GRANT and GRANT
[2016] FCWA 49
•30 JUNE 2016
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: GRANT and GRANT [2016] FCWA 49
CORAM: O'BRIEN J
HEARD: 26, 27 & 29 APRIL 2016
DELIVERED : 30 JUNE 2016
FILE NO/S: PTW 4170 of 2014
BETWEEN: MS GRANT
Applicant
AND
MR GRANT
Respondent
Catchwords:
Alteration of property interests and lump sum maintenance - Assessment of contributions including inheritance - Increase in liabilities by one party after separation - Non-disclosure and conduct of proceedings - Effect of breaches by parties of their duties as trustees of self-managed superannuation fund.
Legislation:
Family Law Act 1975 (Cth) s 72(1), s 74(1), s 75(2), s 79, s 90MT, s 90MZD, s 106A
Superannuation Industry (Supervision) Act 1993 (Cth) s 31, s 52B
Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 7A
Category: Not Reportable
Representation:
Counsel:
Applicant: Ms K Bodey
Respondent: Self Represented Litigant
Solicitors:
Applicant: DCH Legal Group
Respondent: Self Represented Litigant
Case(s) referred to in judgment(s):
Nil
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
Introduction
1[Ms Grant] (“the wife”) and [Mr Grant] (“the husband”) are unable to reach agreement in relation to financial matters.
2The parties have been involved in earlier proceedings about parenting arrangements and child support issues. To their credit, the parties were able to resolve those proceedings and orders were made by consent in relation to them on 16 November 2015.
3The proceedings remaining on foot and to be determined, therefore, are the competing applications of the parties for orders for alteration of property interests, and the wife’s application for spousal maintenance.
Background and history of the litigation
4The husband was born [in] 1970. He is self-employed, [in sales]. During cohabitation, those services were provided through [Company A Pty Ltd] (“[Company A]”). Later, the husband established a separate company called [Company B Pty Ltd] (“[Company B]”).
5The wife was born [in] 1975. She is employed as a [secretary] on a part-time basis.
6The parties began living together in August 1998, and were married [in] 2000. Their daughter [Child A] was born [in] 2004 and their younger daughter, [Child B], was born on [in] 2008.
7It is common ground that the parties separated under one roof on 29 September 2013. At the time, they agreed to remain in the matrimonial home at [Property A] while it was prepared for sale. The wife moved out of the home with the children, and into a rental property on 24 May 2014.
8On 4 July 2014, settlement on sale of the former matrimonial home was completed. The parties had informally agreed that they would each receive an interim distribution of $250,000 from the proceeds of sale, with the balance then remaining (some $31,000) to be retained in a joint interest bearing account pending a final resolution of their financial affairs.
9On 24 July 2014, the wife commenced parenting proceedings only.
10The first court event took place on 5 September 2014. At that point, the husband had not filed any responding documents. The wife sought through her counsel that the husband (who was represented at the hearing) give an undertaking not to deal “inappropriately” with matrimonial assets without her consent, but the husband declined to give that undertaking.
11On 18 September 2014, the wife filed an amended application to seek property and spousal maintenance orders. The husband filed a Form 1A response in relation to parenting issues only on 17 October 2014.
12Shortly thereafter, on 30 October 2014, interim orders in relation to parenting arrangements were made by consent.
13The husband then filed an amended Form 1A response seeking orders for alteration of property interests. The parties attended a conciliation conference on 20 February 2015 and, when matters were not resolved, orders were made to program the proceedings to a readiness hearing and thereafter to trial.
14In accordance with those procedural orders, the wife filed her trial materials in late June 2015. The husband did not. The scheduled readiness hearing took place on 14 July 2015. The husband did not attend, nor was he represented; at trial, he had no explanation for that. The proceedings were included in a callover and in due course a trial was listed to commence on 16 November 2015.
15There was then further correspondence between the parties in relation to the husband’s failure to file trial affidavit material, and what the wife asserted to be his failure to provide disclosure of relevant documents. The wife sought to address those issues through the court, and on 16 November 2015:
(a)final orders were made by consent in relation to the parenting proceedings;
(b)specific orders were made for the husband to provide disclosure of particular documents;
(c)an order was made to enable the wife to sell the [Volvo V60] motor vehicle and deposit the net proceeds of sale in a joint account;
(d)the wife’s application insofar as it sought a departure from child support assessment was dismissed by consent;
(e)the time for the husband to comply with the orders previously made for the filing of his trial affidavit materials and an undertaking as to disclosure was extended to 20 January 2016, with a further order that in the event he did not comply, his Form 1A response was to be dismissed, with the wife having leave to proceed on an undefended basis; and
(f)the husband was ordered to contribute $5,000 to the wife’s costs.
16The husband then filed a Form 13 financial statement and affidavit on 1 December 2015. The matter was subsequently relisted for trial.
Relief sought
17The wife sought orders in the terms of her “Final Minute of Property Orders Sought” filed on 22 April 2016. In broad terms, she sought:
(a)that she receive the whole of the monies remaining in the joint ANZ account, being the remainder of the sale of proceeds of the former matrimonial home;
(b)that the husband pay her a further sum of $140,000;
(c)that the husband cause [Company A] to transfer to her the legal ownership of the [Holden Captiva] motor car in her possession;
(d)that there be orders to, in effect, give her the whole of the parties’ respective entitlements in the [Grant Superannuation Fund] (“the superannuation fund”), a self-managed fund of which the parties are the only trustees and members;
(e)that the husband retain control of [Company A], [Company B], and [Company C Pty Ltd] (“[Company C]”) as trustee for the [Grant Family Trust], and indemnify her in relation to any liabilities of those entities;
(f)that the husband pay lump sum spousal maintenance in the sum of $37,500; and
(g)various pre-emptive orders to deal with what she anticipated would be difficulties in enforcement of the substantive orders sought.
18The husband did not file Papers for the Judge, as had been ordered at the readiness hearing. He did however, in compliance with an order made on 30 October 2014 file an amended Form 1A response on 11 November 2014. In that document, he specified the orders which he sought. At the commencement of the trial, I sought to confirm with him that he still sought orders in those terms, and he told me that he did.
19The orders sought by the husband in his amended Form 1A response were as follows (errors are as they appear in the original):
1.Immediate access to joint funds held with ANZ to pay final Tax/cost/debts for [Company A Pty Ltd] owned ( awaiting final accountants report on financial position
2[Holden Captiva] can then be transferred into [Ms Grant’s] name
3[Volvo V60] (under lease) will be paid off by [Mr Grant]
4No futher payments (spousal maintenance) to [Ms Grant] will be made.
5[Ford Focus ST] retained by [Mr Grant]
6[Ms Grant] be removed from the [Grant Super Fund], and [Mr Grant] to keep asset at [Property B]
7[Ms Grant] too be removed from [Company C] and the [Grant family trust] and assign all rights to [Mr Grant]
20I explained to the husband that part of my obligation to him as a self-represented litigant was to ensure that to the extent possible I properly understood the relief being sought by him. I reviewed with him each line item of the orders sought in his Form 1A response. It emerged that in fact the relief sought by him differed from that set out in his filed document.
21By that process, I clarified that the relief sought by the husband was as follows:
1.He sought that the whole of the monies remaining in the joint ANZ account from the proceeds of sale of the former matrimonial home be paid to him, on the basis that he would then apply those funds to reduce or discharge the liability of Company A to ANZ in respect of its overdraft.
2.He confirmed that the orders sought by the wife in relation to the transfer to her of the Holden Captiva motor car could be made by consent.
3.He stated that the Volvo V60 motor vehicle referred to in paragraph 5 of the interim orders made on 16 November 2015 is owned by Company A, that the associated liability in relation to that car is a debt of that company, and that he is presently servicing that debt by drawing down on the company’s ANZ overdraft referred to above. He sought that the legal ownership of that vehicle remain with the company, and that he be permitted to sell the vehicle and apply the whole of the proceeds towards the company’s debts.
4.He sought that the wife’s application for spousal maintenance be dismissed.
