H and W
[2001] FMCAfam 57
•8 October 2001
FEDERAL MAGISTRATES COURT OF AUSTRALIA
H & W [2001] FMCA fam 57
FAMILY LAW – property – contribution – global or assets-by-assets approach – short marriage 17 months duration – young child – global approach applied – spouse maintenance application.
| Applicant: | D M H |
| Respondent: | C D W |
| File No: | ZP 283 of 2001 |
| Delivered on: | 30 August 2001 |
| Delivered at: | Parramatta |
| Hearing Date: | 29 & 30 May 2001 |
| Judgment of: | Ryan FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Campton |
| Solicitors for the Applicant: | Matthews Dooley & Gibson Level 4, 85 Flushcombe Road, Blacktown 2148. DX 8140 Blacktown |
| Counsel for the Respondent: | Mr Northcott |
| Solicitors for the Respondent: | John Byrnes & Associates, 160 Victoria Road, Drummoyne 2047 |
ORDERS
That the husband pay to the wife the sum of $70,000.00 by way of property settlement within 42 days of the date of these orders.
In the event that the husband fails to comply with Order (1) above, that the husband forthwith do all such things to list the property situate at and known as 11 L Close, “O” in the State of New South Wales 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 (2) above be disbursed as follows:
b)Firstly, in payment of the costs of sale including the real estate agent’s fees and legal fees;
c)To discharge the mortgage to the St. George Bank;
d)In payment of any outstanding rates and charges;
e)In payment of the sum of $70,000.00 to the wife, together with interest calculated in accordance with the rate prescribed in the Family Law Rules from the date of default until the date of payment of monies to the wife;
f)The balance to the husband.
Within 28 days of the date of these orders the respondent husband deliver to the wife the following items:
·2 small black coffee tables
·Yellow cane table
·Planter pole and pots
·Table cloth
·Pots and pan set
·White board
·Long deck chair
·Passport
·Phone book
·Dress/jacket from Bali
·Upright fan
·3 cats
·microwave
·blue toaster
·yellow kettle
·2 blue/yellow dinner sets
·iron
·emu egg
·bottle Moet
·bedroom daisy set
·tapestry
·Skirt Bali
·Croqueted quilt
·2 American Porcelain Dolls
·Bride Porcelain Doll
That the husband pay to the wife by way of spousal maintenance in the sum of $100.00 per week commencing from 30 May 2001, the first payment to be made within seven (7) days of these orders, which order is to continue until the wife resumes full-time employment or H starts school.
That unless otherwise specified in these orders:
1.Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides for the conditions for payments out of such entitlements.
2.Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
That all documents produced under subpoena be collected by the solicitor who issued the subpoena and all documents be forthwith returned to their owner.
That all exhibits be returned at the expiration of 28 days except if an appeal is lodged.
All outstanding financial applications are dismissed.
FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA
ZP 283 of 2001
D M H
Applicant Wife
And
C D W
Respondent Husband
REASONS FOR JUDGMENT
The proceedings
These are proceedings for the adjustment of property and for spousal maintenance.
The applications
D M H (W) (“the wife”) filed an Application for Final Orders in the Family Court on 7 June 2000. Subsequently she filed an amended application on 11 May 2001. This document contains the orders sought by her at the hearing. In essence the orders she sought were:
(1)that the husband pay her $100,000.00 by way of property adjustment
(2)That specified items of furniture and personalty be given to her.
(3)That each party otherwise retain items of property and financial resources in their respective possession and indemnify the other for any liabilities attached thereto.
(4)Spousal maintenance in the sum of $150.00 per week.
C D W (“the husband”) filed a response to the application for orders in the Family Court on 17 August 2000. At the commencement of the hearing he filed an amended response which response identified the orders he sought at trial. In summary, the orders he sought were:
(1)That he pay to the wife the sum of $10,000 by way of property settlement, which amount included provision for spousal maintenance;
(2)That the parties otherwise be declared the owner inter parte of property in their respective possession and indemnify the other in relation to any current liability;
(3)That the wife’s application be otherwise dismissed.
Short history
The husband was born on 17 June 1960 and is now aged 40 years. The wife was born on 30 October 1968 and is now aged 32 years.
They commenced cohabitation on 29 August 1998 and were married on 11 September 1999.
The parties separated on 23 February 2000. There is one child of their marriage, H J W, born 9 October 2000. H lives with the wife. The husband has not met H.
The marriage still subsists.
The evidence
The applicant wife relied on the following evidence:
·Her affidavit sworn and filed 10 May 2001 and her oral testimony;
·Her financial statement sworn and filed 10 May 2001;
·Two affidavits of J K sworn and filed 23 May 2001.
The respondent husband relied upon the following evidence:
·His affidavit sworn 14 May 2001 and filed 15 May 2001 and his oral testimony;
·His financial statement sworn 16 August 2000 and filed 17 August 2000.
During the course of the proceedings agreement was reached as to the value of 11 L Close, “O” and 24 C Street, “W”. As a consequence of the agreement Mr K was not cross-examined. The agreement reflected his expert opinion of the value of the properties.
Both parties tendered documents that became exhibits in the proceedings.
The issues
The primary issues are these:
·Whether the parties’ contributions should be evaluated using a global or asset by asset approach;
·The effect of the wife’s contribution to the child;
·The value of the husband’s interest in J Pty Ltd;
·Whether it is reasonable to require the wife to take in boarders to diminish any need for spousal maintenance.
Background facts
The husband has two children by his former wife, M B. They are S T W born 23 April 1994 and J L W born 22 July 1995. Both children live in New Zealand with their mother.
The parties met in September 1997. They became engaged in June 1998. They are in dispute as to the date when they commenced cohabitation. I am satisfied that co-habitation commenced on
29 August 1998 when the applicant moved into the respondent's home at “O”.
Prior to the commencement of cohabitation each party had assets and financial resources which they subsequently brought into the marriage.
Approximately 10 years ago, in about 1991, the husband purchased a car rental company. He acquired the business on the basis that he would take over its operation and thereafter assume responsibility for all outstanding debts and obligations. This meant that the husband accepted responsibility for outstanding liabilities in the approximate sum of $150,000. The business operates as J Pty Ltd trading as V R. Exhibit A[1] reveals that J Pty Ltd was registered on 20 January 1992. The husband was appointed as a director on 6 May 1992 and his former wife M B was appointed as the other director on 3 November 1992. They are the only directors. There are 12 ordinary A class fully paid shares issued. The husband has 11 shares and Ms B has one. Ms B identifies her shareholder address as being at the husbands home. In his affidavit and oral testimony the husband asserted that the shareholding comprised two issued shares, one each held by Ms B and him. I find that he was mistaken and the shareholding was and is as contained in the ASIC extract. He is I am satisfied the beneficial owner of all shares. Ms B plays no role in the company and the only reasonable conclusion that could be drawn from the evidence is that the husband owns the company totally.
[1] an ASIC extract dated 29 May 2001
The husband asserted that the value of his interest in J Pty Ltd at the commencement of co-habitation was $20,000. This assertion relies on the advice of his accountant, Peter Crocker. Mr Crocker values the company at $40,000 as at 20 November 2000[2] and concludes that the husbands 50 % shareholding means his interest equates to $20,000.00 at that time. Mr Crocker has been the business' accountant for 7 years. His valuation is provided after the apparent embezzlement of monies by the husbands brother. I infer that the fraud adversely affected the value of the business, but to what extent is not in evidence before me. I cannot speculate on this. I am satisfied for the same reasons identified in paragraph 13 that the husband is the beneficial owner of all shares in J P/L at the commencement of co-habitation. His interest in the business at the commencement of co-habitation is thus valued at $40,000.00.
[2] Annexure A husbands affidavit
On 29 November 1993 the husband purchased his home at 11B L Close, O (“O”). He paid $225,000 for the property, $202,500 of which was financed by way of a mortgage from the St. George Bank. J P/L paid the mortgage and other outgoings on “O”. At the commencement of cohabitation the principal due under the mortgage had not reduced.
The wife also owned real estate of which she was the sole registered proprietor at the commencement of cohabitation. She owned 24 C Crescent W ("W"). It has an agreed value at the commencement of cohabitation of $175,000. The property was subject to a mortgage to the Commonwealth Bank, which liability is agreed at $150,000.
In about August 1997 the husband invited his brother to join the business. He did join. Thereafter the husband was primarily responsible for running the car fleet and his brother attended to administration. They executed a financial agreement, which agreement included his brother's partner. The agreement authorised his brother and partner to draw from the company to make repayments, inter alia, towards their Gold Coast unit.
In about March 1998 the parties relationship became serious and they started spending periods of time at each others homes. This pattern continued until August 1998. The wife's father lived at her home and they spent greater time at “O”.
On 29 August 1998, four weeks after they had decided to live together the wife moved from “W” to “O”. The husband transported her belongings to “O”, needing three or four car trips to do so. The wife decided to rent out the W property. Over about 7 days the parties prepared the property which included fixing and reinstalling fly screens, cleaning the windows and general maintenance. The work was carried out over a period of time until the property was tenanted. From November 1999 the property was let for $250.00 a week, which money was received by the wife. She paid the mortgage instalments to the Commonwealth Bank at $250.00 per week. The required payments were $933.00 per month[3]. She paid agents fees, maintenance and repairs and other expenses in relation to the property. She conceded that she received no net benefit from “W” in an income sense during cohabitation. J P/L paid insurance and rates for “W” totalling $2,166.00. I am satisfied that the expenses were greater than the income and that the shortfall was funded by the wife's salary.
[3] Annexure C husbands affidavit
The wife had some savings, she alleges $3,000 while the husband concedes only $1,100.00. No documentary evidence was provided that would have enabled a specific finding. I find therefore that the wife had savings of at least $1,100.00.
The value of the husbands furniture is also a matter of contention. The parties disagree however neither provided any valuation evidence. The husband alleged $25,000.00 although agreed that at the date of hearing it was worth $10,000.00. In the absence of evidence that he disposed of large amounts of his furniture I am not satisfied that his furniture was as valuable as he alleges. Not only didn't he dispose of furniture he acquired some. He bought a television and television unit for $5,800.00. He also has the lounge suite purchased on M B's credit card. Because the difference between the agreed value at the date of hearing and the asserted higher value is not adequately explained on the evidence I find that the value is no greater than agreed for the hearing.
The wife sold furnishings and household items as I identify in paragraph 25 of these reasons. She too compromised the value of her furniture at the date of hearing. She has acquired furniture for which she paid $4,000.00 after separation, which furniture is included in the agreed value. I find that her furniture should be valued at $2,000.00 at the time of cohabitation.
I find that the parties’ assets and liabilities as at the commencement of cohabitation were as follows:
| Assets as at the commencement of cohabitation | $ |
| 24 C Crescent, “W” (W) agreed | 175,000 |
| Motor vehicle (W) agreed | 7,000 |
| Wife’s furniture | 2,000 |
| Wife’s savings | 1,100[4] |
| AMP shares (W) agreed | 4,000 |
| Jewellery (W) | NK |
| 11B L Close, “O” (H) | 290,000 |
[4] Husband's concession
| Husband’s shareholding in J Pty Ltd (H) not agreed | 40,000 |
| Husband’s furniture | 10,000 |
| Husband's savings not agreed | 500 |
| Husbands cash on hand | 200 |
| Jewellery (H) agreed | 4,000 |
| TOTAL ASSETS | 533,800 |
| Liabilities as at the commencement of cohabitation | $ |
| Mortgage secured against “W” property (W) agreed | 150,000 |
| Mortgage secured against “O” (H) agreed | 202,500 |
| TOTAL LIABILITIES | 352,500 |
| NETT ASSETS | 181,300 |
| Financial resources – wife’s superannuation (preserved) | 2,043 |
In August 1998 the husband gave the wife an engagement ring that was insured for $16.680. The purchase price is not in evidence nor is its current value. He later bought the wife an eternity ring for which the husband paid $1,785.00, a pendant for which he paid $1,574.00 and a bracelet for $1,295.00.
On 31 December 1998 the husband established a St George bank account in his sole name "the wedding account". Both parties deposited money into the account, although only the husband could make withdrawals from it. The wife made 8 deposits into the account. These included the proceeds derived from the Barina, sale of AMP shares and proceeds of the sale of some household possessions. In late 1998 she sold her washing machine, dryer, lounge, television, bed and other items for which she received between $1,000.00 and $2,000.00. As some money was spent on household linen, mats and unspecified furniture for “O” the money placed into the wedding account was necessarily modest. The remaining deposits were drawn from her wages. The husband made all other deposits. Other than this account no other account was established into which both parties contributed any money. They maintained separate accounts.
In May 1999 the wife received $7,000 for her Barina which monies were deposited in the joint wedding account.
In mid 1999 the wife sold her AMP share holding for $4,000. Those monies were deposited into the joint wedding account.
The wedding expenses were drawn from the wedding account. Excluding the wife's rings the account paid out $28,049.50 for the wedding. It was the wife's wish to have a grand wedding, a desire the husband accepted and I am satisfied primarily funded.
At the time the parties commenced cohabitation the wife was employed as a manager at Woolworths, B H. She worked there full time until her resignation became effective on 19 November 1999. She had already found other employment prior to her resignation and on 21 November 1999 she commenced part time work at a local dry-cleaners.
The husband had discussed with the wife from about the time of their marriage that he would like to bring his children to live with him in Australia. This needed their mothers agreement. After he was told that his daughter had been abused, he spoke to his former wife during the first week of December 1999 again about the children's residence. When the wife changed her employment the husband had not had an answer from the children's mother about his proposal that his children reside with him. I do not accept the wife's claim that her change in employment was influenced by the possible care of the children.
On 8 December 1999 the husband travelled to New Zealand and collected his children. They returned to Australia on 17 December 1999. He intended that they would live with the parties. The husbands parents also lived at “O”. During the six weeks that the children lived at “O”, the husband's parents were primarily responsible for the children's day to day care. The children remained with the parties until they returned to their mother in New Zealand on 26 January 2000. That same day the wife confirmed that she was pregnant. The parties argued and separated for the first time when she left the home.
