GV & MV - [2003] FMCAfam 610

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GV & MV

[2003] FMCAfam 610

FAMILY LAW – Property – valuation of real estate – comparable sales analysis – obligation to give full and frank disclosure – where failure to disclose paid legal fees – it is not sufficient for a party to simply adhere to the obligations specified by the rules of court.

Child Support (Assessment) Act 1989
Family Law Act1975 (Cth)

Black v Kellner (1992) FLC 92-287
Farnell (1996) FLC 92-681
Hickey (2003) FLC 93-143
In the Marriage of Clauson (1995) FLC 92-595
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Gosper (1987) FLC 91-818
In the Marriage of Kessey (1994) FLC 92-795
In the Marriage of Lee Steere (1985) FLC 91-626
Jenkins v Livesey (1985) 1 All ER 106
Junti (1986) FLC 91-759

Luciano (2000) FamCA 401

Mezzacappa (1987) FLC 91-853.

Pierce v Pierce (1999) FLC 92-844

Russell v Russell (1999) FLC 92-877
Tomasetti (2002) FLC 93-023
Weir v Weir (1993) FLC 92-338

Applicant:

Respondent:

File No:

PAM 2428 of 2003

Delivered on:

3 December 2003

Delivered at:

Parramatta

Hearing dates:

25 & 26 November 2003

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr P.Connor

Solicitors for the Applicant:

Abbott Tout

Counsel for the Respondent:

Mr P. Sansom

Solicitors for the Respondent:

Watts McCray

THE COURT ORDERS:

That within two months of the date of these orders the wife pay to the husband the sum of $106,646.68.
Simultaneously with and conditional upon payment by the wife of the monies due to pursuant to Order 1, the husband shall transfer to her the whole of his right, title and interest in “the property” situate at Greystanes in the State of New South Wales being the whole of the land contained in Certificate of Title Folio Identifier XX. At the same time the wife will give the husband a discharge of mortgage secured against the property in registrable form.
In the event that the wife fails to comply with Order 1 the parties shall forthwith do all acts and things and sign all documents necessary to sell the property situate at Greystanes for sale by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the president of the Real Estate Institute of New South Wales or his nominee.
That the proceeds of sale pursuant to Order 3 be disbursed as follows:
(a)In payment of the costs of sale including the real estate agent’s commission and legal fees.
(b)In payment of 38 per cent of the net balance to the husband.
(c)The balance to the wife from which the wife will pay the husband $663.15. In the event that there have been outstanding rates and charges adjustment at settlement from her share of the net proceeds the wife shall pay the husband amount outstanding.
The wife shall nominate the real estate agent appointed to conduct the sale. In the event that the property has not sold, which is evidenced by an exchange of contracts, within four months of the property being listed for sale, the parties shall procure a sale by auction. The wife will appoint the auctioneer and the parties shall agree on a reserve price for the property sale. In the event that they are unable to agree the parties shall accept the advice of the auctioneer appointed to conduct the sale. The proceeds of sale shall be distributed in accordance with Order 4 including the auctioneer’s costs. In the event that the parties must pay an amount for advertising or other costs associated with the auction in advance of it, the parties shall share those costs equally.
Pending payment by the wife to the husband or the sale of the home, whichever is the former, the wife shall pay the rates, insurances and utilities on the property at Greystanes as and when they fall due.
At the end of contact on Sunday the husband shall return the children C born 8 June 1992 and D born 30 April 1995 to the wife at her home.
At the end of contact on Wednesday evening the wife shall collect the children at the husband’s home.
Pursuant to section 65DA(2) of the Family Law Act 1975 the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.
All exhibits tendered in these proceedings shall be returned at the expiration of one calender month unless an appeal is lodged.
The solicitor who issued any subpoena shall collect that subpoenaed material and returns it to the owner within seven (7) days.
All outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM 2428 of 2003

Applicant

And

Respondent

REASONS FOR JUDGMENT

These reasons were delivered orally.

The Application

This is an application for the adjustment of property pursuant to s.79 and also contact transport arrangements. GV (the husband) commenced these proceedings when he filed an application for final orders on