5.He stated that the Ford Focus ST motor car is legally owned by him, and that he seeks to retain it. He said that the debt associated with that vehicle is a liability in his sole name, and that he proposed to retain responsibility for it.
6.In relation to the superannuation fund he proposed that:
(a)the necessary steps be taken to return to that fund the monies removed from it by the wife and placed in her own [BT superannuation] fund;
(b)the unit at Property B owned by the superannuation fund be sold;
(c)the superannuation fund by that process having been “cashed up”, all necessary steps be taken to complete reporting and tax requirements and that payments of any tax, accounting fees and penalties be made from the cash resources of the superannuation fund; and
(d)the superannuation fund then be wound up, and the net remaining monies in it be divided equally between the parties by the operation of a superannuation splitting order.
7.He proposed that the wife resign as a director of Company C, transfer her shareholding in that company to him, and that she relinquish any claim to the assets of that company and the assets of the Grant Family Trust of which it is the trustee.
8.He sought to retain all assets and property in his sole name, including the recently acquired caravan.
9.He agreed that the wife should retain all assets and property in her sole name.
10.He proposed that each party be responsible for their own personal liabilities.
11.He otherwise proposed to retain control of all assets of Company A and Company B, and responsibility for all liabilities of those entities.
Evidence relied upon at trial
22The wife, as set out in her Papers for the Judge, sought to rely upon:
(a)her trial affidavit filed on 24 June 2015;
(b)her supplementary trial affidavit filed on 13 November 2015;
(c)her two Form 13 financial statements filed on 24 June 2015 and 14 April 2016;
(d)an affidavit of a real estate valuer, [Mr Flemming] filed on 13 November 2015; and
(e)an affidavit of [Mr S], a lawyer professing expertise in relation to superannuation and taxation matters, filed on 15 April 2016.
23Properly, the wife applied for leave to rely on the affidavit of Mr S. That leave was necessary because the affidavit was filed late, and because the wife required permission to adduce expert evidence. The husband opposed that application.
24After hearing submissions from counsel for the wife and from the husband, I granted the wife leave to rely on the affidavit of Mr S on the condition that he was available to be cross-examined. The husband indicated that he would be taking advice in relation to issues raised by Mr S regarding asserted non-compliance by the parties with their obligations as trustees of the superannuation fund, and that he anticipated having that advice by the end of the first scheduled day of trial. On that basis, I directed counsel for the wife to ensure that Mr S was available to be cross-examined no earlier than the second day of trial so that the husband could cross-examine with the benefit of that advice. I also explained to the husband that it was open to him to apply for leave to himself adduce expert evidence if he wished to do so; at my suggestion he deferred his consideration of that point until after he had cross-examined Mr S.
25In due course the husband confirmed that he did not seek to lead further evidence.
26The husband filed a Form 13 financial statement on 4 December 2015. He also filed an affidavit on 1 December 2015. The body of that affidavit contained two paragraphs only, but the document purported to place into evidence as annexures to it what can only be described as “piles” of documents in excess of 550 pages. The documents were not ordered, paginated or properly exhibited to the affidavit.
27The husband did not file an undertaking as to disclosure as had been ordered.
28At the commencement of the trial, counsel for the wife submitted that the husband had not complied with the orders for the filing of trial documents and that accordingly, his amended Form 1A response had (by operation of the orders made on 16 November 2015) been dismissed, and the wife had leave to proceed on an undefended basis.
29I pointed out to counsel for the wife that the husband had in fact filed a Form 13 financial statement and an affidavit within the timeframe specified in those orders. I indicated that an assessment of the quality or probative value of those documents did not go to the question of whether or not the husband had complied with the orders that they be filed. Counsel correctly pointed out that the husband had not complied with the order for filing of an undertaking as to disclosure.
30My review of the husband’s affidavit and the nature of the documents annexed to it led me to enquire with him as to the basis upon which that document had been filed. I explained to him that the mere act of filing the affidavit across the registry counter of the court did not of itself place all the documents annexed to the affidavit into evidence for the purposes of trial. I further explained that if the husband wished any of those documents to be in evidence at trial they would need to be clearly identified so that they could be tendered for that purpose.
31In response, the husband explained that his intention in filing the affidavit in the form that he did was to comply in a transparent way with the order for disclosure contained in paragraph 3 of the orders made on 16 November 2015. In effect, his explanation was that he did not want to be accused of not having provided the documents, so he chose to provide them to his wife via the mechanism of annexing them to an affidavit filed with the court and then served.
32The husband initially told me that he had in fact filed an undertaking as to disclosure. I gave him the opportunity to review his documents more carefully over a break in the proceedings, and on reflection he later acknowledged that he had not in fact filed such an undertaking.
33I explained to him the purpose of an undertaking as to disclosure. In response, he confirmed that (as stated, albeit inelegantly, in his affidavit filed on 1 December 2015) the documents annexed to that affidavit were all of the documents in his possession or control to which his duty of disclosure under the Family Law Rules2004 (Cth) applied.
34On that basis, the husband having sworn an oath that the documents provided were all the documents to which that duty applied, counsel for the wife agreed with my suggestion that the affidavit met the purpose of the undertaking in any event. I accordingly waived the formal requirement for the husband to file his undertaking as to disclosure.
35The husband confirmed that, apart from the bundle of documents subsequently tendered as exhibits, he did not seek to rely on any other evidence.
36The evidence before the Court from the husband, accordingly, was:
(a)his Form 13 financial statement filed on 4 December 2015;
(b)his affidavit filed on 1 December 2015 (without the annexures); and
(c)the bundle of documents tendered by him on the morning of the second day of trial, and which had previously been among the documents annexed to that affidavit.
The husband as a self-represented litigant
37At the commencement of the trial I spent some time explaining to the husband the steps that I was required to take to ensure that procedural fairness was afforded to both parties. I informed him of the manner in which the trial was to proceed, the order of calling witnesses, and his right to cross-examine the witnesses. I explained the importance of cross-examination, and the likelihood that evidence which he did not seek to challenge in cross-examination would be accepted. I explained the difficulty he would face in the event that concessions were not made in cross-examination, given the paucity of his own evidence. I also explained that he, his wife, and the other witnesses would be permitted to give updating evidence in chief only as to facts arising after the date on which the relevant affidavit was sworn, and also explained to him the nature and purpose of re-examination. I stressed the importance of cross-examination being conducted (both by him and by counsel for his wife) as a series of questions and answers rather than as an argument.
38I explained to the husband his right to object to inadmissible evidence, but that I was not obliged to provide advice to him on each occasion that particular questions or documents arose.
39I outlined the procedures relevant to the litigation, and that if a change in the normal procedure was requested by the wife I would consider whether there was any serious possibility of such change causing any injustice to him, in which case I would explain the position to him and ensure that he was aware of his right to object to that proposed course.
40I explained that if a question was asked or evidence was sought to be tendered in respect of which he had a possible claim of privilege, I would inform him of his rights in that regard.
41I also discussed with the husband my obligation to attempt to clarify the substance of his submissions so as to ensure that I properly understood his case as he wished it to be put. I provided him with copies of the relevant sections of the Family Law Act 1975 (Cth) (“the Act”) and suggested that he read them carefully and ensure that he presented his case in a way that would address them. In that manner, I drew to his attention the law to be applied by the Court in determining the issues at trial. I also explained that in certain circumstances it would be open to me to question witnesses, identify applications or submissions which ought to be put to the Court, suggest procedural steps that might be taken, and (as already made clear above) clarify the particulars of the orders to be sought by him or the basis for those orders.
42I am satisfied that the husband understood the information which I gave him in relation to all of those issues. I note also that for periods during the litigation, the husband was represented and advised by various firms of solicitors practicing regularly in family law.
43In that regard, a potential issue arose during the course of the cross-examination of the husband. A question was put to the husband which made it clear that during the course of the litigation he had instructed the firm of solicitors of which I was a partner immediately prior to my appointment to the court. The husband was, entirely understandably, unaware of my professional background. The issue had apparently not occurred to counsel for the wife.
