Hammond and Mullen
[2010] FMCAfam 943
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HAMMOND & MULLEN | [2010] FMCAfam 943 |
| FAMILY LAW – Property – material differences between the asset pool at commencement of the relationship – unreliable evidence during cross-examination – superannuation – non-financial contributions broadly equal – financial contributions favour those contributions made on behalf of the wife. |
| Family Law Act 1975 (Cth) Queensland Building Services Authority Act 1991 (Qld) |
| Jones v Dunkel (1959) 101 CLR 298 |
| Applicant: | MR HAMMOND |
| Respondent: | MS MULLEN |
| File Number: | BRC 4037 of 2008 |
| Judgment of: | Burnett FM |
| Hearing dates: | 27 and 28 July 2010 |
| Date of Last Submission: | 28 July 2010 |
| Delivered at: | Brisbane |
| Delivered on: | 5 August 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hanlon |
| Solicitors for the Applicant: | Wiltshire Lawyers |
| Counsel for the Respondent: | Mr Hackett |
| Solicitors for the Respondent: | Evans & Company |
ORDERS
That there be judgment for the applicant against the respondent in the sum of $35,000.00.
That the execution of the judgment be stayed pending any costs application.
That each party file and serve any submissions in respect of the costs in the matter on or before 4.00pm on 27August 2010.
That the application for costs be adjourned to 2.30pm on 16 September 2010 in the Federal Magistrates Court of Australia at Brisbane.
IT IS NOTED that publication of this judgment under the pseudonym Hammond & Mullen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 4037 of 2008
| MR HAMMOND |
Applicant
And
| MS MULLEN |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
In or about early 1999 the applicant became involved with the respondent. The relationship developed and they married on 10 February 2001.
In July of 2006 the applicant says they separated. The respondent said separation occurred in January 2006 with the parties being separated under the one roof until the applicant ceased residing at the former matrimonial home in July 2006. In my view nothing much turns upon this point of distinction given the length of the relationship. Although for reasons which follow, I accept that the point of separation or final separation occurred as the respondent says, that is in January 2006.
There are no children or other dependants produced by the marriage.
The parties have agreed the amounts and liabilities as at the date of trial and their respective values: see exhibit 1. Those matters are particularised therein.
For reasons which follow, there are material differences between the asset pool at the commencement of the relationship: that which occurred at the time of separation and ultimately that which was available at the trial.
A summary of the assets brought into the marriage is apparent in exhibit 17, which includes a list of the parties’ initial contributions as alleged by the respondent.
The applicant in fact contends that he had assets of a somewhat greater value than those that were acknowledged by the respondent. So far as his material, he contends he had a car with the value of $12,500.00; superannuation to the value of $3,500.00; tools of the value of $8,000.00; stock with the value of $3,500.00. Otherwise he accepts the values attributed in exhibit 17. All up it would seem that on the basis of the applicant’s contention he had assets, at the time of the initial joining of the parties, with the value of $35,000.00. As I have noted the applicant concedes that he had assets to the value of $5,740.00 which gives rise to four points of difference.
From cross-examination of the applicant it is plain that his evidence was simply unreliable on these matters. For instance, cross-examination on the value of the [motor vehicle], a car purchased by the applicant second-hand for $12,500.00 some many years before the relationship commenced and subsequently sold as a trade-in two years into the relationship for $2,500.00 demonstrates that difficulty. Given it was a work vehicle I do not feel the need to be informed by an expert as to the fact that it would have depreciated over the time such that its value clearly fell well short of the estimate of $12,500.00 proposed by the applicant. Needless to say, its value was something greater than $2,500.00 which is evident from the trade-in value achieved about two years after the relationship commenced. In my view the applicant plainly sought to embellish his evidence in respect of this matter, but for present purposes I have adopted a value of $3,000.00 for the vehicle.
The second matter concerns his superannuation. He claimed a value of $8,500.00. However its value at the commencement was demonstrably $2,040.00 see exhibit 2. He claims stock worth $3,500.00 and tools worth $8,000.00. There was no documentary evidence to support these contentions. Given the applicant was [a tradesman] it would be expected that these matters could have been demonstrated. However I was not assisted by him by the presentation of any financial information in respect of those matters.
