GERRY & TRANTOR

FAMILY COURT OF AUSTRALIA

GERRY & TRANTOR

[2010] FamCA 897

FAMILY LAW – PROPERTY – Assessment of contributions made by the husband and on behalf of the husband.

FAMILY LAW – SPOUSE MAINTENANCE – Where the wife seeks maintenance for the duration of her studies so that she may retrain and re-enter the workforce

Family Law Act 1975 (Cth)

APPLICANT:

Mr Gerry

RESPONDENT:

Ms Trantor

FILE NUMBER:

SYC

3009

2007

DATE DELIVERED:

29 September 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

13 - 16 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Foster

SOLICITOR FOR THE APPLICANT:

Haydon Fowler Corbett Jessop

COUNSEL FOR THE RESPONDENT:

Mr Givney

SOLICITOR FOR THE RESPONDENT:

Stuart Lawyers

Orders

Pursuant to s 79 Family Law Act, an order be made in accordance with paragraphs 2 through to 13 below.
The wife shall within 60 days of the date of these Orders cause the discharge of the National Australia Bank mortgage [the mortgage] secured upon the property situate at and known as D [the property].
Upon the wife’s compliance with paragraph 2 the husband shall transfer his right title and interest in the property to the wife.
In the event the wife fails or neglects to comply with paragraph 2 then the parties shall do all acts and things necessary to sell the property and in respect of such sale the following shall apply:-
4.1.The property shall be sold at the best price reasonably obtainable.
4.2.In the event of a dispute as to the best price reasonably obtainable then the parties shall appoint the President for the time being of the Real Estate Institute of New South Wales to assess the best price reasonably obtainable and/or the reserve price at auction.
4.3.In the event the property is not subject to a binding agreement for sale within 90 days of the date of these orders then the wife shall do all acts and things necessary to place the property in the hands of a licensed auctioneer to sell the property by way of public auction at a reserve price agreed between the parties.
4.4.Upon sale the then proceeds shall be paid as follows:-
4.4.1.In payment of agents commission and legal fees occasioned by the sale.
4.4.2.In discharge of the mortgage.
4.4.3.Subject to Order 7 in payment to the wife of the balance.
4.5.It is noted that upon sale and after payment of agents commission and legal costs occasioned by the sale the sum realised may be more or may be less than $1,000,000.00 [called the proceeds realised].
In the event the proceeds realised are less than $1,000,000.00 then such amount as is less than $1,000,000.00 shall be added to the amount of $2,683 referred to in Order 11 and Order 11 shall be varied accordingly.
In the event the proceeds realised are more than $1,000,000.00 then such amount as is more than $1,000,000.00 shall be paid by the parties to the husband.
Pending compliance with Order 2 or in the event Order 4 applies the wife shall indemnify the husband and keep indemnified the husband against all claims which might otherwise be made against the husband in respect of the mortgage.
The husband shall indemnify and keep indemnified the wife in respect of any debt or liability due by either of the parties jointly or severally to both or either of the husband’s parents.
Orders 9.1 to 9.5 inclusive are binding on the Trustees of the AMP Superannuation Fund (the AMP Fund).
9.1.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975
9.1.1.Whenever a splittable payment become payable in respect of the interest held by the husband in AMP Superannuation Fund (whether by way of lump sum or pension) the wife shall be entitled to be paid 100 percent of that splittable payment; and
9.1.2.The wife’s husband’s entitlement to payments out of their interest in the Fund and the entitlement of such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
9.2.That the Trustee of the AMP Fund (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:-
9.2.1.Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created, for the wife/husband by clause 9.1.1 of this Order; and
9.2.2.Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in the Fund.
9.3.That these orders have effect from the operative time and the operative time for this order is four (4) business days after the date of service of these orders upon the Trustee of the AMP fund.
9.4.That liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
Orders 10.1 to 10.5 inclusive are binding on the Trustees of the Australian Super Fund (the Australian Super Fund).
10.1.That in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975
10.1.1.Whenever a splittable payment become payable in respect of the interest held by the husband in the Australian Super Fund (whether by way of lump sum or pension) the wife shall be entitled to be paid 100 percent of that splittable payment; and
10.1.2.The wife’s husband’s entitlement to payments out of their interest in the Australian Super Fund and the entitlement of such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
10.2.That the Trustee of the Australian Super Fund shall do all such acts and things and sign all such documents as may be necessary to:-
10.2.1.Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created, for the wife by this order; and
10.2.2.Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in the Australian Super Fund.
10.3.That these orders have effect from the operative time and the operative time for this order is four (4) business days after the date of service of these orders upon the Trustee of the Australian Super Fund.
10.4.That liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
Pursuant to s 90MT(1) of the Family Law Act 1975, the trustees of the Gerry Super Fund shall cause the fund to make a splittable payment to a fund nominated by the wife by transfer of assets in specie in the value of $2,683 (subject to this amount being increased if Order 5 applies) provided such assets are publicly listed shares and/or monies held in financial institutions.
The wife is declared sole and beneficial owner of:-
12.1.Sutherland Credit Union savings.
12.2.ANZ Bank savings.
12.3.Jeep Cherokee motor vehicle.
12.4.Furniture and effects in her possession and control.
12.5.Her interests in REST Super and MLC Super.
The husband be declared sole and beneficial owner of:-
13.1.National Australia Bank savings.
13.2.Ford 250 motor vehicle.
13.3.KTM motorcycle.
13.4.Camper trailer.
13.5.Furniture and effects in his possession.
13.6.Interest in CLG Family Trust.
13.7.Subject to order 11, the husband’s interest in the Gerry Super Fund.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.
Liberty granted to either party on 14 days notice to make an application in relation to the implementation of these orders.
From the date of these orders until 30 June 2012, the husband shall pay to the wife the sum of $350.00 per week by way of spousal maintenance. The first payment to be made within seven days of the date of these Orders to an account nominated by the wife.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3009 of 2007

MR GERRY

Applicant

And

MS TRANTOR

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

The parties have asked me to make a decision about how their assets and liabilities should be divided.
There are a number of issues to consider. Important among them are:
2.1.The assessment of the value of the husband’s business interest;
2.2.What is the effect upon the assessment of the contribution of the parties of monies provided from time to time by the husband’s father or from entities he controlled, their nature, and in what circumstances those monies were provided;
2.3.Considering the history of assistance provided by the husband’s father, how much of a financial resource the husband’s father (and his mother) is to the husband in the future.
The wife also makes a claim for spousal maintenance and requests that she be supported until the middle of 2012 so that she can complete her current course of education.

APPLICATIONS

Husband

The Applicant husband seeks the following orders in his Amended Application for Final Orders filed 26 March 2010 :
1.That within 30 days the husband and the wife to all acts and things and execute all documents as may be required to list for sale and sell the property known as [D property] being the land described in Folio Identifier […] (“the Property”) on the following basis:
a.The Property shall be listed with […], or such other real estate agent as may be agreed upon by the parties, on an exclusive agency basis for a period of 3 months (“the exclusive agency period”), or such other period as may be agreed by the parties.
b.The parties shall do all acts and things and sign all documents as may be required to procure a sale of the Property by public auction at such time as recommended by the selling agent.
c.The parties shall accept the recommendations of the selling agent in relation to the marketing campaign for the purposes of the sale.
d.The reserve price of the Property for any auction sale shall be that amount agreed upon by the parties and in the absence if agreement by the date which is 3 weeks prior to the auction date, shall be determined by a registered real estate valuer. If the parties do not agree on the valuer to be appointed foe this purpose by the date which is 14 days prior to the auction date, the parties shall engage a valuer as nominated by the selling agent on the request of either party.
e.In the event that the Property is not sold by auction, or by private negotiation within 14 days after the auction, then the parties shall do all acts and things and sign all documents as may be required to offer the Property for sale by private treaty and, at the request of either party, shall offer the Property for sale by further private auction, upon the terms set out above, on such further date as may be recommended by the selling agent.
f.In the event that the Property is not sold by auction or by private negotiation within 14 days after the second auction then the husband and wife shall continue to comply with sub-clause (e) until the Property is sold.
g.For the purposes of selling the Property by private treaty the listing price of the Property shall be that amount agree upon by the parties but if there is no agreement within 30 days the parties shall list the Property for sale at a price as may be recommended by the real estate agent with whom the Property is listed for sale.
h.If an offer is made to purchase the Property by private treaty and the parties do not agree on acceptance of the offer or not, then either party may engaged [sic] a registered valuer to determine the fair market value of the Property. In default of agreement by the parties as to the valuer to be appointed within 2 business days then the parties shall engage such valuer as recommended by the selling agent. If the offer made to purchase the Property is not less than the fair market value of the Property as determined by the valuer the parties shall do all acts and things to accept the offer and to sell the Property to the offeror.
2.That the husband and wife do all acts and things and sign all documents as may be required to cause the proceeds if sale of the Property to be paid out as follows:
a.Firstly, to pay all costs, commissions and expenses of the sale and to pay any council and water rates outstanding in respect of the Property;
b.Secondly, to pay the fees of any real estate valuer engaged for the purposes of paragraph 1 of these Orders;
c.Thirdly, to discharge the mortgage to National Australia Bank;
d.Fourthly, forty per centum (40%) of the balance to the wife;
e.Fifthly, the then remaining balance to the husband.
3.a.    That the husband and the wife and the Trustee of the AMP Flexible Lifetime Superannuation Plan do all necessary acts and things, sign all documents and give all consents necessary to give force to the effect of the Orders hereunder.
b.   That subparagraphs (a) and (c) to (i) inclusive of this Order are binding on the Trustee of the AMP Flexible Lifetime Superannuation Plan.
c.   That the amount allocated to the wife in these proceedings out of the interest of the husband in the AMP Flexible Lifetime Superannuation Plan is $75,000.00 (“base amount”).
d.That pursuant to paragraph 90MT(1)(a) of the Family Law Act 1975 whenever the Trustee of the AMP Flexible Lifetime Superannuation Plan makes a splittable payment out of the interest of the husband in the AMP Flexible Lifetime Superannuation Plan, the Trustee shall:
i.Pay to the wife, or her legal personal representative, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001.
ii.Make a corresponding reduction in the entitlement the husband would have had in the Amp Flexible Lifetime Superannuation Plan but for this Order.
e.   That sub-paragraph (d) of this Order has effect from the operative time.
f.   That the operative time for this Order is four (4) business days after the date of service of a sealed copy of the Orders on the trustee.
g. That the trustee of the AMP Flexible Lifetime Superannuation Plan do all such acts and things and sign all documents as may be necessary so that, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, the trustee can calculate the entitlement of, and make payment to the wife in accordance with sub-paragraph (d) of this Order.
h. That the wife to all things necessary, including but not limited to, exercising her request pursuant to r.7a.05 of the Superannuation Industry (Supervision) Regulations 1994 for the creation of a new interest in her name in the Amp Flexible Lifetime Superannuation Plan with the value of the transferable benefits calculated in accordance with r.7A.11 of the Superannuation industry (Supervision) Regulations 1994.
i. That, pursuant to r14F of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interest made after the trustee has created a new interest in the wife’s name in the AMP Flexible Lifetime Superannuation Plan are not splittable payments.
4.That unless otherwise specified in this [sic] Orders, each party is solely entitled to the exclusion of the other to all other property of whatsoever nature and kind in the possession of such party as at the date of the making of this order.
5.That in the event that either party refuses or neglects to sign any document required to be signed to comply with this Order, the Registrar of the Family Court of Australia is hereby appointed to execute all Deeds and documents in the name if the Husband or Wife and do all acts and things necessary to give validity and operation to this Order pursuant to s106A Family Law Act.
6.That the wife’s Application for spouse maintenance be dismissed.
As will be demonstrated later, the effect of the husband’s final submissions would lead to a division of the assets on an overall basis 53 percent to the husband and 47 percent to the wife. The husband was content in final submissions for the court to make orders in the form suggested by the wife. The husband conceded that the wife should have the first opportunity to acquire the D property subject to any order that might require a payment by the wife to the husband to create an appropriate adjustment. If the findings of the court meant that the husband has to put more than the D property into the wife’s hands, then the husband seeks a transfer of superannuation to the wife, firstly from the AMP Superannuation, next from the Australian Superannuation (if necessary) and finally from the Gerry Superannuation Fund (if necessary) and that assets be transferred out of the Gerry Superannuation Fund “in specie”. The husband opposes any spousal maintenance order being made in the wife’s favour.