44I explained the potential issue to the husband. I explained to him the principles upon which he could, if he chose, base an application for me to disqualify myself. During the course of that dialogue, it became apparent that at some stage at least there had been a dispute between the husband and the relevant firm in relation to payment of fees, and/or the quality of the service provided to him. I therefore explained to the husband the complaints process within the firm, and the likelihood that any complaint he had made about either the fees charged to him, or the service provided to him, would have been brought to my attention at the relevant time.
45I explained that I had no recollection of anything to do with his instructions to the firm, nor of any complaint he might have made, but emphasised that did not mean that I had not had not had some knowledge of those matters at some stage. I explained to him the possibility that further information coming to light during the trial might trigger recollection that I did not presently have.
46Understandably, the husband indicated that he would like some time to consider his position in that regard, and possibly take advice. For that reason, I directed that the trial not proceed into its third day on Thursday, 28 April 2016 as originally scheduled, but that it resume on Friday, 29 April 2016 to afford the husband the opportunity he sought.
47On the afternoon of 28 April 2016 the husband communicated with my Chambers and with counsel for the wife to convey his decision that he did not seek that I disqualify myself, and that he was content for the trial to proceed. He confirmed that position at the resumption of the hearing.
48The wife through her counsel similarly confirmed that she did not seek that I disqualify myself.
Observations as to evidence
49The wife gave evidence in a straight-forward and direct manner. Her evidence was largely unshaken in cross-examination, and most of her evidence given on affidavit was not challenged.
50The real estate valuer engaged by the wife, Mr Flemming, was not required for cross-examination and his evidence was accepted by the husband.
51The wife’s witness in relation to the superannuation fund, Mr S, was available for cross-examination by telephone. He gave his evidence in a straight-forward and frank manner. His answers when asked to comment on which of the various alleged breaches of the superannuation legislation were potentially the more serious were measured and even-handed as between the parties. He made concessions where appropriate. I had no reason to doubt his evidence.
52The husband was an unimpressive witness. Even allowing for some understandable confusion as a result of the disorganised way in which he sought to present documentary evidence, and an apparent tendency to rush to answer questions without giving them due consideration, he demonstrated a tendency to manipulate his recollection of past events, to meet his present interests. His explanations for a number of actions taken by him during the course of the proceedings were also unconvincing, and reflected poorly on him.
53Overall, I was inclined to accept the evidence of the wife in preference to that of the husband. I was not inclined to accept the evidence of the husband in relation to any contentious matter unless that evidence was corroborated.
The issues as identified by the parties
54There were relatively few issues in relation to identification of the asset pool, or valuations. To the extent necessary, those issues are identified later in these reasons.
55The wife asserted that:
(a)the initial financial contributions of the parties at the commencement of cohabitation were roughly equal;
(b)the contributions of the parties during cohabitation, save for the husband’s inheritance and issues raised by the wife in relation to the acquisition by the parties of property at (“[Property C]”) and subsequent losses related thereto, should be regarded as equal;
(c)responsibility for the losses associated with the Property C should be attributed solely to the husband;
(d)the husband should bear sole responsibility for the increases in his own liabilities and those of the entities under his control post separation;
(e)those factors effectively offset the effect of the husband’s inheritance; and
(e)her own expenditure of funds received by her post separation from the proceeds of sale of the former matrimonial home should be regarded as “reasonable”, and that her actions in that regard should be considered in a different light to those of the husband.
56The wife’s contention was that the overall contributions of the parties should be assessed as having been equal. She then asserted that a significant adjustment in her favour to what would otherwise be the “contributions based” result should be made:
(a)because she will have the primary care of the children;
(b)because her earning capacity is less than that of the husband;
(c)on the basis of her assertion that the husband cannot be relied upon to meet his child support commitments; and
(d)by virtue of the diminution in available assets since separation, and her attribution to the husband of responsibility for that.
57Overall, the wife’s position was that the net assets and superannuation now available to the parties should be divided as to 75 per cent to her and 25 per cent to the husband.
58In support of her application for lump sum spousal maintenance, the wife pointed to what she asserted to be a shortfall between her income and weekly expenses, and contended that the husband has the capacity to pay the amount sought. For reasons primarily associated with her scepticism as to the likelihood of the husband complying with any order for periodic spousal maintenance, she sought a lump sum payment of $37,500 representing approximately 24 months of what she asserted to be her weekly income deficit.
59The husband asserted that:
(a)his initial financial contributions were greater than those of the wife;
(b)his overall contributions during cohabitation (even leaving aside the question of his inheritance) were greater than those of the wife; he was particularly critical of the wife for refusing to agree to his frequent requests during cohabitation, at a time when the children were very young, that she return to full-time work;
(c)in addition, his receipt of an inheritance from his mother relatively late in the relationship meant that contributions had to be assessed in his favour; and that
(d)there should be no adjustment in favour of either party to what would otherwise be the contributions based result.
60Overall, the husband’s position was that the net assets and superannuation available to the parties should be divided as to 60 per cent to him and 40 per cent to the wife, based entirely on their respective contributions, and that the wife’s application for spousal maintenance should be dismissed.
61A further matter in issue between the parties was the allocation of responsibility for the problems that have emerged in relation to the superannuation fund. In short, each sought to blame the other for breaches of their respective duties as trustees of the superannuation fund. The wife sought that the husband bear full responsibility for any penalties or tax consequences arising from those breaches. The husband sought that the parties bear those responsibilities equally.
The law
Property settlement
62The court has a wide discretion conferred by s 79(1) of the Act. That discretion must be exercised in accordance with legal principle, and without assuming that the parties’ interests in assets are or should be different from those determined by common law and equity.
63The court must be satisfied that it is just and equitable to make an order adjusting existing property interests. That requirement is readily satisfied in most cases, including this one. Both parties sought orders to alter existing property interests. They are no longer living in a marital relationship, and neither proposes ongoing common use of property.
64In determining what orders will be just and equitable, the court’s power is not confined by any “steps” or “stages”. Having said that, a court will satisfy the legislative requirements if it:
(a)identifies and values the assets and liabilities of the parties;
(b)assesses each party’s contributions to the assets, including any assets which have ceased to be owned by the parties;
(c)assesses the factors in s 79(4)(d) to (g) of the Act, which pick up the factors listed in s 75(2) to the extent they are relevant; and
(d)considers whether the proposed orders are just and equitable.
65The court is required to consider the respective contributions of the parties holistically over the whole period to trial. While nothing in the Act requires the court to allocate a percentage entitlement of the property to each party, the allocation of percentages is a sensible, and generally valuable, practical tool.
Spousal maintenance
66The court has broad powers in relation to spousal maintenance, and may make a range of orders, including lump sum orders.
67The “gateway” to the operation of the Act in relation to spousal maintenance is found in s 72(1) of the Act which provides that a potential liability to pay spousal maintenance arises only if the party seeking maintenance “is unable to support herself or himself adequately… having regard to any relevant matter referred to in s 75(2)”. That liability is crystalised by the making of an order under s 74(1) of the Act which permits the court to make “such order as it considers proper”. That discretion must be exercised with “reasonableness in the circumstances” as the guiding principle. In exercising the power conferred by s 74(1) of the Act, the court is obliged to take into account only the matters referred to in s 75(2) of the Act.
68There is no fettering principle that maintenance which is sufficient to maintain for the recipient a pre-separation standard of living must automatically be awarded if the means of the party from whom maintenance is sought permit that. Section 75(2)(o) of the Act enables consideration of any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account in showing that a party to the marriage is or is not able to pay spousal maintenance. It permits consideration by the court of all of the financial matters which are relevant to a particular case.
The asset pool
69To their credit, by part way through the trial, the parties were able to agree the extent and value of their present assets and liabilities, but for one remaining dispute as to whether rent was owed by Company A to the superannuation fund.