In any event, shortly after the relationship commenced the applicant subsequently incorporated a company, [omitted], to conduct his [omitted] business. An examination of its balance sheet and the notes attached to the balance sheet, at least those that were put in evidence before the court, included an assessment for plant and equipment at cost. I assume the allowance of plant and equipment included his tools. They had a value at cost of $3,679.00 as at 26 October 2001, a date which I take to be about the date of incorporation. That figure I would expect more accurately reflects the value of the applicant’s tools on hand at the time of the commencement of the relationship and I will round that sum up and adopt $4,000.00 as a value of the tools to allow for depreciation between early 1999 and late 2001, a matter of three years.
I also note that the accounts of [the company] made no provision for inventory. I accept the respondent’s evidence that the applicant did not appear to have much inventory beyond some cable and other miscellaneous items, including switches and the like, they being the common consumerables that one might expect [a tradesman] to have in his kit. I have not been assisted with any evidence as to what value these items might have thus any figure which could be ascribed by me in respect to that matter would simply be a guess and I do not intend to engage in the process of guessing.
I reject the applicant as a witness capable of providing a reliable estimate in respect of these matters. I cannot ascribe a value to his stock and afford it no value. Generally, in terms of the applicant’s reliability, a number of issues arose in the course of the trial which have influenced my views about the applicant and gave rise to the conclusion that I have drawn.
First were the plainly illustrated inconsistencies between his sworn statements and the objective evidence which was adduced. In addition, his unreliability has been plainly demonstrated in respect of his general taxation affairs. To attribute sloppiness to the applicant in the handling of his taxation affairs would be to gloss over the reality. It seemed plain to me that he sought to cheat on a number of matters. His general approach to his taxation affairs has informed me as to his general approach to matters where transparency and visibility are required. In my view everything he says has to be viewed critically and generally cannot be accepted unless corroborated by an objective source. As later discussed there are other instances of unreliability in his evidence in this case.
In summary then I find that the applicant’s initial contributions totalled $9,740.00 which was made up as: car equity $3,000.00; superannuation $2,240.00; furniture $5,000.00; tools $4,000.00; and then a credit card debt of negative $2,500.00 giving him $9,740.00, which I round up to $10,000.00 to allow for stock.
Try as the applicant did in terms of seeking to discredit the respondent I had no difficulty in accepting anything sworn to by her. Much of her evidence concerning her assets and their value was capable of objective verification and there was, in my view, no hint of embellishment. I accept the initial contributions by her as set out in exhibit 17; that is, they had a net value of $252,000.00.
On that basis at the outset the parties’ initial contributions were approximately 4 per cent on behalf of the applicant and 96 per cent on behalf of the respondent of the pool. The pool itself was, as can be seen, an extremely modest pool.
The applicant was a 27 year old [tradesman] and the respondent was a 27 year old [health care professional] at the commencement of the relationship. Each came to the relationship with some life experience. The fact is that despite each having had about 10 years’ post-school experience and each having earned certificates and qualifications in trade and of a professional nature in well-earning occupations, it is significant in this case that there was at the outset a significant disparity of assets held by each of them and the disparity has continued between them since the commencement and after separation. I have no doubt that disparity will continue into the future by reason of their individual personalities, but in any event it is quite plain that that disparity also to some extent played out over the six years that they were together.
At the outset it is plain to me from the evidence and I am satisfied that the evidence supports a conclusion that the respondent is both industrious and careful particularly in respect of financial matters and that the applicant is much less so. Before marriage to the respondent the applicant travelled and enjoyed life. In the meantime the respondent worked and saved. During the marriage the applicant enjoyed the largesse of the respondent’s industry and following the marriage the applicant reverted to old habits of self-indulgence, such as acquiring and maintaining an expensive motorcar in circumstances where clearly the providence of such a decision might be questioned. He also appears to have throttled back from hard work and industry. In the meantime the respondent continued to work hard, saved and generally continued to maintain her modest if not somewhat parsimonious habits.