5 August 2002 in the Family Court in Sydney. At trial he moved on his amended application filed 17 November 2003. During his opening address the husband's counsel indicated that his client sought the sale of the former matrimonial home. Later he withdrew from this position and agreed that the wife should be given an opportunity to acquire his interest in the former matrimonial home. Essentially the husband proposed a distribution of the net assets of 60 per cent to the wife and that he have the balance.
The parties have been able to reach agreement on complex issues concerning the children. In relation to the only remaining issue the husband says that the wife should collect the children from his home after midweek and weekend contact. Set out below are the orders he sought:
1.Within 28 days from the date of these orders the husband and wife shall do all acts and things and sign all documents as may be necessary to list the property situated at Greystanes (the “former matrimonial home”) being the whole of the land described in Certificate of Title Folio Identifier XX for sale by private treaty for the best price reasonably obtainable and shall:
(a)Appoint an agent to act on the sale and failing an agreement between the parties as to the agent, the present Real Estate Institute of New South Wales shall appoint an agent, the costs of and incidental to such an appointment to be paid equally by the parties.
(b)Instruct the agent to advertise the property at such amount as may be agreed between the parties and in default of an agreement between them at a sale price of not less than $475,000.00
(c)Appoint a solicitor as may be agreed between the parties to act on such sale and in the absence of an agreement with such solicitor as are present of the Law Society of New South Wales shall appoint to act on such sale, the costs of and incidental to such an appointment be paid equally by the parties as and when same falls due.
(d)Execute a Contract for Sale of the former matrimonial home in the form provided by the solicitor having conduct of the sale.
(e)In the event the property is not sold within two months being listed for sale and in the absence of an agreement being reached between the parties for the further marketing of the property, the parties shall relist the former matrimonial home for sale by private treaty with the agent after a period of one month for future selling periods of three months each time and the sale price of the property shall on each occasion where the property is listed for sale during the three month selling period be 5% lower than the sale price from the previous selling period until otherwise agreed by the parties or until the property is sold.
2.Upon settlement of the sale of the former matrimonial home in accordance with clause 1 herein, the proceeds of sale shall be paid in the following manner and priorities:
(a)Firstly all costs and expenses of the sale including legal costs, disbursements and agents commission
(b)Secondly, all amounts as may be required to discharge the mortgage secured over the former matrimonial home.
(c)Thirdly to pay the wife approximately 55% of the net proceeds.
(d)Fourth to pay the husband approximately 45% of the net proceeds.
3.That within 28days from the date of these Orders the wife shall do all acts and things and sign all documents as may be necessary to transfer to the husband all her right, title and interest in and to the Suzuki Swift motor vehicle registration number XX.
4.Within 28 days from the date of these orders the husband shall do all acts and things and sign all documents as may be necessary to transfer to the wife all his right, title and interest in and to the Toyota Lexcen motor vehicle registration number XX.
5.That it is declared that except as otherwise provided for by these orders each of the parties shall be declared to be the legal and beneficial owner of all other property in their possession, custody and /or control including but not limited to bank accounts, shares, personality and motor vehicles.
6.That the husband be responsible for collecting the children of the marriage namely C born on 8 June 1992 and D born on 30 April 1995 from school at the commencement of contact and that the wife be responsible for picking up C and D from the husband’s residence at the conclusion of contact.
7.That the wife pay the husband’s costs of and incidental to the proceedings.
During the hearing the wife's counsel submitted a minute of order1, that identifies the orders. It is set out below and I incorporate exhibit C into these reasons.
1.That within 3 months of the date hereof the Wife Pay to the Husband the sum of $52,221.25 herein called “the sum”
2.That simultaneously with and conditionally upon payment by the wife to the Husband of the sum the Husband hand to the wife or her Solicitors a signed and attested transfer of the whole of his right, title and interest in the parties former marital home known as and situate at Greystanes in the state of New South Wales herein after called “the home” being more properly described as the land contained in Folio Identifier XX and the Wife shall discharge the existing mortgage or mortgages secured against the marital home and indemnify the Husband and keep him indemnified in respect thereof.
3.That the Wife be and is hereby declared the owner at law and in equity of the 1996 Toyota Lexcen motor vehicle registered number XX and the Husband be and is hereby declared the sole owner at law and in equity of the 1995 Suzuki Swift motor vehicle registered number XX.
4.That otherwise each party be and is hereby declared owner at law of the personality in their respective possessions power or control including but not being limited to banking accounts and policies of superannuation.
5.That the Husband cause the children of the marriage C and D “the children” to be returned to the Wife at her residence after the conclusion of contact on the Sunday of each alternate weekend and the Wife collect the children from the Husband’s residence at the conclusion of Wednesday contact (as provided for in each case by the Orders made 25^th November, 2003).
1 Exhibit C
In broad terms, the wife proposes that she pay the husband $55,221.25 and that upon payment he transfer his interest in the former matrimonial home to her. Simultaneously, she will give him a discharge of the mortgage secured on the home.
In relation to contact, the wife proposes that the husband return the children on Sunday evenings and agrees that she will collect them from his home on Wednesday evenings.

The issues

The principle issues that required adjudication were these:
·The value of the former matrimonial home. The valuers had conferred2 and in their joint statement the wife's valuer contended that the home was worth $400,000 and the husband's valuer contended it was worth $425,000. In some cases such a difference would be seen as de minimus.
·Whether $15,000 advanced by the wife's grandmother was given to both parties or only to the wife.
·Whether the legal fees paid by the wife should be notionally added back and if so, to what extent.
·The transport arrangements for the end of contact.
·What adjustment should be made pursuant to s.75(2) having regard to principally, the wife's care of the children and her greater income.
2 Exhibit B

Chronology

The wife was born on 13 December 1962 and she is 41 years old.
The husband was born on 28 March 1964 and he is 39 years old.
The parties met in 1983 when the wife was visiting relatives in Italy. The husband lived in the village. Thereafter the parties formed a relationship and remained in contact with each other, visiting from time to time.
The husband came to Australia in about June 1986 for a vacation and while here the parties decided to marry. Without departing from Australia the husband was granted permanent residence.
The parties married on 15 February 1986.
Upon the husband’s arrival the parties commenced cohabitation. At this time, the wife owned a Daihatsu Charade worth $6,000. Neither party had other valuable assets nor liabilities or financial resources of any significance. The husband quickly obtained part time work at a fruit market and the wife was studying full time completing her teaching training. On Saturdays the wife taught Italian at a High School in Western Sydney. In March 1986 the husband secured full time employment in a fruit shop.
Initially the parties lived in rental property in Sydney and then moved to another suburb in the Sydney area. The parties then moved into the wife's parents' home so that they could save a home deposit. Whilst there they paid $100 per week as their contribution for food and other household expenses. Although both parties helped out in and around the home, overall the arrangement was financially advantageous to them. This is a contribution made on behalf of the wife.
At about the same time as the parties moved into the wife’s parent’s home the husband started full time work for the wife's father in his business at a the markets.
In early 1987 the wife started full time work as a secondary school teacher. Her first position was at a high school in western Sydney. In December 1988 the parties holidayed in Italy. The wife's father sold his business and upon their return the husband started working for its new owner.
Early 1989 the wife's grandmother sold her home. On 20 March 1989 the wife received a $15,000 cheque drawn on her mother's account, which moneys came from her grandmother. This money was deposited into a Westpac bonus deposit interest bearing account in the wife's sole name. At the same time the wife’s sisters were given an equivalent sum. The husband contended that the $15,000 should be categorised as a financial contribution made by both parties equally. The money is sourced from her relative and the transaction managed by her mother. The cheque was drawn in her sole name. She and her sisters all received an equivalent amount. The totality of these factors persuades me that the money was a gift to the wife and a contribution made on her behalf (see In the Marriage of Gosper (1987) FLC 91-818; In the marriage of Kessey (1994) FLC 92-795).
On 29 June 1989 the parties completed the purchase of a home at