70For convenience, the table below sets out the agreed position of the parties as to their legal and equitable interests in the various assets, liabilities and superannuation, and the values thereof.
| Joint assets | ||
| 1 | ANZ [XXXX] (balance of proceeds of sale of former family home) | $31,522 |
| 2 | [Company C] ANZ [XXXX] | Nominal |
| 3 | Total joint net assets | $31,522 |
| Wife's assets | ||
| 4 | Westpac [XXXX] | $353 |
| 5 | Westpac [XXXX](term deposit) | $100,000 |
| 6 | Westpac e-saver [XXXX] | Nominal |
| 7 | Westpac reward saver [XXXX] | $150 |
| 8 | ING account [XXXX] | $427 |
| 9 | [Child B Account XXXX] | $736 |
| 10 | [Child A Account XXXX] | $806 |
| 11 | Contents | $5,000 |
| 12 | Jewellery & personal effects | $5,000 |
| 13 | Total wife's assets | $112,472 |
| Wife's liabilities | ||
| 14 | ANZ [XXXX] | -$1,140 |
| 15 | Westpac [XXXX] | -$4,303 |
| 16 | ATO liability | -$1,163 |
| 17 | Child support to husband (amount of overpayment) | -$2,047 |
| 18 | Total wife's liabilities | -$8,653 |
| 19 | Total wife's net assets | $103,819 |
| Husband's assets | ||
| 20 | [Property D] | $530,000 |
| 21 | Furniture & contents | $6,000 |
| 22 | ANZ [XXXX] | $6,001 |
| 23 | Paypal | Not known |
| 24 | [Ferrari kit car] | $20,000 |
| 25 | [Ford Focus ST] | $4,000 |
| 26 | Caravan | $7,000 |
| 27 | Dingy | $1,000 |
| 28 | Tools | $1,350 |
| 29 | Life insurance | $1,000 |
| 30 | Child support (amount in credit) | $2,047 |
| 31 | Total husband's assets | $578,398 |
| Husband's liabilities | ||
| 32 | Home Loan [XXXX] | -$290,907 |
| 33 | Equity Manager [XXXX] | -$96,541 |
| 34 | Bankwest Visa [XXXX] | -$1,284 |
| 35 | CBA Bank Mastercard [XXXX] | -$8,036 |
| 36 | ANZ Platinum Visa [XXXX] | -$984 |
| 37 | ATO liability | -$4,215 |
| 38 | Total husband's liabilities | -$401,967 |
| 39 | Total husband's net assets | $176,431 |
| [Company A] assets | ||
| 40 | [Holden Captiva] in wife's possession | $8,000 |
| 41 | [Volvo V60] | $7,000 |
| 42 | Total [Company A] assets | $15,000 |
| [Company A] liabilities | ||
| 43 | ANZ overdraft [XXXX] | -$28,101 |
| 44 | ANZ Visa [XXXX] | -$16,462 |
| 45 | Esanda Finance for [Volvo V60] | -$8,456 |
| 46 | ATO liability | -$8,000 |
| 47 | Total [Company A] liabilities | -$61,019 |
| 48 | Total [Company A[ net assets | -$46,019 |
| [Company B] assets | ||
| 49 | Debtors | $58,145 |
| 50 | [Ford Falcon XR6] | $20,000 |
| 51 | Office furniture & contents | $1,500 |
| 52 | Total [Company B] assets | $79,645 |
| [Company B] liabilities | ||
| 53 | ANZ account with overdraft facility [XXXX] | -$1,117 |
| 54 | Husband's ANZ Visa [XXXX] | -$7,129 |
| 55 | Esanda Finance for [Ford Falcon XR6] | -$22,000 |
| 56 | Creditors | -$7,712 |
| 57 | Total [Company B] liabilities | -$37,958 |
| 58 | Total [Company B] net assets | $41,687 |
| 59 | TOTAL NET ASSETS (excluding superannuation) | $307,440 |
| Superannuation | ||
| Joint - [Grant superannuation fund] | ||
| 60 | [Property B] | $125,000 |
| 61 | ANZ E saver [XXXX] | Nominal |
| 62 | ING [XXXX] | Nominal |
| 63 | ANZ [XXXX] | Nominal |
| Wife | ||
| 64 | [BT Superannuation] | $99,147 |
| 65 | Total superannuation | $224,147 |
| 66 | TOTAL NET (including superannuation) | $531,587 |
71The parties agreed that the funds held in bank accounts for the children by the wife, and the amount by which the husband is “in credit” for periodic child support, should be included as assets available for division between them. Absent any argument, and given the minimal effect of that approach, I raise no issue in relation to it.
72The parties were not able to agree whether Company A owed rent to the superannuation fund. The wife asserted that a debt of $11,012 was owed in that regard. The husband denied that there was any such debt. The dispute arose primarily because of absence of agreement as to whether or not Company A had been occupying Property B owned by the superannuation fund over a particular period. The evidence was insufficient to establish any such liability.
73Late in the trial the husband asserted that Company B owed Company A a relatively modest sum of money. Given that it is common ground that he is to retain control of both entities, he sensibly agreed that no finding was required in that regard.
Changes in the asset pool since the date of separation
74A significant issue at trial was the question of responsibility for the depletion of the asset pool since the date of separation.
75By the time of trial, Company A had liabilities of $61,019. Company B had liabilities of $37,958. The husband had liabilities of $401,967 – of that only his debt of approximately $290,907 associated with the purchase of his home at Property D was not the subject of criticism by the wife.
76It is common ground that the parties separated on 29 September 2013. The liabilities of the husband and the business increased significantly between that date and trial. At 26 September 2013 Company A’s overdraft account was in credit in an amount of just over $14,000; by the time of trial the account was overdrawn by some $28,000. The husband gave evidence that he drew down approximately $30,000 on a line of credit to facilitate his purchase of [Property D] ; by the time of trial the debt on that line of credit was in excess of $96,000. Various credit card liabilities also increased.
77The wife also contributed to the diminution of the assets since the date of separation. As already noted, she received the sum of $250,000 from the proceeds of sale of the former matrimonial home on 4 July 2014. Her savings now amount to just over $100,000. Her evidence was that she had spent the sum of $102,000 on legal fees up to 31 March 2016, and that the balance spent from the proceeds of sale of the home had been expended on day to day living expenses for herself and the children.
78Neither party suggested that monies expended since separation should be notionally “added back”. Both accepted that the Court’s task is to identify their respective legal and equitable interests in existing property and, if it is just and equitable to do so, make orders altering those interests. That said, it remained open to the parties to argue that any unreasonable dissipation of funds, or increase in liabilities, should be taken into account.
Contributions
79At the commencement of the relationship the husband owned [Property E], a car and some personal effects. The wife’s evidence was that she had savings of approximately $25,000. She also had a car and personal effects.
80There was no evidence as to the value of the equity held by the husband in Property E at the commencement of cohabitation. The wife claimed that equity had a value similar to that of her savings, but that assertion was not based on any admissible evidence as to the value of the relevant property. That said, the wife’s view was not challenged in cross-examination, nor did the husband give or adduce any evidence on point.
81Neither party gave evidence in chief as to their respective superannuation entitlements at the commencement of cohabitation. In cross-examination, the husband put to the wife the proposition that at the start of the relationship he had superannuation worth about $40,000 and she had superannuation worth about $20,000. The wife agreed with that proposition.
82At the time the parties began living together, they were both working full-time. The husband was earning the higher income. Shortly after the commencement of cohabitation, however, the husband was made redundant. He undertook a computer course then worked at a variety of short-term jobs.
83In January 2003, the husband established his own business with a colleague, providing information technology support and sales. In due course the colleague left the business and the husband continued to run it. The wife assisted as a secretary while maintaining her other full-time job.
84The husband worked full-time in the business from the date of its inception until trial. There was a period when he had to work from home due to a back injury, but I am satisfied that he exercised his full earning capacity to the best of his ability throughout the relationship.
85The wife continued to work full-time until very shortly before the birth of the parties’ first child. She then returned to part-time work and continued to also assist with the business in a bookkeeping capacity. She was primarily responsible for parenting and homemaker duties, particularly when the children were very young. The husband for his part also contributed around the home, including work on various renovations.
