Griffin and Griffin
[2010] FMCAfam 1275
•2 December 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GRIFFIN & GRIFFIN | [2010] FMCAfam 1275 |
| FAMILY LAW – Alteration of property interests – ascertainment of pool – add-backs – assessment of contributions – assessment of s.75(2) considerations – just and equitable order. |
| Family Law Act 1975, ss.75(2), 79 |
| Browne & Green (1999) FLC 92-873 DJM & JLM (1998) FLC92-816 Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervenor) (2003) FLC93-143 MH & MZ (2005) FLC93-226 Kowliw & Kowaliw (1981) FLC 91-092 Money & Money (1994) FLC 92-485 Norbis & Norbis (1986) 161 CLR 513 AJO v GRO (2005) FLC 93-218 Pierce & Pierce (1998) FLC92-844 Townsend & Townsend (1995) FLC 92-569 Williams & Williams [2007] FamCA 313 |
| Applicant: | MS GRIFFIN |
| Respondent: | MR GRIFFIN |
| File Number: | WOC592/2007 |
| Judgment of: | Altobelli FM |
| Hearing dates: | 27, 28 & 30 September 2010 |
| Date of Last Submission: | 30 September 2010 |
| Delivered at: | Sydney |
| Delivered on: | 2 December 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Alexander |
| Solicitors for the Applicant: | Verekers Lawyers |
| Counsel for the Respondent: | Mr Millar |
| Solicitors for the Respondent: | Kells The Lawyers |
ORDERS
Within forty-two (42) days the wife shall pay to the husband by way of property settlement the sum of one hundred and thirty eight thousand and seventy three dollars ($138,073).
Upon payment of the sum referred to in Order 1:
(a)the wife shall do all things and execute all documents to cause the mortgage presently registered on the title of the property known as Property F in the State of New South Wales to be discharged;
(b)upon compliance by the wife with Orders 1 and 2(a), the husband shall transfer to the wife all his right title and interest in the property.
In the event that the wife fails to comply with Orders 1 and 2(a) the husband and the wife shall forthwith do all things and execute all documents to cause the property to be listed for sale by public auction with such auction to take place within eighty four (84) days of these Orders and upon sale of the property to cause the proceeds of sale to be paid as follows:
(a)payment of the amounts secured by mortgage on the property;
(b)agent’s commission, auction expenses, advertising costs and legal costs of the sale;
(c)the balance of the proceeds to be divided between the husband and the wife in a manner which implements the reasons for judgment.
In the event that the property is not sold at auction, the husband and the wife shall cause the property to be listed for sale after the auction by private treaty and shall cause the property to be sold for the best price reasonably obtainable within twenty eight (28) days after the auction.
In the event there is no agreement between the husband and the wife as to the listing agent, the auctioneer, the reserve price for the auction or the best price reasonably obtainable then within seven (7) days of the dispute arising the parties shall do all things and execute all documents to appoint the President of the Real Estate Institute of New South Wales or his nominee to determine the matter in dispute, which determination shall be binding upon the parties.
The wife shall indemnify the husband and keep him indemnified in relation to any liability he may have for any debts secured by mortgage on the property and for the performance of any obligation under the mortgage.
Pending completion of the sale pursuant to these orders, the wife shall pay all outgoings in relation to the property including rates, water rates, house insurance and mortgage payments as and when they fall due.
The wife shall deliver up to the husband within fourteen days of these orders at a time and place to be agreed between the husband and the wife the items of property referred to in the Schedule attached to these Orders.
The wife is to diligently search for, and if found, provide to the husband in accordance with (8) above, the following items:
(a)Waterford crystal wine glassware;
(b)Stuart crystal whisky decanter and glass set;
(c)Framed map.
Except as otherwise provided by these Orders each party is to have sole right title and interest as against the other in any items of property currently in the possession of that party and any monies, funds, shares, and investments presently standing in the sole name of that party.
Each of the parties is to be solely responsible as against the other for any liability presently standing in the sole name of that party.
Liberty to apply to both parties on seven (7) days notice in writing in relation to the interpretation, implementation or enforcement of these orders.