Wife

The Respondent wife in a Minute of Order provided at the commencement of the hearing, sought the following orders:
1.The wife shall within 60 days of the date of these Orders cause the discharge of the National Australia Bank mortgage [the mortgage] secured upon the property situate at and known as [D] [the property].
2.Upon the wife’s compliance with Order 1 the husband shall transfer his right title and interest in the property to the wife.
3.In the event the wife fails or neglects to comply with Order 1 then the parties shall do all acts and things necessary to sell the property and in respect of such sale the following shall apply:-
3.1.The property shall be sold at the best price reasonably obtainable.
3.2.In the event of a dispute as to the best price reasonably obtainable then the parties shall appoint the President for the time being of the Real Estate Institute of New South Wales to assess the best price reasonably obtainable and/or the reserve price at auction.
3.3.In the event the property is not subject to a binding agreement for sale within 90 days of the date of these orders then the wife shall do all acts and things necessary to place the property in the hands of a licensed auctioneer to sell the property by way of public auction at a reserve price agreed between the parties.
3.4.Upon sale the then proceeds shall be paid as follows:-
3.4.1.In payment of agents commission and legal fees occasioned by the sale.
3.4.2.In discharge of the mortgage.
3.4.3.Subject to Order 6 in payment to the wife of the balance.
4.Noted that the value of the property represents 42 per centum of the asset pool and upon sale and after payment of agents commission and legal costs occasioned by the sale the sum realised may be more or may be less than $1,000,000.00 [called the proceeds realised].
5.In the event the proceeds realised are less than $1,000,000.00 then such amount as is less than $1,000,000.00 shall be paid by the trustee of the [Gerry] Super Fund and Order 9 shall be varied accordingly.
6.In the event the proceeds realised are more than $1,000,000.00 then such amount as is more than $1,000,000.00 shall be paid to the husband upon sale.
7.Pending compliance with Order 1 and in the event Order 3 applies the wife shall indemnify the husband and keep indemnified the husband against all claims which might otherwise be made against the husband in respect of the mortgage.
8.The husband shall indemnify and keep indemnified the wife in respect of any debt or liability due by either of the parties jointly or severally to both or either of the husband’s parents.
9.Pursuant to Section 90MT(1) the trustees of the [Gerry] Super Fund shall cause the fund to make a splittable payment to a fund nominated by the wife of a sum of $219,705.00 or assets contained within the fund of that value provided such assets are publically listed shares and/or monies held in financial institutions.
10.The Orders 10.1 to 10.5 inclusive are binding on the Trustees of the AMP Superannuation Fund (the Fund).
10.1.That a base amount of $141,000.00 is allocated, as required by s.90MT(4) of the Family Law Act 1975, to the wife out of the husband’s interest in the Fund.
10.2.That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975
10.2.1.The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001; and
10.2.2.The wife’s husband’s entitlement to payments out of their interest in the Fund and the entitlement of such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
10.3.That the Trustee of the Fund (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:-
10.3.1.Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created, for the wife/husband by clauses (a) and/or (b) of this Order; and
10.3.2.Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in the Fund.
10.4.That these orders have effect from the operative time and the operative time for this order is four (4) business days after the date of service of these orders upon the Trustee of the funds.
10.5.That liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
11.The Orders 11.1 to 11.5 inclusive are binding on the Trustees of the Australian Super Fund (the Fund).
11.1.That a base amount of $32,000.00 is allocated, as required by s.90MT(4) of the Family Law Act 1975, to the wife out of the husband’s interest in the Fund.
11.2.That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975
11.2.1.The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001; and
11.2.2.The wife’s husband’s entitlement to payments out of their interest in the Fund and the entitlement of such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
11.3.That the Trustee of the Fund (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:-
11.3.1.Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created, for the wife/husband by clauses (a) and/or (b) of this Order; and
11.3.2.Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in the Fund.
11.4.That these orders have effect from the operative time and the operative time for this order is four (4) business days after the date of service of these orders upon the Trustee of the funds.
11.5.That liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
12.The wife is declared sole and beneficial owner of:-
12.1.Sutherland Credit Union savings.
12.2.ANZ Bank savings.
12.3.Jeep Cherokee motor vehicle.
12.4.Furniture and effects in her possession and control.
12.5.Superannuation entitlements.
13.The husband be declared sole and beneficial owner of:-
13.1.National Australia Bank savings.
13.2.Ford 250 motor vehicle.
13.3.KTM motorcycle.
13.4.Camper trailer.
13.5.Furniture and effects in his possession.
13.6.Interest in CLG Family Trust.
13.7.Sale proceeds Malibu boat.
13.8.Sale proceeds A1 Dingy.
13.9.Dingy and outboard motor.
13.10.Harley Davidson motorcycle.
13.11.Puzey 125 motorcycle.
14.The husband shall for a period of two years from the date of these Orders pay to the wife the sum of $350.00 per week by way of spousal maintenance. The first payment to be made within seven days of the date of these Orders to an account nominated by the wife.

As will be plain when the balance sheet is settled, the effect of the property orders that the wife seeks is for her to receive the D property, for her to attend to the mortgage on that property, for her to receive assets which are currently in her possession or name and for her to receive the whole of the husband’s interest in the AMP Superannuation Fund, the whole of the husband’s interest in the Australian Super Fund and assets in specie from the Gerry Super Fund.

DOCUMENTS RELIED UPON

Husband

Husband’s Further Amended Application 26.03.10
Applicant Husband’s primary affidavit 30.03.10
Husband’s financial statement 26.03.10
Husband’s affidavit 04.12.09
Husband’s affidavit 26.03.10
Affidavit of Mr C 23.03.10
Affidavit of Mr O Gerry 28.05.10

Wife

Wife’s Further Amended Response 22.06.10
Respondent Wife’s primary affidavit 11.06.10
Wife’s financial statement 11.06.10
Statement filed by wife on 15.9.10

Single expert

Report of Mr P 26.08.10 (Exhibit B) and his affidavit 13.09.10

SHORT HISTORY

The wife was born in 1956 and is aged 54 years.
The husband was born in 1963 and is aged 47 years.
The parties married and commenced cohabitation in 1987.
L was born in 1992 and is currently aged 18 years.
T was born in March 1995 and is currently aged 15 years.
The parties separated under the same roof in April 2005, and the husband left the home in August 2006. The period of relationship cohabitation was 18 years.
The parties divorced in October 2006.