86The husband was critical of the wife for not returning to work full-time when the children were very young. He submitted that because of her refusal to do so, his contributions should be assessed as being greater than hers. I reject both the criticism of the wife and the conclusion the husband proposed should be drawn from it. It is sufficient to observe that the law has long acknowledged that contributions as a homemaker and parent are to be recognised not in a token way, but in a substantial way.
87In mid-2007, the parties purchased Property C for $340,000. They paid a modest deposit only, and primarily financed the purchase by borrowing from the National Australia Bank. They subdivided the property and contracted to build a house on each block. The timing of the investment was unfortunate and both properties were eventually sold at a loss.
88The wife’s evidence was that Property C was purchased, and development commenced, at the insistence of the husband and over her objections. She also implied in her trial affidavit that at least part of the loss on the sale of the first home arose because the husband “panicked”. She asserted that those losses, or a greater share of them, should be attributed to the husband and that her contributions to the balance of the assets should therefore be considered to have been greater.
89I reject that proposition. The evidence was not such as to persuade me that the wife was in any relevant sense overborne, nor that the husband acted unilaterally. It was not suggested that the purchase of Property C was intended to diminish the asset pool; at its highest, the wife’s argument was that the husband acted imprudently, and over her objections. That is not sufficient to support the proposition that he should bear sole responsibility for the losses, whether directly or indirectly.
90The husband received an inheritance from his mother’s estate in March 2012. The wife’s evidence was that the inheritance was in the sum of $120,000. While he led no direct evidence on the point, the husband put to the wife in cross-examination the proposition that the inheritance in fact totalled $135,000, and was received by him in two separate tranches of $15,000 and $120,000. Nothing turns on the differing recollections of the parties in that regard, given the holistic nature of the assessment of contributions, and the associated principle that such an assessment is not in any sense a strictly mathematical or accounting exercise.
91It is common ground that the funds inherited by the husband were applied to benefit the family, whether by reducing existing liabilities, meeting living expenses, or in some part acquiring further assets.
92Were it not for the receipt late in the relationship of the inheritance, and the significance of the sum inherited relative to the overall asset pool, I would have had no hesitation in finding that the contributions of the parties up to the date of separation were equal. That said, the receipt of the inheritance must weigh the assessment of contributions up to the date of separation in favour of the husband.
93That is not, however, the end of the analysis. The wife contends that she has made greater contributions than has the husband since separation. She points to her care of the children in the face of what she alleges to be inconsistent payments of child support, and abusive and difficult behaviour on the part of the husband. Her contention is, in effect, that the husband’s conduct made her contributions more onerous.
94Other examples of the husband’s behaviour complained of by the wife included:
(a)his actions in leaving the Ford Focus ST motorcar on her front lawn for several months without providing the keys to the vehicle;
(b)his email sent on 30 July 2014 informing her that he had cancelled her mobile telephone, and would arrange for a tow truck to attend at her workplace to collect the car she was using;
(c)his actions in transferring (albeit briefly) to an account in his sole name the bulk of the funds held in the joint account from the proceeds of sale of the home;
(d)his “April Fools’ Day joke” (as he characterised it) of leading her to believe that he was prepared to settle the proceedings by payment of a cash sum to her, when he was not;
(e)his various text messages and other communications with her and with her lawyers; and
(f)his approach to issues of disclosure, and to the conduct of the proceedings generally.
95The evidence of the parties in relation to the issue of child support was confused at best. The wife said that she had only received child support after proceedings in this court were commenced. She suggested that, for a time at least, the husband’s position in relation to the parenting proceedings was driven by his focus on financial matters (including child support) rather than the best interests of the children. Exhibited to her trial affidavit was an email sent to her by the husband on 18 July 2014 which said:
“More time with kids equals more money. So you don’t have to work. I won’t support a lazy ex-wife[.] Simple.”
96The husband admitted that he wrote that email and that he had missed some child support payments. He suggested that his actions were excused by a private agreement in place with the wife. At one point, he asserted that “business was slow” and pointed to other expenses which he had to meet, including legal fees.
97The parties eventually agreed that the husband was paying child support in the sum of $247 per week up until 4 March 2016. A reassessment in or about February 2016 reduced the child support payable to $47 per week. It appears that the situation at trial, whereby the husband was “in credit” in his child support obligations, arose by virtue of a combination of those factors, and the overall confusion between the parties.
98It is understandable that the wife would complain of the husband’s conduct. That conduct reflects poorly on him. That does not mean that the proper assessment of the respective contributions of the parties should be influenced by it. While in certain limited circumstances, matters of that nature might be taken into account pursuant to s 75(2)(o), I am not satisfied that is appropriate in this case.
99Doing the best that I can with the evidence available, I assess the respective contributions of the parties at 55 per cent to the husband and 45 per cent to the wife.
Other factors – section 79(4)(d) to (g) inclusive
100The wife is aged 40 and is in generally good health. She has recently suffered injuries as a result of a significant dog bite, and requires ongoing treatment as a result, but does not suggest that her earning capacity has been affected by those injuries.
101The wife continues to work part-time as a secretary earning approximately $965.00 per week. She continues to have the primary care of the children. While I consider it likely that she will increase her working hours to something closer to full-time in due course, I do not anticipate her doing so until the children are somewhat older.
102The husband is aged 46. He led no evidence in chief in relation to his health issues, but put to the wife the proposition that he had suffered from problems with his back at various times and also from anxiety during the marriage. She agreed with those propositions, without professing to have any knowledge of the current state of the husband’s health.
103Notwithstanding that, and the unsatisfactory state of the husband’s evidence regarding his income, I am satisfied that he continues to have an earning capacity similar to that which he enjoyed at the date of separation. I make that finding despite his assertions as to the downturn of his business since separation and the other difficulties which he says he is facing.
104The evidence established that:
(a)in the financial year ended 30 June 2013 (immediately prior to separation) the husband’s income was about $90,000; and
(b)in the financial year ended 30 June 2014 his income was $99,996.
105Despite the contents of his sworn Form 13 financial statement, the husband conceded under cross-examination that the total benefits received by him from the business for the financial year ended 30 June 2015 totalled at least $71,167 in the form of direct payments, plus additional benefits. His oral evidence suggested that his total earnings from all sources were approximately $91,477.
106As earlier noted, I had little confidence in the veracity of the husband’s evidence. Even the documentary evidence provided by him was inconsistent and confusing. By way of one example only, several versions of various financial statements for the entities were produced, each with significantly different details. The husband was unable to explain the inconsistencies between those documents in any satisfactory way. Similarly, he was unable to explain the inconsistency between his sworn Form 13 financial statement and the concession which he made as to the benefits which he had received from the business entities for the financial year ended 30 June 2015.
107In circumstances where the husband was unable or unwilling to give any clear or coherent evidence as to his own earning capacity, or a detailed explanation as to why he would assert his earnings had dropped since separation, I am satisfied that a robust finding that his earning capacity remains largely unchanged since separation is appropriate.
108As noted above, the evidence as to the husband’s payment of child support was confused and unclear. Much of that confusion was understandable, given the observations already made regarding the husband’s financial record keeping, and the differing versions of financial statements produced for the entities.
109That said, the evidence also established that for the most part the husband has paid child support in accordance with any relevant administrative assessment from time to time. While there may be continuing disputes between the parties as to the full extent of the husband’s income, and accordingly as to the factual bases for future assessments, those are matters properly to be resolved in the usual manner. The evidence does not support the wife’s contention that her property entitlements should be increased because of factors relating to past or future payment of child support.
110As noted, the wife contends that the actions of the husband in significantly increasing his liabilities and those of the entities should be viewed with considerable scepticism. She asserts that the husband has embarked on a calculated course of action designed to reduce the asset pool available for division, to her detriment.