Greystanes. Its purchase price was $143,000. They borrowed $115,000 from National Mutual Royal Bank and the balance, including necessary expenses, came from their savings. This means that the $15,000 given to the wife made up about half of the non-mortgage funds used to complete the purchase.
At settlement, the parties moved into the home. The wife and children still live in it. When they moved into the home the parties opened a joint bank account. Thereafter throughout the marriage the wife managed their financial affairs and as the husband was paid cash, she used his wages for daily living expenses and her wages were paid directly into the joint account. I am satisfied that throughout the marriage both parties applied all of their income to joint matrimonial purposes.
It is quite clear that having moved into the home both parties worked hard in and around the house. I accept the evidence at paragraph 19 of the husband's affidavit.
“After we moved into the former matrimonial home the wife and I commenced to make improvements to the property as and when we could afford to do so. Those improvements included:
· painting internally (both the wife and I painted the property inside) – this included sanding, under-coating and top- coating;
· tiling the kitchen – I did this assisted by a friend of the family, namely JN – I prepared the surface, laid the cement and fixed the files;
· the wife and I jointly did gardening together, improving the outside gardens, planting tree and shrubs etc;
· I installed the paving around the swimming pool – this was done approximately 4-5 years ago and it included purchasing and laying stones and making sure the surface was even. I constructed the paving around the swimming pool after work. This job took me about one week to do.”
In April 1992 the wife commenced paid maternity leave. Their son, C, was born on 8 July 1992. From the time of his birth the wife was primarily responsible for his, and later, D's care. The husband's care of the children was also significant. As a fruiterer, the husband's work required him to start early. He worked five days a week starting between 2 and 3 am and was home between about 12 noon and 1 pm. After the wife returned to work her mother came to the home and cared for C, until the husband arrived home. This pattern started in October 1992. When the wife resumed part time work she was teaching five days per week in a job share position. Other than when the wife was on maternity leave, when D was born, the arrangement whereby the husband cared for the children in the afternoon on the days that the wife worked, continued until separation.
In March 1995 the wife started paid maternity leave. The parties daughter, D, was born on 30 April 1995.
In July 1995 the husband commenced working for FH as a fruiterer, which position he still holds. The wife remained on maternity leave until February 1996. During maternity leave she took care of the children full time, her care being complemented by the husband's input when he was at home. When the wife returned to work in February 1996 she resumed her job share position working five days per fortnight. The arrangements for the care of the children are set out in paragraph 22 to 25 of the wife's affidavit, which I incorporate into these reasons.
“As deposed to above, I returned to part time work, on a job share basis, in February 1996. From this time, until I returned to full time work in 2001, I worked 5 days each fortnight.
Whilst I was at work, my mother cared for both children in our home during the day. GV would care for the children from the time he finished work until I returned from school. In the evenings, GV usually bathed the children and I attended to feeding them and putting then to bed. I did not return home until approximately 9.45pm and thus GV would care for the children, including putting them to bed, at these times. On Saturday’s, whilst both GV and I were at work, my mother would care for the children at our home.”
In 2001 the wife resumed full time work. She took the children to before school care daily and the husband collected them from school in the afternoon.
There was three major sets of home improvements. The first set of improvements in 1994 was significantly undertaken by the husband. In 1997 there was a roof restoration project funded by the wife's parents and undertaken by contractors. In 1999 the parties undertook substantial home extensions for which they paid $48,500. This involved the addition of a new family room, laundry, bathroom, conversion of the dining room into a study and a renovation of the existing study.