The respondent has summarised in exhibit 17 the income contributions during the relationship. The information contained in exhibit 17 has been sourced from income tax returns and I am satisfied that that information is accurate. During the course of the relationship each party continued in their respective employment, although the evidence of later earnings would suggest that the applicant enjoyed a greater income earning potential than his actual earnings demonstrate. In any event, it is plain that he employed a reasonable effort throughout the relationship.
There is no complaint that the respondent did not apply herself in her occupation or otherwise in the course of the relationship. As the evidence indicates, her earnings were approximately 70 per cent of the earnings for the marriage. The applicant himself earned about 30 per cent of the total earnings for the marriage, and as I have noted I accept that they each applied an equal rate of effort.
In addition to this fact, other matters arose, particularly concerning contributions to what became the former matrimonial home. About three years after cohabitation commenced, the respondent agreed to sell her apartment introduced by her into the marriage and acquired real estate in the form of vacant land at [S] (an area in the Gold Coast hinterland). There is some evidence of contributions having been made earlier by the applicant to the improvement of the respondent’s apartment. However it appears to have been only minimal, largely involving the introduction of kickboards, but overall nothing of any moment and nothing to which any value can be ascribed. However upon its sale and purchase of the [S] property the applicant says he made significant contributions to the house then constructed upon the land.
The acquisition of the [S] property was funded by the proceeds of sale from the respondent’s apartment. A loan was then negotiated with the [W Bank] for construction finance to construct a house upon the land. No particulars were given as to the full extent of that finance except that there is a contract in the evidence which demonstrates the construction costs of about $350,000.00.
The land remained vacant for a number of months after it was acquired before construction commenced following the entry by the respondent into a contract with a builder, Mr B. Mr B was known to and it would seem is an associate of the applicant.
Between the time of selling the apartment and until about February 2005, that is from about 2003 until 2005, the parties lived in rental accommodation. In February 2005 they then moved into the partly-constructed dwelling upon the land. At that time the respondent says the dwelling was about 25 per cent complete. It was clearly pretty rough as the house then had no toilet, electricity or laundry and the main bedroom was not complete; it rather sounds like they were camping out.
Although there was a contract in place each of the applicant and respondent by reason of some of the exclusions provided from the contract undertook works around the property with a view to reducing the costs of construction. Those included such works as painting. This was done by them in their spare time.
The applicant says that he, in particular, did electrical works to save costs. While I accept that he did do some works, I think he has overstated the value of those works and their extent. I accept the respondent’s evidence that the electrical works remain incomplete and, in fact, to some extent are in a dangerous condition. That is consistent with the house being partly complete as I am satisfied it is. The applicant himself did not ascribe any particular value to those works. Also he says that he made contributions by way of materials, the hire of equipment, etcetera. Again there was no value ascribed to those particular alleged contributions.
He did, however, say that he had an arrangement with the builder for a $37,000.00 standing credit which he claimed was ultimately reduced off the building price for the property. He also claimed that he drew a cheque for $49,403.87 for the final payment on the contract for the construction of the house. Overall however he says that all these matters taken collectively had a value of $198,200.00 in respect of which he claims a direct financial contribution.
Except for the matters concerning the $37,000.00 standing credit and the cheque for $49,000.00, none of the other matters were further particularised. I will address each of those matters in due course but suffice to say that insofar as the difference between $198,200.00 and the other two sums – that is $37,000.00 and $49,000.00 – has been claimed I do not accept that any such sum is due for reasons which follow.
While the notion of a contra in the building trade is no alien in that industry such an arrangement ought to have been capable of corroboration and verification. Mr B still carries on business and is notionally available. While it is open to infer that Mr B may not have been a willing witness to give evidence about arrangements which imply improper conduct on his part in respect of his tax affairs, it is equally open to infer consistent with the principles in Jones v Dunkel (1959) 101 CLR 298 that the applicant did not call on Mr B because he was concerned his evidence would not support the position which he advances. I think that is perhaps in this instance the more likely outcome as I am not prepared to draw any inferences in respect to Mr B’s own tax affairs based on a contra arrangement because such arrangements are, if properly recorded, quite appropriate. So it follows that I am not prepared to accept that there was indeed a $37,000.00 standing arrangement.