111Certainly, the husband’s evidence in relation to this issue was less than convincing. I am not satisfied that he has intentionally increased liabilities primarily and solely for the purpose of causing detriment to the wife, as asserted by her, but nor do I accept his bland assertions that he had no choice other than to take on additional debt because of what he would suggest were his parlous financial circumstances. For example, under cross-examination he agreed that many if not most of his child support payments were made from the equity line of credit, thereby increasing that liability. He also increased that liability by paying the $5,000 costs ordered on 16 November 2015 from that source. He has also told the wife on 11 September 2014 that he had sold the [Ferrari kit car] to pay debts; in fact, he had (to use his expressions) “technically” sold the car to a friend while refinancing an ANZ liability, and then “reversed the sale”. He owns the car to this day.
112The state of the evidence does not, however, permit me to adopt the mathematical approach proposed by the wife in relation to that issue (even were it otherwise appropriate to do so). That said, I find that the reduction in the assets available for division is in part attributable to steps taken by the husband which had the effect of significantly increasing the liabilities in circumstances where his actions were not necessary or reasonable. That is appropriately a matter to be taken into account pursuant to s 75(2)(o).
113Similarly, the wife sought that all responsibility for potential liabilities of the superannuation fund, and of the parties as trustees for that fund, be placed at the feet of the husband. She pointed in particular to her evidence as to the husband’s use of monies from the superannuation fund to acquire the Ferrari kit car and a caravan, and to her evidence that the business operated by him, after separation, failed to pay a commercial level of rent to the superannuation fund.
114While the husband denied the wife’s evidence in relation to the transactions of which she complained, I was not inclined to accept his evidence. The proposition on the part of the wife, however, ignores a very important fact; that by her own actions in withdrawing from the superannuation fund a sum greater than her member entitlements, the wife herself breached her duties as a trustee.
115The evidence of the Mr S is instructive in that regard. He identified various actual and alleged breaches of the superannuation legislation. Mr S was asked to give his opinion as to the likely penalties associated with each of the breaches, if proven. Dealing with the various alleged breaches, he said:
(a)in each instance, the Australian Taxation Office (“ATO”) could impose administrative penalties for proven breaches;
(b)more serious breaches could lead to a conclusion that the superannuation fund was noncomplying, with serious adverse tax consequences over and above those administrative penalties;
(c)in each instance the assessment of the severity of breaches, and the imposition of penalties, was a matter for the discretion of the ATO;
(d)the allegation by the wife (denied by the husband) that Company B had occupied Property B without paying a commercial rent was, even if proven, not likely to be regarded as overly serious. Provided rectification was made, and a suitable explanation provided to the ATO, it was unlikely that even administrative penalties would be imposed;
(e)if (as asserted by the husband) Company B had never occupied the office, and that was the explanation for the failure to pay rent, then there was no breach;
(f)an issue arose as Property B owned by the superannuation fund was registered in the sole name of the husband as trustee, rather than in the names of both parties as joint trustees. Mr S regarded that as a relatively inconsequential breach, capable of rectification, and with administrative penalties being unlikely;
(g)the breach arising from the wife’s actions in removing from the superannuation fund a sum greater than her member balance was more serious, and more likely to attract at least an administrative penalty from the ATO even if rectified; and
(h)the alleged actions of the husband in withdrawing funds from the superannuation fund (under the guise of loans to his friend) and making use of those funds to purchase personal assets was the most serious of the alleged breaches. Mr S took the view that at least an administrative penalty would be likely in that regard, and could not discount the risk of the superannuation fund being found to be non-compliant.
116Mr S outlined the steps which should be taken by the parties to rectify any breaches, and to make appropriate submissions to the ATO in order to minimise the risk of draconian penalties being imposed. Noting the broad discretion of the ATO in these matters, he understandably could not predict with any accuracy the likely outcome. In broad terms, however, he expressed quiet confidence that if the parties dealt appropriately and promptly with the matter, a finding of non-compliance (with the attendant tax consequences) was unlikely.
117I am satisfied as to the expertise of Mr S, and I accept his evidence.
118Against that background, and bearing in mind the fundamental proposition that both trustees bore equal joint and several responsibilities in relation to the superannuation fund, I am not prepared to make any adjustment in favour of either party which would see one bearing more responsibility than the other for the as yet unquantified costs arising from any breaches.
119Taking all those matters into account, bearing in mind the size of the available pool, and doing the best that I can given the state of the evidence, I consider it appropriate to make an adjustment of 15 per cent in favour of the wife to what would otherwise be the contributions based result.
120It follows that I have concluded that a division of the net assets, liabilities and superannuation of the parties (including the assets and liabilities of the entities under their control) in the proportion of 60 per cent to the wife and 40 per cent to the husband is just and equitable.
121The issue then arises as to what form of orders is appropriate to give effect to that overall division. The wife seeks to maximise the amount of any cash adjustment payable to her, and to take as little as possible of her overall entitlement in the form of superannuation. The husband’s case is that no cash adjustment is appropriate, and that the superannuation fund should be divided equally. Both parties conceded that if a superannuation splitting order was to be made, other than in a very modest amount, Property B would need to be sold.
122In considering this aspect of the matter, I have had regard to the wife’s need for immediately available assets, as distinct from the deferred benefit of superannuation entitlements. I have also considered the husband’s capacity to fund any payment to the wife which I may order. I am conscious that, no matter what order I make, it is unlikely that the wife will retain sufficient funds to enable her to purchase new accommodation. That is particularly so as she owes a significant amount in outstanding legal fees. While that liability has, properly, not been included on the table of assets and liabilities to be divided between the parties, it cannot be ignored when considering the overall effect of the proposed orders on the wife’s circumstances. Against that, and regardless of any views that might be held in relation to his conduct to date, the fact remains that the husband’s borrowing capacity is limited and his available equity in the home which he has purchased since separation is modest.
123I note also that there is some uncertainty as to the value which will remain in the superannuation fund, and not simply because of the uncertainty as to penalties. There was no evidence to quantify the likely accounting and other costs, and there can be no certainty as to the sale price which will be achieved in relation to Property B.
124In all the circumstances, I consider it appropriate to apply the proposed 60/40 division in favour of the wife both to the immediately available assets, and separately to the superannuation fund.
125In relation to the superannuation fund, that is appropriately done by a series of steps to ensure that the assets of the fund are realised and divisible, and that the as yet unquantified potential liabilities are met prior to the application of a splitting order. In that way, a true “net value” of the superannuation fund will be divided, and the risk of either party bearing a disproportionate responsibility for their joint failings as trustees will be avoided.
126While the costs associated with the winding up of the superannuation fund, accounting fees, and any penalties which may be imposed cannot presently be calculated with any precision, I take into account the evidence of Mr S that any penalties are unlikely to be severe. In the event that the superannuation fund is found to be non-complying (with the attendant tax consequences), that burden will be shared between the parties.
127In relation to the immediately available assets, the required cash payment is readily calculated by reference to the present values already established. The table below sets out the effect of the proposed division, on the basis of the agreed division in specie, and on the basis that the wife retains the whole of the monies in the joint account.