The parties separated on 14 February 2002.
Although separated they continued to live in the former matrimonial home until the husband left it on 1 February 2003. The husband paid the wife the following sums:
(a)For the first two weeks after separation, $400 per week.
(b)For the ensuing three to four weeks, about $350 per week.
(c)From March 2002, $300 per week.
(d)From 2 August 2002, $400 per week.
(e)From 12 August 2002, $350 per week.
The wife made the following payments identified in paragraphs 40 and 42 of her affidavit;
“Since our separation in February 2002, and including throughout the period GV continued to reside at the Greystanes home, I have paid all expenses in respect of the home, and for the children.
(a)I have paid all council rates in respect of the property. I have receipts for all payments made since November 2002, which total $854.19;
(b)I have paid for dishwasher repairs and have receipts for such expenses totalling $381.00;
(c)I have paid school contributions for the children in the sum of $40.00;
(d)I have paid for repairs to the sliding screen door in the sum of $70.00;
(e)I have paid the sum of $921.50 in respect of removal of a tree;
(f)I have paid $178.00 in respect of pest control;
(g)I have paid all Integral Energy accounts in respect of electricity for the home;
(h)I have paid all Sydney Water accounts in respect of the home;
(i)I have paid all Optus home phone accounts as well as the second line for the internet, which I disconnected at the time GV left the home;
(j)I have also paid all Optus pay TV accounts, which I disconnected in about September 2002 as I could not longer afford to meet this expense;
(k)I have also paid all fees due to … Childcare in respect of the children’s attendance at before and after school care;
(l)I have also paid all fees for musical lessons for the children at a School of Music at $590.60 per term. In 2003, the children commenced to have music lessons with JR at a cost of $400.00 per term;
(m)I have also paid al dance lesson fees for D which total $600.00 per year plus costumes and shoes;
(n)I have also paid all NRMA Home Building Insurance cost which is paid by direct debt each month from my bank account now in the amount of $29.51 per month. Further, I have paid all NRMA Home Contents Insurance premiums each month;
(o)I have continued to maintain private health insurance for the children and I at a cost of $169.86 per month which is paid by direct debit from my bank account;
(p)I have maintained monthly payments to ADT in respect of home security, now in the amount of $50.67 per month.
Since separation, I have continued to make repayments to Members Equity in respect of both of the mortgage loan accounts secured on the Greystanes property. I have paid the sum of $209.12 per fortnight in respect of loan account number XX and the sum of $366.00 per fortnight in respect of loan account number XX. The minimum payment required in relation to each of these loans is $183.70 and $288.20 respectively. In about December 2002, I telephoned Members Equity seeking to reduce mortgage payments to the minimum repayment. However the conditions necessary to change repayment arrangements had been altered and I was not able to make this variation, without GV’s signature. During the marriage, GV and I had each been able to alter payment arrangements independently of one another. I have therefore continued to pay $123.22 per fortnight above the minimum requirements for the loans.”
Because she felt the tensions between the parties made continued cohabitation unbearable, the wife made an application that she have exclusive occupation of the home. On 6 December 2002 the parties entered consent orders in the Family Court that provided, inter alia, that the husband would vacate the former matrimonial home either on obtaining alternate premises or on or before 31 January 2003, whichever occurred first. The orders included a notation that the husband could remove a selection of furniture and his personal possessions. He removed the following items “a bedroom suite (namely a bed and a dressing table), a couch, a TV set, a TV cabinet, a video player, a dining table, some plastic chairs and all of my personal belongings. I also removed a lawnmower and a whipper snipper.”
After he moved out of the home the husband sold his parcel of NRMA shares, for $3300. He used that money to buy a washing machine, microwave, stereo, and a selection of small kitchen appliances.
Since he moved out of the home, the husband has paid child support. Initially assessed to pay $866.83 per month, the current assessment that operates from 1 November 2003 until 31 January 2005 requires the husband to pay $551 per month. Since July 2003, the Child Support Agency has collected child support. The husband's child support payments are up to date.

The relevant law

The approach to the determination of an application under s.79 is well established by authority: See In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-593. The process involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s 75(2) insofar as they are relevant; any other order made under the Act affecting a party or child; and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or might be liable to provide in the future for a child to the marriage.
In determining what order should be made under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so: s.79(2). It is the justice and equity of the actual orders that the Court must consider: See Russell v Russell (1999) FLC 92-877. In relation to parenting orders, the Court must make an order that will promote the best interests of the particular child.

The assets, liabilities, and financial resources as at the date of the hearing

The parties agree on the value of some assets and liabilities. The issues requiring determination are the value of the former matrimonial home; the extent to which the wife's paid legal costs and moneys held in her solicitors trust should be notionally added back; and whether the parties' superannuation should be treated as property or a financial resource.
In relation to valuation evidence, the wife relied on the affidavit of Mr David Bird sworn 10 November 2003 and his oral testimony. He said the market value of the home as at 5 November 2003 was $385,000. The husband's valuer, Mr O’Neill, inspected the property twice, firstly as at 11 July 2003, he concluded the home to be worth $375,000. He revalued the property on 5 November 2003 and because his market analysis indicated strong growth during the intervening four months, he revised his opinion and concluded that the property is worth $445,000.
The valuers describe the property in similar terms, agreeing on location, land size and slope and improvements. Only because he used an easier narrative style in terms of the description of the property, I find that the property’s essential features accord with the description given by Mr Bird at paragraphs 2.1, 2.2, 2.3, 3.1, 3.2, 4.1, 4.2 and 4.4 of his report.
Both valuers adopted the same approach in order to determine the property’s current market value. Both examined the property and interrogated commercially available property databases in order to understand recent market conditions, with appropriate allowances for differences in each property and their sale date. The purpose of this exercise is to identify properties as near as possible in all respects to the subject property in the current climate.
The valuers conferred during the afternoon of the first day of the hearing. They prepared a joint order statement1, which revealed that they were unable to agree on the value of the home. Essentially their disagreement arose from their analysis of the sales evidence and not as a result of any disagreement about matters such as location, dimensions, services and the like. Unable to fully compromise their opinions, both valuers emphasised that valuation of property cannot be discerned with scientific precision. Importantly, they agreed that the recent past weeks has seen a definite steadying or cooling of the Sydney residential market, evidence of lower auction clearance rates, properties being withdrawn from auction and potential purchasers adopting a more cautious approach.
1 Exhibit B
The valuers agreed that their original opinions as to value included a degree of tolerance and that they should come closer together on their opinion. Thus, in spite of his opinion that the market was cooling, Mr Bird revised his opinion upward to $400,000. In spite of his opinion that the market was cooling: “It has yet to affect values” Mr O’Neill comfortably lowered his valuation to $425,000. When giving his oral testimony, he made it quite plain that he expected the parties to “Grasp the nettle” and compromise the two opinions so that for the purpose of the proceedings the property would be valued at $412,500. I was left with the strong impression that Mr O’Neill did not regard $412,500 as an unreasonable market value.
One of the difficulties that the valuers needed to grapple with was that Guildford comprises predominantly brick bungalows, often on comparable landholdings but overall, superior properties to the subject property. There was some difficulty finding directly comparable clad properties, but no difficulty finding sales in Greystanes. There were between 100 and 200 sales in the last six to twelve months. Because the valuers used different databases, it was understandable that although between them they examined 18 properties neither quoted the same property as comparable or influencing their opinion as to current market trends. Neither suggested that in the 18 properties examined they had discovered a directly comparable property sold recently.
In order to understand their differing opinions it is necessary to understand what each valuer deduced from their market analysis.
For his November valuation Mr O’Neill relied on seven sales all relating to properties superior to the subject property. All properties comprised superior houses and only 24 Percy Street and 70 Ian Street comprised comparable landholdings. Excluding these two properties, the remaining five had superior location. Sales ranged between a low of $424,000 for the Percy Street property and a high of $496,000 for 30 Tingall Street. By referring back to the sales examined for the July valuation, Mr O’Neill noted a significant increase in prices. The July valuation examined six properties, none comparable, one inferior and five superior. Sales dates range from between 23 September 2002 to

