Haddock & Haddock
[2007] FamCA 747
•20 July 2007
FAMILY COURT OF AUSTRALIA
| HADDOCK & HADDOCK | [2007] FamCA 747 |
| FAMILY LAW - PROPERTY - Settlement in relation to marriage - Inheritance - Non-disclosure |
| Family Law Act 1975 (Cth) - s 75(2), s 75(2)(e), s 75(2)(o), s 79(2), s 79(4) |
| Hickey and Hickey (2003 FLC 93-143; 30 Fam LR 355 Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 James and James (1978) FLC 90-487 Heath and Heath; Westpac Banking Corporation (1983) FLC 91-362 Bonnici and Bonnici (1992) FLC 92-272 Norbis and Norbis (1986) FLC 91-712 |
| APPLICANT: | Mr Haddock |
| RESPONDENT: | Mrs Haddock |
| FILE NUMBER: | SYF | 2303 | of | 2006 |
| DATE DELIVERED: | 20 July 2007 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Johnston JR |
| HEARING DATE: | 25 and 26 June 2007, 19 July 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Watkins |
| SOLICITOR FOR THE APPLICANT: | Conditsis & Associates, Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Johnston |
| SOLICITOR FOR THE RESPONDENT: | Brazel Moore, Lawyers |
Orders
That the husband and the wife forthwith do all things and sign all documents necessary to enable the former matrimonial home situate and known as P property in the State of New South Wales, being the whole of the land comprised in Certificate of Title bearing Folio Identifier …, to be sold by private treaty for the best price reasonably obtainable.
That in the event of the former matrimonial home failing to be sold by private treaty after three (3) months from the date of listing of the property for sale, the parties shall make all such arrangements and do all such things and sign such documents and equally pay all moneys necessary to procure a sale of the former matrimonial home by public auction at a reserve price to be agreed upon between the parties and failing agreement, at a reserve price determined by the auctioneer.
That subject to Order 4 hereunder, following the sale of the former matrimonial home, the proceeds of sale be disbursed as follows:-
(a) payment of Real Estate Agent’s commission;
(b) adjustment of rates and taxes;
(c)payment of legal costs and disbursements and other ancillary costs associated with the sale;
(d)payment of 60.95 percent of the balance to the husband;
(e)payment of the remaining 39.05 percent to the wife.
That pending completion of the sale of the former matrimonial home, the Wife shall –
(a)have exclusive occupation of the former matrimonial home to the exclusion of the husband; and
(b)be responsible for the payment of all rates, taxes and other outgoings payable in respect of the former matrimonial home.
That as between themselves the husband and wife shall respectively be entitled to keep all other property and financial resources in their respective possession, care or control not otherwise provided for by these orders including but not limited to all items of personal property, superannuation, savings, motor vehicles, furniture and furnishings, household effects, choses in action, and the like in his or her possession as at the time of the making of these orders.
That the husband and wife do all things and sign all documents necessary to give effect to these orders.
That in the event that either party refuses or neglects to sign any deed or instrument necessary to give effect to the orders herein within 14 days of a written request to do so, then the Registrar of the Court is appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and do all acts and things necessary to give validity to the operation of the deed or instrument.
That all exhibits be released.
That both parties have leave to re-list these proceedings on 7 days notice in relation to the implementation of these orders.
That the above orders not commence operation until 8 August 2007.
That both parties have leave to re-list these proceedings by arrangement with the Associate to Johnston JR for the purpose of submissions in relation to the form of the orders only such re-listing not to be later than 7 August 2007.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 2303 of 2006
| Mr Haddock |
Applicant
And
| Mrs Haddock |
Respondent
REASONS FOR JUDGMENT
Introduction and Applications
These are property proceedings.
The parties are Mr Haddock, to whom for convenience I shall refer as “the husband” and Mrs Haddock, to whom for convenience I shall refer as “the Wife”.
The husband seeks orders to the effect that the parties’ former matrimonial home at P be sold and that the proceeds of sale after payment of agent’s commission and legal costs on sale be paid in the proportions of 87 percent to the husband and 13 percent to the wife. The husband also seeks an order to the effect that otherwise the parties retain superannuation and property in their possession and/or control respectively.
On the other hand, the wife also seeks an order to the effect that the former matrimonial home be sold and that otherwise the parties retain their superannuation and property. But the wife seeks a very different order about distribution of the net proceeds of sale. This is to the effect that the net proceeds of sale be paid to the parties in equal shares. This is reflective of a very substantial difference between the parties in what each asks the Court to order as a just and equitable result in these proceedings.
Background
The wife was born in January 1962 and she is therefore 45 years of age. The husband was born in May 1962 and he too is 45 years of age. The parties married on 27 October 1984 and they separated on 26 September 2005.
There are two children of the marriage, N born in June 1986, who is 21 years of age and L born in January 1989, who is 18 years of age.
At the commencement of the marriage the husband’s property consisted of some furniture and a small amount of savings. He was working as a manager.
The parties had purchased a home unit at W a few months before their marriage for $57 500. The deposit of $17 500 was paid from the wife’s savings and she also paid stamp duty and legal costs. The wife had received a personal injury compensation payment of $25 500 just before marriage. The balance of $40 000 was borrowed on mortgage.
At the commencement of the marriage the wife’s property consisted of her interest in the home unit, a Holden Camira motor vehicle and a small amount of savings.
In October 1986, the parties purchased a home at M for $108 000. The husband’s parents gave them $30 000 towards this purchase. The husband’s parents also loaned them $76 515 as a bridging loan for this property. The parties sold their unit for $66 500 and applied the net proceeds of sale to this purchase. They borrowed the balance of $61 000 and repaid the husband’s parents for the bridging loan.
The husband’s parents subsequently loaned the parties $5000 to have a swimming pool installed at their home. In March 1987, the husband’s parents paid approximately $11 000 for a new Ford Laser motor vehicle for the husband.
In 1991 the parties sold their M home for approximately $ 110 000. They then purchased the property at A for $175 000.
In 2000 the parties purchased 3 acres of vacant land at P for $330 000. They borrowed approximately $340 000 from Westpac to fund this purchase. They arranged to have a home constructed on their land by AV Jennings. This cost $152 141 plus some additional costs. The parties sold their A home in June 2001 for $275 000.
During the approximately ten months construction period, the parties resided rent free in the husband’s parents’ holiday home at V.
In January 2002 the wife’s father died. The wife received an inheritance of $1 590 000.
The wife used part of her inheritance to pay the then outstanding mortgage balance of $277 000. The wife also paid $26 000 for construction of a swimming pool, $24 000 for a colourbond shed and $87 000 for another shed and improvements to the property.
In 2001 the husband’s parents had loaned the parties $20 000 to fund work on their driveway, purchase of a ride on mower and for mortgage repayments. The wife repaid this loan and more by a payment to the husband’s parents of $40 000 from her inheritance.
In 2005 the wife purchased a new Subaru Forrester motor vehicle.
In July 2005 the parties borrowed funds from C Company to purchase shares in a U joint account.
Approximately one month after separation the husband moved into his parents’ holiday home at V with the boys. N has since moved back to live with his mother in the P home.
The Applicable Law
The Court must be satisfied that in all the circumstances it is just and equitable to make an order. This is provided by s 79(2) of the Family Law Act 1975.
The Full Court of this Court in its decision in the case of Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 said as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335 (and various other well known authorities).
Despite some criticism of this decision by the majority of the Full Court in Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414, see for example paragraphs 36 and 37 at page 79,641 and paragraph 63 at page 79,646, in my view it is not incorrect to take the approach to the hearing of property proceedings as described in Hickey above.
Property available for division
There were some issues concerning what the available property of the parties is.
Alleged non-disclosure by the husband
There was a very strong submission by learned counsel for the wife to the effect that the husband had failed to make a full and frank disclosure as required under the Rules. It was submitted on behalf of the wife that her solicitors had been endeavouring over a long time to ascertain details of various trusts in which it was suspected the husband is a beneficiary. This seems to have been as a consequence of the wife’s obvious knowledge that the husband’s family operate a large and apparently successful enterprise operating under what might broadly be described as the R group of companies and trusts. Despite correspondence from the wife’s solicitor now reaching back a considerable time, somewhat sketchy details of the husband’s interest in a trust were provided to the wife’s solicitors only during the week just prior to the hearing.