CREDIT

Husband

The husband’s revelation of his financial position to the wife came slowly. The husband initially failed to disclose a significant interest in a self managed superannuation fund which had as it members his father, his uncle and himself (“the Gerry Super fund”). The husband failed to disclose (until the first morning of the hearing) that he was a named beneficiary in a discretionary trust controlled by his father known as the O Gerry Family Trust.
The husband’s evidence was that these non disclosures were a product of lack of knowledge. He said he simply was not aware that he was a member of the self managed superannuation fund, nor was he aware he was a beneficiary of the family trust and when he became aware he disclosed those interests to the wife.
Information about the superannuation fund and the trust was in the hands of Mr O Gerry. The husband’s case is that, knowing there was a case between the husband and wife, the husband’s father kept information about both the superannuation and the trust from him.
The husband concedes that he and his father were very close, they lived close to one another and saw one another on a weekly basis. They often went fishing together; there were regular telephone calls during the week between the two of them.
The timing of when the husband became aware of his substantial interest in the Gerry Super Fund was a subject examined during the hearing. The husband was actually appointed as a director and secretary of Gerry Superannuation Pty Ltd in March 2000 but denies he has any memory of ever signing any documents appointing him as a director and a secretary of that company, or otherwise in his capacity as an office bearer of the company. On 30 June 2006 the husband’s member’s account in the Gerry Super fund stood at $413,481 but it is not mentioned in the husband’s 2006 financial statement, the husband says because he wasn’t aware of it at the time.
The husband asserted that he had no knowledge of a significant interest in the Gerry Super fund up to 19 October 2009. On that day a balance sheet was presented to me (Exhibit A) in which there is no disclosure by the husband of that interest. The husband originally stated that he first became aware of his interest in the O Gerry Family Trust when his lawyer did an ASIC name search. However, in re-examination, the husband said that he had meant to say that he first became aware of his interest in the superannuation fund when his lawyer did an ASIC name search and discovered that the husband was a director of a company called “[Gerry Superannuation] Pty Ltd”. It is the husband’s case that at that time, his lawyer made an inquiry and ascertained the nature of the interest in the superannuation fund.
The husband’s father in re-examination originally indicated that he informed the husband’s solicitor “about two years ago” of the existence of the husband’s interest in the Gerry Super fund. That is, the husband’s father’s evidence was that at least the husband’s lawyer was aware in 2008 that this fund existed. That evidence by the husband’s father brought into question the professional conduct of the husband’s lawyers. This evidence led to the filing of an affidavit by the husband’s lawyer and him giving oral evidence and also me giving leave to Mr O Gerry to be recalled for the purposes of providing additional evidence. The husband’s lawyer accepted that in May 2008 he had been sent a letter from Mr C (the co-director and co-owner in the husband’s business) dated 5 May 2008. That letter had enclosed with it an ASIC personal name extract results search. That search clearly indicated that the husband, at that time, was the director and secretary of a company named “[Gerry Superannuation] Pty Limited”. The husband’s lawyer was not able to offer any explanations as to why he did not appreciate the importance of that information at the time. However, the fact is that he, at this time, sent a copy of the search to the solicitors for the wife (and consequently there cannot be any assertion that he was attempting to hide the information). I accept that he first turned his mind to this information when he himself did an ASIC name search on 22 October 2009. The husband’s lawyer obtained member information statements from the husband on 25 November 2009 and forwarded them to the wife’s lawyers on 4 December 2009.
Mr O Gerry, when recalled, indicated that he wished to correct the evidence that he had given and said, consistently with the affidavit filed by the husband’s lawyer, that meetings between he and the husband’s lawyer had only taken place on 8 March 2010 and 20 May 2010 (and not 2008).
Whilst I accept the latter version, it does cast some doubt, as I will shortly discuss later the reliance which I am prepared to place upon statements made by Mr O Gerry.
At paragraph 11 of his affidavit filed 28 May 2010, Mr O Gerry speaks of contributions made to the members of the Gerry Super fund, including the husband and says, “I did not tell [the husband] about the superannuation contributions made for him to [Gerry] Superannuation Fund. I wanted to keep the fact that those contributions had been made on [the husband’s] behalf a secret from him for as long as possible”.
During his oral evidence, Mr O Gerry was questioned about the evidence set out in the preceding paragraph. He gave the following oral evidence:
You’ve kept a secret though, haven’t you? About his assets?‑‑‑Well, I didn’t disclose to him the fact that there was money being put in his superannuation fund, on the recommendation of my accountant, [Mr B].
…
Initially I thought the husband’s father, by this answer, was shifting the responsibility for the secrecy about the self managed superannuation fund to his accountant. The superannuation fund was audited by the husband’s father’s accountant, Mr B. When pressed, Mr O Gerry however said that he was not saying that it was his accountant’s choice not to tell his son but his.
A short time later, the husband’s father gave the following evidence:
Is it not the case, Mr [Gerry], that you knew your son should disclose that he had a superannuation entitlement?‑‑‑Yes, I did.
So, is it the case, Mr [Gerry], that you’re saying to the court that you wanted to make sure that the court didn’t know that your son had money in a superannuation fund?‑‑‑I certainly wasn’t hiding anything. It was done by my accountants, not me.
Can you tell the court what you mean by that answer?‑‑‑I don’t see that it’s hard to fathom out what it means.
Okay. Well, how was it your accountant’s responsibility? If you were keeping a secret and weren’t telling anybody, how is it your accountants’ responsibility?‑‑‑How was it my accountants’ responsibility?
Yes?‑‑‑I took his advice as to what should be done with superannuation on a yearly basis.
Mr [Gerry], is it the case that between August 2006 and 1 December 2009, you spoke to your son about his interest in the [Gerry] Superannuation Fund?‑‑‑I would have, yes.
Two things arise from this passage of evidence. Firstly it seems clear that Mr O Gerry was attempting to shift part of the responsibility for the non disclosure to his accountant, Mr B. Mr B was not called to give any evidence in the trial. Secondly, Mr O Gerry concedes that he would have spoken to his son about the superannuation between August 2006 and December 2009. So it is the husband’s father’s oral evidence that his son knew about the superannuation fund prior to the time when it came to the attention of the husband’s lawyer.
In addition, I find it is inherently unlikely that the husband’s father would not have at some stage during his discussions with his only son with whom he had a close relationship, told him about the interest in the Gerry Super fund.
It is also inherently unlikely that the husband was the director and secretary of a company since 2000, a company that had a name which indicated it had something to do with superannuation, but had no knowledge about that company. On balance I do not accept the husband’s evidence about that.
Documents tendered (Exhibit N) indicate that at least in the years that those financial statements cover, member statements were generated for each of the three members of the fund. I take notice of the fact that it is a statutory requirement that a self managed superannuation fund provide member statements to each of the members each year. The husband claimed that he never remembered receiving a member’s statement. As I have already commented, Mr B, the auditor of the fund, was not called to explain whether or not he was aware that the member statements he prepared were ever given to the husband.
The accounts prepared by the superannuation fund record minutes of the meeting of directors on an annual basis. The official record says that present at these meetings were the husband, the husband’s father and the husband’s uncle (see Exhibit N). The oral evidence was that notwithstanding the husband was the director and secretary of this company, he did not attend meetings as asserted by the documents prepared by the accountant and auditor of the Gerry Super fund.
I do not accept the husband has been frank about the level of his knowledge of his interest in the Gerry Super fund prior to him disclosing that interest to the wife and the court towards the end of 2009.
The husband’s awareness that he was a named beneficiary of the O Gerry Family Trust (“the family trust”) was also explored during the hearing.
The wife, through her solicitors over some considerable period and on a number of occasions, asked the husband to provide her with details of any interest that he had in the family trust. Exhibit H contains the correspondence, they are documents dated 29 November 2009; 13 May 2010; 19 May 2010; 22 June 2010; and 9 July 2010. That information requested was not made available until, at the earliest, the first morning of the hearing.
The husband gave evidence that he had made an inquiry about his status as beneficiary of a trust to both his father and his father’s accountant, and he had been told that he did not have that status. Whilst the husband’s father asserted (and I have not accepted) that he kept the existence of the husband’s interest in the Gerry Super fund a secret from the husband, the husband’s father did not make a similar assertion in relation to the husband’s status as a named discretionary beneficiary of the family trust.
The case put by the husband’s lawyers was that what happened in relation to monies coming from the family trust to the husband was that monies were distributed from the family trust to the husband’s father and the husband’s father then, from those monies, made a payment to his son. That assertion is supported by the tax records produced by the husband’s father which indicate that neither the husband nor his sister received any distributions from the income of the trust at all.
The financial accounts of the trust were produced at the first morning of the hearing and were not the subject of any interrogation. During the trial I raised with counsel for the husband my interest in looking at the husband’s father’s tax returns to see whether or not income was treated in a similar way in those tax returns. Those tax returns were produced and were consistent with the document produced for the trust.
Whatever might have been the accounting by the husband’s father for income being distributed from the family trust, what actually happened on a significant number of occasions was that the husband was provided by his father with a cheque drawn on the bank account of the family trust. The husband received regular cheques from his father that were drawn on an account styled “[E FINANCE] PTY LTD ACN […] AS TRUSTEE FOR [O GERRY] FAMILY TRUST”. It was the usual pattern that two other cheques were drawn at the same time, one for an equal amount (and the evidence is that that cheque was provided to the husband’s sister) and one for double the amount (and the evidence was that that amount went to the husband’s parents). The cheques were drawn to the nearest cent and I infer they were a division 25/25/50 percent of some calculation of profits of the trust for a half yearly period. It seems common ground that the husband did not account in his tax returns for these sums on the basis that they were not income in his hands.
While the husband’s father originally said that family trust distributions were made only to he and his wife, and then gifts were made to the husband and his sister from the parents’ personal account, he conceded that this was not the case when presented with the evidence in the bank statements.
The husband in cross examination said that he didn’t know where the cheques that he was paid by his father came from and his memory was that they had ‘[E Finance] Pty Ltd’ written on them. That is true in relation to some of the cheques but many of them had ‘[E Finance] Pty Ltd as trustee for the [O Gerry] Family Trust’ written on them.
The husband wished to have me believe that he was totally unaware and uninterested in the source of the funds being provided to him on a regular basis from his father. He conceded that the payments were in a regular pattern (approximately each six months). He wished me to believe that he simply banked the cheque by filling out a deposit slip where he would have written the name of the payer of the cheque without noticing that it was from the family trust. He wished me to believe that even when the wife made assertions about the existence of the family trust to the Child Support Agency, the husband made no inquiries whatsoever of his father as to the source of the fund he had been regularly receiving.
Exhibit I contains a document sent by the wife to the Child Support Agency and the husband’s response to that document. In her document the wife says “[the husband] receives income from [O Gerry] Family Trust which is paid to him twice a year. Attached are bank statements showing the deposits. His earning/income capacity is not accurately reflected to the CSA or the Family Court.” In his response which the husband declared to be “true and correct”, the husband says “the payments from (my family only) were mortgage reduction gifts that we both benefited from. Since I have moved out the payments have stopped. I do not need those payments. The mortgage was $280,000 at that time. I do not receive any payment from a family trust. I am not a beneficiary to any trust. This has been put in writing to [the wife] by my lawyer, father, and employers.”
Given the number of cheques the husband received which clearly had on them that they were a payment from the bank account of the family trust, the statements that he has made for the Child Support Agency are disingenuous. Moreover, the evidence in the husband’s father’s affidavit demonstrates that the husband continued to receive bi-yearly trust payments after separation occurred, and before the date recorded on the CSA document.
I find that the statements made by the husband in Exhibit I to the Child Support Agency, particularly the husband’s assertion that the payments had stopped, do not reflect well on the husband’s credit.
I am also not convinced about the husband’s evidence about his knowledge of business matters. The husband asserted in his oral evidence that at the time of the sale of the business in 2004 he was only peripherally aware of what was going on. At that time, the business employed about 32 people. The husband was responsible for overseeing most of them. The husband was the most important person in the organisation in relation to ensuring the quality of the production of the product of the business.
I do not accept that the husband, who started work in this business at the age of 15 and by the early 20s had a significant role to play on a production floor, was at all times totally in the dark about management matters. In 1993 the husband was made an alternate director. The husband says that although this gave him the ability to co-sign cheques, it gave him little entrée into knowing how the business worked. The husband conceded during cross examination that at least one overseas trip he visited a factory in the United States to have a look at how (presumably a similar) business worked.
Notwithstanding the sworn evidence of the husband and of his father, I find that it is inherently unlikely that the version of the husband’s involvement in the process by which the business was sold was an accurate one.
I am also sceptical about the husband’s evidence regarding an alleged debt to Mr C. The husband asserted that he personally owed his current business partner, Mr C, an amount of $350,000 (although the husband gave other evidence which was inconsistent as to whether it was he or his corporate trustee which owed the money). The husband conceded there was no documentation in relation to this alleged debt and he asserted that the debt arose from conversations that he had had with Mr C. In fact the husband had not mentioned this debt in his written evidence. There was filed on his behalf evidence by Mr C asserting that he had a conversation with the husband about this amount. I further discuss this matter later when assessing the value to the husband of his interest in the CLG Family Trust. The husband at no stage in his most recent financial statement indicated that there was any debt outstanding between he and Mr C as he asserted in his oral evidence. This inconsistency in his evidence causes me some disquiet, not only in relation to the issue of the alleged debt of $350,000 but in relation to the weight that I can put on the husband’s assertion as to his level of lack of knowledge about his financial matters.
At paragraph 6 of the husband’s affidavit filed 26 March 2010, the husband swears that he had read the affidavit of Mr C that was filed on his behalf in these proceedings and further says that he has got no reason not to accept the accuracy the matters set out in that affidavit and that he believed them to be the truth. It became clear in the husband’s oral evidence that he had not read Mr C’s affidavit at all.
When I consider the husband’s evidence overall, I am not confident that I can accept statements that he has made, particularly about controversial matters, without them being corroborated by objective evidence or them being inherently likely.