24 March 2003. The lowest price recorded was $356,000, the inferior property, to $478,000 for 9 Jasper Street. The increased sales prices confirmed Mr O’Neill belief that the Sydney property market was rising rapidly and that the inner west boom market had reached mid-western Sydney. Having seen boom markets perform in this same manner in the past, this trend came as no surprise to him.
While Mr Bird agreed with this general notion, he disagreed with the percentage increase attributed to the mid-west market. At present there are no statistics that identify the annulated growth rate for the end of the September 2003 quarter. Based on 14.5 per cent for the previous six months, Mr O’Neill assumed somewhere between 12 and 15 per cent as the rate for the current quarter. This percentage is inconsistent with his somewhat glib observation during his oral testimony that the second six months of this year had seen the market grow even faster than the first half. Apart from his focus on superior properties and lack of appreciation that there was a range of properties selling at considerably lower prices as identified by Mr Bird, Mr O’Neill did not analyse the Greystanes market in depth. Rather, he applied generalised Sydney market conditions to this particular region. Had Mr Bird not identified a tranche of lower sales, this approach may have been acceptable. Mr Bird's data demonstrates that there are also significantly lower sales occurring, something that properly led to Mr O’Neill lowering the value attributed to the subject property.
This puts into focus the contrast between Mr O’Neill’s two opinions. He originally opined that the subject property increased by $70,000 in only four months, a 19 per cent increase. Mr Bird described this jump as ludicrous. In the absence of directly comparable sales at the start and end of the period, the rise is surprising. It even outstrips Mr O'Neill’s generous opinions of the percentage increase rise in the quarter. Mr O’Neill was obviously angry when questioned about this and repeatedly emphasised his vast experience and knowledge of Sydney market conditions. What he did not say was that his July opinion was an underestimate; that he demonstrated awareness of lower sales in the period; located directly comparable sales; or have reasonably certain data about the actual percentage increase in the second six months. This leads me to conclude that his November opinion was overly generous and that a lower percentage must be applied to the July valuation, there being no challenge to it. Reducing the applicable percentage to 10 per cent, which seems to be a reasonable medium between the sales identified by Mr Bird and those by Mr O’Neill, results in a valuation of $412,500.
Similar cautions must be applied to Mr Bird's opinion. He was apparently unaware of Mr O'Neill’s higher price sales and assumed market conditions ignorant of higher prices. Regrettably, he did not identify whether the sales he used related to superior or inferior properties. As an expert it is his obligation to set out the complete facts relied upon. This omission is significant and undermines the veracity of his opinion. His concession upward flies in the face of his opinion that the market is softening. While I accept that being given late instructions meant that he did not have time to complete a report to his usual standard, inclusion of a valuation rationale and comparable descripter is fundamental to the task that he was engaged to address. To an extent, Mr Bird relied simply on his knowledge of general Greystanes market conditions in coming to his opinion and left me with the strong impression that particular comparable sales were seen as largely irrelevant.
Just as I am satisfied that Mr O'Neill’s valuation overstated the value, so I am satisfied that Mr Bird understated it. Because he does not describe the properties well, I cannot conclude to what extent he does so. Hence, having regard to the findings I have already made in terms of the adjustments properly made to Mr O'Neill’s valuation, I am satisfied that the property has a current market value of $412,500.
I now turn to the issue of legal fees.
Although the wife swore two financial statements, on 21 August 2002 and 10 November 2003 as well as her trial affidavit, she did not disclose that she had paid considerable legal fees. The wife impressed me as an honest witness and she appeared dismayed at the force of the attack made by the husband's counsel about this issue. I accept her evidence that she was unaware that her obligation to give full and frank disclosure extended to legal expenses. It is concerning that her two financial statements not only fail to disclose paid legal fees, but her expenses fully absorb her income. There is no available income by reason of which she could have paid her legal fees. Yet she did pay a considerable sum drawn from her income and paid by instalments.
Throughout these proceedings one firm of solicitors has represented the wife. The wife's counsel submitted that it would be unfair to criticise the wife or those advising her for this omission because the pro forma financial statement did not specifically identify legal fees as an expense.
In Weir v Weir (1993) FLC 92-338, the Full Court said at 79,593:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black v Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make full and frank disclosure of their financial affairs. See also Junti (1986) FLC 91-759 and Mezzacappa (1987) FLC 91-853.
And further on:
Irrespective of any obligation created by the Family Law Act or the Family Rules that we have identified, in our opinion the obligation of full and frank disclosure applies because of the duty of the Court to consider all of the circumstances of the case. See Jenkins v Livesey (1985) 1 All ER 106. This is particularly important in cases where the financial circumstances of the parties may be relevant. It is not sufficient for a party to simply adhere to the obligations specified by the rules of Court. If the relevant rules are deficient in identifying an aspect of a party's financial circumstance then this is not a basis for a plea that there was non-disclosure because the rules did not identify an aspect of a party's circumstances that may be relevant.
In the matter of Luciano (2000) FamCA 401, O'Ryan J summarised the principles that emerge from these cases as follows.
·In proceedings in the Family Court in relation to financial matters, there is an obligation of each party to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto.
·The obligation arises because of the necessity for the Court in such proceedings to consider all aspects of the financial circumstances of each party.
·The obligation is not created by the rules or the practice of the Court and the rules simply set out the procedure by which that obligation may be fulfilled.
·If there is a deficiency in the practice adopted for the purpose of making such a disclosure, mere compliance with the requirements of the relevant rules if deficient, is not enough.
·If there is non-disclosure in the relevant sense then the failure to disclose undermines the whole process of adjudication of the proceedings in relation to financial matters.
·A finding of non-disclosure may in appropriate cases, depending on the circumstances, result in the other party being granted without more, the relief sought.
These principles are well known. Any practitioner appearing with reasonable regularity in this jurisdiction should be aware of the need to disclose paid legal fees. Obviously the wife's solicitors were intimately aware of her financial arrangements regarding her legal fees. They had a clear obligation to advise her that disclosure was required.
Whilst the same firm had carriage of the matter the solicitor attending the wife changed. It is possible that information concerning fee arrangements was overlooked during the process. In the circumstances, I am not satisfied that the omission was deliberate. Nonetheless, it is most regrettable. If it were the case that I was satisfied that the omission was deliberate then the consequences are potentially quite serious professionally.
During cross-examination the wife said she had paid about $28,000 in legal fees, give or take a few thousand dollars. She calculated this by reference to a statement from Watts McCray to which she added $11,500 recently paid on her behalf by her parents. The managing partner of Watts McCray, swore an affidavit that was filed on the second day of the hearing. Annexure D to his affidavit is a letter dated 24 November 2003 addressed to the wife setting out cost estimates for finalisation of the hearing. It describes: “Total costs and disbursements to date $17,859.17.” The wife assumed that this meant that she had paid this amount. Knowing that on 3 November 2003 she paid into trust her mother's cheque of $4500 and a further $7000 on