The husband is a discretionary beneficiary of the Haddock Family Trust both in relation to income and capital. The other beneficiaries are his father, mother, siblings and relatives of his father. The Trust was established by the husband’s father in 1979, his father being the original trustee. The trustee currently is a corporation called G Pty Limited. The shareholders are the husband’s parents and they have the voting power. The Trust appears not to have made any distribution to the husband in the financial year ended 30 June 2006. The Haddock Family Trust had made distributions to the husband in 1985, 1986, 1987 and 1989. The amounts involved came to a total of $40 722. Whether these monies were actually paid to the husband is not clear. It is not clear also whether other distributions have been made to the husband. The husband has not put any evidence of any trust distributions before the Court.
The husband is also a discretionary beneficiary in the AH Family Trust. It is not clear whether any distributions have been made to the husband from that Trust. There are other trusts and corporations in the R group. For example the R Trust Unit Trust. However, the husband is not a beneficiary in this Trust.
Very late in the hearing, in fact after the husband had closed his case, learned counsel for the husband sought to file in Court an affidavit by an accountant which I was informed contained some limited information in relation to relevant trusts. In circumstances where such information had been asked for by those acting for the wife some considerable time ago, and in view of the lateness of the material and its possible prejudice to the wife, I declined to permit that affidavit to become part of the evidence in the husband’s case.
In all these circumstances, there was a very strong submission on behalf of the wife to the effect that the husband had failed to make a full and frank disclosure of his financial circumstances. This is true in the sense that there is some evidence that distributions had been made to the husband from the Haddock Family Trust and the husband had not demonstrated any knowledge in Court about those matters or whether any recent distributions had been made in his favour by any trust. The husband has a duty to disclose all relevant financial material and that has not occurred as I have said. To that extent there is some failure to disclose.
But in all the circumstances of this case, I am not persuaded that this failure will prevent the Court from being able to do justice to both of the parties. It is clear that the husband has a financial resource in the form of the Haddock Family Trust and presumably the AH Family Trust. But it remains a matter of conjecture whether such a resource is valuable. This was information that was within the husband’s ability to put before the Court. To the extent that it is relevant then the inference will be drawn against him in this regard. This matter will be taken into account pursuant to s 75(2)(o) of the Act.
Capital gains tax
It was also submitted on behalf of the wife that at some point the wife will have to pay capital gains tax in respect of appreciation on her investments. Those who represent the wife calculated that an amount in the vicinity of $66 000 capital gain is relevant in relation to the wife’s inheritance and at some point she will have to pay capital gains tax.
There was no evidence in proper form about this matter and certainly no evidence by a qualified expert in relation to what the quantum of any capital gains tax might be in specific circumstances or scenarios. In these circumstances, in my view, it is not appropriate for the Court to speculate. But I propose to keep this in mind when considering relevant s 75(2) matters.
Available property
The property available for division between the parties consists of the following:-
$
1. P Property
800,000
2. Wife’s home contents
5,000
3. Wife’s Westpac account
11,591
4. Wife’s Subaru
20,000
5. Ride on mower
2,000
6. Wife’s jewellery
3,500
7. Husband’s Westpac account …
2,232
8. Husband’s Westpac account …
9,031
9. Husband’s tools
500
10. Husband’s superannuation
98,602
11. Joint investments net
62,884
12. Wife’s investments
a. Cash account
20,688
b. U Diversified Active
201,991
c. U Diversified Index
472,909
d. X Company
120,272
e. B Company
71,021
f. C Company
82,858
g. S Unit Trust
113,030
_____________
Total
$2,098,109
There are no liabilities.
Contributions including the wife’s inheritance
I am unable to make an assessment of contributions without making some observations about the relevance of the wife’s inheritance in this case. A major issue is how the Court should treat the wife’s inheritance.
As indicated above, the wife’s father died in January 2002 and the wife inherited $1 590 000. As has also been indicated, the wife has expended a considerable amount of her inheritance in funding the acquisition of the parties’ home at P, and making improvements to it and its surrounding property. Further amounts of the inheritance have been used by the wife to purchase a motor vehicle and other personalty as I have said. In addition, approximately $1 000 000 has been invested by the wife.