Likewise I have difficulty with the applicant’s evidence concerning the cheque for $49,403.87. The bank statements demonstrate that this cheque has all the characteristics of a round robin transaction; that is the applicant drew a cheque for $49,403.87 the same day as he deposited a cheque for $59,503.49 which was received by him from the builder. The difference probably represents some due to him from the builder for services rendered or perhaps more precisely to his company, but in any event the transaction has in my view all the hallmarks of a round robin transaction, that is when one particularly considers the sum noted as being the final payment due under the contract. An examination of the schedule to the building contract between the parties demonstrates the progress claims payable through the course of the works. In respect of the final claim due upon completion the sum allowed was a sum of $58,635 due upon practical completion. There is no sum in the building schedule to the contract which equates with a sum of $49,403.87. Furthermore the nature of the transaction itself brings into question the applicant’s contra arrangements.
The only transaction of those that I have noted above then is the payment of $59,503.48 which, as I have earlier indicated, is entirely suspicious especially as it is said to constitute a final payment in circumstances where the contract works remain incomplete.
In this case construction finance had been arranged with the [W Bank]. The usual terms of such finance calls for the presentation to the lender by the borrower of progress claims and certificates, sometimes certified by a quantity surveyor. The bank pays upon the certificate. The evidence is that the loan has not been fully drawn suggesting that no certificate of practical completion has been delivered to the bank warranting it to call upon the facility put in place. In those circumstances I doubt that any sensible person would be prepared to make a final payment to a builder.
I do not accept that the applicant made the payment in the round robin transaction for the purpose said, but that it was really a round robin transaction with a view to seeking to deceive the respondent in these proceedings.
All up I formed the view that the transaction was suspicious. The transaction itself of course could have been answered by calling Mr B, but again he was not called.
Furthermore I am not satisfied with the applicant’s evidence in respect of the remaining sums said to be applied to the house construction.
Anybody who has practiced law in the field of building and construction would have an acute appreciation of the regulatory framework governing record maintenance. In this case there are no records. There has been no disclosure of any relevant records in relation to these matters. That has been a matter of contest between the parties and a source of dispute between them. Even if the applicant himself had decided not to maintain personal records that would only have adversely impacted personal records such as personal timesheets on his behalf and/or expenditure items. This would not have impacted upon records available from other subcontractors and/or suppliers which of course as a matter of tax regulation are required to be maintained by such other subcontractors and/or suppliers and no doubt ought to have been available on non-party disclosure if there had been any indication as to whom those third parties might be. There of course are also other requirements under the Queensland Building Services Authority Act.
In any event no records were produced. In my view the applicant’s reliability in the absence of records to assist his recollection has been shown to be demonstrably wanting in other instances and I do not accept his evidence in this respect except insofar as it can be corroborated by objective evidence.
The applicant did do some works about the house. They were works relevant to his trade for which he ought to be allowed some consideration and credit. However the respondent says, and I accept, that she too did works about the house. She also reorganised her affairs because she recognised an ability to make a more direct contribution in respect of works around the house. She acknowledged in that regard that her time was more productively spent working extra time in her optometry practice on weekends to earn more money in order to apply it more quickly to retire the mortgage debt which I am satisfied she did. In that regard her efforts, I think, were equally productive to the parties and constituted an equal set-off or offset to the applicant’s efforts which, as I have noted, he ought to be allowed credit for.
Aside from these matters the parties largely pooled their resources and efforts throughout the marriage. The applicant sought to advance an argument that the applicant’s effort ought to be afforded greater weight because of his occupation. That argument seemed to suggest that there should be some notional weighting of the various occupational characteristics, an assessment of those characteristics and their significance to the development of asset pool and then an adjustment to reflect that assessment. That might be so in some cases. However in this instance the applicant said that that would produce a 25 to 30 per cent contribution in favour of the applicant to the point of separation.