While the husband was in New Zealand collecting the children the wife used a credit card issued to M B to buy a lounge suite. She paid $825.00. Although the card had issued to Ms B, it had been sent to the husband's home. It was a replacement card issued after Ms B's purse was lost. With the husband's knowledge the wife used the card in the USA whilst they were travelling. On his behalf J P/L made the card repayments. I prefer the wife's evidence that the husband gave her the credit card and expected her to use it as if it was her card. After separation the wife used the card to buy clothes. She did not have the husband nor Ms B's authority to continue to use it. Nothing however turns on this. The husband telephoned his former wife and she cancelled the card.
On 10 February 2000 the wife returned to the home and removed some of her personal belongings.
The parties briefly attempted to reconcile. They were not successful and finally separated on 23 February 2000.
Shortly after separation the husband learned that his brother had drawn large sums of money from the business, much greater than the financial agreement authorised. Upon being discovered his brother and partner left the company and returned to Queensland. They took with them a large volume of the companies records. The husband reported the matter to the Police and relevant corporate authorities. He has embarked on a tortuous process of attempting to reconstruct from duplicate records held by others, for example banks, the companies records. He believes about $140,000.00 was wrongfully removed by his brother. The husband has retained solicitors and plans to initiate proceedings in an attempt to recover the monies. He says, and I agree, that the likelihood he may successfully recover the monies, either whole or in part, is at best speculative. The husband has been unable to prepare any financial or taxation returns for the year ended 30 June 2000.
In spite of the wife's many requests for delivery of her personal belongings, the husband delayed in permitting her to have them. Delivery was finally arranged, using the wife's girlfriend to sign off delivery. The husband forwarded the items identified in annexure "X" to his affidavit to the wife.
The wife stopped work shortly prior to H's birth. She stopped paid employment and started to receive pension support from Centrelink. Such was the parties relationship that the first notice the husband received that his son was born, was when he a child support assessment. He was assessed as liable to pay child support at $63.00 per month, commencing 16 October 2000. He challenged H paternity and the parties agreed to undertake DNA parentage testing. Silbase reported on 5 December 2000[5] that the husband is the child's father to a 99.9999% degree of certainty.
[5] Annexure D wife's affidavit
On 3 November 2000 the husband's child support liability increased to $103.58 a month.
Since separation the wife has purchased a car for which she paid $10,000.00 and furniture for $4,000.00. She says that these funds were borrowed from a friend J J. Ms J did not give evidence in these proceedings nor was any documentation provided evidencing the advance.
The wife resumed part time work at the dry cleaners shortly prior to the commencement of the hearing.
The husband has taken in a boarder, who pays him $100.00 per week to live at “O”.
Neither party has repartnered.
Relevant law
The approach to the determination of an application under Section 79 is well established by authority (In the Marriage of Lee Steere and Lee Steere[6]; In the Marriage of Ferraro[7]; In the Marriage of Clauson[8] the process ordinarily 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 section 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 section 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.
[6] (1985) FLC 91-626
[7] (1993) FLC 92-335
[8] (1995) FLC 92-595
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell[9].
[9] (1999) FLC 92-877
An important issue in these proceedings has been whether the court should approach the assessment of the parties entitlement using a global approach or the asset by asset approach. The global approach involves the division of the parties assets on an overall proportion of the global view of the assets. Tuck and Tuck[10]. The asset by asset approach involves a determination of the parties interests in individual items of property. McMahon and McMahon[11]. In Norbis v Norbis[12] the High Court held that either approach is legitimate, and that in some cases either approach may be adopted in part or in whole. An examination of the reported cases reveals that the global approach is the generally preferred approach and the approach most frequently applied. Zyk v Zyk[13]. The rationale for its predominance is identified in the following passage taken from Norbis v. Norbis supra[14].
"Although it is natural to assess financial contributions under sec. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.” per Mason and Deane JJ.
[10] (1981) FLC 91-021
[11] (1995) FLC 92-606
[12] (1986) 161CLR 513
[13] (1995) FLC 92-644
[14] at p.75,168
The asset by asset approach has been adopted in those matters where the marriage is of short duration and during which the parties have strictly divided and kept their own assets separate from each other. McMahon supra. An apparent distinction, even when these two features apply is the importance of s75(2) factors, including the presence or absence of children of the marriage. In neither McMahon supra nor Quinn and Quinn[15] was there a child of the parties. See also Kerr and Kerr [16].
[15] (1979) FLC 90-677
[16] Full Court of the Family Court 11 August 1995 (unreported)
The wife makes an application for spouse maintenance. In Bevan and Bevan[17] the Full Court of the Family Court identified the process for assessing a claim for spouse maintenance. It said[18] this requires:
"1.a threshold finding under s72;
2.consideration of s74 and s75(2);
3.no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
4.discretion exercised in accordance with the provisions of s74, with reasonableness in the circumstances" as the guiding principle."