The husband’s case relies on a submission that because he gave the wife’s father considerable assistance over the years, that in fairness to the husband, a considerable proportion of the wife’s inheritance should be regarded by this Court as having been gifted to both the husband and the wife or otherwise regarded as a significant contribution by the husband to the property. The overall submission is that in these circumstances the contributions by the husband to the broad pool of available property have been 40 percent.
In support of this submission the husband included in his affidavit approximately thirty paragraphs of material under the heading “My Contributions to the Welfare and Property of the Respondent’s Father”. In this material the husband deposed to having visited the wife’s father at least once per fortnight and to having undertaken a very considerable amount of gardening and yard maintenance, cleaning windows, doing some odd jobs and, after the father’s death, cleaning up his house and garden and removing contents and rubbish in order to prepare the property for sale.
In turn, the wife agrees that the parties visited her father regularly, although not as frequently as alleged by the husband, and that they both gave her father considerable assistance at his home. But the wife also alleged that her father paid them for their efforts, both by giving them cash and by providing them with a food hamper on most occasions of their visits.
The wife’s allegations in this regard were the subject of counter allegations and denial by the husband and so it went on.
In my view, this aspect of the husband’s case namely, the submission that contributions by the husband to the property and welfare of the wife’s father are relevant in these proceedings has been overstated.
In support of this submission learned counsel for the husband referred to the decision of the Full Court of this Court in the case of James and James (1978) FLC 90-487. That was a farming case. In that case at the time of marriage the husband had been engaged by his father to assist him in operating a farm on land owned by the father. The husband and wife lived on the farm and worked on it. After separation the husband’s father died and the husband received a substantial inheritance.
The Full Court said at page 77,526 as follows:
… there was clear evidence … that the expectations on the part of both husband and wife were that they would have that property albeit in the husband’s name, in the fullness of time and … it was in the context of this expectation that (the wife) made the contributions which she did as wife and mother and in other ways referred to by her Honour.
By the time the matter came on for hearing on the wife’s application those expectations had been to a large degree fulfilled in that the husband had acquired by inheritance approximately one half of his father’s estate which included one half of the matrimonial home. This home as we indicated earlier has now been sold …
In the view of this Court it would be just and equitable therefore for an order to be made settling upon the wife an amount which would assist her in the provision of a home for herself which will no doubt be a home for the two dependent children until they have become self-supporting.
Learned counsel for the husband sought to argue that the present case is similar to that case and that the husband undertook the gardening and assisted the wife’s father in the expectation that when the wife’s father died the wife would inherit the property. It was submitted that on this basis it would be only fair that the husband shared in a significant part of the wife’s inheritance.
In my view, the facts in James are quite different from the present case. In James, the parties lived on the farm and worked it as the major source of their livelihood in partnership with the husband’s father. In my view, this is a quite different situation from the parties visiting the wife’s father in the present case on occasional weekends assisting the wife’s father with gardening and housekeeping.
Learned counsel for the husband also referred to the case of Heath and Heath; Westpac Banking Corporation (1983) FLC 91-362. In that case Nygh J. accepted that the wife had made a contribution to a property in the sole name of the husband funded from borrowings and money inherited by the husband from his late mother’s estate. Nygh J. found that the wife had made contributions by paying some of the mortgage payments. But his Honour also observed that both the husband and the wife had made a contribution towards the welfare of the husband’s parents, especially his mother, when they were elderly and required care. His Honour said that to that extent the bequest was an expectation, the wife’s efforts going towards the acquisition of that expectation.
I accept that these decisions have some rather limited relevance to the present case. But I am unable to accept that they are justification for a finding on contributions by the husband at anywhere near the level sought on behalf of the husband.
In relation to the parties’ contributions overall, I make the following observations. Both parties have made direct financial contributions. As I have indicated above, just before marriage, the wife received a payment of $25 500 as compensation for personal injury. This enabled her to contribute the deposit of $17 500 to the purchase of the parties’ first home. She also paid the legal costs and stamp duty. Apart from her savings, the wife’s property at the commencement of marriage consisted of her Holden Camira motor vehicle and some personalty. The wife was working in hospitality at the commencement of the marriage and subsequently worked as a carer at a medical centre. The wife also worked in home day care and as a carer for the Y Health Group. At one point the wife also did some work as a night stacker at a supermarket. The wife ceased paid work just before N’s birth and did not resume this until after the birth of L in 1989. The wife ceased paid employment altogether in 2002, after she had received her inheritance.