17 November 2003 also from her mother, she deduced she had paid $28,000.

The effect of the managing partner’s evidence which attaches the wife's office and trust ledgers is that between 12 August 2002 and 10 November 2003 the wife paid $12,651.19 on account of costs incurred $16,702.50. The difference between the latter sum and $17,859.17 is probably worked performed but not yet billed. Nothing turns on the distinction. The wife received a separate estimate of fees required for this hearing1. This estimated additional costs of $11,500. Because she did not have available funds the wife borrowed the money from her parents. Those moneys are currently held in trust by the wife's solicitors. In spite of the fact that the wife was obviously confused by the fee issue and misunderstood the November correspondence, the husband's counsel submitted that all but about $5000 should be notionally added back. He contended that because the advance from the wife's parents was not documented and no date for its repayment had been given, the court would disregard the loan as uncertain and treat the advance as a gift. Hence the moneys held in trust, but for the $5000 to which I have made reference, would be added back.
1 Exhibit E
I accept the wife's evidence that she must repay her parents and that she will do so as soon as she is able. Hence the moneys in trust will not be added back. Applying the principles in Farnell (1996) FLC 92-681

I add back $12,651.19 paid by the wife to her solicitors from income earned post separation.
The husband's counsel submitted that the court would treat the parties' superannuation interests as a financial resource. When I asked him to refer me to any authorities, which supported his submission, he was unable to do so. The question posed, in effect, is does s 90MA “The object of this Part is to allow certain payments (splittable claim of payments) in respect of a superannuation interest to be allocated between the parties to a marriage either by agreement or Court order.” mean that a superannuation interest is to be treated only as property when it is sought to invoke the provisions of Part VIIIB and not otherwise? In my view it does not. The intention of s.90MA when read in conjunction with s.90MC is to extend the definition of matrimonial cause so that the categorisation of an eligible superannuation interest is changed to make it an asset for the purpose of s.9. In my opinion, this is consistent with the recent decision of the Full Court in the matter of Hickey (2003) FLC 93-143.
In relation to the value of the wife's car, the evidence was imprecise. The best evidence that I have is that she had made an inquiry of the NRMA database red book and discovered that it had a value of $8000. I treat this as an admission against interest and find accordingly.
In relation to household furniture both parties agree that I will disregard the household goods in their respective possession.
The value of their superannuation interests are agreed.
Accordingly, I find that the assets, liabilities and financial resources as at the date of the hearing are as follows:

Assets as at the date of hearing	$
Non-superannuation Assets
Notionally add back the paid legal fees (w)	$12,651.19
Former matrimonial home	$412,500
1996 Lexcen (w)	$8000
1995 Suzuki Swift (h)	$5000
TOTAL NON-SUPERANNUATION ASSETS	$438,151.19
Superannuation
Non-government superannuation scheme (w)	$20,557
C Superannuation Retirement Fund of (w)	$6532
B Superannuation (h)	$23,871
TOTAL SUPERANNUATION INTERESTS	$50,960
TOTAL ASSETS	$489,111.19

Liabilities as at the date of hearing
Mortgage against the home (agreed)	$133,596
Visa (w) (agreed)	$3295
St George loan (h)	$2700
TOTAL LIABILITIES	$139,591
NETT ASSETS	$349,520.19

There were no submissions made which suggested that the Visa and St George loan should be disregarded.

Evaluation of the contributions

The husband's counsel contended that the court would find the parties' contributions were equal and that a detailed analysis of contributions was not required. The wife contended that the contributions favoured her as to 55 per cent.
The wife made a greater initial contribution in the sense that she had a car worth $6000. She also introduced a $15,000 gift sourced from her grandmother. In conjunction with living with the wife's parents it seems that this gift and the moneys that the parties were able to save during the period resulted in their capacity to purchase their home when they did. It seems quite plain from the facts, as I understand them, that unless the parties had received the gift and lived in the wife's parents' home the probability is that they would have remained in rental accommodation for a considerably longer period than they did. They were able to acquire savings, which combined with the gift purchased their home. This meant that their money worked for them sooner than what otherwise would have been the case. I accept counsel for the wife's submission that the principles in Pierce v Pierce (1999) FLC 92-844 are apposite. Simply because the contribution made by the wife is smaller than that made by the husband in Pierce does not mean, as counsel for the husband contended, that the court would fail to recognise the significance of her contribution.
During the marriage both parties contributed all of the money earned by them to joint matrimonial purposes. Both parties put in maximum effort to secure their family's well being. When the opportunity arose, both parties took additional employment. For example, the wife did part time work as identified in her affidavit. The wife identifies that between 1992 and 2000 the husband worked, in addition to his full time job, on Saturdays. Overall, when one examines the financial circumstances of the parties, putting to one side the initial contribution and the gift, the husband made a slightly greater financial contribution during the marriage than did the wife. In making this finding I have not overlooked that the wife's parents paid for the carport.
Improvements to the home were significant and in I incorporate into these reasons paragraphs 19, 22, 24 and 25 of the husband's affidavit. This is an important contribution primarily by him. Generally the parties divided the work at the property so that the husband maintained the exterior and the wife maintained the interior. Overall the husband's contributions to the conservation and improvement of the property exceed the wife's.
The wife's role as a homemaker and parent was significant. The husband agreed that she was primarily responsible for the children's care. She took periods of maternity leave and was available on a full time basis during those periods to care for the children and the home. For a substantial portion of the marriage she worked part time. The husband also made an important contribution caring for the children.

I have already made reference to the arrangements made for their care in the afternoon. Overall however, including the period post separation, the wife has made a greater contribution as a homemaker and parent than the husband has. In Ferraro (supra) it is made clear that such contributions must be given real weight.
Excluding the initial contributions and the gift, as at separation I am satisfied that the parties' contributions were equal. Since separation the wife has had primary responsibility for the care of the children and until the husband vacated the home this year on Fridays and Saturday nights he was usually away from the home, during which time the wife had the care of the children. Having moved away from the home, he has needed to re-establish a home for himself, which he has done in a fairly modest way. The wife has had the benefit of the overwhelming majority of their matrimonial assets. When I balance the circumstances post separation I am satisfied that the contributions post separation are equal.
Overall, I am satisfied that the wife has made a slightly greater contribution than the husband. I evaluate her contribution at 52 per cent and the husband's contribution at 48 per cent.
I have already made findings in relation to child support, which I take into account.
The orders I make will not affect the earning capacity of either party.
At 52 per cent of the assets, the wife is entitled to $181,750.49 and the husband to $167,759.

Section 75(2)

The wife is 41 years old and in good health and the husband is 39 and in good health. I make no adjustment pursuant to sub-section (a).
Both parties have the income, financial resources and property identified in their financial statements Subject to a number of variations in her financial statement the wife identifies that her total income is $1558. However, it appears that she has understated the current child support payable and I am satisfied that her weekly income comprises salary of $1241, family assistance of $79 and child support of $155. The husband's income is derived entirely from salary of $922 per week. The wife's counsel submitted that as the husband is able to live within his means, on a needs basis there should be no adjustment made in his favour because of the wife's greater earning capacity. I do not agree. I agree with the husband’s counsel’s submission that the income differential warrants an adjustment in the husband's favour. I make an adjustment in the husband's favour pursuant to sub-section (b).
I have already identified the children's living arrangements. They live with their mother and have frequent contact with their father. The husband's counsel emphasised that the husband pays child support and submitted that there should only be a modest adjustment. In Clauson (supra) the Full Court said:
In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment opportunity, and the restriction upon an independent lifestyle which the obligation to care for children usually entails.
These principles are applicable to the circumstances of this case. I am satisfied as a consequence of her substantially full time care of the children that there should be an adjustment in the wife's favour pursuant to sub-section (c).
Both parties have the commitments identified in their financial statements. In addition they have outstanding legal fees in the sense that the wife must repay her parents and the husband has the legal fees identified in the statement provided by his solicitor which became an exhibit[1]. The effect is that the husband has still a greater sum to pay in terms of addressing his legal fees and I am satisfied I should make an adjustment in the husband's favour pursuant to sub-section (d).
[1] Exhibit D
Neither party contends for an adjustment under sub-sections (e) –(m).
Sub-section (n). I have already made findings in relation to the outcome of the contributions phase. The wife will have assets of about $181,000 and the husband will have assets of about $167,000. Their superannuation is reasonably comparable. There is no reason why there should be any further adjustment pursuant to sub-section (n).
I make no further adjustment pursuant to s.75(2) (o) or (p).
Having regard to all of the section 75(2) factors, I find that there should be an adjustment in the wife's favour of 10 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to section 75(2): See Tomasetti (2002) FLC 93-023. Any lesser adjustment, given the size of the asset pool, would be notional. The effect of this is that the wife will have 62 per cent of the assets and the husband will have 38 per cent.