Schedule
Husband’s CD collection
Husband’s tools
Framed photographs of husband’s great grandmother
Husband’s grandmother’s cutlery
Husband’s grandmother’s buffet
Husband’s personal photo albums
IT IS NOTED that publication of this judgment under the pseudonym Griffin & Griffin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
WOC592/2007
| MS GRIFFIN |
Applicant
And
| MR GRIFFIN |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for alteration of property interests under the Family Law Act, commonly known as an application for property settlement. The applicant is the 43 year old wife, and the respondent her 49 year old husband. They married [in] 1991, and separated on 8 October 2005, thus having cohabited for approximately 14 years. They have two children aged 16 and 15. The parents have entered into consent orders which provide for shared care of the children, on the basis that they spend five nights each fortnight with their father as well as various times during the day.
Background
The parties agree that the husband had quite substantial assets at the time of cohabitation including properties at [H] and [O], as well as shares in a company known as [N] Pty Limited. In addition, the husband had some unquantified superannuation entitlements as a result of ten years employment before cohabitation. The wife concedes that there should be an adjustment in the husband’s favour of 7.5 per cent for contribution, representing the assets brought into the marriage. The husband has a slightly different approach. In relation to non-superannuation assets he says the adjustment in his favour should be 10 per cent, and then in relation to superannuation assets, the adjustment should also be 10 per cent.
The wife asserts that there should be an adjustment in her favour under section 75(2) of the Family Law Act. By the time of final submissions, her counsel submitted that there should be a 5 per cent adjustment in her favour. When the husband commenced his case on the first day of the hearing, his counsel opened on the basis that there should be a 5 per cent adjustment in the wife’s favour under section 75(2), but by the close of the case I understood his counsel to be submitted that there should be no 75(2) adjustment in the wife’s favour. A number of issues arise in relation to the constitution of the asset pool, and these will be referred to in more detail below.
It is not necessary in this case to go into a detailed financial history of the marriage. In terms of assessing contribution really the question is what weight I should place on the assets brought into the marriage by the husband. Suffice it to say that the properties owned by the husband at [H] and in [O] were sold during the course of the marriage and the sale proceeds applied towards the acquisition or conservation of assets that are presently represented in the pool of assets. The parties undertook substantial renovations to the property being the former matrimonial home. This included the construction of a pool. The evidence indicates that quite substantial funds were applied for this purpose, but the wife raises as an issue about whether some of the moneys supposedly applied towards construction costs, were in fact applied for the husband’s personal benefit. All of these transactions took place prior to separation.
The husband works in the IT industry. The wife is [employed in the health industry]. The husband worked throughout the marriage, and the wife also worked either in paid employment outside of the home, or unpaid work within the home. In substance, the parties raise no substantive issues about the contribution that they each made during the course of the marriage. The wife raises a rather half-hearted argument that there should be an adjustment in her favour for contribution in the post-separation period, and I will deal with that below. One of the complications in this case, of course, is that it is now over 5 years since the parties separated.
Both the husband and the wife earn reasonable incomes. The husband has the benefit of a company which assists him in structuring his income and finances. In addition to the wife’s earnings as a [omitted] she receives child support from the husband as well as family tax benefit. She asserts that the husband has failed to disclose the true extent of his income to the court.
Both the husband and the wife raise issues as to the others credit, both in the context of the financial disclosure that they have made to the court. I will need to make findings in this regard.
The wife would like to be able to retain the former matrimonial home at Property F, provided she can afford to pay out her husband. The husband has no objection, in principle, to this. By the time of closing submissions, her position was that she would like to pay him out in the sum of $100,000. The husband proposes that she pays him $218,525, and he offers a super split of $16,026.
In any event, the main issues that the court needs to determine includes the constitution of the pool of assets, assessing contribution and section 75(2) considerations, and then making an order that is just and equitable under the circumstances. There are some minor issues between the parties in relation to the division of personal property.
Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the husband in bringing property into the marriage. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:
26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:
…respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
32. In MH & MZ (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
In relation to add-backs, the applicable law can be found in decisions such as the Full Court's decision in AJO v GRO (2005) FLC 93-218.
I set out the relevant passages from that Full Court decision that describes the situations in which add-backs are appropriate.
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31. As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
“44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
Credit Issues
In his closing submissions, counsel for the wife submitted that the husband was less than honest with some of his evidence, and also “a bit lax” in terms of his financial evidence, and attempted to either understate or overstate his financial situation, as the context demanded. Whilst there is an element of truth to this submission, the evidence does not reach the requisite degree that would justify making an adverse finding as to credit against the husband.
In his closing submissions, counsel for the husband submitted that the wife was an unsatisfactory witness whose evidence should not be accepted on any matter which is either in dispute or upon which the court would need to rely on the wife to establish, in the absence of reliable corroborative evidence. I agree with counsel for the husband. In cross-examination she was frequently unresponsive, sometimes evasive and argumentative and occasionally inconsistent in answering the same or similar questions. She demonstrated a cavalier approach to disclosure of her own financial circumstances, all in the context of running a case that pointed the metaphorical non-disclosure finger to her husband. The court agrees with the submission of counsel for the husband that the wife did deliberately present herself as someone in financial difficulty in the post-separation period, but in the context of evidence that demonstrates she had substantial moneys available to herself for discretionary expenditure. True it is that both the husband and the wife appeared to have enjoyed a good lifestyle in the post-separation period, but the husband never asserted as part of his case that he was in dire financial straits. By contrast that was certainly a part of the wife’s case.
As will be seen below, the wife was convinced that in the years leading up to the final separation the husband had drawn down on a joint matrimonial debt, and applied matrimonial funds to his own purposes. The husband denies this, and suggests that during the relevant period the parties were living beyond their means. It is almost an adage in family law that she who asserts non-disclosure must come with clean hands. The wife’s failure to do so not only undermined her non-disclosure case against the husband, but has greatly contributed to my adverse findings against her in terms of her own credibility.
Ascertainment of the Asset Pool
During final submissions the husband’s counsel submitted the following schedule of property, liabilities and superannuation:-
| Property | ||
| 1. Property at Property F | Joint | 625,000 |
| 2. 2 shares in [N] Pty Ltd | H | 218,000 |
| 3. [N] Australia Pty Ltd | H | 12,400 |
| 4. Honda Euro motor vehicle | W | 15,500 |
| 5. Furniture and effects in Property F | W | 20,520 |
| 6. Furniture and effects in Property F | W | 500 |
| 7. Furniture and effects in Husband's unit | H | 510 |
| 8. Wife's jewellery | W | 8,325 |
| 9. Pearl necklace | W | 4,000 |
| 10. Husband's watch | H | 600 |
| 11. Bank accounts | W | nk |
| 12. Cheque account | H | nil |
| 13. Savings account | H | 32 |
| 14. Commonwealth Bank account | H | 2,700 |
| $908,087 | ||
| Liabilities | ||
| 15. Mortgage | Joint | 162,000 |
| 16. Citibank credit card | H | 4,000 |
| 17. Jetstar card | H | 11,100 |
| 18. Personal tax debt | H | 36,866 |
| 19. [N] Australia tax debt | H | 8,960 |
| 20. [N] Australia accounting fees | H | 1,760 |
| 21. Mastercard debt | W | 5,000 |
| $229,686 | ||
| Net property | $678,401 | |
| Superannuation | ||
| 22. [W] Super | H | 137,476 |
| 23. [F] Super | W | 50,243 |
| 24. [A] Super | W | 13,697 |
| 25. [M] Super | W | 1,000 |
| $202,416 | ||
| Total net property and superannuation | $880,817 | |
A number of issues arise in relation to the pool of assets. The husband asserts that item 9, a pearl necklace purchased by the wife for herself on her 40th birthday in 2007 should be included in the asset pool. I disagree. There is no evidence to indicate that the wife purchased this item of jewellery using assets held at the time of separation. The evidence indicates that she was working at the time of separation and thereafter and, in these circumstances, I cannot discern how the husband can make a claim for contribution to this item, and accordingly it simplifies the alteration of property interest process significantly if it is excluded from the pool.