[17] (1995) FLC 92-600
[18] at 81,981-82,982
A claim for spouse maintenance that is heard at the same time as an application for property adjustment adds an extra step to the process. The sequence of determining the applications is important and the property application must be determined before the spouse maintenance claim is considered. This is to ensure that the terms of any order made in the property claim are considered in the spouse maintenance application. Clauson supra.
Assets and liabilities as at the date of hearing
The parties reached agreement as to the value of most assets and the quantum of liabilities.
I find that the assets, liabilities and financial resources of the parties as at the date of the hearing are as identified in the following table.
| Assets as at the date of hearing | $ |
| 24 C Crescent, “W” (W) agreed value | 185,000 |
| Furniture (W) agreed | 4,000 |
| Motor vehicle (W) agreed value | 10,000 |
| 11B L Close, “O” (H) agreed value | 350,000 |
| Furniture (H) agreed value | 10,000 |
| Jewellery (H) agreed value | 1,500 |
| Jewellery (W) | 1,500 plus |
| Shareholding J Pty Ltd (H) | 40,000 |
| Woolworths shares (W) agreed value | 3,000 |
TOTAL ASSETS: | 605,000 |
| Liabilities as at the date of hearing | $ |
Mortgage secured on “W” (W) agreed | 145,000 |
| Mortgage secured on “O” (H) agreed value | 175,000 |
| Joyce Jones (W) | NIL |
| TOTAL LIABILITIES: | 320,000 |
TOTAL NET ASSETS: | 285,000 |
Financial resources | $ |
| Wife’s preserved superannuation benefit | 10,021 |
| Husband’s proposed litigation claim against his brother | NIL |
The wife’s engagement ring comprised a one-carat ring, she also has a half-carat diamond pendant, and a diamond studded bracelet, gold bracelet given to her at the wedding reception, another gold bracelet, her eternity and wedding rings. The court was not given satisfactory valuation evidence of this jewellery. The wife’s assertion that her jewellery has a current value of $1500 is implausible. Her engagement ring and diamond pendant, I am satisfied, has significantly greater value than that alleged by the wife, although the court is not in the position to make findings as to its precise value.
I am not satisfied that the wife has a continuing liability to J J. No documentation was provided evidencing the advance or corroborating that the wife has a continuing debt to Ms J. The advance and conditions for repayment are both matters that are, in the ordinary course, readily provable.
Section 79(4) contributions
I have already made findings about the assets and liabilities held by each party at the commencement of cohabitation. The husband had net assets worth $142,000.00 while the wife's net assets were worth $39,100.00. Both parties were in full time employment, until the wife stopped work for Woolworths and started part time work with B’s Dry Cleaners. The wife earned between $600-700 net per week whilst at Woolworths. Until November 1998, one half of her net income maintained the “W” property. Once “W” was tenanted, the drain on her salary reduced and she had a greater net disposable income. I do not accept that the rental income from “W” was applied to make provision for the wedding. The wife applied some of her net income to household expenses, including the groceries and entertainment. She spent the balance on herself. At the commencement of cohabitation the husband was drawing $350 per week on average from the company. In addition the company paid for the “O” telephone account, its water rates, council rates and mortgage. The company paid for house and contents insurance at “O” and the husband’s visa card. The company met the wife’s costs for a trip to New Zealand, in the amount of $3,420.00. The wife made other trips to New Zealand that she met from her own income. The husband received a fully serviced vehicle from the company throughout cohabitation. I accept his that he used his drawings to pay some of the grocery expenses and to share the party’s personal living expenses. Although the wife denies it, I am satisfied that throughout the course of cohabitation the husband applied the entirety of his income to the betterment of the family. By comparison the wife was able to maintain “W” and spend a greater percentage of her income on her own lifestyle until she started part-time work. I infer that with her reduced hours and the nature of her work in the dry cleaners that she earned considerably less at B's than she earned at Woolworths. That this must be so is confirmed by the earnings she currently receives in the dry cleaners. Because she lived at “O” the wife was able to make “W” an income-producing asset such that her contribution to its maintenance was reduced. Thus the husband made an indirect contribution to the maintenance of “W”.
There was no change to the value of the husband’s interest in J Pty Limited, an asset that the wife made no contribution to during the course of cohabitation. The husband owned his household furnishings and otherwise the furniture as at the date of hearing was contributed to by his payment for the lounge suite bought on M B’s credit card and television and its unit.
The husband made a small direct financial contribution to “W” as I have already found[19]. The wife made no direct financial contribution to “O”. Nor did the husband make any financial contribution to the acquisition of the AMP nor the wife’s Woolworths shares. The Barina was owned by her, as were her household furnishings. He made no contribution to the acquisition of the wife's car and furniture purchased after separation.