Mr O Gerry (the husband’s father)

I was informed during the trial and it did not seem to be a matter of controversy that Mr O Gerry was said to be in poor health.
The evidence was that he was the patriarch of the family and the person who exercised considerable influence over the financial dealings of family members.

The husband’s father’s memory about when he had told the husband’s solicitor about his son’s interest in the Gerry Super fund two years before was faulty. Mr O Gerry was not giving me accurate evidence when he gave that answer and it casts doubt on his ability to accurately relate events to me and overall I was not confident about the reliance I could place upon the evidence of Mr O Gerry.
As outlined earlier in extracts from the husband’s father’s evidence, I find he made inconsistent statements about the alleged decision not to disclose the Gerry Super fund to the husband, alternately giving different versions as to who was responsible for allegedly withholding the information.
Further, Mr Gerry initially stated, in relation to the Gerry Super fund, that he leaves its management to the accountant, and he just gets statements to sign. He explained that he was not a ‘paper man’ and did not take a great interest in the money in the fund. Mr Gerry subsequently told me that he actively managed his investment portfolio and that he made all the investment decisions, they are “all [his] doing” and the accountant finds out about the decisions from the paperwork the husband’s father creates.
Given the level of sophistication of Mr O Gerry in managing financial matters, his evidence about his understanding about the existence and content of the family trust deed was puzzling. Notwithstanding the fact that he had produced that document for his son on the morning of the hearing, he asserted to the court that he was unfamiliar with the document. After explaining he was unfamiliar with the terms of the trust, he was later able to offer information, without looking at the document, that his children were discretionary beneficiaries. He said he learned this from the husband or his lawyers when they asked him to provide the deed, notwithstanding that without the deed they could not have known about the discretionary beneficiary nomination.
As outlined earlier, Mr Gerry was also inconsistent about the way beneficiary dividends were paid, changing his evidence when presented with objective material that did not agree with his version of events. This casts a shadow over the evidence he gave in relation to the circumstances of the trust.
Mr O Gerry denied that the payment of $300,000 he made to his son was causally related to the receipt by Mr O Gerry of the sum of $3,500,000 for the sale of the business in which his son had been actively involved since he was 15 years of age. That is so inherently unlikely that I do not accept his evidence in relation to that. This is discussed more fully later in my reasons.
Again, taking the husband’s father’s evidence as a whole, I am doubtful whether or not I can uncritically accept statements made by the husband’s father about controversial matters.

Mr C

Mr C was clearly an intelligent person who had a detailed knowledge of the business dealings of the company. In relation to the alleged amount of $350,000 owed by the husband, as I indicate later, I am not able to accept that Mr C’s version is inherently likely. I do however accept other evidence given by Mr C about the importance of the husband to the business that was originally purchased by he and others in 2004 and the husband’s importance to the future of the business that he and the husband now run together.

The wife

The wife impressed as a witness who answered questions honestly. Her credit was not impugned during cross examination. She quite easily made a number of concessions against her interest when answering questions.

Mr P

Counsel for the husband challenged Mr P at length in relation to his methodology. Mr P was resolute in the expression of the opinions that he held and his original written opinions remained uncompromised at the conclusion of his cross examination.

Conclusions on credit

There is not a large degree of dispute between the parties in respect of historical matters. Most of the controversial matters relate to the business dealings of the husband and his father and the wife was without knowledge in relation to those matters and was not tested in respect of those matters. Although little turns on a comparison of the credit of the parties, I have indicated that I have reservations about accepting uncritically the evidence of the husband and his witnesses about financial matters.

CHRONOLOGY

The wife was born in the USA in 1956.
The husband’s family business ‘Gerry Products’ was founded in 1958 and Gerry Products No 1 Pty Ltd (GP1) commenced to trade in 1968.
The husband was born in 1963.
The Gerry Superannuation fund was set up in 1968.
The husband began working for the family business, Gerry Products in 1980.
On 20 December 1984 the husband purchased a unit at S for $60,000 and entered into a $55,000 mortgage. $10,000 was borrowed from his father.
The parties met in January 1987 in Queensland and began a relationship shortly after.
The parties married and commenced cohabitation in 1987. At that time the husband was working in the family business and was also a sports instructor. The wife was a manager of a catering company.
In February 1989 the S unit was sold for $140,000 with net proceeds of $110,000.
In 1989 the parties purchased a property at A (“the A home”) for $210,000. A deposit of $100,000 was paid which was the net sale proceeds from the S unit and joint savings, and the balance was secured by NAB mortgage of $110,000.
The A home was renovated in 1992 including preparing a nursery, kitchen refurbish, removal of a wall and enclosing the veranda. This was partly financed by gifts from his parents totalling $13,400.
The first child of the marriage, L, was born in 1992 and is currently aged 18 years. The wife took maternity leave and was not reemployed, resulting in legal proceedings and a $5,350 settlement.
In November 1993 the wife commenced a part time sales job. The parties agreed the wife would cease part time work in January 1997.
The second child of the marriage, T, was born in March 1995 and is currently aged 15 years.
The A home was renovated in 1997/1998. This included new roofing, the construction of a pool, and a large extension. The cost was $90,000 with $75,000 being a gift from his parents.
The A home was sold in 1998 for $480,000 and the parties bought a property at D (“the D home”) for $555,000. The parties funded the purchase by applying $360,000 from the A sale and drawing down on a mortgage facility secured against the property.
Renovations were carried out on the D home in 1999/2000, including a large second storey extension, roofing, painting, kitchen conversion, a back deck, carport and landscaping. The cost of the renovation was $200,000 and was funded by drawing against the mortgage.
The wife worked casually in 2001 with work relating to the national Census.
The husband and wife operated a business from 2002 to 2005.
In October 2003 the wife commenced a part time sales job, which lasted four months. She also worked in a second part time sales job from November 2003 to March 2005.
On 29 January 2004 Gerry Products No 1 was sold to F Pty Ltd for $10million. The amount of $7million was paid to the husband’s father and uncle in cash. There was vendor finance in relation to the remaining $3million but that money was never received. F Pty LTd leased the premises for the business from a company owned by the husband’s brother and uncle and continues to do so.
Shortly after the sale, the husband received $300,000 from his father.
The parties separated under the same roof in April 2005, and the husband left the home on 19 August 2006. The wife remains living in the former matrimonial home.
In August 2006 the husband looked at buying a property in Sydney’s south. The husband gave evidence that this intended purchase came to nothing. The wife did not make any comment about this matter in final submissions.
On 23 August 2006 the husband attended the D home to remove household items and motor vehicles from the property.
The husband cancelled the redraw facility on the mortgage and credit card in August 2006, which the wife was using for living costs for her and the children.
The parties divorced in October 2006.
The husband commenced cohabitation with his new partner in December 2006.
In 2007 the wife obtained a Diploma of Business at TAFE.
On 8 July 2007 L commenced living with the husband full time. This lasted until February 2008. In November 2008 she commenced a week-about arrangement with both parties, and from December 2008 she lived full time in a self-contained part of the wife’s residence.
In 2008 the wife commenced a Bachelor of Arts at a Sydney University.
On 4 December 2008 Gerry Products No 1 was restructured and refinanced, with the husband’s father again asserting a financial role in the business, and the husband being made a director and receiving equity in the business.
Final Parenting orders were made on 20 November 2009.