In circumstances where five years has elapsed since the date of separation, and both parties have been in full-time employment, I do not propose to include in the pool items 11-14 representing bank accounts owned by either the husband or the wife. For the same reason, I propose to exclude a number of the personal liabilities and specifically items 16, 17 and 21. This is particularly the case in circumstances where both parties enjoyed a certain standard of living in the post-separation period (example holidays for the husband, jewellery acquisitions for the wife) which might be perceived to be beyond their means. They should not now have to subsidise each others lifestyle in the post-separation period. There is no evidence before me to indicate that the debts in question were the same debts that might have been in existence at the date of separation. I do accept, however, items 18, 19 and 20 as representing liabilities quite properly incurred by the husband as a result of the realisation of his interest in [N] Pty Limited and [N] Australia Pty Limited, which is reflected as assets.
The wife may not have agreed with item 7, being the value of the husband’s furniture and effects in his unit, but this figure is the best evidence I have, and the wife led no contrary evidence.
The major issue in relation to the constitution of the asset pool was the submission that there should be an add-back of a global figure of $100,000 to reflect firstly legal fees in the sum of $21,000 paid by the husband out of a dividend he received from the company, secondly an amount that [N] Australia Pty Limited irresponsibly failed to recover as a debt from a related company, and thirdly on account of unexplained but otherwise substantial draw downs by the husband from joint loan facilities. This global claim for an add-back was a rather unusual way of framing the claim, and it is necessary to explore each component in more detail.
The first component is a claim that has substance. At paragraph 25 of the husband’s affidavit sworn 29 September 2010 he deposes to using $37,664 of the money received by way of dividend from [N] Pty Limited to cover his legal expenses owed to his barrister and solicitor. Notwithstanding this evidence, the claim by the wife is for an add-back of $21,000, which is explained by other evidence given by the husband. I categorise the $21,000 as a premature distribution of matrimonial assets. If this money had not been paid it would have been represented in a higher figure at items 2 or 3 of the balance sheet. It is appropriately added back.
The second issue arises in the following manner. [N] Pty Limited made an unsecured loan to a related company, [D] Pty Ltd. Whilst the husband has an interest in [N], he does not have an interest in [D] Pty Ltd. The loan in question was $167,630 which [N], and therefore the husband, wrote off. The wife asserts that the right to recover this loan is a chose in action to which the husband, as 40 per cent shareholder, is entitled. Whilst counsel for the wife conceded that the financial statements in evidence relating to [D] Pty Ltd do demonstrate an inability to pay this account, he submitted that as a trading company with a significant turnover, there were prospects of recovery and hence it was a chose in action for the husband of significant value. Even counsel for the wife conceded, however, that the value of this chose in action needs to be discounted to reflect the risks of recoverability and the costs thereof. Counsel for the husband submits, however, that the prospects of recovery are so far fetched that the chose in action is, in effect, speculative, and that in any event it’s discounted value would be nil. Given that the husband’s position is, at best, a minority shareholder in the company owed the debt, in a context where the majority interests in the company are positively motivated not to recover the debt, then absent litigation to compel the recovery by the company, the prospects would have to be remote. Moreover, as counsel for the husband quite properly submitted, even if the husband were able to recover, the costs of realisation and then the taxation impacts of the payment are such that the amount, if recovered, would be negligible. I agree with counsel for the husband. Based on all the evidence, my strong impression is that recovery of the unsecured loan to [D] Pty Ltd is, at best, speculative, and thus the claim for an add-back is far-fetched. I decline to take this into account.
The third aspect of the claim for an add-back is based on the husband’s control of finances in the two year period preceding the date of separation. I accept that the evidence indicates that, for all practical purposes, the husband was in control of the family’s finances at this time. I accept that the evidence indicates that during this period the parties were effecting renovations to the home including quite substantial improvements by way of a pool. I accept that neither know the real cost associated with this construction and the renovations. I accept that during this period there were substantial draw downs on a loan taken out to finance this building work and that the husband cannot explain each and every transaction, many of which were in cash, other than by general reference to the building work. It is probably likely that the husband was wrong in the evidence that he gave about the precise period of the building works. The wife’s counsel’s submission is that, in effect, in the period leading up to separation, and under the husband’s stewardship of the family finances, the home loan increased substantially. I also accept that in the period after separation the wife’s stewardship of this same finance facility, for the same purpose, actually resulted in a reduction in the capital owed. But does any of this evidence lead to the inference that the drawings made by the husband did not benefit the family, and or were for his own benefit? Quite apart from the more interesting legal point about whether there can be an add-back for the premature distribution of assets before separation (other than in the context of section 106B) the evidence simply does not support the inference that the wife asks me to draw from the evidence. Just because neither the husband nor the wife can explain precisely how these moneys were used, this does not mean that there has been wrong-doing. The wife bore the onus of proof and she has failed to discharge that. Based on all the evidence, it is more likely than not in my opinion that the building work at the former matrimonial home cost the parties far more than they originally thought, and that is the reason why the indebtedness increased during the relevant period. I accept the husband’s denials that any of these funds were used for his own personal benefit, and not for the stated purpose of completing the building works.