As indicated above, the wife received the inheritance of $1 590 000 in mid 2002.
On the other hand the husband, as indicated above, had some furniture and a small amount of savings at the commencement of the marriage. As also indicated above the husband was working as a manager and, after a couple of years, in his family’s business E Pty Limited. He has continued in the full time employment of this business throughout the marriage. The husband also drove a taxi cab. Until the wife received her inheritance he was the major breadwinner for the family.
As also indicated above, when the parties purchased their M home the husband’s parents gave them $30 000 towards the purchase. The husband’s parents also made numerous other contributions during the course of the parties’ marriage. These include paying approximately $11 000 for a Ford Laser motor vehicle for the husband and paying a $4000 tax bill. Between the years 1987 to 2004 the husband’s family’s business paid all petrol and insurance costs for the cars of the husband and the wife and also costs of registration and maintenance for the husband’s car.
The parties lived rent-free at the holiday home of the husband’s parents at V for ten months. The husband’s parents also gave the parties numerous gifts including a new sewing machine for the wife in 1986, as well as a washing machine, table and chairs and they paid virtually the entirety of the costs of an overseas holiday for the parties and the children, the purpose of which was to attend the wedding of the husband’s brother in Italy.
Much was made on behalf of the husband about the value to the parties of this holiday. But in my view, the Court should exercise considerable caution in respect of this gift. This holiday was offered to the parties very much in the context of an important family function which was going to be attended by all members of the family. Clearly there was not only benefit to the parties from the gift but also a benefit to the husband’s parents and other relatives of the husband who attended this celebration. In any event, this is not a contribution to any property of the parties. In my view, the gift of the overseas holiday is not a contribution within the meaning of s 79(4) of the Act. I propose to take this into consideration, however, pursuant to s 75(2)(o) of the Act as I do the babysitting and hospitality provided by the husband’s parents.
The wife did most of the cooking as well as the major part of the domestic work including cleaning within the home.
The wife undertook some home maintenance and improvement work including painting the interiors of both the M and A homes and a fence. The wife also assisted the husband with planting and maintaining gardens although the husband undertook more of this.
On the other hand the husband undertook a considerable amount of landscaping work at M, A and P. He constructed a large rock retaining wall at A. He laid extensive paving at M, assisted by the wife’s father, and also installed pavers at P.
The husband also undertook the major part of the lawnmowing and gardening at M, A and P. He maintained the swimming pools at A and P. He erected a wire fence at M, a pergola at A and he prepared the base for the garden shed at P. He also installed garden and watering systems at A.
It is clear that the wife has been the children’s primary parent. Her contributions to their welfare have been greater than those of the husband. Her responsibility in relation to N has proven to be a considerable challenge. N has always had special needs. He has suffered from learning difficulties and developmental delay. He has been diagnosed as functioning in the mildly delayed range. He was diagnosed to have been suffering from Attention Deficit Hyperactivity Disorder at 6 years of age. He was prescribed Ritalin.
N has had assistance from speech therapists and occupational therapists. The wife assisted him within a daily structure in respect of these areas of his needs over many years. N has also suffered from psychosis.
On the other hand, the husband has also made significant contributions to the welfare of the children. There is no issue that he played with the children when they were young, attended to their needs and took them to the gym, karate and to various sporting fixtures.
But it is clear that the wife’s contribution to the welfare of the boys has been greater than that of the husband. This is largely a function of the way the parties arranged their responsibilities. That is, the husband was the major breadwinner for the family and the wife was the primary parent.
Had it not been for the wife’s inheritance, considering all other contributions by the parties, these would have been assessed as being equal, certainly up to the time of the wife receiving her inheritance. But the inheritance changed things very significantly for the parties. They suddenly had the use of a very considerable amount of money. As indicated above, this enabled the mortgage to be repaid on the P property. The inheritance also funded extensive improvements to the property as well as the purchase of the motor vehicle and some other personal property. It has been a very substantial contribution and comes in on the wife’s side of the ledger, as it were.