APPROACH TAKEN

In this matter my task is to:
110.1.Identify and value the property, assets, financial resources and liabilities of the parties;
110.2.Identify relevant contributions and assess them;
110.3.Consider relevant matters referred to in Section 79(4)(d) – (g) of the Family Law Act 1975 (FLA);
110.4.Ensure my order adjusting the property, assets and liabilities of the parties is just and equitable.

BALANCE SHEET

The balance sheet was refined during the course of the hearing and at the end of the hearing there were only three disputed items on the balance sheet.
There is an argument between the parties as to whether or not the assessment of contributions should be approached upon a global basis. The husband submits that there should be two pools which separate the non superannuation and the superannuation assets.
This however was a long marriage. I find that there is no utility in attempting to assess contributions to the two pools suggested by the husband, in different ways. I consequently will take a global approach to the assessment of contributions.
Set out below is a table of the assets and liabilities of the parties. I have determined the amounts of the three disputed items by indicating their determined value in bold in the table. The reasons for my determination are set out after the table.

Assets
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
1	J	D property	$1,000,000.00	$1,000,000.00	Agreed	$1,000,000.00
2	H	NAB account	$7,150.00	$7,150.00	Agreed	$7,150.00
3	W	Sutherland Credit Union	$500.00	$500.00	Agreed	$500.00
4	W	ANZ account	$567.00	$567.00	Agreed	$567.00
5	W	Jeep Cherokee	$5,000.00	$5,000.00	Agreed	$5,000.00
6	H	Ford F250	$45,000.00	$45,000.00	Agreed	$45,000.00
7	H	KTM 250 Motorcycle	$6,000.00	$6,000.00	Agreed	$6,000.00
8	H	Camper trailer	$4,750.00	$4,750.00	Agreed	$4,750.00
9	W	Contents	$3,000.00	$3,000.00	Agreed	$3,000.00
10	H	Contents	$3,000.00	$3,000.00	Agreed	$3,000.00
11	H	Gerry Family Trust	$245,854.00	$678,347.00	Determined	$678,347.00
12	H	AMP Superannuation	$142,908.00	$142,908.00	Agreed	$142,908.00
13	H	Australian Super	$49,025.00	$49,025.00	Agreed	$49,025.00
14	H	Gerry Super	$386,161.00	$386,161.00	Agreed	$386,161.00
15	W	REST Super	$3,532.00	$3,532.00	Agreed	$3,532.00
16	W	MLC Super	$636.00	$636.00	Agreed	$636.00
Total assets			$2,335,576.00
Liabilities
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
17	J	Home mortgage	$81,600.00	$81,600.00	Agreed	$81,600.00
18	H	NAB car lease	$12,804.00	$12,804.00	Agreed	$12,804.00
19	H	L and K Gerry	$20,000.00	$0.00	Determined	$0.00
20	W	HECS debt	$0.00	$9,000.00	Determined	$0.00
21	J	Expert fees (on mortgage)	$11,330.00	$11,330.00	Agreed	$11,330.00
Total liabilities			$105,734.00
Total net assets			$2,229,842.00

Item 11 -The value of the CLG Family Trust

The single expert Mr P provided a report dated 25 August 2010, a supplementary affidavit sworn 13 September 2010 and gave oral evidence.
Consistent with Mr O’s written opinion, the wife asserts a value to the husband arising out of the CLG Family Trust in the sum of $678,347.
The husband suggested that the figure on the balance sheet should be $245,854 ($442,729 - $196,875). The husband suggested the amount of $442,729 was the value to him of his interest in the CLG Family Trust prior to the consideration of an alleged debt to Mr C. The amount of $196,875 was Mr P’s calculation of the amount the alleged debt affected the valuation of the husband’s interest in the CLG Family Trust.
Counsel for the husband, during his cross examination of Mr P, suggested to him on more than one occasion that his methodology was flawed. Mr P did not accept that assertion on any occasion that it was made to him.
During final submissions, counsel for the husband suggested that I should embark upon a process which would see me abandon the basis upon which the single expert carried out his valuation and adopt alternate methodology which would see interest added back so that Mr P’s calculation of future maintainable earnings would be reduced.
I was also invited to have regard to the historical performance of the company in a more significant way than the way Mr P incorporated it in his methodology. It was suggested to Mr P during cross examination that he had not taken the historical performance of the business property into account. He did not accept he had not done so.
Having suggested an alternate method of valuation, counsel for the husband submitted that it would be appropriate to adopt the same multiple to a future maintainable earning figure that had been calculated on a quite different basis to that used by Mr P.
None of the mathematics of the calculation suggested by counsel for the husband during final submissions were put to the single expert. It was not put to the single expert that it would be appropriate to use the same multiple if a different methodology was adopted. I am unable to accept it would be appropriate to use a similar multiple if a different methodology was used.
I am unable to accept any of the submissions made by counsel for the husband which led him to submit on the husband’s behalf that I should accept the figure of $442,729 as being an appropriate figure for the husband’s interest in the CLG Family Trust (prior to any alleged debt to Mr C being taken into account). I accept Mr P’s figure as to the value to the husband of his interest in the CLG Family Trust.

The debt owing to Mr C and its effect on the value of the CLG Family Trust

The husband asserted that the value of his interest in the business was affected by a debt that he or the CLG Family Trust owed Mr C in the sum of $350,000.
The husband, Mr C and the CFO of the business gave Mr P future budget projections of the business enterprise for the 2011 year. Mr P has substantially relied upon those budget projections when preparing his valuation. He has also relied upon historical material and other information that he was given after the report was made available.
Mr P was asked to assume the CLG Family Trust owed $350,000 and was asked to calculate what the actual effect would be on the value to the husband’s interest in the CLG Family Trust. Mr P concluded the effect of the arrangement as set out in the specific questions asked by the husband would be to reduce the value of the husband’s interest in the CLG Family Trust by $196,875.
Mr C gave evidence that when he purchased the company in 2004 there was substantial documentation (counsel for the wife suggested that Mr C during his evidence indicated that the documents generated during the 2004 agreement were about 1.5 metres high. I am not sure that Mr C actually had his hands that far apart but certainly he indicated that the documentation was half a metre high). Mr C has been involved in about 50 acquisitions. Despite all of that, in 2008 when he says he entered into an agreement with the husband for the husband to pay $350,000, there was no documentation prepared or signed by either of them. One reason there might be no documentation is that if there was a discussion as asserted between the men, both of them knew that Mr O Gerry, who was integral to the overall arrangements, would have not countenanced such an agreement. Any agreement about $350,000 between the husband and Mr C is in my view, without consideration. Again the evidence given about this agreement has to be looked at in the context in which the overall deal was being done. Mr C was personally liable for debts of approximately $9,000,000. Part of that sum was an amount of $2,800,000 which was owed to Mr O Gerry. The balance was owed to the ANZ Bank. A deal was done whereby Mr O Gerry forgave his debt and the ANZ Bank was satisfied by the borrowing from NAB in the sum of $1,400,000. Mr C and the husband became jointly liable for that borrowing. The reason that Mr C gave as to why he thought the husband did owe him something was because of the money he had lost from the payment made in 2004 by the company in which he had an interest known as “F Company”. That is an illogical position for Mr C to take given that Mr C would have ended up bankrupt had a deal not been able to be done with NAB to pay out ANZ and to extinguish a debt to the husband’s father. Integral to that deal from the husband and the husband’s father’s point of view, was securing the husband’s future in the refinanced enterprise. The husband was also an important “asset” of that business. The evidence I have would lead me to believe that the financing by NAB was partly based on the husband being a part of the ongoing business and the husband’s father offering words of comfort to the NAB and retaining an actual interest in the shareholding of the business.
As earlier indicated, there is no documentation in relation to this debt. The debt is alleged to have arisen out of a conversation that the husband had with Mr C. During cross examination, Mr P was shown accounts that recorded $350,000 upon them. These accounts had been brought into existence after Mr P had called for them. Mr P gave oral evidence that the way the accounting had been done for this alleged debt was very unusual. Exhibit G are financial statements of the CLG Trust. The only evidence about the debt is in Mr C’s affidavit and these CLG documents. Mr P said pg 47 doesn’t agree with the corporate records for Gerry Products because the Gerry Products capital should be $350,000 higher. The balance sheet for CLG is ‘extremely odd’ regarding the $350,000; if there was this verbal agreement the shares are properly recorded at cost price as an asset, but the trust should not then owe money back to the company that it just gave money to, to buy the shares. Mr P opined that the balance sheet is ‘wrong’.
The husband however in his oral evidence indicated, in his view, it was he who personally owed money to Mr C and that the debt was conditional upon the business reaching some level of profits at some point which would provide excess liquidity from which this debt could be paid. The husband said he did not expect the debt to be in any of the accounts of Gerry Products because in his view, it was more an agreement between Mr C and himself. So on the husband’s version, it was a personal debt repayable at no specific time with no terms in respect of repayment.
I am unable to accept that that liability of $350,000 exists.
Given that, I do not accept either the recalculations suggested by counsel for the husband during his submissions nor the existence of the $350,000 debt. I accept Mr P’s evidence and find that the value to the husband of his interest in the CLG Family Trust is in the sum of $678,347.