Accordingly, I am prepared to add-back into the asset the husband’s legal fees paid of $21,000 being the money received by way of a dividend from [N] Pty Limited.
Having regard to all of these matters the final pool of assets will be as follows:
| Property | ||
| 1. Property at Property F | Joint | 625,000 |
| 2. 2 shares in [N] Pty Ltd | H | 218,000 |
| 3. [N] Australia Pty Ltd | H | 12,400 |
| 4. Honda Euro motor vehicle | W | 15,500 |
| 5. Furniture and effects in Property F | W | 20,520 |
| 6. Furniture and effects in Property F | W | 500 |
| 7. Furniture and effects in Husband's unit | H | 510 |
| 8. Wife's jewellery | W | 8,325 |
| 9. Husband's watch | H | 600 |
| 10. Legal fees | H | 21,000 |
| $922,355 | ||
| Liabilities | ||
| 11. Mortgage | Joint | 162,000 |
| 12. Personal tax debt | H | 36,866 |
| 13. [N] Australia tax debt | H | 8,960 |
| 14. [N] Australia accounting fees | H | 1,760 |
| $209,586 | ||
| Net property | $712,769 | |
| Superannuation | ||
| 15. [W] Super | H | 137,476 |
| 16. [F] Super | W | 50,243 |
| 17. [A] Super | W | 13,697 |
| 18. [M] Super | W | 1,000 |
| $202,416 | ||
| Total net property and superannuation | $915,185 | |
Thus, the total gross sum value of non-superannuation assets is $922,355, and the net value $712,769. The value of superannuation assets is $202,416. The combined pool amounts to $915,185. Superannuation assets comprise only about 22 per cent of the total assets and I think that, under the circumstances, there is no need for me to adopt the two pools approach.
Contribution
The husband’s evidence about the assets held by him at the time of cohabitation is set out at length in his affidavit of 27 October 2009. His evidence about the properties he owned at [H] and [O] is compelling, convincing, and largely not contested by the wife. It is unlikely that his shareholding in the company known as [N] Pty Limited, which owned a unit on the Gold Coast (or, more correctly, was in the course of acquiring the same at the time of cohabitation) had a substantial value. It is more likely than not that any accretion in value took place during the course of the marriage, and this was a negatively geared asset.
The husband was not able to quantify the value of the ten years of superannuation entitlements that he asserted he had as at 1991 when they married. I think this is a significant problem in the husband’s case, particularly in the context where he seeks to assess a contribution to superannuation in the context of a specific superannuation pool. I must say it is highly unlikely that the superannuation had a considerable value given that the husband described himself as undertaking a traineeship with a regional county council for most of the period in question. In the circumstances, particularly having regard to the length of the period of cohabitation since then, I do not think it is appropriate to even attempt to recognise any greater contribution made by the husband to his superannuation entitlements. Indeed, given that it must follow that the vast majority of his superannuation, and all of the wife’s superannuation, was accumulated during the marriage I consider myself free to treat this case as a single pool of assets.
I am satisfied as being just and equitable an assessment of contribution at 57.5 per cent in favour of the husband, attributable to the assets that he brought into the marriage at cohabitation. Whilst it is true that, particularly having regard to how, precisely, these assets were subsequently applied during the course of the marriage, they represent a substantial percentage of the current non-superannuation pool, the fact is that the wife made substantial and myriad other contributions during the marriage that need to be taken into account. An adjustment of 7.5 per cent in the husband’s favour is appropriate.