In this case I have some difficulty with that approach. First, how can relevant value be attributed to those differing characteristics, putting aside the obvious lack of evidence to prove these factors, how does one assess the relevant values of [a tradesman] versus those of [a health care professional]? How does one assess the relative values between housework and garden work and other domestic activities undertaken by the parties in the course of a functional and sometimes dysfunctional relationship?
While a case in more extreme instances might give rise to a proper or a valid basis for such an assessment, in this instance there were no such extremes. In this case both parties had extremely marketable and relatively remunerative skills. Each applied a roughly equal rate of effort to the application of their skills for income-earning purposes, although as the evidence shows the respondent earned more. The evidence also demonstrates that the applicant had a higher earning capacity such that he could well, if he had chosen, earned income that was commensurate with that of the respondent. But the respondent makes no complaint about the applicant’s failure to do so at least through the course of the marriage. That fact alone does not render the applicant less worthwhile.
They each applied a broadly equal related effort to the tasks necessary to render the household functional. Each applied broadly equal rates of effort to the improvement of the matrimonial assets. They pooled their financial resources to achieve an economically efficient household. In my view in that regard largely their financial and non-financial contributions could be seen to be relatively equal subject to a matter I will address in a moment.
Within exhibit 17 is a table of comparative income contributions during the relationship. It demonstrates as a percentage the applicant’s income contributed to about 30 per cent of the gross income in the relationship, and the respondent’s was about 70 per cent. In this regard the respondent impliedly if not explicitly recognised at the outset having regard to their differing professions that to some extent there would be this disparity in the course of maintaining the relationship between them. Those sums having been earned were subsequently dissipated into a common pool, some of which was consumed by the parties in day-to-day living and some of which went into the house itself. That matter I will address below in terms of the adjustment.
While there are no complaints of waste, in this instance a question remains about $70,000.00 said to have been taken by the applicant from the applicant’s business. The complaint broadly is that at the time of separation there was $70,000.00 in the account of [the company] which was drawn down by the applicant. The profit and loss statements for the company lend some support to this contention. If one looks first to the profit and loss statement for the year ended 30 June 2007 it can be seen by reference to the preceding year’s figures, which form part of the 2007 report, that in the year 2007 the director’s fees total $42,500.00. That sum I note is picked up in the applicant’s tax return for that financial year as his income for that year.
In 2007, though granted the profit from trading was significantly higher because of obviously higher sales, the director’s fees went from $42,500.00 to $100,000.00. Needless to say having regard to the higher sales, the difference of about $60,000.00 flowed directly into payments made to the applicant; 2007 of course was the year following the separation of the parties.
From a review of the profit and loss statement, exhibit 7, that is for the year 2008, it can be seen, again, by effecting a comparison between the 2007 and 2008 figures, that while the director’s fees for 2008 fell to nothing following a fall of sales from $143,000.00 in 2007 to $85,000.00 in 2008, director’s fees fell to nothing and a loss of about $40,000.00 was realised. But all up it seems that somewhere in the space of 12 months something approaching $70,000.00 has passed through the hands of the company and into oblivion.
It is of further note that so far as the records are concerned, despite the applicant being able to produce income tax records for the years up to 2006 and from 2008 on, there was no income tax record for 2007. On that basis I am satisfied that a sum of about $70,000.00 was in fact drawn down from the company by the applicant and applied to his own use. For reasons that will follow shortly, whether it be $70,000.00 or even something less, is probably not going to be of great moment in the outcome in this application.
Furthermore my view in relation to that matter is fortified by reference to the events that followed in 2008 with the company ultimately becoming insolvent and being placed into liquidation. Clearly, aside from the fact that the company’s sales appear to have suffered a significant if not catastrophic decline the withdrawing of such a significant quantum of capital would obviously account for the company’s ultimate demise.
Another financial matter relevant to the application concerns the company itself. Although the company appears only to have had a notional capital value of about $4,000.00 by reference to its balance sheet, it seems the balance sheet fails to include any goodwill component which would, of course, have called it to book any goodwill value for the recurrent nature of a business of this kind. For instance, if one were to adopt a middle ground and accept the 2007 figures as representing the true and realisable value of the business and, of course, accept that an apposite and appropriate rate of director’s fees would be something approaching $75,000.00, which by reference to the applicant’s current salary could be justified, it would seem then that there could be roughly an annual surplus of about $25,000.00 a year. No effort has been taken to ascribe any value to that matter and I do not ascribe any value to it but make the observation that there is something there that again the respondent has elected not to pursue but which if she chose to it could have been considered in her case. In any event for reasons which follow that omission would make no difference in the outcome.
One further matter raised by the applicant in his favour is an alleged $50,000.00 contribution. That matter was particularised in his affidavit and, in particular, is detailed in a table to be found in exhibit 8. That table affects a comparative analysis of contributions made to a case management account which was maintained by the applicant. It demonstrates his contributions or his deposits, the respondent’s deposits and an analysis of those deposits which were made by the respondent on his behalf. It can be seen from that analysis that of the $50,000.00 which the applicant claims to have deposited to the benefit of the parties from his income, that $15,000.00 indeed has its origin with payments made by the respondent to the applicant notionally on account of the work undertaken by the applicant in the respondent’s business.
As I have earlier noted, I do think that there generally was a pooling of income made by the parties by reference to their respective incomes, and if anything, I note that the approach advanced by the respondent affords the applicant a much more generous allowance than he would have if I were simply to confine myself to the matters advanced by him, in particular by reference to exhibit 8.
In summary then I have discussed the matters relevant to the financial contributions that I think have been made directly or indirectly by the parties, both at the outset and during the course of the marriage, and also matters that are relevant to their other contributions, that being other than financial contributions, made directly or indirectly by them during the course of the marriage. I will touch upon matters relevant to financial contributions afterwards in a short time, but in broad terms I have, as I say, noted that I think the non-financial contributions were broadly equal and I think the financial contributions demonstrably favour contributions made on behalf of the wife, although I am not prepared to discount entirely contributions made by the applicant despite the fact that I think he has not made a significant contribution, at least not much beyond the pooling of his income into the joint funds such as the respondent did.
Concerning post separation contribution the following arise: first, the wife’s post separation savings of $88,764.00; the reduction made by the wife to the mortgage over the [S] property since separation, the sum of $106,733.00; a reduction made by the wife of the business loan after separation in the sum of $42,859.00. There is a need to deduct the husband’s tax liability that relates to his post-separation period, a sum of $39,619.00. There is I think a need to add-back the value of the pre-separation disposition of the $70,000 from the husband’s business. There is also a need to deduct each party’s superannuation following separation, only a sum of $105,814.00, which accepting those figures leaves a notional pool of $317,449.00.
From the notional pool at separation I accept there should be an allowance of at least $200,000.00 on account of initial contributions and in saying that I am accepting the respondent’s submissions and I will make some observations about them generally, but except that the respondent has made the submissions, I would have taken a much tougher line. I would have been more inclined to adopt a strict arithmetic approach accepting the findings that I have made but in any event these are the submissions made by the respondent and I will respect them. I should say I think they are entirely reasonable.
That then leaves the remaining pool of $117,449.00 which ought to be adjusted in accordance with financial contributions during the relationship. The respondent contends there should be an allowance of 30 per cent to the husband and 70 per cent to the wife which again I think is an exceedingly generous allowance particularly when one has regard to the fact that aside from their equal non-financial contributions and allowing for the disparity in the non-financial contributions, and I note that this sum mirrors largely the income during the period, it ignores the capital value or I should say the return of the wife ought to have been afforded in recognition of the capital value that she brought into the marriage. In simple terms, the wife’s capital spared both the applicant and the respondent the need to pay rent for the term of their relationship. That matter has never been accounted for. To my mind if it had been accounted for it would have perhaps caused a greater allowance in terms of direct financial contributions by the wife during the course of the marriage in recognition of her entitlement to some dividend on account of her capital invested in this association.