Item 19 - $20,000 debt to husband’s father for car

The husband claims that he owes his parents (and more specifically his father) an amount of $20,000 arising out of an arrangement he and his father say they entered into when the husband wished to purchase a Ford 250 motor vehicle. The husband’s father indicated that the motor vehicle was a bigger motor vehicle than he believed his son should buy and when his son approached him for finance he had to be talked into it. He said that the agreement was “I would get that deposit back at the end of the lease term” (see pages 15 and 16 of Exhibit AA). It seemed to be a matter of common agreement that the lease term will expire in approximately four months.
This is somewhat inconsistent with what the husband now says. The husband says his father has confirmed that he requires the repayment “and I propose to do so from my property settlement”.
Counsel for the wife submitted that I would apply Biltoft (1995) FLC 92-614. In that case the Full Court recognised that generally unsecured liabilities would be deducted from the value of assets when ascertaining the value of a property pursuant to the provisions of Section 79 FLA. That general practice is subject to certain exceptions available in the Judge’s discretion, including whether or not the debt is likely to be enforced, if it was vague or uncertain, or if it was unreasonably incurred.
There has been no evidence provided at any point in the history of monies moving from the husband’s father to the husband has he made any payment to his father in the other direction. Given the husband’s father’s undoubted wealth, I am unable to be confident that the husband will in fact pay his father $20,000 in four months time. If the husband’s evidence about the term of the repayment is accepted, the repayment would be made after my orders for property settlement are made. As will be demonstrated later, even upon the husband’s application, the husband will not have any immediately available liquid assets (outside that which he can draw from the business). I find that it is unlikely that any money will be paid by the husband to his father at the time of the property orders. That is demonstrative of the fact that no firm reliance can be placed on the evidence of the assertion that there is a debt of $20,000 between the husband and his father which will be enforced. I will not add that debt to the balance sheet.

Item 20 - wife’s HECS debt

The wife asserts that she has a HECS debt of $9,000.
That debt has not yet crystallised and is not immediately payable. It was a matter of common agreement between counsel for the parties that the HECS debt was payable only in circumstances where the wife is earning sufficient income to trigger the obligation to make payment in respect of that debt. In the event the wife obtains employment at a sufficient level of remuneration to trigger the HECS debt, then she will have an income stream from which to pay that debt. The HECS debt is a contingent liability and is not one that I should add to the balance sheet.

Item 21

It is agreed that the parties should be equally liable to pay the fees of Mr P. I was informed that in fact the amount for item 16 has already been added to increase the home mortgage. The simplest approach is to have the wife responsible for the whole of the debt in item 16 as she will be taking over the mortgage.

Husband’s legal fees

The husband’s legal fees have not been paid out of the marital funds but exist as a debt to his parents and have not been taken into account.

Husband’s Gerry Superannuation (item 14)

The value of the husband’s Gerry superannuation is $386,161. This sum is not in dispute. What is in dispute is whether the husband willingly failed to disclose his interest in the Gerry Superannuation fund, and I have already discussed that issue above.

CONTRIBUTIONS

The wife seeks a division of 57.5 percent to the husband and 42.5 percent division to herself, on a global basis, of the net assets. The submission of the wife is that the husband should be afforded the credit of a 15 percent differential in relation to contributions. Counsel for the wife submits that even having regard to contributions made on the husband’s behalf by his parents, that is a generous differential in the husband’s favour.
The husband was not able to precisely specify his percentage split during submissions and so that it is clear, I do that calculation now. As indicated, the husband asserted there should be two pools; a pool for superannuation assets and a pool for non superannuation assets. The net assets, excluding superannuation assets, were in the sum of $1,647,580. The husband suggested that those assets be divided 67.5 percent to himself and 32.5 percent to the wife. The superannuation assets were in the sum of $582,262 and the husband asserted that those assets should be divided as to 60 percent to himself and 40 percent to the wife. The effect of the husband’s submissions would have divided the overall assets 65.5 percent to himself and 34.5 percent to the wife, based on contributions.

Initial Contributions

At the commencement of the relationship the wife brought with her an MGB sports car, which was later sold for $5,000 and some furniture.
At the commencement of the relationship the husband brought with him a unit at S purchased for $60,000, two and a half years before the marriage and sold nearly two years after the marriage for $140,000. The mortgage statement annexed to the wife’s primary affidavit shows a loan balance of $45,435 one month after the parties were married. The husband was responsible for mortgage repayments on the S unit and before marriage he rented the unit out. He also owned a ski boat, and household furniture and effects.

Financial Contributions

The wife has a work history punctuated by multiple positions of a largely unskilled nature including sales assistant work, and volunteer work. She did hold a position from 1987 to 1992 with a catering company as chef, chef manager and catering manager. Her gross income during that employment was between $40,000 and $50,000.
The husband has worked in the family business, Gerry Products, since he was 15 years old. He became the production manager in his early twenties and continues to be entirely responsible for production. The following duties were undertaken by the husband in his role (listed in Exhibit P):
146.1.Management of the production operations of the business;
146.2.Management of the tooling department;
146.3.Design of product to customers’ requirements;
146.4.Design of tooling for manufacturing products;
146.5.Troubleshooting customer problems ;
146.6.Resolving QA issues related to production and/or design;
146.7.Developing new markets based on product technical merit (the husband said he did not work in this capacity prior to the restructuring in 2008);
146.8.Working as a Board member on company strategy (the husband said he did not work in this capacity prior to the restructuring in 2008);
146.9.Overseeing financial performance of the business (the husband said he did not work in this capacity prior to the restructuring in 2008);
146.10.Management and review of staff performance; and
146.11.Other fiduciary duties as required.
The husband received the following gifts from his parents which the wife asserts were entitlements through the business, not gifts. The main sources of the ‘gifts’ were:
147.1.The husband’s father and mother personally or through E Finance Pty Ltd (Source A);
147.2.The husband’s parents through O Gerry Nominees Pty Ltd (Source B); and
147.3.The O Gerry family trust (with E Finance Pty Ltd as trustee) (Source C).
The money received is outlined as follows (with source identified):
148.1.$5,000 on 30 June 1988 to reduce the mortgage on the S unit (source A);
148.2.$25,000 on 31 July 1989 to reduce the mortgage on the A home (source A);
148.3.$13,400 in smaller amounts throughout 1992 for renovations to the A home (source A and B);
148.4.$50,000 in March 1994 to reduce the mortgage on the A home (source A);
148.5.$75,000 in June 1998 for the A home renovations (source A);
148.6.$101,270.67 over the course of the marriage (source C);
148.7.$5,000 on 30 June 2000 drawn against O Gerry’s company’s Gerry Holdings;
148.8.$10,000 on 14 November 2000 deposited into the mortgage account (source A);
148.9.$40,000 on 31 January 2001, deposited into the mortgage account (source A);
148.10.$23,000 on 2 February 2001 (source B);
148.11.$300,000 on 2 April 2004. This was used by the husband to payout the two mortgages in the sum of $189,083 and $110,917, and create $32,052 credit (source B); and
148.12.$20,000 on 7 November 2005 to purchase a car (Source A).
The husband summarises the funds contributed by the parents (not counting the item at sub paragraph 149.7) as:
Personal advances (A)  $227,300
Advances from parent’s company (B)              $334,100
Advances from parent’s family trust (C)          $101,270
Total  $662,670
The payment of $300,000 on 2 April 2004 was the subject of discussion during the evidence of the husband and the husband’s father. Both asserted it was a discretionary payment by the husband’s father and that is the sworn evidence of them both. They both took the opportunity during evidence to make the point that a similar amount of $300,000 was to be paid to the husband’s sister some time in the first half of 2004. I have no objective evidence that would indicate that that was so, and I note that the bank statement produced to me only shows a payment to the husband. Notwithstanding that, I accept the husband and his father might be telling the truth about the payment to the husband’s sister. It is in my view, important to describe the circumstances in which this payment was made to the husband. A business was being sold by the entity controlled by the husband’s father and his brother. The incoming purchaser had a keen interest in ensuring continuity of the product produced by the business. The business was sold at the beginning of 2004 for $10,000,000. The amount of $7,000,000 was paid to the husband’s father and to his uncle in cash and the remaining $3,000,000 was the subject of vendor finance (and was never paid). The husband’s father conceded that during the six months that the negotiations for the sale took place, there was an interest by the purchaser in ensuring that the husband continued his role as manager of production. The husband’s oral evidence was that he was prepared to commit to that role as long as the incoming purchasers treated him well. Both the husband and the husband’s father assert that no formal employment agreement was signed by the husband with the new purchaser. The husband’s father asserted that during the period of time the husband worked in his business, the husband was paid a good salary and that he did not owe his son anything more than he owed any other employee. As I have earlier said, I do not accept that evidence genuinely represents O Gerry’s position.
The “gift” of $300,000 to the husband came only two months after the husband’s father had just received a payment of $3,500,000. The business was sold on 29 January 2004 and the money was paid to the husband on 2 April 2004. Whilst the husband’s father indicated that his motivation for giving the money to the husband was so that his current mortgage could be extinguished, the amount of the gift actually exceeded the amount required to pay the mortgage. The payment to the husband of $300,000 from the sale proceeds is not in my view a “pure gift”. It is not simply the relationship between the father and son that in my view led to that payment. I find that that payment was an acknowledgment by the husband’s father to the husband of effort that the husband had put into the business over a long period of time (18 years of which were during the marriage). Both the husband and his father seemed to assert that that conclusion was not open because they said a similar payment had been made to the husband’s sister by the husband’s father. I do not accept the logic of that proposition. The fact that O Gerry gave $300,000 to his son, wholly or in part, for one reason does not mean that he could not give a similar amount to his daughter for another reason.