[19] paragraph 19
Thus, the husband’s direct financial contributions significantly exceeds the wife when evaluated comparatively.
The wife alleged that she made a contribution to the maintenance and improvement of “:O”. Her evidence in this regard was exaggerated. During the course of the relationship new timber flooring and a new interior archway were built at “O”. Part of the interior of the house was painted. A professional tradesman erected the archway and the wife assisted to the extent of cleaning the paintbrushes when the painting was done. She was involved in the choice of flooring. Although he denied it, I am satisfied that the wife did undertake household cleaning. This was the most meaningful contribution by her to the “O” property. I find that the husband’s parents, who lived in the property and were not in paid employment, contributed to the housework. The husband contributed to the maintenance of “W” to the extent outlined in paragraph 19. His contribution was minimal. Overall, I am satisfied that the husband’s non-financial contributions were very slightly greater than the wife’s.
The wife's contribution to the welfare of the family is particularly significant taking into account H’s birth occurred after separation. She has cared for H without the husband’s assistance. The husband has paid minimal child support since separation. Both parties otherwise made an equivalent contribution to the housework prior to separation. The wife's contribution as homemaker and parent significantly exceeds the husband’s.
The orders I propose will not affect the earning capacity of either party.
The husband is assessed to pay child support at $103.58 a month. His contribution, although based on the formula is an inadequate. On the wife's behalf her counsel strongly submitted that the husband was unlikely to pay child support at a proper rate in the future. He submitted this was apparent because the husband challenged paternity, paid only a small amount to date, was in business and thus able to minimise his taxable income and artificially minimise his child support and was generally unreliable. The husband was adamant that he intended to make a proper contribution to his son, as he does to the costs of his other children. I accept that his manifestly inadequate response has been caused by his emotional response to the failure of his marriage and his inability to see his child. The parties were making good progress in resolving the impasse vis contact, an outcome that will influence the husbands attitude positively in favour of child support. Although at law there is no nexus between the two, many people respond otherwise. I am satisfied that he will make proper child support payments in the future.
I find, therefore, that the parties total contribution should be assessed as being 75 percentage as by the husband and 25 percentage by the wife. To the extent that the husband submits the expenditure applied to the wedding was an extravagance attributable only to the wife and that she must accept financial responsibility for it I reject the submission. Quite clearly this was a joint extravagance that both enjoyed to the hilt. It was consistent with their briefly flamboyant lifestyle.
Section 75(2) factors
(a) The husband is 40 years old and is in good health. The wife is 32 years old and is also in good health. I make no adjustment pursuant to the sub section.
(b)The husband works full-time in his car rental business. His evidence is to the effect that he wishes to continue to do so and is able to do so. He currently draws $200 per week as either wages or director’s fees. In addition, he receives financial benefits from the business. These are identified in Annexure A to his financial statement filed 17 August 2000. They comprise $200 per week motor vehicle expenses, approximately $10 per week household telephone accounts, $50 per week Visa card payments, $20 per week council & water rates on “O”, St. George Bank mortgage on “O” of $300 per week, and home contents insurance $20 per week. In addition, his former wife Ms B is a director and shareholder of J Pty Ltd. The husband’s agreed child support commitment is paid by J Pty Ltd to M B in the sum of $6,500 per annum. I have already made findings that J Pty Ltd is the alter-ego of the husband and that he is the beneficial owner of the share issued to M B. He receives $100.00 each week from a boarder. The wife is employed two days per week, Saturday and Sunday, in a dry cleaners. She receives $170 net per week. Her expectation is that she will be able to continue working those days for the foreseeable future. She trained during the course of the marriage as a nail artist. At the commencement of cohabitation and until November 1999 the wife worked at Woolworths, transferring from the Central Coast store to Baulkham Hills in November 1998. She worked with Woolworths for approximately 14 years and at the time of commencement of cohabitation was a delicatessen manager. In that capacity she earned approximately $700 net per week. She gave up her employment in November 1999 and took up part-time employment with a dry cleaner, working 30 hours per week from November 1999 until September 2000. I am satisfied that the wife has the physical and mental capacity, together with relevant work experience and qualifications to work on a full-time basis in a dry cleaning store, in a managerial capacity in a large store and as a nail artist. The parties have the property identified earlier in these reasons. I make an adjustment pursuant to the sub section in favour of the wife.
(c)H is eight months old. He was born after separation and there is no dispute that he will continue to live with the wife. Because of his age, the wife has adjusted her working hours, working two days per week. But for the care of H, I am satisfied that she could return immediately to full-time employment. Her decision to care for H and work part-time is a reasonable one. She has been readily able to arrange child care and pays $20 a day to a friend. The nature of her qualifications will give the wife the opportunity to take up relevant employment, also on a part-time basis as H gets older. When he starts school at age five, the wife will be able to take up further opportunities for employment and at the same time reduce the costs associated with H’s pre-school or day care expenses. However, she will have the care of H and the opportunity for full-time employment is materially affected as a consequence. I find that this subsection requires an adjustment in the wife’s favour.