I note that in the case of Bonnici and Bonnici (1992) FLC 92-272 the Full Court of this Court was considering how the Court should deal with two inheritances received by the husband (from his late uncle and subsequently from his later mother) quite late in the marriage and before separation. At page 79,020 the Full Court said as follows:-
The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. Such circumstances might include the care of the testator prior to death by the husband or wife as the case may be or other particular services to protect a property. See James and James (1978) FLC 90-487. But there was no evidence of this in the present case despite submissions by counsel for the wife to the contrary. Accordingly, we think that in the present case the moneys received by the husband from the sale of the freehold and from his uncle’s estate should not be brought into account.
In my view, the caution expressed in the first part of this passage obviously cannot be ignored. Despite the reference in the later part of the passage to unusual circumstances as including care of a testator which has some similarity to the sort of things which the husband and wife did to assist the wife’s father, in my view the Court must keep this in perspective. That perspective is one in which the wife inherited her father’s estate because of her family connection with him. Without her, there would not have been property with a value of $1 590 000 to assist these parties. Accordingly, as I have said the inheritance has come in on the wife’s side of the ledger as it were, and the major part thereof should be regarded as a contribution on her behalf.
It was submitted on behalf of the wife that the Court should approach its assessment of contributions by considering two pools of available property, rather than by considering assessment of contributions on a global basis. This was on the basis that some of the wife’s inheritance has been intermingled with property of the parties such as the former matrimonial home and improvements and the balance of the inheritance has been invested in investments which can be regarded as having been kept separate from the matrimonial property.
I note that in Bonnici (above) the Full Court went on to say (also at page 79,020) as follows:
In a case such as this, we think that the global approach, taken by his Honour, presents considerable difficulties. If the matter had been approached upon an asset by asset basis, we think that the task of his Honour and this Court would have been a simpler one.
Despite those observations, I propose to adopt the global approach to assessment of contributions in this case. Clearly it is not incorrect to use an asset by asset approach. But the approach which is preferred in most cases is the global approach. In this regard I note the general discussion by the Full Court of this Court in the case of Norbis and Norbis (1986) FLC 91-712.
As I have said, the inheritance was very substantial and the major part must be regarded as having been on behalf of the wife. Despite the fact that the husband was the major breadwinner for the family up to the point where the wife received the inheritance, the amount of the inheritance and the fact that it came late in the marriage lead to the finding that there has been considerable disparity in financial contributions and that the disparity falls significantly in favour of the wife. In addition, the wife has made greater contributions as homemaker and parent than has the husband.
In my view, for these reasons the Court should assess the wife’s contributions overall as having been three times more than the contributions of the husband. This equates with a finding on contributions of 75 percent by the wife and 25 percent by the husband.
s 75(2) matters
As indicated above, the husband is 45 years of age. He is in good health. He is working full time in the position he has held in the business owned by his parents which he has now occupied for many years. On all indications to date, one would anticipate the husband continuing to work in this position for the foreseeable future.
His income is a total of $1536 per week which includes $288 attributed as the value of the company vehicle provided for his use. The husband is well able to live within his means.
On the other hand, the wife is also 45 years of age and in good health. As indicated above she ceased working in the paid workforce in 2002. Her weekly income is $2334 from her investments.
As indicated both the parties’ children are now young adults. At the time of the hearing N was living with his mother and L was living with his father. Whether this arrangement will continue is far from clear at this stage.
Learned counsel for the wife did not submit that N’s circumstances required a set-off of property in favour of the wife. But I propose to make some observations about this matter because I discerned some issue between the parties about it.
Clearly there are difficulties in terms of N’s special needs. The wife suggested he was dependent on her and the husband denied that N is dependent. In any event, in my view, the responsibility for supporting N is not a s 75(2) matter in relation to which the Court should make an adjustment of property one way or the other. This is for two reasons. Firstly, he is an adult. Although s 75(2)(e) requires the Court to take into account the responsibilities of either party to support any other person, in my view both parties will be responsible to the extent that N might require support into the future. But one does not have a crystal ball and it is impossible to determine what the parties’ respective responsibilities in this regard might be. In these circumstances, in my view, in the event that N might require financial support in the future, this would be more appropriately considered by the Court in the context of an adult child maintenance application by N.
I also take into account the likelihood at some point in the future that the wife will have some capital gains tax to pay. I also note the overseas holiday provided by the husband’s parents and their babysitting and hospitality. I note also that the husband has a financial resource as discretionary beneficiary in the trusts referred to above. But it is impossible to know the value of this to him as I have indicated above.