Non-Financial Contributions

During the cohabitation, the wife was the primary carer of the children. She did the vast majority of the parenting. Although she acknowledged the husband did provide some assistance, this was significantly limited by the time spent away from the home for work or leisure activities.
The husband played a role in the children’s lives since birth, helping in the day-to-day responsibilities of child rearing in the time he had available as well as engaging in fun activities.
The wife sets out a long list of leisure activities in which the husband partook, culminating in many hours away from the home. This included fishing, boating, motorcycling, skiing and golfing. Between July 1998 to March 2001, the husband was absent from the home on boating trips for 165 days. He was also away from the home frequently on business. Some of the time the husband spent on the boat was not only for accruing hours for his qualifications, but also for giving lessons and conducting chartered tours which were paid, and spending time with the children. Tournaments occurred two or three times in the summer months in the early 1990s. The husband ceased golf afternoons when L started school.
Whilst the husband had golf and water sports as regular relaxation during the marriage (some of which he enjoyed with the children), his role in parenting the children was a secondary one to the wife who was always available for the children throughout the time the parties were together.
The husband’s time away from home meant that the wife was primarily responsible for the children. This responsibility restricted her employment choices and hindered her professional development.
The husband obtained an owner/builder license for the renovations to A home and the D home, and engaged and supervised all work. The wife also provided assistance in the renovations.
The wife worked in the administration of the parties’ business between 2002 and 2005 and did not receive any formal remuneration.

Post Separation Contributions

Since separation the wife has been solely responsible for the maintenance and upkeep of the D home. The wife details all maintenance works in her affidavit at paragraph 93 and 94.
The wife has paid the mortgage on the D home from August 2007, when she received a notice to say $2,000 was in arrears, until 24 May 2010 when the redraw facility was changed. The wife paid $17,000 towards the mortgage in that time.
The wife has also been responsible for council and water rates. The Sutherland Shire Council commenced Local Court proceedings to recover the outstanding payments and legal fees, which totalled $3,076.41. The wife entered into an arrangement to pay $20 per week, and the husband said he matched that.
Since separation to date, the wife has paid $3,500 in water rates. She has also paid $1,500 per annum for private health insurance for her and the children, and $2,200 for L’s medical treatment.
Since separation the wife has had sole responsibility for the maintenance and veterinary costs of the family pets, which include a dog, two cats and four chickens.
The wife has continued her contributions in the role of parent since the date of separation. The husband says he has been involved in the children’s care since separation, having the children on alternate weekends from Friday afternoon until Sunday night, a midweek night and half the holidays. In November 2009 this time was extended by three nights each fortnight in relation to T. He said that T frequently comes to his house after school to spend time with him. L’s time increased to week about and two weeks about after a period of 4 months living solely with the father. Since December 2008 she has lived with the wife.
The husband paid voluntary and then formal child support. Before L turned 18 (in March 2010) this was $1,168 per month, and since that time $886.76 per month. In addition to paying child support the husband said he has paid:
165.1.T’s school fees of $1,500 in 2006 and $800 per term since 2007;
165.2.T’s stationery and textbooks;
165.3.Mobile accounts for both children;
165.4.Clothing for both children;
165.5.Costs for sporting activities;
165.6.L’s TAFE books and stationary;
165.7.L’s private health insurance since September 2007;
165.8.L’s $4,500 car plus registration, insurance, petrol and maintenance; and
165.9.T’s $500 car which the husband and son have been doing up.

Conclusion on Contributions

Counsel for the wife suggested an appropriate split based on contributions would be 42.5% to the wife and 57.5% to the husband on a global pool. The husband, who preferred the two pooled approach, considers an appropriate split for the non-superannuation pool to be 67.5% to the husband and 32.5% to the wife, and for the superannuation to be 60:40 in favour of the husband. As earlier indicated, this equates to a suggested 65.5/34.5 division, in the husband’s favour, of assets for contributions. I note that the parties’ assessment of contributions is based on different values for the property pool.
I am mindful of the myriad of contributions both parties made during an 18 year period. Balanced against these contributions are the significant contributions made in a number of areas by the husband or on his behalf. In summary these are:
167.1.An equity (unvalued) in the S unit at the commencement of the marriage.
167.2.Contributions coming to the husband from his father. These total approximately $662,000. Part of that is the sum of $300,000 which I have commented in my view has a connection with the fact that the husband, at a time when his father had received $3.5million for his share in the business, had been working the business for approximately 27 years. The wife’s case is that all of these monies came to the husband as a result of his employment in the business. That in my view is a position that cannot be sustained, nor however in my view, is the husband’s position that all of these monies are referrable to him being the son of his father. Some realistic view needs to be taken as the position that the husband played in the family business.
167.3.Monies placed in the husband’s account in the Gerry Superannuation Fund. The husband’s entitlement in that fund is approximately $386,000. I have no clear evidence as to when contributions were made on the husband’s member’s account and whether or not they were realistically connected with his level of income in the business (but I assume they were).
167.4.The 2008 acquisition by the husband of an interest in the business. I have found that that valuable asset is worth $678,000 to the husband. The husband worked in the business since he was 15 years of age, so about ten years prior to the marriage, about 18 years during the marriage and about five years since. There is some connection between the husband’s efforts in each of those three periods and the fact that he owns this asset today. The asset of course was acquired by the husband post separation. I find however that it is unrealistic to say that none of the acquisition of that asset is referrable to efforts made by the husband during the marriage. Clearly, the level of the husband's skill developed across these three periods of time, all contributed towards him being in the position to acquire the assets. The backing of his father was also important.
Having considered all of the contributions made initially during the time the parties were together and since they have separated, including the amount and nature of assets to which the wife cannot claim a contribution, I conclude that the appropriate split, based on contributions, would be 37.5 percent to the wife and 62.5 percent to the husband, on a global pool of assets.

SECTION 79(4)(d) - (g) MATTERS

The wife is 54 and the husband is 47. The husband is in good health.
The wife has a medical condition for which she is registered for disability services with her university and the RTA. She experiences pain and numbness in her right hand and arm, for which she underwent carpel tunnel surgery in 2006 but continues to suffer intermittent pain. She also experiences shooting pain in her heels, hips, buttocks and lower back. These symptoms are aggravated by standing walking or sitting for long periods, and cold weather. The wife is prescribed anti-inflammatory medication and painkillers. The wife has given evidence (corroborated to some degree by the reports that have been admitted) about the pain in her feet. There is however no medical evidence that would indicate what affect any medical condition which the wife suffers might have on her future earning capacity.
The wife says that her role as homemaker has disrupted her employment opportunities. The wife has obtained a Diploma of Business, and is currently undertaking a Bachelor of Arts, at a Sydney University which should be completed by mid 2012. She hopes to gain employment arising out of this degree.
Although the husband criticises the wife’s efforts in finding employment, I find the job applications that she has made in recent times are appropriate given the circumstances in which the wife found herself. I also accept her evidence that she has been unsuccessful for a long time in securing employment. Without paid employment the wife receives the following weekly income:
Austudy   $240
Child Support                   $178
Family Tax Benefits          $30
Scholarship   $20
Students  $32
The mother’s weekly expenditure of $667 is more than her income. She also has meagre superannuation entitlements of $4,130 and liabilities of over $90,000. The parties’ daughter L is a member of the wife’s household and earns about $200 per week. T is still financially dependent.
The husband has a far better income earning capacity than the wife, earning over $3,000 per week and spending within his means. The husband’s earning capacity now stands at $155,000 plus motor vehicle allowance and superannuation.
I find that the husband’s earning capacity is a result of a long contribution to the company, including the 18 years the parties were together. During that time the wife sacrificed her future career prospects to enable the husband to hone and acquire new skills which has put him in a position of co-owner of the business formerly owned by his father and uncle.
Not only does the husband have a substantial annual income for the future, he also has a significant long service entitlement (which he says he intends not to take in cash) and a very significant accumulated sick leave entitlement (which of course would only be available to him should he become sick). The wife however has neither substantial long service leave entitlement nor does she have any sick leave entitlement.
I find that the husband’s father constitutes a significant financial resource for the husband. The husband has one other sibling. Mr O Gerry (and his wife) has significant wealth. I have no evidence as to precisely what that might be, but he is the half owner of a factory unit which currently returns $26,000 per month by way of rental income. At 30 June 2009 the O Gerry Family Trust held over $2 million in cash and financial assets and the husband’s father’s interest in the Gerry Superannuation Fund was worth nearly $1,900,000.
Counsel for the husband did not attempt to gloss over the fact that the husband has received regular payments from his father (funds drawn from the family trust) and there is no reason to expect that that family support for the husband would diminish. In contrast, the wife has no family support in Australia and apart from the children is relatively isolated here.
The affidavit of the husband’s father sets out the payments made to the husband after January 2006 from the O Gerry Family Trust. In four years the husband has received $74,482.72 from the family trust, and an average of about $13,000 a year in the last two years ($12,189.90 in 2009). The details of the monetary contributions provided by the husband’s father were set out earlier.
The husband is cohabiting with another woman (Ms W) and her children from time to time, together with his own. The husband and Ms W have been in a relationship since January 2007. Ms W contributes to the household income. The husband’s current partner assists the husband’s father in accounting matters. The husband gave evidence that, although he did not initially indicate in his financial statement any knowledge about her financial position, he had subsequently ascertained that she is in receipt of income of approximately $80,000 a year plus superannuation. The husband asserted that he had only asked her about her income one week before the hearing. Ms W was not called by the husband in his case to give any evidence and consequently there was no opportunity to explore with her the extent to which she says she shares her financial position with the husband. Ms W put money towards the purchase of a boat which she currently is said to own with the husband’s father. The boat is registered in the husband’s name and he pays the insurance on it. It appears she may have had monies available to her from a prior property settlement with her former partner.
Mr O Gerry volunteered that he thought that his son’s new partner was a more than appropriate match for his son. It seems the husband’s new relationship will not be a fetter to financial assistance the husband might expect from his father in the future.
Whilst the wife conceded that the boat owned by his partner and his father (which is registered in his name) should not be put as an asset on the balance sheet, it is still the case that the husband has the use of that expensive item and I have no doubt that he treats it as his own.
The wife throughout the marriage enjoyed with the husband a superior standard of living. Upon separation, that lifestyle ended. The wife has lived on a fairly small amount of money since the separation. In contrast, the husband has not seemed to have had any fetter on his ability since separation to expend money on a discretionary basis.