(d)Both parties have a duty to maintain H. The husband also has a duty to maintain his two children by his former wife. Each has the commitments identified in their financial statements. These commitments are modest and will only enable each to have a modest standard of living. The wife has the capacity to return and live in her “W” property. It has been rented since November 1999, returning $250 per week. The rental income does not meet the entirety of the outgoings at “W”. Were she to return and live in the property herself, her financial situation would deteriorate because the outgoings would continue without the ameliorating effect of the rental income. The husband submits that the wife should return to “W” and take in boarders, just as he has taken in a boarder. The wife does not wish to take in a boarder whilst H is so young. This is a reasonable decision in my view. I make an adjustment in favour of the wife pursuant to the subsection.
(e)Other than already identified, neither party has a responsibility to support any other person. I make no other adjustment under this subsection.
(f)The wife receives a Social Security benefit in the sum of $225.00 per week. She has superannuation entitlement as identified in paragraph 50. She is comparatively young and will not be eligible to receive her benefits for at least 25 years. I make no adjustment under this subsection.
(g)During their brief period of cohabitation, the parties enjoyed a flamboyant lifestyle. They saved for and celebrated their wedding in comparatively extravagant style and considerable sums of money were spent purchasing jewellery for the wife. They travelled overseas for their honeymoon. Subsequent to separation, both have endured a reduction in their standard of living. The husband has suffered a serious financial setback as a consequence of the apparent extortion of company monies and resources by his brother. The wife has elected to continue living in Sydney and has not returned to her home at “W”. The “O” property comprised a superior home to “W”, if only by reason of its value. Counsel for the wife submitted that the wife was entitled to maintain the standard of living she enjoyed during the period of the marriage. Cohabitation was 17 months. The wife enjoyed a higher standard of living than what she was used to prior to the commencement of cohabitation. The length of cohabitation is relevant to the reasonableness of maintaining the standard of living enjoyed during the period of cohabitation after separation. Because the period of cohabitation was so short, I do not accept the submission that the wife is entitled to maintain the standard of living she enjoyed during the time she lived with the husband. The wife has a full household of furniture, as does the husband. Both parties have suffered a diminution in their standard of living subsequent to separation and neither obviously spends money on extravagances nor are they wasteful. I make no adjustment under this subsection.
(h)I make no adjustment under this subsection.
(j)I make no adjustment under this subsection.
(k)This marriage was a short marriage. I make no adjustment under this subsection.
(l)The wife’s evidence, which I accept, is that she wishes to be available as a full-time parent for H and to be available for him until he commences school each day. She has compromised that commitment and now works Saturdays and Sundays. She has the capacity to take on further part-time work as H gets older. I am satisfied that she will not return to full-time paid employment until H is at least 4 years old, and that then she may reasonably limit her hours of employment to approximately coincide with school hours. The nature of her skills ought reasonably to enable her to do so. I make an adjustment under this subsection in favour of the wife.
(m)The husband has taken in a boarder. The boarder pays $100 per week. Otherwise there are no relevant financial circumstances arising as a consequence of the cohabitation. The wife resides with H alone. I make no adjustment pursuant to this subsection.
(n)The husband will pay $70,000.00 to the wife. Otherwise they will each keep the property and carry the liabilities identified in paragraph 50. I make no adjustment pursuant to the subsection.
(na)The husband is assessed to pay child support in the sum of $103.58 a month. His contribution is a small one and is considerably less than the child support paid for his elder children. He will be liable to pay child support for 17 more years. I make no adjustment pursuant to the subsection.
(o)The wife has jewellery that is worth more than the value quantified in these reasons. The value alleged by her is an understatement of its current value. Because the evidence is inadequate I am unable to make findings as to its true value other than to find it is considerably greater than the conceded $1,500.00. I make a tiny adjustment in the husband's favour pursuant to the subsection.
(p )This issue does not arise.
Having regard to all of the section 75(2) factors I find it appropriate that there should be an adjustment in the wife’s favour having regard to sub-section 75(2)(b)(c)(d) and (l) as moderated by section 75(2)(o). The appropriate adjustment to make in the wife’s favour is 20 per cent.
Section 79(2) — is this a just and equitable outcome?
I find following the parties seventeen month cohabitation that their contributions throughout the cohabitation were 75 percentage in favour of the husband and 25 percentage by the wife. The wife will have the primary ongoing responsibility for the care of the party’s son who is not yet one year old. This responsibility will impinge upon her capacity to participate in the full time paid workforce for some years to come. The husband has secure and appropriately paid employment. I have made detailed findings concerning the application of section 75(2) and do not repeat them. Balancing all these factors, I find that it is appropriate that the party’s net assets should be divided as to 45 per cent to the wife and 55 per cent to the husband.