Section 79(2)

Finally, I must consider s.79(2) and whether this is a just and equitable outcome. After a marriage of this duration in which both parties have applied maximum effort in terms of earning an income and the care of their children, it is important that there is proper recognition of the quality of the contributions made by both of them. Were it not for the ingestion of the greater initial contribution and then the gift made on the wife's behalf, the contributions would have been equal. It would not be just and equitable to simply stand back and say that after this length of marriage the parties' contributions should be treated equally. That does not reflect the law.
Similarly, the court cannot brush aside the financial consequences to the wife of her substantial care of the children. The husband has a lesser income and his superannuation is slightly less than the wife's. Over the years, notwithstanding her care of the children, the wife will probably grow her superannuation at a greater rate than the husband will be able to. However, these parties are of a comparable age and it seems to me both have a reasonable opportunity to provide for their financial future in terms of superannuation through earned income. The outcome therefore is just and equitable.

Conclusion

The wife will have the opportunity to acquire the husband's interest in the home. It is valued at $412,500. She and the children have remained in the home since separation. The wife has made sufficient inquiries to satisfy me that giving her the opportunity to acquire the home is an opportunity she is likely to be able to avail herself of. She has paid legal expenses, $12,651.19; her Lexcen at $8000 and superannuation at $27,089. The total assets are $460,240.19 from which must be deducted the mortgage of $133,596 and the Visa card of $3295. That leaves her with net assets of $323,349.19. She is entitled to 62 per cent of $349,520.19, which is $216,702.51. Therefore the wife must pay the husband $106,646.68.
By way of cross checking, the husband has his car at $5000; and superannuation at $23,871, giving him total assets of $28,871. He has the loan of $2700, giving him net assets of $26,171. 38 per cent of $349,520.19 is $132,817.67. Deducting from this the assets he has, there is a balance of $106,646.68. This is the amount that he must receive from the wife.
In the event that the wife does not make the payment to the husband within eight weeks, then the house must be sold. Although it has an agreed value, its sale price cannot be known. Excluding the home and the liability attached to it the net assets are $70,616.19. The wife has net assets of $44,445.19. She is entitled to $43,782.04 of the non-home assets. Therefore, from her share of the net proceeds of sale she must pay the husband an adjusting amount of $663.15.
This outcome, I am satisfied overall, is just and equitable.

Contact

The parties intend that they will continue to live within close proximity to each other. They have agreed that in addition to special occasion and holiday contact, the children will have contact with their father each alternate weekend and on Wednesday afternoons after school. As was his prior practice, the husband collects the children from school. He says the wife should collect the children at the end of contact.
With respect to both parties, this largely seemed to be an issue in relation to which the interests of the children were marginal. It appeared to be an issue of principle between them rather than an issue that truly emphasised the interests of the children. At worse, the parties probably live about a 15 minute drive from each other. So the issue is one of inconvenience. It cannot be said, it seems to me, that 15 minutes for either of them is burdensome. Nor could it be strongly submitted that 15 minutes earlier finish for contact or later finish for contact materially influences the quality of contact.
The relevant issue, to the extent that one can be discerned when focussing on the children's interests, is sending a message to the children that both parties make an effort in relation to contact. It also need to be ensured that the children are aware and have the opportunity to see that their parents can cooperate with each other in relation to contact. This will potentially send a powerful message to both children that whatever their parental differences may have been vis their own relationship, the parties continue to cooperate and focus as parents.
The husband's counsel submitted, I thought somewhat surprisingly, that the court would have no regard to the effort involved in the wife’s daily care of the children. It is not reasonable that the Court artificially divide parental responsibility into portions and focus purely on that part that concerns contact. As a working parent with the substantial care of the children, the demands on the wife’s time are significant. As a working parent exercising good and frequent contact to his children, the demands on the husband’s time are also substantial. They are, however, not directly equivalent to the greater demands on the wife. Therefore, it seems to me that the wife’s efforts in relation to contact must be evaluated in the context of all of the work she does in the daily care of the children and providing for them. When approached from that angle, there can be no good reason why the parties do not share the contact returns.
The wife proposes that she will collect the children on Wednesday nights, when the shorter periods of contact take place. That approach is sensible as it gives the children maximum time with their father in his milieu on Wednesdays. On alternate Sundays I can see absolutely no reason why the husband cannot make arrangements to return the children to their mother at the end of contact. That also sends a message of cooperation between he and the children's mother and I will order accordingly.
I am satisfied that the orders I make in relation to contact are in the best interests of the children.
For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate:

Date: