HALLIDAY & HALLIDAY
[2010] FMCAfam 1011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HALLIDAY & HALLIDAY | [2010] FMCAfam 1011 |
| FAMILY LAW – Property. |
| Family Law Act 1975, ss.75(2); 79 |
| Hickey & Hickey & Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 Milankov (2002) FLC93-095 Aleksovski (1996) FLC 92-705 Farnell & Farnell (1996) FLC 92-681 Re NHC and RCH(2004) FLC 93-204 |
| Applicant: | MR HALLIDAY |
| Respondent: | MS HALLIDAY |
| File Number: | ADC 4765 of 2008 |
| Judgment of: | Cole FM |
| Hearing dates: | 24 & 25 November 2009, 22 March and 19 July 2010 |
| Date of Last Submission: | 19 July 2010 |
| Delivered at: | Adelaide |
| Delivered on: | 17 September 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hogg |
| Solicitors for the Applicant: | David Burrell & Co. |
| Counsel for the Respondent: | Mr Bowler |
| Solicitors for the Respondent: | Barr Lawyers |
ORDERS
Within twenty eight (28) days of the date of these orders, the wife transfer to the husband her right title and interest in the following being:
(a)Lot [9] being the whole of the land comprised in Certificate of Title Volume [omitted];
(b)Lot [10] being the whole of the land comprised in Certificate of Title Volume [omitted];
(c)Lot [11] being the whole of the land comprised in Certificate of Title Volume [omitted];
(d)Lot [12] being the whole of the land comprised in Certificate of Title Volume [omitted];
(e)Lot [13] being the whole of the land comprised in Certificate of Title Volume [omitted];
(f)Lot [1] being the whole of the land comprised in Certificate of Title Volume [omitted].
The husband indemnify the wife and keep her indemnified in respect of any liabilities or outgoings in respect of the said land.
That simultaneously with the provisions of paragraph (1) hereof the husband transfer to the wife all his right title and interest in the following properties being:
(a)Lot [6] being the whole of the land comprised in Certificate of Title Volume [omitted];
(b)Lot [7] being the whole of the land comprised in Certificate of Title Volume [omitted];
(c)Lot [8] being the whole of the land comprised in Certificate of Title Volume [omitted];
(d)Lot [14] being the whole of the land comprised in Certificate of Title Volume [omitted];
(e)Lot [5] being the whole of the land comprised in Certificate of Title Volume [omitted];
(f)Lot [16] being the whole of the land comprised in Certificate of Title Volume [omitted];
(g)Lot [2] being the whole of the land comprised in Certificate of Title Volume [omitted].
The wife indemnify the husband and keep him indemnified in respect of all outgoings and liabilities in respect of the said properties thereafter.
But simultaneous with the transfers conducted pursuant to paragraphs (1) and (3) of these orders, the parties take such steps and do such actions as are reasonably required to refinance the mortgages such that:
(a)the husband is solely responsible for:
(i) NAB US Dollar Account [6] and;
(ii) ANZ Mortgage [3]
(b)the wife shall be solely responsible for ANZ Mortgage [4].
The settlement of the transactions referred to in paragraphs (1), (3), and (5) of these orders the wife pay to the husband the sum of $40,000.
Any interest the wife may have in:
(a)Lot [16] and Lot [4], [C];
(b)the plant and mining equipment retained by the husband;
(c)the husband’s opal collection as catalogued by Mr K;
(d)the [P] specimen;
(e)the Ford Motor Vehicle and Toyota Utility currently in the husband’s possession;
vest in the husband absolutely.
Any interest the husband may have in the:
(a)Ford Motor Vehicle in the wife’s possession;
(b)the opals held by the wife;
vest in the wife absolutely.
The wife vacate the premises at Lot [13] [P] Road, [M] as at the date of settlement referred to in paragraphs (1), (3) and (5) of these orders.
Upon vacating the said premises the wife deliver up by leaving at the property:
(a)[X]’s bed and bedroom furniture;
(b)the husband’s bed and bedroom furniture (located in the spare room);
(c)the tractor and slasher (65 horse power);
(d)the welder;
(e)the table grinders;
(f)the opal cutting and carving machines (with diamond tips for processing);
(g)the welder (with rods);
(h)the hand tools (located on the wall of the shed);
(i)the hand tools (located on the back veranda);
(j)the snail sprayer attachment for the tractor;
(k)the saw for trees;
(l)the whipper snipper;
(m)the circular saw;
(n)the drills bracket (under the work table beside the workbench);
(o)the hand grinders;
(p)the large floor drill;
(q)the mechanical hydraulic hoist fitted on the back of the Ute;
(r)half of the associated gardening shovels;
(s)two pallets of pavers;
(t)[X]’s bike.
Any interest the husband may have in the following furniture and chattels located at the [M] property namely:
(a)all remaining household white goods;
(b)all furniture and hardware and household library;
(c)all household goods and chattels;
vest in the wife absolutely and the wife be at liberty to remove these from the premises.
Save and except as otherwise specified in these orders:
(a)any interest that the husband has in any property, monies, opals, superannuation or any other goods or chattels in the name or possession of, or under the control of the wife, vest in the wife;
(b)any interest that the wife has in any property, monies, opals, superannuation or any other goods or chattels in the name or possession of, or under the control of the husband, vest in the husband, and;
(c)each party pay, and indemnify the other in respect of any liability that may arise in relation to any item of property that vest in him or her pursuant to these orders;
(d)each party pay all liabilities in that party’s name and indemnify the other party in relation thereto.
There be liberty to the parties to apply as to consequential orders.
IT IS NOTED that publication of this judgment under the pseudonym Halliday & Halliday is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 4765 of 2008
| MR HALLIDAY |
Applicant
And
| MS HALLIDAY |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings concern the competing proposals of the parties for the division of the matrimonial assets.
The husband in his case outline puts forward two proposals which essentially allow for an equal division of the matrimonial assets once an allowance has been made for:
a)the contributions/gift from the wife’s sister and
b)what he claims is the $308,000 worth of initial contributions made by him.
c)opal worth $100,000 that the husband says is in the wife’s control and is kept by her in an overseas location.
The wife at the commencement of trial had not specified the orders sought by her save and except counsel suggesting that it be an equal division of the matrimonial assets. A minute of orders sought was provided during the course of the hearing.
Counsel in closing submissions advised that each party agreed that there should be an equal division of the assets.
The issue is what should be included in the pool for division.
The husband amongst other things seeks what his Counsel describes as add backs or adjustments for amongst other things the opal collection, property and mining equipment he had at the commencement of the relationship, gifts from his parents, and funds received from a compensation payment.
The wife amongst other things seeks that the blocks of land purchased with the assistance of some US$280,000 in funds received from her sister be quarantined or excluded from the pool and that a sum of $100,000 being monies removed from the VT Super Plus account be added back to the pool.
These issues will be addressed in due course.
Background
The husband was born in the United States of America [in] 1943. He migrated to Australia in 1969.
The wife was born in Taiwan [in] 1955.
The parties married [in] 1985 and separated in October 2008.
[In] 1993 the child of the marriage [X] was born.
[X] lives independently of the parties and is supported by the father. He does not communicate with his mother.
I will refer to relevant aspects of the parties’ relationship when considering their contributions to the acquisition, conservation and improvement of the asset pool.
The evidence
The husband relies on:
a)his Application filed 12 December 2008;
b)his Financial Statement filed 30 September 2009;
c)his Affidavit filed 30 September 2009; and
d)his Affidavit filed 16 November 2009.
The husband gave evidence and was cross-examined.
The wife relies on:
a)her Affidavit filed 15 December 2008;
b)her Trial Affidavit filed 29 October 2009;
c)her Financial Statement filed 9 February 2009; and
d)the Affidavit of Ms O (her sister) filed 15 October 2009.
The wife and Ms O gave evidence and were cross-examined.
The parties jointly instructed Mr E re the values of the land and Mr K regarding the values of the opal and mining equipment.
Mr E filed an Affidavit on 26 October 2009 and was not required for cross examination, his evidence being uncontested.
Mr K filed an Affidavit on 24 July 2009 and gave evidence by phone. His valuation was contested by the wife. She did not produce any alternative evidence.
It is notable that in a case such as this where the usual directions were made for updated Financial Statements to be filed on or before
30 September 2009 that whilst the husband filed his Financial Statement on 2 October 2009 the wife did not file an updated Financial Statement.
Neither party can claim to have filed an accurate Financial Statement nor did they choose to address any changes that may have occurred with specific reference to their Financial Statement when filing their Trial Affidavits. As a consequence, neither of their documents provided a complete picture of their financial circumstances, which to my mind, reflected on their respective credibility.
Each party was prepared to make unsubstantiated allegations regarding the contributions they had made or the assets retained by the other party without providing any detailed corroborating evidence. For example, the husband alleged that at the commencement of the relationship he had amongst other things, a three-storey property in [P], a 105 acre [property] in [C], two houses in [P] and one investment house in [T]. There is no evidence to support this allegation nor is there any evidence as to what became of these properties. They are not shown as an asset on his Financial Statement sworn on the
30 September 2009 nor is there any detailed explanation of what became of them in his Trial Affidavit.
The husband also alleged the wife had retained opals to the value of $100,000 that she had taken to a location outside of Australia. There was nothing to support this.
The wife disputed the evidence of Mr K (the valuer jointly appointed by the parties to value the husband's opal collection). She did not attempt to show that she had any expertise in valuation of opals.
She did not choose to bring any alternative evidence to counter that of Mr K.
In addition, she asserted that the value of the opal collection held by the husband amounted to as much as $650,000 based on a figure that was previously set for the sale of the collection (a figure the husband says was set by the wife). Again, there was no expert evidence to corroborate the allegation.
Both parties claimed some expertise in business. Both agreed they had bought and sold properties in the course of the relationship. They should have been aware of the Capital Gains Tax consequences of the sale of the properties and the need to complete the tax returns in the appropriate manner. Their explanation as to how this was accounted for, bundled in with the sale of opals, was not something I was comfortable with.
In the circumstances, there are grave concerns regarding the credibility of each of the parties.
The Trial
Unfortunately, the estimate of the hearing time provided by the parties’ legal representatives, namely two days for this matter was inadequate.
At the conclusion of the third day, there were serious concerns about the payment of Capital Gains Tax on the sale of land that the parties had held. The proceedings were adjourned for a fourth day to obtain advice from the accountant and for closing submissions. The matter concluded on 19 July 2010.
The Law
In determining what orders should be made for the division of the matrimonial assets I am required to take an approach that involves four inter-related steps which are to:
a)identify and value the property, liabilities and financial resources of the parties at the date of hearing (“the Asset Pool”);
b)identify and assess the contributions of the parties within the meaning of s.79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”) and determine the contribution-based entitlements of the parties expressed as a percentage of the net value of the property of the parties (“Contributions”);
c)identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), including the matters referred to in s.75(2) of the Act 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 2 (“Financial Resources and Needs”); and
d)consider the effect of these findings and determinations and resolve what order is just and equitable in all the circumstances of the case (“Review of Outcome”).
See Hickey & Hickey & Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143.
I will now consider those matters.
The asset pool
The parties have a basic agreement about the value and identity of the matrimonial asset pool, save for some items that have been noted. That is, it is agreed that the property comprises:
Lot [6] [P] Road, [M] $290,000.00 Lot [7] [P] Road, [M] $275,000.00 Lot [8] [P] Road, [M] $285,000.00 Lot [9] [P] Road, [M] $275,000.00 Lot [10] [P] Road, [M] $285,000.00 Lot 2 [P] Road, [M] $228,500.00 Lot [14] [P] Road, [M] $295,000.00 Lot [13] [P] Road, [M] (shed/house) $390,000.00 Lot [12] [P] Road, [M] $300,000.00 Lot [11] [P] Road, [M] $315,000.00 Lot [G] Road, [M] $140,000.00 Lot [5] [H] Road, [M] (purchased with wife’s
sister’s money)
$280,000.00 Lot [16] [H] Road, [M] (purchased with wife’s
sister’s money)
$280,000.00 Lot [3] [C] (pre-marriage asset) $60,000.00 Lot [4] [C] (pre-marriage asset) $10,000.00 Husband’s motor vehicle – Toyota Ute (red book) $4,100.00 Husband’s motor vehicle – Ford Wagon (red book) $11,500.00 Wife’s motor vehicle $3,500.00 Husband’s opals (value disputed) $68,230.00 Wife’s opals $3,000.00 Husband’s money in bank (……. see Add back argument) $26,800.00 Wife’s money in bank (……… see Add back argument) $46,770.00 Mining equipment at [C]
(pre marriage asset)
$150,000.00 V2 superannuation balance (note Add back sought) $20.30 Negligence Claim (Surveyor) $70,000.00
Disputed items
Wife’s opal collection (allegedly held overseas) $100,000.00 [P] (husband’s figure of $3,000-5,000
(however currently on consignment for a sale price of $14,000)
Funds withdrawn from V2 superannuation fund $100,000.00
Liabilities
ANZ Mortgage [3] $142,489.00 ANZ Mortgage [4] $231,038.00 National Australia Bank US Dollar Account [6] (converted to [email protected] $229,43.65
Items not agreed
There remain a number of issues regarding the value of particular items, whether or not the items should be included, and whether they should be added back into the pool. Those issues will now be addressed.
Husband’s opal collection and the ‘[P]’
The parties jointly instructed Mr K to value the opals. Mr K filed an Affidavit on 24 July 2009.
The wife did not seek to produce any further expert evidence. In her Trial Affidavit filed on 29 October 2009 she indicated that she did not accept the valuation of Mr K of the opals in the husband’s possession. Her reasons were:
a)the valuer valued the items at a wholesale value rather than a retail value;
b)the valuation did not cover all of the opals in the husband’s possession (for example, she noted he had four opal pieces in a wooden box that she says the husband asked her to try and sell in Taiwan in 1997 for $250,000 and he has a large ten kilogram opalised tree branch which is of considerable value). She also referred to an item called the ‘[P]’ on consignment in a [C] shop. In addition, she alleged that he had retained possession of a large unspecified quantity of opal jewellery; and
c)the valuation of the opalised ichthyosaur vertebrae at $25,000 was inaccurate. In support of this she said that the parties entered into an agreement with [omitted] Corporation of [omitted] USA to sell the piece on consignment. She alleged that the husband said at this time that the item was worth $650,000.
The valuation of Mr K
The wife did not seek to produce any further expert evidence to assist her case. Nor was it suggested that she had any expertise that could counter the evidence provided by Mr K.
Mr K gave evidence by telephone and was cross-examined. He did not depart from the evidence provided through his valuation.
His evidence was clear that valuing the collection at wholesale represented the maximum value to the parties if the items were sold in today’s market. If the parties wanted to sell the items then they would have to be dealing with opal dealers and wholesale suppliers and in the circumstances, the wholesale method of valuation was the most appropriate when determining what a willing but not anxious buyer would pay and what the parties would receive.
I accept his evidence on this point.
Other opals in husband’s possession
The wife alleged that the husband had other opals in his possession that had not been produced for valuation. One of these was the item known as the ‘[P]’. I will refer to that subsequently.
She also alleged that the husband has a large ten kilogram opalised tree branch and four opal pieces in a wooden box. I am unable to find any substance in her allegations.
Each party has alleged the other has not disclosed all of the opals in their possession. I was not impressed by either party’s evidence on this issue. As Counsel for the husband conceded, both parties have had access to and control of the opals and there is no clear chain of custody of any of the opals in question that could be reasonably relied on to establish that the items existed and what their value was. In the circumstances, the wife has not established, and I cannot find that the husband is in possession of four opal pieces in a wooden box, a large ten kilogram opalised tree branch, or any other items, save for the ‘[P]’, that have not been disclosed.
Value of “Opalised” vertebrae
The wife also criticised the value attributed to the opalised ichthyosaur vertebrae. Having made that allegation there was no suggestion that the wife had the requisite specialist training and knowledge to counter the evidence of Mr K.
Mr K’s evidence was clear in respect to this matter and I accept his evidence that the relevant piece was valued at $25,000. The suggestion that I rely on a figure of $650,000 that was purportedly attributed to the piece by the husband (who denies this and says the value was attributed by the wife) is inadequate and does not assist the case.
Whilst it is clear that there was an arrangement to sell the opal at that price, there is nothing to suggest that anyone was willing to purchase it. That is, there is nothing to suggest that the price sought was realistic.
I must rely on the available evidence before me that the vertebrae were part of a larger specimen that was on display in the [omitted] museum. A price of $100,000 to $150,000 had been sought for the whole specimen (which was incomplete). These pieces comprised a small part of the whole and using that piece as a guideline, were valued accordingly. The wife has not chosen to produce an alternative opinion and in the circumstances, the value attributed to the piece by Mr K is accepted.
The [P]
The husband’s evidence in respect of the ‘[P]’ piece does not reflect well on him. In closing submissions, he argued that the ‘[P]’, a thirty kilogram piece on consignment at the [omitted] in [C] (having been there since 2008 for $14,000) should be assessed at $3,000 to $5,000.
This piece was not included in the items provided to Mr K. Mr K is now unable to provide a value for the piece. The husband says he did not make the piece available for a number of reasons.
He says he only owns 70 per cent of the piece with 30 per cent being held by Mr P.
He goes on to say that he and Mr P made an agreement that whatever the balance would be worth, Mr P would accept the whole ‘[P]’ as a trade for his time in helping to repair the husband’s bulldozer. He says the agreement was made in 2007/2008. His evidence is the work on the bulldozer has not been done to date. The work that Mr P is to do is simply to be another pair of helping hands and be there to just help lift things.
In other words, his argument is that the piece is:
a)only partially owned by him pursuant to an agreement for which there is no documentary evidence;
b)he gave away his part of the piece in exchange for work that needed to be done on the bulldozer in 2007/2008;
c)that work has yet to be done; and
d)the piece has been on consignment in [C] at a gallery, however it is not worth what is being sought for it.
He also submits that:
a)having not provided the information to Mr K I should now, in the absence of any expert evidence, reach a conclusion that the piece is worth $3,000 to $5,000; and
b)the item should not be included in the pool in any event.
The husband’s explanation is less than satisfactory. He did not include this in the items valued by Mr K. His reasons for not doing so are not satisfactory. He has sought to sell the item for a sum of $14,000. There is no expert evidence, as there is with the vertebrae, to say that the item is worth less.
There is no corroborative evidence to show that Mr P has a 30 per cent interest, just the allegation of the husband. Mr P has not sought to protect his alleged interest and furthermore, has not done the work to complete the “deal” to give him that interest.
In the circumstances which do not put the husband’s evidence in a good light, I propose to include the ‘[P]’ at a sum of $14,000 in the asset pool.
The wife’s opals
The husband alleges that the wife has opals in her possession that she has stored in Taiwan that are valued at in excess of $100,000. There is no evidence to support this. As is the case with the wife’s allegations, neither party can point to any depreciation schedule or schedule showing the assets held by them at any particular time in respect of the opal collection.
Each party had access to and control of the opals.
There is no chain of command that I can rely on.
In the circumstances, I do not propose to include that figure in the asset pool, there being insufficient evidence for me to find the wife has retained an asset of this value.
Items parties seek to quarantine or exclude from the pool
The parties seek to exclude from the pool the following items.
The husband wishes to exclude:
a)Opal collection $68,230.00
b)Lot [3] [C] (husband’s prior to marriage) $60,000.00
c)Lot [4] [C] (husband’s prior to marriage) $10,000.00
d)Mining equipment held by the husband at commencement of relationship – husband’s value $41,400.00
The wife seeks to exclude:
a)Lot [17], [H] Road $280,000.00
b)Lot [18], [H] Road $280,000.00
The husband submits that items referred to above should be treated as add backs. I do not accept this. The issue of whether the value of an asset should be added back, centres around the issue of whether one party has received what the Full Court in Milankov (2002) FLC93-095 characterised as “a premature distribution of property”. This is not what is canvassed here.
The issue is whether the items should be included in the pool or quarantined. If they are to be included in the pool, then consideration to what adjustments should be made would come under the issue of the contribution of the parties.
What the parties are in effect seeking is that they be credited with the full amount of the contributions they claimed to have made to the matrimonial asset pool.
The husband is essentially seeking that items that he brought to the marriage in or about 1985 being an opal collection now worth $68,230 and the land and plant and equipment held by him at that time be excluded from the matrimonial asset pool.
This matter has been considered in a number of authorities including the matter of Aleksovski (1996) FLC 92-705 where the husband received an amount of $38,481 being a retrenchment payment some two years prior to the parties’ separation. Part of the funds received by the husband had been put toward the cost of renovations on the former matrimonial home. The Court found that the Trial Judge erred in failing to credit the husband with the full amount that he received upon retrenchment, His Honour referring only to a figure of $18,400. They went on to say:
Trial Judges must weigh and assess contributions of all kinds and from all sources made by each of the parties throughout the cohabitation. Whilst weight must be given to a contribution which a party makes shortly before separation, less weight may be given to a contribution made by a party early in the cohabitation period of a long marriage.
Whilst the timing of a contribution may well be relevant, consideration must be given to the facts that the parties have a relationship of some twenty three years, there is a child of that relationship, and they have each in their own way made financial and non-financial contributions to the acquisition, conservation and improvement of the assets together with contributions to the welfare of the family.
[C] land, mining equipment, opal collection
With respect to the items held by the husband at the date of the commencement of the relationship, being the dug out, land, mining equipment, and opal collection, the husband argues that the land has unique “geological and geomelogical characters” and should be treated differently to “normal” real property.
There is no evidence to suggest that the land, mining equipment or indeed the opal collection (which will be addressed later) have not been the subject of the efforts of the parties to maintain and improve those assets. There is no dispute that the mining equipment has been used over the years and that the parties have contributed to its maintenance and upkeep.
I do not accept the husband’s arguments that the frequency of its use, the nature of the equipment or the climate of [C] make this a special case and in the circumstances, consider that these items should be included as part of the pool.
Contribution of wife’s sister
With respect to the wife’s assets, I have noted that the time at which a contribution is made can be very relevant. A gift was made of approximately US$280,000 by the wife’s sister to enable the purchase of two blocks of land.
The husband says the blocks were purchased with the assistance of a $10,000 deposit provided by the parties with the remainder being supplied by the sister.
The wife rejects this saying that her sister paid for the purchase price with the funds covering any disbursements associated with the cost of the purchase.
The blocks of land have since risen in value and it is agreed that they are now worth $280,000 each.
The parties have either from their individual funds or from joint funds contributed toward the payment of the rates and taxes, the wife saying that she paid for these, the husband disputing this saying the contribution was made by the sister in 2007.
I note the wife in her Trial Affidavit filed on 29 October 2009 at paragraph 43 states that:
“…when the purchase had been completed, the remaining funds were returned to [first name omitted] except for $3,000 which was left to cover future rates and taxes and fees.”
I do not accept that the rates and taxes have been paid by the wife. I do however, accept the funds left over were returned to the sister.
Both parties agree that:
a)the excess funds were returned to the sister; and
b)the purchase price for the blocks was AU$145,000 each.
The parties separated in October 2008.
I do not think it is appropriate that the entire value of the blocks of land purchased with the assistance of the wife’s sister be excluded from the asset pool.
Surprisingly, for an asset purchased only three years ago, the evidence as to who paid the deposit, the costs of purchase and the rates and taxes remains in dispute. It is open to me and I find that save for the stamp duty, some if not all of these payments were made from joint funds.
The decision to purchase, and the acquisition of the blocks occurred during the latter years of the relationship. It was a decision made by the parties. The parties contributed to the acquisition and maintenance of the land. The value of the land has significantly increased. Whilst it is proper to bring the sister’s contribution to account, it would not be appropriate to include the increase in the value of the properties.
The husband concedes that the wife should be credited with the late contribution. On the available evidence the contribution is AU$290,000 (being the purchase price for the 2 blocks at $145,000/block) plus stamp duty. I would, to include that disbursement, round the total contribution up to $300,000. I consider this amount, being the direct contribution of the sister, should be excluded from the pool. I will deal with the rise in the value of the properties when considering the parties’ contributions.
Agent Orange / compensation / parties’ family contributions
The husband also seeks to have quarantined from the pool or credited to his side of the ledger:
a)the funds received from the Agent Orange compensation claim of $75,000; and
b)the alleged contributions from his family in the United States in the sum of US$28,000.
No authorities are quoted to assist the Court with respect to these matters.
The Agent Orange compensation was received either in 1995/1996 or around 2001, the husband’s evidence being particularly vague in this matter. There is no evidence to show what those funds were applied to.
The funds allegedly received by the husband from his family were allegedly received on an unspecified date. There is no evidence to show what the funds were used for. In fact, there is no evidence to corroborate the husband’s allegation that he did receive gifts from his family.
Whilst on this topic, the wife also alleges that she received funds from her parents. Unless otherwise conceded by the husband, I do not accept that these were received as there is no evidence to corroborate the payment.
In the circumstances, I do not think it appropriate that either item be excluded from the pool or credited to either party in this manner. I will refer again to these topics when discussing the parties’ contributions.
Add backs
The issue of add backs has often arisen in the context of legal fees. In Farnell & Farnell (1996) FLC 92-681 the husband used $20,000 he withdrew from a joint account at separation on legal fees. The Trial Judge treated the $20,000 as a notional asset which he added back to the total property pool. The Full Court dismissed the husband’s appeal.
His Honour Justice Fogarty said at paragraph 83,068 that:
My strong impression from sitting on Appeals in a large number of property cases over the years is that the common or usual practice is that, unless parties themselves choose to approach it another way,
(a) the liability of the parties for costs is generally disregarded in the sense they are not treated as liabilities to be deducted in order to arrive at the net property figure;
(b) costs already paid are not generally added back as notional property unless the particular circumstances justify it (such as here);
(c)the circumstance that each party does have legal costs needs to be taken into account in a general way considering the overall impact of the orders on the parties;
(d)the circumstance that the parties have or have paid legal costs is a basic factor in determining, at the conclusion of the proceedings, whether an order for costs should be made within the parameters of section 117.
In Re NHC and RCH (2004) FLC 93-204 the Full Court summarised earlier Full Court authorities on the issue and said:
56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the Trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59. Outstanding legal fees themselves are generally not taken into account as a liability.
From the above, it is apparent that some of the issues to consider are whether the funds existed at separation and was the expenditure of those funds reasonable.
Funds withdrawn from joint account
The parties separated in 2008.
Each party continued to withdraw funds from the accounts. It is agreed the husband withdrew $127,000 and the wife $46,770.
The wife in her Outline of Case and closing submissions sought add backs of $127,000 for the withdrawals by the husband and $46,770 on the part of the wife.
It is also common ground that the husband paid for the costs of the relationship including bills, rates, mortgages and appraisals during the intervening period on behalf of the parties. No precise schedule is provided of expenses that the husband has paid in that time. The husband says that all of the money received by him was applied to the joint expenses of the parties. He further submits that this was not questioned when Counsel for the wife had the opportunity to cross-examine him.
I have difficulty with this submission in view of the assumptions it requires the Court to make (one of which is that the husband’s evidence that the reasonable expenses of the parties amounted to approximately $10,000 per month). That difficulty is enhanced by the husband’s explanation of his expenditure subsequent to the orders made in November 2010 where a number of expenses, such as flights to the United States of America, and dinners at Byron Bay, which are items which are clearly not joint expenses are included.
Furthermore I am not assisted by the husband annexing a bundle of receipts and invoices with very little explanation, from which I am supposed to draw the conclusion sought by the husband. It is not for the Court to decide for example if a Visa Account of $7,253.81 is a reasonable expense if all that is annexed is the account summary. It is not possible in the circumstances to treat this sum as a mathematic equation and the treatment of these payments should be referred to under Contributions.
I am not satisfied that all of the funds withdrawn by the husband were appropriately spent on the parties’ joint expenses and in the circumstances would add the entire sum back. I would also, as submitted by counsel for the wife, add back the sum of $46,770 withdrawn by her. Any payment by the husband toward the outgoings of the parties will be further discussed when considering the parties’ contributions.
The V2 Superannuation Fund
The V2 Superannuation Fund when opened had a sum of over $100,000 in it. It is agreed that the fund now has $20.32. Both parties are Trustees of the fund. The wife alleges that the husband withdrew a sum of $100,000 from the fund. The husband denies the allegation. Save for the fact that the withdrawal has occurred, there is nothing to say when it was done or by whom.
The husband concedes that he withdrew a sum of $5,000 from the fund to meet the parties’ expenses.
The wife seeks that the sum of $100,000 be added back. In view of the fact that it is not possible to find how the funds were withdrawn and by whom, I do not propose to do so and will include the value of the fund at its present amount, namely $20.32.
The fund was commenced with a deposit on 30 June 2008 of $100,000. The wife’s Counsel produced a letter from the ANZ marked 1 July 2008 with an attached statement of $100,000 (Exhibit 7). The statement says “[Mr Halliday] as Trustee for”.
The account does not appear to have been mentioned in the first Affidavits filed by the parties. When the husband swore his Financial Statement on 4 February 2009, the account had $5,275 in it.
Neither party has:
a)produced any further statements for the account;
b)advised me why $100,000 was deposited into the account or where it came from;
c)directed me to any tax treatment of the lump sum; or
d)suggested they do not have access to the account.
It would be reasonable, with both names on the account, to conclude both parties would have access to statements.
The wife, at paragraph 18 of her Affidavit sworn on 29 October 2008, refers to the V2 Superannuation Fund with a balance of $5,200 at separation. It would therefore seem that the funds were withdrawn prior to separation.
Despite having over twelve months to do so, neither party sought the provision of statements from the bank. The wife alleges she sought the husband produce these statements and he did not comply with that notice to produce.
At the end of the day I am left with no evidence to show who took the money or what happened to it. On what is before me I am not able to make assumptions and will regard the money as lost by the parties.
It may well be that there is a liability arising from the treatment of funds in the superannuation account.
There does not appear to be any special treatment sought by the parties in the 2007 or 2008 Financial Statements and the returns filed by them, in respect of the deposit of the $100,000 into the account.
In the circumstances, there is nothing on the evidence before me that enables me to make any finding with respect to this other than that set out above.
It may very well be the case that the fund is non-compliant. It is common ground that both parties are Trustees of the fund. In the circumstances, they would be equally liable for any penalties arising from the non-compliance. I see no need to make an order for this fund which currently holds $20.20 and consider it appropriate both parties remain responsible for any liability arising therefrom.
US Dollar Account
I cannot however reach the same conclusion in respect of the events that occurred subsequent to the 25 November 2009.
On that day it was noted that the husband would withdraw no more than $10,000 per month from the parties’ National Australia Bank US Dollar Account and from those funds would pay the expenses agreed by the parties; with the solicitors for the parties to exchange within seven days of 25 November 2009 a schedule of proposed agreed expenses.
It was then ordered by consent that from the date of those orders the husband be authorised to operate the National Australia Bank US Dollar Account pending further order and the husband provide a monthly reconciliation of funds expended pursuant to paragraph 1 of the order.
The husband operated the account however failed to meet his requirements to:
a)pay only the agreed expenses of the parties; and
b)account for the expenditure on a monthly basis to the wife.
Submissions were made that both parties were overseas during this time and it was difficult to obtain instructions. Those submissions do not address the requirements of the orders.
The husband proceeded without agreement to draw down funds and the amount due and owing on the National Australia Bank US Dollar Account rose from approximately $150,000 to over $200,000 at the conclusion of these proceedings.
Counsel for the wife submitted that the entire amount should be added back to the asset pool.
After some discussion, Counsel for the wife also conceded that the husband had continued to meet the commitments of the parties being the monthly mortgage payments, rates and taxes and other related items of expenditure.
Counsel for the wife then conceded that it would be appropriate to exclude the legitimate expenses of the parties being mortgage commitments etc and add back the remaining amount.
Each party filed an Affidavit with the Court in respect to this matter. Neither party sought to adduce further evidence. The Affidavits annexed the correspondence between the parties. The husband’s affidavit also annexes a bundle of receipts and statements from which I am supposed to conclude that the funds were properly spent. Save as set out below, the documents were of a limited use. Counsel for the parties agree that it is not for the court to conduct an audit and the matter is dealt with on the bases set out below.
From the correspondence annexed to the Affidavits filed on behalf of the wife and the husband, it is apparent that the wife wrote to the solicitors for the husband by letter dated 16 December 2009 setting out those expenses which she agreed could be paid from the drawings from the US Dollar Account.
By letter dated 4 February 2010, the husband responded setting out a schedule of the expenditure that he sought to meet. The schedule did not appear to refer solely to joint expenses of the parties including, amongst other things:
a)Internet and wireless expenses;
b)rent;
c)expenses for his trip to America of some $500 per month; and
d)medication/medical assistance and financial assistance for his daughter of $400 per month.
It would then appear that the husband chose without regard to the order and without regard to the need to obtain an agreement from the wife, to draw down funds and to apply them for his own purposes.
In the circumstances, in accordance with the secondary submission of Counsel for the wife, I am minded to credit the legitimate expenses met by the husband as those items referred to in the letter from the wife’s solicitors dated 16 December 2009.
As neither the wife nor the husband has, save for the correspondence from the husband’s solicitors dated 4 February 2010, set out exactly what these amounts should be, I must refer to the letter from [omitted] to Mr Barr, solicitor for the wife, setting out the monthly expenses. This is a method that was conceded by both parties that, in view of the lack of detailed information supplied, was an appropriate way of dealing with the matter.
In the circumstances, I would allow those monthly expenses that had been specifically agreed to which are:
a)mortgage with ANZ Bank - $1700;
b)mortgage with ANZ Bank - $950;
c)taxes and emergency levies - $400;
d)ambulance insurance for the family - $30;
e)for [X] - $433 (being the $100 per week allowance agreed to);
f)school fees, clothing, books, classroom supplies for [X] - $370;
g)rates, taxes and emergency levies re [C] - $150; and
h)telephone for [C] - $20.
This amounts to an agreed withdrawal from the National Australia Bank US Dollar Account of AU$4,350 per month.
For the period from 25 November 2009 until 19 July 2010 there should have been approximately eight months of drawings. This amounts to a figure of AU$32,424.
The husband’s closing submissions show the National Australia Bank US Dollar Account to be AU$229,434.65 or US$200,865.54.
The amount due and owing in AU$ at the commencement of these proceedings was on the husband’s figures a sum of $159,827 which when converted to AU$ using the conversion rate adopted by the husband amounts to $182,559.19. For the reasons set out above I have found it appropriate for the husband to draw down some funds. I have calculated the husband was able to draw AU$32,424 from the account making the outstanding balance $214,983.19, (when $32,424 is added to the previous balance of $182,559.19). The husband chose to withdraw funds for other purposes and chose not to provide an appropriate account for this.
I would therefore find any amount due and owing over and above that figure is to be the sole responsibility of the husband. That is, the liability is included at $214,983.19 and orders are made for the remaining liability to be met by the husband.
Pre-marriage opal collection
The wife disputed that the husband had an opal collection at the commencement of cohabitation. She did not dispute however that the husband had been opal mining for some years prior to the relationship commencing.
She was cross-examined extensively on this and shown, amongst other things, press clippings showing the husband with pieces of the collection.
She reluctantly conceded that she may have seen some of the items prior to the parties being married and some of them post the parties being married.
Her evidence in respect to this was unsatisfactory.
In the circumstances, I accept that the husband’s opal collection existed as at the date of commencement of the cohabitation of the parties.
The Pool
For the reasons set out above, I therefore find that the matrimonial asset pool is comprised of:
Lot [6] [P] Road, [M] $290,000.00 Lot [7] [P] Road, [M] $275,000.00 Lot [8] [P] Road, [M] $285,000.00 Lot [9] [P] Road, [M] $275,000.00 Lot [10] [P] Road, [M] $285,000.00 Lot [2] [P] Road, [M] $228,500.00 Lot [14] [P] Road, [M] $295,000.00 Lot [13] [P] Road, [M] (shed/house) $390,000.00 Lot [12] [P] Road, [M] $300,000.00 Lot [11] [P] Road, [M] $315,000.00 Lot [G] Road, [M] $140,000.00 Lot [5] [H] Road, [M] (purchased with wife’s
sister’s money)
$280,000.00 Lot [16] [H] Road, [M] (purchased with wife’s
sister’s money)
$280,000.00 Lot [3] [C] (pre-marriage asset) $60,000.00 Lot [4] [C] (pre-marriage asset) $10,000.00 Husband’s motor vehicle – Toyota Ute (red book) $4,100.00 Husband’s motor vehicle – Ford Wagon (red book) $11,500.00 Wife’s motor vehicle $3,500.00 Husband’s opals $68,230.00 Wife’s opals $3,000.00 Husband’s money in bank (brought to account in the amount Added back) $127,000.00 Wife’s money in bank (brought to account in the amount Added back) $46,770.00 Mining equipment at [C]
(pre marriage asset)
$150,000.00 V2 superannuation balance $20.30
Liabilities
The liabilities are as follows:
ANZ Mortgage [3] $142,489.00 ANZ Mortgage [4] $231,038.00 NAB US Dollar account (converted to AU$ @ 1.14223) $214,983.19
Excluded from the pool:
Wife’ sister’s contribution $300,0000.00
Contributions
There is some difference between the parties as to when they commenced cohabiting.
It is the husband’s evidence that they commenced cohabiting in 1985 when they married. It is the wife’s evidence that they commenced cohabiting in or about 1983. Both Counsel concede that nothing turns on this issue.
Assets at commencement of cohabitation
Whilst it is agreed that the wife had minimal or no assets (save for a sum of $15,000 to $20,000 she claims which is not admitted by the husband and for which there is no evidence to support this claim) when the parties commenced cohabiting, there appears to be some agreement that as at the date of commencement of cohabitation, or around 1983/85, the husband owned:
i)Lot [3] [C];
ii)Lot [4] [C];
iii)Plant and mining equipment; and
iv)Opals (although the size and identity of this collection is in dispute).
With respect to the items held by the husband at the date of the commencement of the relationship, being the dug out, land, mining equipment, and opal collection, the husband argues that the land has unique “geological and geomelogical characters” and should be treated differently to “normal” real property.
There is no evidence to suggest that the land, mining equipment or indeed the opal collection (which will be addressed later) have not benefited from the efforts of the parties to maintain and improve those assets.
I do not accept the husband’s arguments that the frequency of its use, the nature of the equipment or the climate of [C] make this a special case. He argues that the value of the assets should be brought to account at the value nominated by him for 1985. There is no evidence to support the husband’s assertion and I do not accept this submission.
In addition the wife concedes that at the date of marriage the husband owned properties in the United States. There is very little detail as to what these properties were or what happened to them.
It is further agreed that the parties had a business of [omitted] in the United States. It is common ground that that business went into liquidation after action was taken by the Internal Revenue Service and nothing was retrieved from the business. There is nothing to show that any of the assets in the United States remain or were used (for example, sale proceeds) to benefit the parties in Australia (or indeed to show that they ended up being a liability). On the evidence I have, which is minimal, it is not possible to make any allowance for this.
As a consequence of the [omitted] business and the opal mining activities, the husband submits the parties lived a lifestyle that involved them travelling between Taiwan, the United States, and in the husband’s case, Australia.
It is the wife’s evidence that she was a partner in this business (which is denied) and that she was engaged in working for and promoting the business with the husband. It is implicit in her evidence that the business in which she and the husband were engaged supported their lifestyle. I therefore accept that the initial financial contributions of the husband were significant in setting the parties up.
The parties agreed that in 1993 they moved to [C] to reside.
Their son [X] was born [in] 1993.
In 1995 the wife became an Australian Citizen.
In 1996, the parties purchased the matrimonial farming block in [M] being ten blocks of 6.2 acres for $78,500. The land was purchased with a $10,000 deposit and a mortgage of $68,500.
In 2001 the parties purchased the property known as Property [A], [M] for $145,000 which they subdivided into two blocks. These were sold for $202,000 and $68,500 respectively providing a net profit on the husband’s evidence of $125,500 before costs. In 2002 the parties purchased the [O] Terrace/[G] Road properties for $130,000. The property comprised three acres with an incomplete house which was renovated and subdivided into three one acre blocks.
On 28 August 2006 the [O] Terrace/[G] Road block with the renovated house was sold for $198,500.
In 2007 the parties sold a portion of the subdivided block being 2.5 acres from Lot [15] for $228,500.
In 2007 blocks [5] and [16] were purchased for $145,000 each. The husband’s evidence is that this was with a deposit of $10,000 paid by the parties and a contribution of $279,998 paid by the wife’s sister.
On 27 June 2008 the second [O] Terrace/[G] Road block was sold for $140,000. The third block remains on the market for $194,000 being the list price with an agreed value of $140,000.
The parties separated in October 2008.
On 20 October 2008 the wife withdrew $25,000 from the parties’ ANZ joint Mortgage Offset Account.
On 13 November 2008 the wife withdrew $2,000 from the parties’ ANZ joint Mortgage Offset Account.
In November 2008 the husband withdrew $100,000 from the ANZ joint Mortgage Offset Account and US$15,000 from an ANZ bank account. It is conceded this in effect meant he had taken AU$127,000.
On 2 December 2008 the husband filed an application seeking orders for the division of the matrimonial assets.
On 12 December 2008 an order was made by Federal Magistrate Kelly restraining the parties from selling, transferring, dealing with or assigning any asset in their respective possession.
On 6 April 2009 the wife withdrew $5,200 from the parties’ ANZ joint Mortgage Offset Account.
On 24 April 2009 the wife withdrew $5,800 from the parties’ ANZ joint Mortgage Offset Account.
On 8 July 2009 the wife withdrew $8,770 from the parties’ ANZ joint Mortgage Offset Account.
There is no dispute that the husband has, since the date of separation, been responsible for meeting the cost of the outgoings including mortgages on the parties’ properties, some of which for the period to November 2009 was paid for from funds withdrawn by him, and some of which has been brought to account post November 2009.
Agent Orange
In August 1991 proceedings were instituted regarding injuries received by the husband from Agent Orange. The husband initially stated that the funds were received by him in or about 1995/96. He subsequently changed this in a further Affidavit filed with the Court to suggest that the funds were received in 2001/2. Save for the husband's evidence, there is no additional evidence to show when the funds were received.
The husband does not choose to set out what the injury suffered by him was. There is no evidence to suggest that the injuries are ongoing and have not resolved.
The wife’s evidence is that she and [X] also received injuries and were part of this claim. This is denied by the husband. There is no documentary evidence to support the wife's claim. When pressed during cross-examination the wife conceded that she could not recall whether she was in the United States at the time the alleged poisoning took place. Furthermore, it would appear that [X] was not conceived at the time that the cause of action arose.
The parties concede the funds received from the claim amounted to US$75,000.00.
The wife was adamant that the funds were received whilst the parties were in [C]. The husband's evidence as to when the funds were received appears to vary. In his first Affidavit he says they were received in 1995/1996, in his second he says 2001. In 2007 the parties were residing in [M].
In the absence of any documentary evidence and the concession of the parties that a sum of US $75,000 was received in respect of the compensation claim, I am inclined to find that the funds were received prior to 2001. I do not accept the wife's evidence however that she and [X] were a party to the proceedings.
Negligence claim – Surveyor
In 2000, the parties made a claim against the surveyor of their land for negligence. The allegation is the surveyor “gave away” 700 square metres which had been valued at $70,000. The parties received a settlement and received $35,000 each.
The husband submitted that his share of the funds ($35,000) had been spent on joint expenses while the wife’s had not. There was nothing to support this position. The wife had a further $17,000 in the bank that was over and above the amount shown on her Financial Statement. I regard the monies as having been utilised by the parties for their own purposes. The funds were received in respect of a loss they jointly sustained for which they jointly received compensation.
Real estate in the United States
It is conceded that the husband had real estate in the United States. There is no concession nor is there any evidence as to what was done with that real estate.
In the circumstances, it is difficult to make any allowance for this in the calculation of the contributions to the asset pool.
Section 79(4)(a)
The husband contends that he brought into the marriage considerable wealth including the [C] land, mining plant and equipment and a number of opal pieces amongst other things.
It is suggested by the husband and that even with a relationship of this length, the land, plant and equipment and other assets should not be treated like any other real property as its inherent value is not in its capital appreciation rather in the ability for that land to produce opal which can be processed and sold at a value. Save for the fact that the parties engaged in a successful [omitted] business for some years, there was nothing to support this submission, nor was I referred to any authority to support this submission.
Nevertheless, from the history of this relationship, it can be concluded that the land and assets of the husband provided some support for the parties in the early years and gave them a base from which they were able to build their current asset pool.
It is conceded that the husband had been opal mining since the early 1970’s. This is in excess of ten years prior to the parties commencing cohabitation on the wife’s evidence. It is reasonable to assume that owning two blocks of land in [C] and plant and mining equipment that there was a collection of opals (“the [C] assets”).
The wife was an active partner in the business throughout the years of the marriage. She assisted with sales and bookkeeping on the husband's evidence.
In addition the wife through her family contributed a sum of $10,000 from her parents and a sum of US$280,000 from her sister. The contribution from her sister was added directly to the asset pool by way of assistance with the purchase of land. I have already decided that the funds used to purchase the land should be included.
It must be noted that the introduction of these funds enabled the parties to purchase assets which appear to have significantly increased in value over the recent years. This is a contribution that must be brought to account.
The husband also alleges that he received a US$25,000 inheritance from his father's estate during the relationship. This is not conceded, there is no evidence of the receipt of the funds, and there is no evidence as to what if anything they were applied to. In the circumstances, I do not accept this evidence and make no allowance for this.
Since the parties separated the husband has continued, from the funds held by him, to meet the outgoings in respect of the parties’ property. In view of the fact that these funds are being added back it is appropriate to credit the husband with this contribution.
Section 79(4)(b)
It is submitted by the husband’s counsel that his motivation and vision to develop the [M] properties and to build the substantial [omitted] which is currently on the property, should be brought to account.
I do not accept this as a special contribution to the acquisition, conservation and improvement of the assets.
This is a long relationship and it is open to me to find that the parties worked when able as a partnership in the joint venture of acquiring, conserving and improving the assets. I find nothing exceptional in the non-financial contribution of either party.
Section 79(4)(c)
The husband claims that he provided much of the day to day care for [X] during the many extended months of holiday/travel that the wife undertook for business and pleasure. He estimates that she was away for approximately six to nine months each year. There is no evidence in his Affidavits on which I can rely to support this.
He goes on to state that he continued to provide 100 per cent of the care of [X] as the wife’s relationship broke down with the child. The evidence that he gave at Court after being asked, was that [X] is currently residing elsewhere with friends. This was not information that was volunteered. This was initially explained as a temporary arrangement whilst he was focussed on the proceedings, however it transpired that there was no set time for [X] to return, the parties apparently having a falling out.
At the end of the day however there is no suggestion that the wife has any sort of relationship with her son. This means in effect that the husband is responsible for ensuring his welfare on a day-to-day basis. Whilst the son is residing with others, it is still for the father to provide financial support and to be there when required particularly in view of the fact that the wife concedes that she is no longer talking with her son.
The husband has in the circumstances made a significant contribution to the welfare of the family through his care of the parties’ son particularly since the parties separated in November 2008.
Section 79(4)(d)
The husband says that the orders sought by him in his proposals will allow him to enjoy his passion for opal prospecting unimpeded and will not affect the earning capacity of either party.
The husband concedes that subject to the evidence, the wife’s sister’s financial contribution of $280,000 be added to the wife’s side of the ledger with only the capital appreciation of the block to be added to the ledger.
It is to be noted however that neither party addresses the capital gains tax issues arising from the possible sale of the blocks in the future. It is not possible to bring this to account in view of the lack of evidence.
Section 79(4)(g)
The husband alleges the wife has made no effort to support or contribute towards [X] since separation. At the same time he concedes that all of the child’s costs have come from the joint matrimonial resources during this period.
Once the property is divided however, he submits there is little likelihood that the wife will contribute toward the cost of maintaining [X]. I accept this submission.
In addition, in view of the fact that I have decided that the sum of $127,000 drawn out of the parties’ accounts by the husband, from which he paid for [X]’s expenses should be added back, it is appropriate to credit the husband with contributions made by him from the funds he withdrew. In so saying it is noted the wife did not provide support for [X] from the funds in her possession.
Wastage
The husband submits there should be an adjustment for the fact that the wife refused to allow him to continue trading. He cites amongst other things the lost opportunity of being able to buy the stock and trade at the opal show, and the purchase of property at [N] Terrace. He seeks to rely on the income of the parties declared for previous years to support this proposition. This requires me to assume the previous years tax returns correctly set out the income which I do not. That also requires me to assume those ventures would have been successful which I cannot. He submits there should be an adjustment of 2 per cent. I do not accept this submission.
Taking into account all of the above including the early contributions of the husband and the late contribution of the wife through the rise in the value of the land, I consider the parties’ contributions to be equal.
Section 75(2) factors
I note that the husband is aged sixty-seven years. He claims that he is in poor health as a result of complications with both Agent Orange poisoning and complications resulting from back surgery a number of years ago. No evidence is supplied in respect of this submission.
I therefore can only have regard to his age.