I have referred to the property of the parties. On the basis of my finding about contributions, this would leave the parties in a very disparate position, the overwhelming amount of property being enjoyed by the wife. This is a significant s 75(2) matter. Because of this very significant imbalance, in my view, it is only fair that a set-off of property be ordered in favour of the husband so as to achieve a just and equitable order as required by s 79(2) of the Act. In my view, the appropriate set-off is 5 percent of the value of the available property.
Accordingly, in my view, the husband is to enjoy 30 percent of the available property and the wife is to enjoy 70 percent of the available property.
Leave to re-open
Shortly after completion of the hearing, the husband filed an application in which he sought leave to re-open his case. This was on the basis that he wanted to put further evidence before the Court. It was submitted that the parties’ son N had experienced a psychotic episode the weekend following completion of the hearing and that N had changed his primary residence from living with his mother to living with his father.
I declined granting to the husband such leave to re-open his case. As I indicated at the time, in my view, the living arrangements for N was not a matter which in my view was relevant to the result. As I also indicated, N is an adult. By moving from his mother’s residence to his father’s residence he demonstrated that there was no certainty about whether he would reside with one or other of them. Perhaps in future he might reside independently from them.
As indicated above, learned counsel for the wife informed the Court that he had not made any submission during the hearing to the effect that the Court should take into account the fact that N was living with the wife at the time. The wife opposed the granting of leave to re-open. In any event, as I have indicated above, to the extent that there might be a need for financial support for N at some time in the future, an adult child maintenance application could be considered.
For all these reasons, in my view, it was unnecessary and inappropriate for the leave sought by the husband to be granted.
Conclusion
The wife is to have 70 percent of the available property ($2 098 109). This is property with a value of $1 468 676.
The wife has the following property:
$
1. Contents of home
5,000
2. Westpac account
11,591
3. Subaru motor vehicle
20,000
4. Ride on mower
2,000
5. Jewellery
3,500
6. 50 percent of investments (as ordered)
31,442
7. Her other investments
1,082,769
_____________
Total
$1,156,302
Accordingly, to achieve property with a value of $1 468 676 the wife requires further property with a value of $312 374 ($1 468 676 - $1 156 302 = $312 374). This will come from the sale of the P property. $312 374 is 39.05 percent of $800 000 agreed as the value of this property.
On the other hand, the husband is to have 30 percent of the available property. This is property with a value of $629 433.
The husband has the following property:
$
1. Westpac account …
2,232
2. Westpac account …
9,031
3. Tools
500
4. Superannuation
98,602
5. 50 percent of investments (as ordered)
31,442
_____________
Total
$141,807
To achieve property with a value of $629 433 the husband requires further property with a value of $487 626 ($629 433 - $141 807 = $487 626). This will come from the sale of P property. $487 626 is 60.95 percent of the agreed value of $800 000 for P property.
The fourth step
The P property will be sold as sought by each of the parties. The net proceeds of sale will be paid to the parties in the proportions of 60.95 percent to the husband and 39.05 percent to the wife. The other property and superannuation will be retained by each of the parties who has possession and/or control of it.
As indicated above, the husband will have 30 percent of the available property which is property with a value of $629 433.
The husband will have sufficient funds to be able to accommodate himself and the boys to the extent that they might require accommodation. He also has his superannuation and the other property, and financial resource, to which I have referred.
On the other hand, the wife will have 70 percent of the available property which is property with a value of $1 468 676.
This is a very considerable imbalance, especially given the duration of the marriage of almost 21 years and the fact that two children have been raised to adulthood. But the reason for this considerable imbalance lies in the fact that the wife inherited such a very substantial amount so late in the marriage and at a time when the parties’ total property arising from all their efforts during the marriage can only have had a modest value by comparison with the value of the inheritance.
In my view, on the basis of all relevant matters, this division will achieve a just and equitable order as required by s 79(2) of the Act.
The orders I propose to make will not affect the income earning capacity of either party.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Judicial Registrar W P Johnston.
Associate: ____________________
Date: 20 July 2007
IT IS NOTED that this judgment for all publication and reporting purposes be referred to as HADDOCK & HADDOCK
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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