In any event, the wife only seeks 70 per cent and I am content to allow her that sum and permit the 30 per cent for the applicant. As the respondent says in her submission which I accept and adopt that equates to the applicant having in real terms, without any cash adjustment, an entitlement to about $76,223.00 made up as his furnishings, the early capital withdrawal, superannuation and the tax liability. This is well in excess of 30% of the pool of $117,449.00.
So far as section 75(2) factors are concerned, the applicant contends there should be an adjustment in his favour on the basis of the disparity of earning capacity. I do not accept that as I accept the respondent’s submissions in this regard, and they are first, that the parties came to their relationship in their chosen careers and the relationship was not adversely impacted upon by their respective earning capacities, but perhaps furthermore as the evidence shows the applicant does have the capacity to earn a significantly greater income than that which he earns at the moment. As to whether he chooses to realise his full potential is entirely a matter for him and I do not think of itself warrants the imposition of any burden upon the respondent because of the applicant’s lack of industry or diligence which I think in this instance he clearly lacks.
Other matters advanced or which were touched upon and implicitly advanced by the applicant include his change in circumstances. He has now entered into another relationship and has now a dependant child. They are, of course, lifestyle choices that are entirely independent of his association with the respondent and I cannot see how the respondent can be said to be causally responsible for and be necessarily required to make a contribution to any of those matters.
For the respondent it was advanced that she has a legitimate basis upon which to expect her earnings will decrease in the future. She is 38, she says she wishes to have children. In that event she says that she will have to sell her business and work as an employee in order to satisfy that particular matter. The respondent calls for a modest adjustment. Again, I do not see why in this instance the applicant should be burdened with lifestyle choices that the respondent may choose to make. These are matters that are beyond the applicant’s control and may never be realised, but in any event it is a matter for the respondent how she chooses to progress. She has the capacity to earn, she is earning, she has demonstrated a capacity to live within her means and I do not think that will change irrespective of what she chooses to do lifestyle-wise in the future. This is not a case where I think there is any adjustment required in terms of section 75(2).
Looking then to the property adjustment itself, having regard to where we started, and that is with the initial contributions, and the pool at trial, it is agreed, as I have already noted, that the pool at trial has value of about $550,000.00. I accept the submissions made by the respondent that there should be a notional removal from the pool of the matters which have had a direct effect on the value of the pool and relate to post-separation contributions wholly concerning one or other of the parties. That gives a pool for distribution of $17,449.00.
As to whether it is just and equitable as is submitted by the respondent, she recognises in her submissions that the sum of $70,000.00 constitutes a notional adjustment, and if one deducts the $70,000.00 then the sum which ought be awarded is $6,223.00. However the respondent proposes the applicant be awarded a sum of $35,000.00. It is submitted on behalf of the respondent, that a sum ought to be awarded. That in my view is more than just and equitable.
Let me say again I would not be inclined, if I was adopting a strict arithmetic approach, to have discounted the $70,000.00. On a strict arithmetic basis the husband would have got an award of $6,223.00, but in this case the respondent has quite generously sought to waive the $70,000.00 pre-withdrawal which is, as I have noted, is a very generous concession. I say that particularly because not only has the respondent generously allowed this matter to be put aside in the overall computation, but it is compounded by the respondent not pursuing, as I think she would have been entitled to, the loss occasioned to the partnership between them by the manner in which the applicant permitted his very valuable business to disassemble to a point where it had to be wound up and had no value. No doubt, as I noted, it is a matter that has not reflected in the figures, but I have to say it has not escaped my attention.
But in any event, the respondent does not press for that which leaves the respondent contending for a payment by her to the applicant of the sum of $35,000.00. In my view that is more than just and equitable. It is overly generous on behalf of the respondent and I think an overly generous allowance if, as I say, the matter had been left to me to determine solely on its merits.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 3 September 2010
0