The global approach is the proper approach to apply in assessing the parties contributions. This is so even taking into account the manner in which the parties separated most of their financial and non financial contributions to the assets. Were it not for the impact of the section 75(2) part of the exercise, particularly because of the wife's care for H Mr Northcott's submissions would have had greater force. However, in the particular circumstances of this short marriage not only is the global approach more convenient it is the approach that ensures a proper evaluation of the parties overall contributions.
The husband will have the benefit of his business and “O”. He will need to borrow money to satisfy the wife’s claim for property orders. I am satisfied that he can do so without placing himself in financial difficulty. The wife will continue to have “W” and can either apply the capital sum she will receive in reduction of the mortgage or use it to produce income.
The outcome of the application of section 79(4) and section 75(2) has resulted in a distribution favourable to the husband 55 per cent as to the wife’s 45 per cent I am satisfied is just and equitable within the meaning of section 79(2). The reason for that is that the section 79 exercise requires that I give proper weight to the husband’s significantly greater initial contribution, to the wife’s initial contribution as well as her financial future having regard to her care of H. A few small items of personalty remained the subject of dispute over who should have them. The dolls should be the wife's, they should be with the cabinet it is agreed she will have. Ultimately no substantial submissions were made that would justify the wife taking the stereo. It will remain with the husband.
Thus the wife will receive $128,500.00 of the net assets. She currently has assets valued at $58,500 and so will receive an additional sum of $70,000.00 payable by the husband. In the event he does not make the payment to her she will be entitled to enforce the payment against the husband’s assets.
I was pressed by the wife's counsel to make credit findings adverse to the husband. Whilst there were aspects of the husbands evidence that were unsatisfactory, so too were may aspects of the wife's evidence. For example her evidence relating to the commencement of cohabitation and contribution to the “O” property. This is not a matter that justifies a general finding as to credit. I have accepted each party’s evidence in respect of different factual matters that arose. To do otherwise would over-emphasise the difficulties that I identified in the husband’s evidence whilst minimising the wife's.
Spousal maintenance
The wife brings an application under section 74 and section72 for the payment of spousal maintenance. The husband opposes her application challenging her need and alleging that he is not reasonably able to pay maintenance. Because she has the care of a child who is not yet one and a reduced opportunity for employment as a consequence, the wife has shown that she is unable to adequately support herself. I must disregard her Centrelink benefit and agree with her submission that the rental from “W” ($250) is neutral. Putting aside the expenses incurred for H and for “W” she has weekly expenses of $359.50. This includes $212 identified in paragraph 54 of her Financial Statement, half her rent $77.50 and half her insurance $16.00 (contents) plus credit card payments at $14.00. She pays $40.00 per week babysitting charges while she is working. The husband submitted that the wife could give her tenant a notice to quit and that she and H could live at “W”. She too, it is submitted, could take in boarders. This submission is an unreasonable one given H’s age and the uncertainty inherent with taking in boarders. It would be unreasonable in my view to require the wife to do so. In six weeks she will receive $70,000 by way of property adjustment. If this is invested, she could expect a return of 4.86%[20]. This will result in a pre-tax return of $65.42. Alternatively she can make a capital reduction on her mortgage, which would reduce her repayments by about half.
[20] 90 day bill rate Australian Financial Review 29 August 2001
The husband has a true income of approximately $55,000 per annum.[21] His net living expenses are $280 per week[22]. Thus he has the capacity, taking into account the borrowings he must raise to comply with the order under section 79, to make a payment by way of spousal maintenance in the sum of $100 per week.
[21] paragraph 62(b)
[22] Financial Statement sworn 28 May 2001 page 2.F
I am confident that the wife, by reason of her qualifications and experience in the work force, has the capacity to return to full time work whenever she chooses to do so. Her decision to work part time at present is a reasonable one having regard to H’s age. She is likely to return to full time employment receiving money comparable to that which she earned at Woolworths at least by the time H starts his full time schooling. Until H starts school full time the wife will be unable to support herself adequately and the husband will be ordered to contribute to her support. Once H starts full-time school the wife will be able to return to work and earn sufficient income to provide for her own reasonable needs without support from the husband.
The wife's application for spouse maintenance is contained in her amended application filed on 11 May 2001. The husband was entitled to consider the application and take advice on it. I am satisfied that the order for the payment of spouse maintenance should commence from the date of the hearing. The legitimacy of the wife's need for spousal maintenance was apparent by the completion of the hearing and the order will be effective from that day.
For these reasons I make the orders identified at the beginning of the judgment.
I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of Ryan FM
Associate:
Date: 30 August 2001
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