He suggests that his ability to conduct mining enterprises is almost inconceivable. He then in the same argument suggests that he needs to repair the bulldozer so that he can commence the mining operations forthwith. The husband's evidence is not consistent on this point nor is it supported by anything else.
The wife is aged fifty-five years and continues to work although she claims that her opportunities for gainful employment are limited by her age and her injuries to her hands. As is the case with the husband, she does not provide any medical evidence to support her alleged disabilities.
Furthermore, it is a matter for some concern that she chose not to file a current financial statement. The information that she swore and provided to the Court in evidence of her financial circumstances was out of date and inaccurate. It did not for example disclose the fact that the wife was making $100 per week from selling [omitted] at the local market. Nor did it show that she has an extra $17,000 in her bank. The complete disregard for the obligations to make proper disclosure caused concern as to whether or not there were any other aspects of the wife's financial circumstances that had yet to be disclosed.
The husband gave evidence that he was a successful businessman who is capable of making money. He sought permission from the wife to draw down additional funds to enable him to set himself up and to get on with business. The husband on his own as evidence would suggest that he has the physical and mental capacity for appropriate gainful employment either in the [industries omitted].
The wife on her evidence would appear to have a capacity for employment she has demonstrated this through her ability to successfully run a market stall.
The wife concedes that she does not have a relationship with her son. The husband's evidence, given reluctantly, is that his son and he are having a difficult time with their relationship and that his son is living apart from him. Nevertheless it is open to me and I find that the husband still has the responsibility for supporting [X].
Neither party has attempted to submit that the commitments they have should entitle them to additional funds.
Neither party has the responsibility to support another person save and except for [X].
The husband has an entitlement to a pension from the United States for which he receives an allowance of US$1,100 per month.
Neither party is pressing for maintenance from the other.
Neither party is cohabiting with another.
The wife is currently not providing child support, save and except for any joint contribution made towards [X]'s upkeep from the joint funds of the parties.
On the evidence before me, the husband will continue to be responsible for the welfare and financial support of [X]. There is nothing I can point to in the wife's evidence that will suggest that there is likely to be any assistance provided by her.
Taking into account the matters set out above I consider it appropriate to make a further adjustment of 5 per cent.
Just and equitable
Each party seeks to stay at what is known as the former matrimonial home which is in effect a shed that has been renovated by the parties in the course of the relationship.
The husband says that this is a place where he and [X] are comfortable.
The wife submits that she does not wish to move.
The husband says that the person residing there has an obligation to maintain the property in accordance with the council by-laws. At present, he says the parties are in breach of those by-laws.
He submits that the wife does not have the skills or the resources to properly maintain the property.
He therefore seeks an order that he be able to move back into the former matrimonial home and reside there.
Furthermore, he submits that save for the two blocks purchased with the assistance of funds received from the wife’s sister, which are to remain with the wife, the land should be divided such that the blocks held by the parties adjoin each other rather than being mixed together. This appears to be common ground with the wife save that they each want the blocks sought by the other.
There is very little evidence provided by the wife as to why she should remain living in the shed on blocks of land outside of [M].
There is some evidence by the husband that he has identified properties through the course of the relationship and has been instrumental and organising the purchase and sale of those properties.
There is also some evidence on the part of the husband that he is capable of maintaining these properties and effecting improvements which are required (and I note the correspondence received from the council) to the properties and to enable them to comply with council by-laws.
In the circumstances as neither party was prepared to compromise in respect of this matter I am faced with having to decide in favour of one or the other.
I did indicate that it was open to me to order the sale of all properties. This however would trigger significant capital gains and is not, I think, warranted at this stage.
I therefore have elected to proceed in favour of the husband’s proposal but with the appropriate adjustments to be made in due course.
This means that the husband will have pursuant to the orders the following assets:
Lot [9] $275,000 Lot [10] $285,000 Lot [11] $315,000 Lot [12] $300,000 Lot [13] $390,000 Lot [1] $140,000 Plant and equipment [C] $150,000 Lot [3] and Lot [4] [C] $70,000 Opals/ Mr K valuation $68,230 [P] $14,000 Toyota Ute $4,100 Ford Wagon $11,500 Add back $127,000 Sub-total $2,022,830
The wife will have:
Lot [6] $290,000 Lot [7] $275,000 Lot [8] $285,000 Lot [14] $295,000 Lot [2] $228,500 Lot [5] $280,000 Lot [16] $280,000 Wife’s motor vehicle $3,500 Wife’s opals $3,000 Add back $46,770 The gross value of the asset pool $4,009,600
I have found contribution to the purchase of Lots [5] and [16] by the wife’s sister should be excluded from the asset pool. This means that the sum of $300,000 needs to be deducted from the gross value.
The adjusted value is then $3,709,600.
The liabilities being the two ANZ mortgages and the NAB US Dollar Account converted to Australian Dollars are $588,510.90.
The net value of the matrimonial asset pool is then $3,121,089.10.
The husband should receive 55 per cent of the net value of those assets. Fifty five per cent is equivalent to $1,716,599.
The husband has pursuant to these orders assets to the value of $2,022,830.
Pursuant to the orders the husband takes responsibility for the NAB US Dollar Account and the ANZ mortgage for account number [3] for $142,489.
This means that the net value of the assets in the husband’s hands are $1,665,357.90.
The wife receives 45 per cent of the net value of the asset pool. Forty five percent is $1,404,490.
The wife has assets to the value of $1,986,770 from which needs to be taken the $300,000 contribution of the sister. For the purposes of this exercise she then has assets to the value of $1,686,770.
Pursuant to the orders the wife will be responsible for the debt to the ANZ of $231,038.
This means that the net value of the assets for the wife will be $1,455,732.
Pursuant to these calculations this means that the wife is to pay the husband $50,000 (being the rounded down figure).
The husband seeks that a number of the items remaining at the former matrimonial home be assigned to him. In his financial statement filed the 2 October 2009 he puts the household contents at $10,000.
The orders I make allow for the husband to retain a number of these items.
I note in the depreciation schedule for the 30 June 2008 that the equipment in the shed has a written down value of $21,518 whilst the tractor has a written down value of $3,948. Rounding the total of those figures off this would mean that the plant and equipment sought by the husband has a value of approximately $25,000. The husband pursuant to these orders would receive 55 per cent of that value. Making the wife’s entitlement the sum of $11,250.
The wife is retaining the furniture and chattels and white goods such as they are. In the circumstances I would round down the wife’s interest in the plant and equipment sought by the husband to $10,000.
I would then reduce the amount to an owing by the wife to the husband to $40,000.
On either parties’ version of the history of this matter, this is a long relationship.
The parties have one child who remains dependent upon them.
The wife concedes she has no relationship with [X]. The responsibility for the support of [X] must fall to the husband.
The husband was born in 1943 and is aged sixty seven. The wife was born in 1955 and is aged fifty five. Neither party is young.
Each party at the conclusion of this matter will be left with assets with a net value of in excess of $1,500,000.
I have had regard to all of the matters set out above and in the circumstances I did not consider it appropriate when considering the just and equitable requirements in s.79(4) to make any further adjustment to the assets.
I certify that the preceding two hundred and sixty-four (264) paragraphs are a true copy of the reasons for judgment of Cole FM
Associate:
Date: 17 September 2010
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