| Husband to retain | Wife to retain | |||
| Joint assets | ||||
| 1 | ANZ [XXXX](balance of proceeds of sale of former family home) | Nil | $31,522 | |
| 2 | [Company C XXXX] | Nominal | Nominal | |
| Wife’s assets | ||||
| 3 | Westpac [XXXX] | $353 | ||
| 4 | Westpac [XXXX] (term deposit) | $100,000 | ||
| 5 | Westpac e-saver [XXXX] | Nominal | ||
| 6 | Westpac reward saver [XXXX] | $150 | ||
| 7 | ING account [XXXX] | $427 | ||
| 8 | [Child B Account XXXX] | $736 | ||
| 9 | [Child A Account XXXX] | $806 | ||
| 10 | Contents | $5,000 | ||
| 11 | Jewellery & personal effects | $5,000 | ||
| Wife’s liabilities | ||||
| 12 | ANZ [XXXX] | -$1,140 | ||
| 13 | Westpac [XXXX] | -$4,303 | ||
| 14 | ATO liability | -$1,163 | ||
| 15 | Child support to husband (amount of overpayment) | -$2,047 | ||
| Husband’s assets | ||||
| 16 | [Property D] | $530,000 | ||
| 17 | Furniture & contents | $6,000 | ||
| 18 | ANZ [XXXX] | $6,001 | ||
| 19 | Paypal | Not known | ||
| 20 | [Ferrari kit car] | $20,000 | ||
| 21 | [Ford Focus ST] | $4,000 | ||
| 22 | Caravan | $7,000 | ||
| 23 | Dingy | $1,000 | ||
| 24 | Tools | $1,350 | ||
| 25 | Life insurance | $1,000 | ||
| 26 | Child support (amount in credit) | $2,047 | ||
| Husband’s liabilities | ||||
| 27 | Home Loan [XXXX] | -$290,907 | ||
| 28 | Equity Manager [XXXX] | -$96,541 | ||
| 29 | Bankwest [XXXX] | -$1,284 | ||
| 30 | CBA Bank Mastercard [XXXX] | -$8,036 | ||
| 31 | ANZ Platinum visa [XXXX] | -$984 | ||
| 32 | ATO liability | -$4,215 | ||
| [Company A] assets | ||||
| 33 | [Holden Captiva] in Wife's possession | $8,000 | ||
| 34 | [Volvo V60] | $7,000 | ||
| [Company A] liabilities | ||||
| 35 | ANZ overdraft 7186 | -$28,101 | ||
| 36 | ANZ Visa 1635 | -$16,462 | ||
| 37 | Esanda Finance for [Volvo V60] | -$8,456 | ||
| 38 | ATO liability | -$8,000 | ||
| [Company B] assets | ||||
| 39 | Debtors | $58,145 | ||
| 40 | [Ford Falcon XR6] | $20,000 | ||
| 41 | Office furniture & contents | $1,500 | ||
| [Company B] liabilities | ||||
| 42 | ANZ account with overdraft facility [XXXX] | -$1,117 | ||
| 43 | Husband's ANZ visa [XXXX] | -$7,129 | ||
| 44 | Esanda finance [Ford Falcon XR6] | -$22,000 | ||
| 45 | Creditors | -$7,712 | ||
| Total husband | $164,099 | $143,341 | ||
| Total net non-superannuation value | $307,440 | |||
| Cash adjustment (settlement sum) | -$41,123 | +$41,123 | ||
| Total | $122, 976 (40 per cent) | $184,464 (60 per cent) | ||
The wife’s application for spousal maintenance
128In her fourth amended Form 1 application filed on 24 June 2015, the wife sought that there be “such order as to the wife’s spousal maintenance as deemed appropriate and in consideration of any property orders made by the Court”.
129In her minute of orders sought filed for the purposes of trial on 22 April 2016, the wife sought lump sum spousal maintenance in the sum of $37,500.
130She did not seek an order for periodic spousal maintenance.
131The wife gave very limited evidence in relation to this aspect of her application. She said that she worked part time, during school hours, five days per week, earning a salary of $965 per week before tax. Her periodic expenses as set out at Part N of her Form 13 financial statement filed on 14 April 2016 were not the subject of any challenge in cross-examination. None were inherently unreasonable in any event, although it is to be anticipated that the claimed expense of $100 per week for “dog, counselling, accountant” will reduce (at least in part) following the conclusion of these proceedings.
132The wife pays tax of $145 per week. She gave evidence in her financial statement as to her rent and various insurance payments, but did not in any sense apportion any of that expenditure as being for the benefit of the children. She claimed, accordingly, a weekly shortfall between her earned income and her personal expenses of $359 per week.
133She said that she wants to continue in her role as a parent, and that she has little confidence that the husband will meet his periodic child support obligations in the future. She did not seek an order for lump sum child support.
134While there is no doubt that the wife’s financial circumstances are difficult, and that money is tight, I am not satisfied on the evidence that she has met the threshold test of establishing that she is unable to adequately support herself.
135Even if I am wrong in that conclusion I cannot be satisfied on the evidence that the husband has the capacity to pay the lump sum sought, particularly considering as I must the terms of the orders proposed to be made in relation to property of parties. The wife has sought lump sum, rather than periodic, maintenance. There is no apparent source from which payment could be made. The evidence does not support a conclusion that it would be appropriate or proper to order the husband either to borrow, or to sell assets, to pay spousal maintenance.
136It follows that I am not prepared to make the spousal maintenance order sought.
Other orders sought by the wife
137The wife also sought various pre-emptive orders to deal with difficulties she anticipated in the enforcement of the substantive orders sought. She sought the ability to lodge a caveat over the husband’s Property D, and injunctions restraining him from undertaking any renovations or improvements on that property. She also sought injunctions restraining him from increasing his liabilities in any way pending payment of any settlement sum to her, orders to appoint her as the trustee for sale of his home if he did not pay any required amount within 30 days, liberty to apply at short notice for an enforcement warrant for possession of the property, and an order authorising the Principal Registrar of the court pursuant to s 106A of the Act to execute any required documents.
138As already noted, the husband’s conduct of the proceedings to date reflects no credit upon him. That said, he has (for example) complied with the earlier costs order made in the proceedings, albeit by drawing on his line of credit.
139In my view, the husband’s conduct of the proceedings falls short of the type of conduct which would justify extensive and pre-emptive enforcement provisions in the primary substantive orders to be made following trial. I am not, therefore, prepared to make those orders, other than to make the requested order to permit the wife to lodge a caveat over Property D pending payment of the settlement sum.
140It goes without saying that the husband should understand that the Court’s clear expectation is that he will comply fully with the orders which are to be made. Of course, the Court has the same expectation of the wife.
Proposed orders
141I have given the parties the opportunity to obtain advice as to the form of orders to be made, particularly in relation to the Superannuation Fund. Having then heard submissions from the parties, I propose to make the following orders.
NOTING THAT
AThe [Grant Superannuation Fund] ABN [XXXXX XXXXX X] (“the Fund”) is a self-managed superannuation fund listed by the Australian Taxation Office (“ATO”) on the Super Fund Lookup website ( as a complying superannuation fund.
BThe trustees and members of the Fund (collectively “the Trustees”) are:
(a)the Applicant, [MS GRANT]; and
(b)the Respondent, [MR GRANT].
CThe current governing rules of the Fund were adopted by the Trustees on 15 September 2003 (“the Rules”).
DThe requirements of procedural fairness in accordance with s 90MZD of the Family Law Act 1975 (Cth) (“the Act”) have been observed on the basis that the parties are the Trustees.
IT IS ORDERED THAT
1.Within 7 days from the date hereof, the Respondent do all things and sign all documents necessary to transfer and assign to the Applicant his interest in the funds held in ANZ accounts [XXXXX XXXXX XXXXX ], being the remaining net sale proceeds from the sale of the parties former matrimonial home.
2.Within 30 days from the date hereof, the Respondent do all things necessary to pay or cause to be paid to the Applicant the sum of $41,123.
3.The Respondent do all things and sign all documents necessary to cause legal ownership of the 2008 [Holden Captiva] motor vehicle in the Applicant’s possession to be transferred to her.
4.The Applicant:
(a)be at liberty to lodge a caveat over the Respondent’s [Property D] (“[Property D]”); and
(b)do all things necessary to withdraw the said caveat at her expense, immediately upon compliance by the Respondent with the orders contained in paragraphs 1, 2 and 3 of these orders.
5.Within 14 days from the date hereof, the Respondent provide to the Applicant for her execution all documents required to be executed by her to:
(a)resign from any position held by her in [Company A], [Company B], [Company C] and the [Grant Family Trust];
(b)transfer to the Respondent or his nominee, any shareholding held by her in the companies referred to in subparagraph (a) above; and
(c)assign to the Respondent or his nominee, or otherwise relinquish, any monies owed to her by the said entities or any of them.
6.Within 14 days thereafter, the Applicant execute the said documents and return them to the Respondent or his nominee.
7.Other than as specified in these orders, the Respondent retain the following property and any interest that the Applicant may have in the following property forthwith vest in the Respondent absolutely:
(a)all funds standing to the credit of the Respondent in any bank account in his name;
(b)the Respondent’s [Ferrari Kit Car];
(c)the Respondent’s 1998 [Ford Focus ST];
(d)the Respondent’s [Ford Falcon XR6];
(e)the Respondent’s [Winnebago] caravan;
(f)the Respondent’s tool box, trolley and air compressor;
(g)the household contents and furniture in his possession; and
(h)any other property not the subject of these orders and in his possession or control.