Conclusions about s79(4)(d)-(g) matters

Counsel for the wife also sought a 12.5 percent adjustment for s 79(4)(d) - (g) matters but from a greater baseline of net assets on the balance sheet and a more generous assessment of contributions in the wife’s favour. Counsel for the wife said it would not have been difficult to go to 15 percent but that he was mindful of the nature of the assets that were to be distributed and the effect that the orders he sought had on the ultimate justice and equity of the distribution.
Both parties suggested an adjustment of 12.5% would be appropriate given the factors outlined above. I note again that this adjustment was based on different balance sheets and contribution calculations. Based on the findings I have made in the wife’s favour in respect of balance sheet items and in respect of contributions, I accept that it would be appropriate to make a 12.5 percent adjustment in respect of s 79(4)(d) - (g) matters in the wife’s favour.

JUST AND EQUITABLE

In the end the wife sought a 55/45 division of the assets in her favour and the husband sought a 47/53 division in his favour.
Taking into account the findings made in respect of contributions and s 79(4)(d) - (g) matters, I find that it would be just and equitable to divide the net assets of the parties as to 50 percent to the wife and 50 percent to the husband.
The parties were in general agreement as to which assets each should have and the order in which the various superannuation funds should be called upon to effect the adjustment.
The following division of assets will achieve the percentage split desired.

Husband gets 50%

Assets

Item No.

Description

Percentage

Value

2

NAB account

100%

$7,150

6

Ford F250

100%

$45,000

7

KTM 250 Motorcycle

100%

$6,000

8

Camper trailer

100%

$4,750

10

Contents

100%

$3,000

11

CLG Family Trust

100%

$678,347

14

Gerry Super

$383,478

Liabilities

Item No.

Description

Percentage

Value

18

NAB car lease

100%

$12,804

19

L and K Gerry

100%

$0

Net Assets to Husband

$1,114,921

Wife gets 50%

Assets

Item No.

Description

Percentage

Value

1

D property

100%

$1,000,000

3

Sutherland Credit Union

100%

$500

4

ANZ account

100%

$567

5

Jeep Cherokee

100%

$5,000

9

Contents

100%

$3,000

12

AMP Superannuation

100%

$142,908

13

Australian Super

100%

$49,025

15

REST Super

100%

$3,532

16

MLC Super

100%

$636

14

Gerry Super

$2,683

Liabilities

Item No.

Description

Percentage

Value

17

Home mortgage

100%

$81,600

20

HECS debt

100%

$0

21

Expert fees (on mortgage)

100%

$11,330

Net Assets to Wife

$1,114,921

Standing back I consider that this distribution of assets is a just and equitable one.

SPOUSAL MAINTENANCE

A party to a marriage is liable to maintain the other party to the extent that the aforementioned party is reasonably able to do so, if, and only if, that other party is unable to support herself adequately whether:
191.1.by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
191.2.by reason of age or physical or mental incapacity for appropriate gainful employment; or
191.3.for any other adequate reason.
Counsel for the husband submits that the only threshold test that the wife can rely upon is the last one; the “any other adequate reason” being that the wife is currently in a course of tertiary education, which education is due to be completed at the end of the first semester in 2012. The wife does not limit herself only to that threshold test. The wife however limits her application for spousal maintenance until June 2012.
The wife is seeking to retrain so that she may re-enter the workforce. She is currently undertaking an Arts degree, and has 18 months until completion. She is studying three subjects each semester, and attends university Monday to Wednesday each week and alternate Thursdays. She wishes to have spousal maintenance assistance until she has completed her studies.
During cross examination, counsel for the husband put to the wife that although her current involvement in tertiary education would fulfil the criteria of full time university education for the purposes of her Centrelink entitlements, she could in fact take more subjects in upcoming semesters and consequently complete her degree at an earlier time. The wife replied that that was uncertain as only particular subjects are offered in particular semesters.
The wife does not rely simply on her involvement in her further studies. She still has two children living at the home, and I have no indication that L, at age 18, will leave the home in the near future. I have some evidence that T maybe going into an apprenticeship next year. He is however still under the age of 18 and I accept that the wife believes that she needs to continue her role as parent to some degree.
Although as I have earlier indicated, the medical evidence is insufficient to convince me the wife’s physical incapacity affects her ability to obtain appropriate employment, the wife is a 54 year old woman who has been out of the workforce for many years.
Counsel for the husband submitted that I would find that the applications the wife has made for employment to be unconvincing and further find that she has the capacity for some type of part time employment and further that she has a significant amount of time available. It was put that the wife doesn’t need to work very much in order to be able to generate the $350 per week needed. I accept that the wife has in fact attempted to obtain appropriate employment but has not been able to achieve that.
I find that the wife has demonstrated an adequate reason as to why she is unable to support herself adequately at the current time.

The wife’s need

Disregarding as I must the wife’s income tested Government benefits, the wife’s income is limited to an amount she receives by way of scholarship of $20 per week and monies that she receives from time to time from board from students. The evidence is that that is an average of about $32 gross a week (out of which she has to supply food for the students). The overall income would therefore be no more than $52 per week.
If the wife’s plans work out, she will go into the full time work force some time in 2012. At that time, she will not have retired (in fact she will only be starting her new career).
Counsel for the husband asserted that the wife could access the superannuation she received under the property orders to support herself once she was 55 years of age. Counsel for the husband was given the opportunity to provide me with the legislative details about how it might be that the wife could access these monies. So far as I am aware, no written submissions have been provided. I note that under regulation 6.01(7) and 6.12 SIS Regulations, the wife can access her superannuation upon retirement at 55 (because she was born before 1960) if she shows that her gainful employment has ceased and she does not intend to become gainfully employed again for more than 10 hours per week. However, the wife’s evidence is that she hopes her degree will lead to gainful employment, not retirement. The monies that have been transferred to the wife pursuant to the property orders for her future retirement should not be a basis upon which the wife’s demonstrated need for periodic spousal support whilst she retrains (in circumstances where the husband has a clear capacity to pay) should be negated.
The husband also asserts that the wife has access to the proceeds of the D home if it is sold under my orders, from which she can support herself. Counsel for the wife submits the wife should not have to sell the D house to support herself. I accept that is so, at least until mid 2012.
The wife’s weekly expenditure as set out in her financial statement is $381 per week. There was no testing of that expenditure and it seems more than reasonable. Some items (for example holidays) are listed as nil. When a reasonable allowance is made for holidays, I am comfortably satisfied that the wife’s claim of $350 per week is more than established on the basis of need.

Capacity to pay

The husband receives about $207 per week from the family trust. He also receives net in hand over $2,000 per week from his employment (the gross figure salary and car allowance is $3,172; tax is $901). The husband therefore has, in hand, income of about $2,200 per week.
The husband’s main expenses are $500 per week towards rent; $250 per week for child support; $323 in respect of his own expenses; $64 in insurance and other costs in relation to his motor vehicle (which are offset against a motor vehicle allowance he receives from his employer).
The husband was asked a number of questions in cross examination relating to expenditure of monies on holidays and leisure. It did not appear that the husband had any constraints on his ability to expend money on those activities.
Based on the periodic amounts of money coming into the husband on a regular basis, I am satisfied that he has ample capacity to make a payment in the sum of $350 per week as claimed.
The court needs to consider whether or not a maintenance order is proper. In doing so the threshold test needs to be met, having regard to any relevant matter referred to in subsection 75(2) FLA. I have previously, in discussing the property application, dealt with relevant 75(2) matters and I take those matters into account without repeating those statements in this part of the judgment. I am mindful that the orders proposed altering the property of the parties. Each will receive an equal division of the net assets. The husband however is in a stronger financial position than the wife looking to the future. His income is currently higher; could be expected to be higher for the foreseeable future and consequently his ability to regenerate his capital is superior. The assets that the wife will receive are not liquid assets. She may, in the medium term, need to dispose of the current home in which she lives with the two children, but that will depend on her ability to earn an income once she completes her tertiary education. I am unable to find that the superannuation assets that she receives by way of property division might be made immediately available to her or that it is appropriate to require her to draw upon her superannuation for periodic support.

Conclusion in respect of spousal maintenance

I conclude that it is proper to make a spousal maintenance order in the wife’s favour in the amount sought in her application in the sum of $350 per week until 30 June 2012.

I certify that the preceding two hundred and nine (209) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 29 September 2010.

Associate:

Date: 29.9.2010

[2010] FamCA 897

29 September 2010

Key Legal Topics

Areas of Law

Family Law

Property Law

Legal Concepts

Remedies

Jurisdiction

Procedural Fairness

Husband gets 50%
Assets
Item No.	Description	Percentage	Value
2	NAB account	100%	$7,150
6	Ford F250	100%	$45,000
7	KTM 250 Motorcycle	100%	$6,000
8	Camper trailer	100%	$4,750
10	Contents	100%	$3,000
11	CLG Family Trust	100%	$678,347
14	Gerry Super	$383,478
Liabilities
Item No.	Description	Percentage	Value
18	NAB car lease	100%	$12,804
19	L and K Gerry	100%	$0
Net Assets to Husband			$1,114,921
Wife gets 50%
Assets
Item No.	Description	Percentage	Value
1	D property	100%	$1,000,000
3	Sutherland Credit Union	100%	$500
4	ANZ account	100%	$567
5	Jeep Cherokee	100%	$5,000
9	Contents	100%	$3,000
12	AMP Superannuation	100%	$142,908
13	Australian Super	100%	$49,025
15	REST Super	100%	$3,532
16	MLC Super	100%	$636
14	Gerry Super	$2,683
Liabilities
Item No.	Description	Percentage	Value
17	Home mortgage	100%	$81,600
20	HECS debt	100%	$0
21	Expert fees (on mortgage)	100%	$11,330
Net Assets to Wife			$1,114,921