8. The unchallenged evidence of the wife is that she proposes offering the husband’s family the first opportunity to purchase the property.[8]

   [8] Affidavit of the wife filed 10/04/2019, pars 44-47

9. Debts in the nature of maintenance costs and levies have accrued.

10. The wife proposes to sell the D property.

11. There are known debts but selling costs can only be estimated.

12. Accordingly the asset pool is constituted by:

(a) Assets

Item 2	W	D property	298,870
Item 3	W	Motor vehicle 1	16,000
Item 4	W	R Bank account	3,000
Item 5	W	Jewellery and contents	20,000
Item 6	H	Bank account	Not known
Item 7	H	Assets	Not known
Item 11	W	Superannuation	85,228
$423,098

(b) Liabilities

Item 8	W	taxes 2019	1,416
Item 9	W	taxes 2018	7,087
Item 10	W	Omit
Item 11	W	Personal loan N Finance	12,000
Estimated costs of sale of the D property	E30,000
Wife’s costs	15,615
Total	66,118
Net Grand Total	$356,980

(c) Analysis of sale of the D property

Sale of the D property	298,870
Less estimated costs of sale	E30,000
Less Items 8 and 9	8,503
Less wife’s costs	15,615
Total	54,118
Net Total	$244,752

60 percent to the wife -	146,851
40 percent to the husband -	97,901
$244,752

1. Wife will retain:

Item 3	Motor vehicle 1	16,000
Item 4	R bank account	3,000
Item 5	Contents	20,000
Item 11	Superannuation	85,228
$124,228
Less:
Item 11	Personal loan	12,000
Net Total	112,228
Plus:
60 percent of net proceeds of the D property	146,851
Total	$259,079

1. Husband will retain:

Item 6	Joint bank account in Australia
Item 7	Unknown assets
Less:
Item 10	Other liabilities
Plus:
40 percent of net proceeds of the D property	97,901
Total	$97,901

Costs

1. The wife has exclusively borne the costs of properly bringing the financial dispute to conclusion. She deposes to having paid legal costs of $12,315, with a further sum of the $3,300 anticipated due to the fact that the husband has been aware of the proceedings but has chosen not to participate.

2. The husband discontinued early discussions so the matter was unable to be resolved by consent.

3. In those circumstances the costs of the wife should be, and have been, included as a cost in the sale of the D property in the USA.

2. Would it be just and equitable to make an adjustment to interests in property

1. The wife very properly recognised that although both pieces of real estate were in her name, Court orders should be made.

2. The wife wishes to finalise her financial relationship with the husband.

3. The husband has chosen not to take any step, either to support or to oppose the wife’s application.

4. An adjustment is just and equitable.

3. Consideration of ss 79(4) and 75(2) of the Act in order to come to a just and equitable adjustment

Contributions under section 79(4)

1. At the commencement of cohabitation in 1996 the husband had the property in State C (Item 2) which was unencumbered. He had bought the property in 1992 for US$80,000.

2. The wife had what she describes as “some savings” which suggests a modest sum.

3. During the 19 years of their relationship the parties lived and worked overseas in Country H, USA, Country J, City K, Country L and City M. The moves were driven by the husband’s employment as an executive of a corporation.

4. In those countries where she was able to obtain a visa, the wife worked in her occupation as a health professional.

5. In 2012 the wife returned to Australia, with the husband remaining in Country L to work but regularly flying back to spend time in Australia with the wife.

6. In 2015 the marriage ended. The wife remained living in Australia. The husband remained living overseas.

7. Over almost twenty years with the wife moving to accommodate the career moves of the husband, the contributions can be considered equal although the direct financial contribution of the husband was greater.

8. The relevant matters to be taken into account are as follows:

Relevant factors under section 75(2)

The age/state of health and capacity to work of each of the parties

1. The parties are in their middle years, both in good health and in employment.

Superannuation

1. The wife has an interest in two superannuation funds amounting to $85,228, some of which was accumulated during the marriage.

2. There is no information about superannuation held by the husband. However he is reported by the wife to have told her that in retirement he has a pension plan whereby his last five years of salary prior to retirement is averaged and paid from date of retirement for life.[9]

   [9] Affidavit of the wife filed 10/05/2019, par 6

3. This is a substantial benefit which outweighs future support for the wife even if she contributes for the next 15 years at current rate of contribution.

Capacity to earn

1. The husband has had senior roles in large corporations, technology companies and telecommunications. He has a capacity to earn significantly more than the wife. She discloses an income of $78,000 per annum as a health professional appropriately described by counsel as a “respectable income but not a high one.”

2. The husband has changed employers at times but has maintained executive level positions.

3. This disparity in income is a matter which requires an adjustment in favour of the wife.

Inheritance

1. The wife has an inheritance with a value of $612,500. This is a financial resource of some substance relative to the pool.

2. If the wife chooses to gift two thirds of the value of the property to family members that is her choice to make. She is the sole owner of the property at this time.

3. There should be an adjustment back in favour of the husband.

4. The extent of the adjustment is difficult to calculate when the assets and liabilities of the husband are undisclosed by him.

5. It is likely that if the wife had been solely relying on the assets in the pool without this inherited resource, the whole of the pool would have been assigned to her given the income and superannuation differential.

4. Analysis of whether the adjustment contemplated is just and equitable

1. On the basis of the evidence that is before the Court, an overall division of the pool in the ratio of 72.5 percent to 27.5 percent in favour of the wife over the husband reflects those competing factors and is in my view just and equitable.

I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 13 June 2019.

Associate: 

Date:  13 June 2019