8.Other than as specified in these orders, the Applicant retain the following property and any interest that the Respondent may have in the following property forthwith vest in the Applicant absolutely:
(a)all funds standing to the credit of the Applicant in any bank account in her name;
(b)the 2008 [Holden Captiva] motor vehicle;
(c)the Applicant’s jewellery;
(d)the household contents and furniture in her possession; and
(e)any other property not the subject of these orders and in her possession or control.
9.The Respondent pay and indemnify the Applicant and keep her indemnified against any and all debts, encumbrances and any other liability associated with any property retained or transferred to, or vested in the Respondent or an entity in his control pursuant to these orders.
10.The Applicant pay and indemnify the Respondent and keep him indemnified against any and all debts, encumbrances or any other liability associated with any property retained or transferred to, or vested in her pursuant to these orders.
Grant Superannuation Fund
11.Within 7 days from the date hereof, the Applicant do all things necessary to transfer or roll over to the Fund the entirety of her interest in the [BT Superannuation] fund.
12.Within 30 days from the date hereof, the Trustees do all things necessary to place on the market for sale by private treaty [Property B] (“[Property B]”) owned by the Fund.
13.Thereafter, the Trustees do all things necessary to sell [Property B] at a price agreed between them, and pay the whole of the proceeds of sale (after deduction of agent’s fees and commissions and expenses of sale) into the bank account operated by the Fund.
14.The Trustees shall within 7 days from the date hereof, do all things and sign all documents necessary to:
(a)vary the Rules in accordance with the provisions under cl 18 of the Rules noting that the variation must contain provisions which:
(i)allow for splitting benefits in accordance with Part 7A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (“SISR”);
(ii)allow to transfer of benefits in accordance with the operating standards contained in the Superannuation Industry (Supervision) Act 1993 (Cth) (“SISA”) and associated regulations; and
(iii)allow for any said transfers include provision to allow for transfer of benefits in specie;
(b)observe all their obligations in relation to the operating standards in accordance with s 31 of the SISA and associated regulations and the statutory covenants in accordance with s 52B of the said Act; and
(c)prepare an updated Financial and Member Account Statement (“the First New Financial Statement”) for the Fund in accordance with the Australian Account Standards and serve the First New Financial Statement on the parties, noting that the First New Financial Statement should include an allowance for any Capital Gains Tax liability of the Trustees to comply with these orders (if any).
15.Thereafter, the parties in their capacities as trustees of the Fund jointly instruct the accountants for the Fund to:
(a)make such disclosures and submissions as may be required to be made to the ATO in relation to any possible breaches by the parties of their duties as trustees of the Fund; and
(b)communicate and liaise further with the ATO as to any steps needed to be taken by the Trustees to rectify any such breaches, pay any penalties and otherwise take all necessary steps to ensure that the affairs of the Fund are entirely in order.
16.Thereafter, the parties in their capacities as trustees of the Fund pay from the resources of the Fund:
(a)accounting and other reasonable fees required to complete the steps necessary to place the affairs of the Fund in order; and
(b)any penalties imposed or tax assessed.
17.Thereafter, the Trustees shall do all things and sign all documents necessary to prepare a further updated Financial and Member Account Statement (“the Second New Financial Statement”) for the Fund in accordance with the Australian Account Standards and serve the Second New Financial Statement on the parties, noting that the Second New Financial Statement should include an allowance for any Capital Gains Tax liability of the Trustees to comply with these orders (if any).
18.Thereafter, the parties in their capacities as trustees of the Fund do all things necessary to implement the orders contained in paragraphs 20 - 26 below.
19.Service of the orders contained in paragraphs 20 – 26 below (“Service Date”) on the Trustees be deemed to have occurred on the date that the Second Financial Statement is issued and the Court notes that this will enliven the operating standards under Part 7A of the SISR.
20.In accordance with s 90MT(1)(b) of the Act:
(a)the Applicant is entitled to be paid the specified percentage, being 100 per cent, out of the Respondent’s superannuation fund interest;
(b)the Respondent’s entitlement to the amount in his member account (and the entitlement of any other person to payments out of the Respondent’s interest) in the Fund, is correspondingly reduced;
(c)the operative time for this order operates from the beginning of the day of the creation of the new interest in the name of the Applicant in accordance with reg 7A.11 of the SISR;
(d)the Respondent is entitled to be paid the specified percentage, being 40 per cent, out of the Applicant’s superannuation fund interest immediately after the implementation of paragraph 20(a) above;
(e)the Applicant’s entitlement to the amount in her member account (and the entitlement of any other person to payments out of her interest) in the Fund is correspondingly reduced; and
(f)the operative time for this order operates from the beginning of the day of the creation of the new interest in the name of the Respondent in accordance with reg 7A.11 of the SISR.
21.The Trustees, do all such acts and things and have signed all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Act and the SISR the entitlement awarded to each party in paragraph 20 of these orders; and
(b)pay the entitlement whenever the Trustees make a splittable payment out of either parties interest in the Fund.
22.Within 7 days of the Service Date, the Trustees serve on the parties the documents required under the SISA including but not limited to a request under reg 7A.03 of the SISR.
23.Within 7 days after service by the Trustees of the Second New Financial Statement or the request under reg 7A.03 of the SISR, whichever occurs last, the Applicant shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising her request pursuant to reg 7A.05 of the SISR for the Trustee to create a new interest for the Applicant in the Fund and for the purpose of this paragraph the Trustee shall allow the Applicant until this date to serve the said Notice on the Trustee pursuant to reg 7A.08 of the SISR.
24.The Trustees shall meet within 7 days after receipt of the notice referred to in paragraph 23 above and in that meeting do all such acts and things, and sign all such documents as may be necessary to create a new interest for the Applicant in the Fund in the name of the Applicant pursuant to reg 7A.11 of the SISR.
25.Within 7 days after service by the Trustees of the Second New Financial Statement or the request under reg 7A.03 of the SISR, whichever occurs last, the Respondent shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising his request pursuant to reg 7A.05 of the SISR for the Trustee to create a new interest for the Respondent in the Fund and for the purpose of this paragraph the Trustee shall allow the Respondent until this date to serve the said Notice on the Trustee pursuant to reg 7A.08 of the SISR.
26.The Trustees shall meet within 7 days after receipt of the notice referred to in paragraph 23 above and in that meeting do all such acts and things, and sign all such documents as may be necessary to create a new interest for the Respondent in the Fund in the name of the Respondent pursuant to reg 7A.11 of the SISR.
27.Promptly after the implementation of the orders contained in paragraphs 20 -26 inclusive, the parties each do all things necessary to:
(a)wind up the Fund;
(b)pay from the resources of the Fund in equal proportions from the member account of each party any accounting or other fees reasonably incurred in order to implement the winding up; and
(c)each then roll over their respective member balances then remaining into a compliant superannuation fund of their choosing.
28.Any penalties imposed personally on either party arising from failures prior to the date of these orders in their duties as Trustees of the Fund be paid equally by them, and for that purpose each party reimburse the other as required within 14 days of provision of proof of the penalties imposed.
29.Pending the completion of the winding up of the Fund:
(a)each party is restrained from dealing with, charging, encumbering or disposing of any of the assets of the Fund other than in accordance with the terms of this order and doing any such act or thing which would defeat, extinguishing or reduce the entitlement of either party under this order unless otherwise agreed in writing between the parties; and
(b)the Respondent and Applicant shall immediately revoke any binding death benefit nomination already made and each party be, and is hereby, restrained from:
(i)making any binding death benefit nomination in favour of a child described in regulation 13 of the SISR;
(ii)making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
(iii)doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this order.
30.The parties have liberty to apply in relation to the implementation of these orders.
31.All outstanding applications and responses otherwise be and are hereby dismissed.
I certify that the preceding [141] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
0
0
0