As at the date of separation neither party asserts that, but for the matters referred to above, there should be an adjustment in their favour for any contribution they have made. I regard that as entirely appropriate. I am satisfied they both worked to their capacity, albeit in different roles.
To the extent that the wife argued that there should be a post-separation contribution in her favour, I do not accept this argument. During this relatively long post-separation period the wife was in occupation of the home for the most part, the husband renting, the wife had the primary care of the children, the husband had frequent and substantial contact and paid child support, and for the most part they both had a reasonable standard of living. There is nothing in the evidence to justify a finding of greater post-separation contribution in favour of the wife.
A Section 75(2) Adjustment?
The husband is 49 years old, the wife 43 years old. The age disparity is insignificant in the circumstances of this case and does not attract a section 75(2) adjustment in its own right.
Both parties are in full time employment. The wife has income from her position as a [omitted] as well as child support and family tax benefit. I doubt if she has a capacity to increase her income substantially above that which it is at the moment. By contrast, even though the husband currently earns an income comparable to that of the wife, I am confident that he has the capacity to earn more and probably will on the conclusion of these proceedings. He also has the advantage of the financial flexibility available through the company.
The wife is responsible for the care of the children nine nights of the fortnight compared to the husband’s five, but each have the children with them for half the school holidays. The children are older. Nonetheless, she does have a slightly higher need in this regard, as compared to the husband.
Both the husband and the wife have partners whose financial circumstances did not figure prominently in this case but who, I suspect, will be able to provide each of them with emotional and financial support in the future.
Whilst there is some evidence of financial benefits provided to the wife by [name omitted], I accept the wife’s evidence that this was a loan that needs to be repaid once the property settlement proceedings are concluded.
Whilst I have found that the wife has engaged in non-disclosure, this has adversely affected her credit in relation to the contentious issues discussed above, but I do not believe it calls for a section 75(2)(o) adjustment.
Having regard to all of the matters referred to above I still believe it is appropriate for the wife to have a 5 per cent adjustment in her favour, particularly to take into account her additional responsibility for the children and the differences in the respective earning capacities of the husband the wife. Accordingly I will make an adjustment in the wife’s favour under a section 75(2) of 5 per cent.
Just and Equitable Order
The husband is entitled to 52.5 per cent of $915,185, or $480,472. Conversely, the wife is entitled to 47.5 per cent, or $434,712.
The wife wishes to retain the former matrimonial home, if she can afford to pay out the husband. On this scenario she would take the value of the home less the mortgage, together with her own non-superannuation assets plus superannuation which would give her a total entitlement of $572,785. However pursuant to these orders she is only entitled to $434,712, meaning that the payout to the husband is $138,073. Conversely, on the basis the husband keeps his superannuation and non-superannuation assets together with his share of the liabilities, he receives net assets of $342,400. As his entitlement is $480,472, the payment to him should be $138,072.
I see no need, in the circumstances of this case, to split the super, so each party can retain their existing superannuation entitlement. I will give to the wife 42 days to pay to the husband the sum in question. She will, of course, need to take over the mortgage. If she cannot pay, or if she cannot refinance the mortgage into her own name, the property will need to be sold and consequential orders will be made in this regard. Under the circumstances, I consider these orders to be as just as equitable as the circumstances permit.
Finally, there are a number of items of personal property that were in contention. The husband’s evidence in this regard is contained at paragraph 51 of his affidavit of 21 September 2010. The items that he claims are contained in the schedule to the minute of orders sought by the husband. Doing the best I can on the evidence that I heard the wife agrees that the husband can have his CD collection, tools, framed photograph of the husband’s great-grandmother, grandmother’s cutlery, grandmother’s buffet and personal photo albums. The wife’s evidence is that she does not know the whereabouts of the following items: Waterford crystal wine glassware, Stuart crystal whiskey decanter and glass set and framed map. The wife does not agree to the return of the other items and there is insufficient evidence before the court to enable a determination to be made as to ownership of these items. Accordingly, they will stay where they are. In relation to the undisputed items above, the wife is to make them available to the husband in accordance with the orders I make. The wife is to also diligently search for the crystal and the framed map, and provide them to the husband if she finds them.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Date: 2 December 2010
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