Hammond & Newtown
[2023] FedCFamC2F 165
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hammond & Newtown [2023] FedCFamC2F 165
File number(s): CAC 1748 of 2019 Judgment of: JUDGE MANSFIELD Date of judgment: 23 February 2023 Catchwords: FAMILY LAW – PROPERTY – Final orders - Post trial application to re-open to adduce further valuation evidence permitted – Guiding principle of whether or not the interests of justice are better served by allowing or rejecting the application applied - EB v CT (No .2) [2008] QSC 306 followed - Contest over contributions and extent of future needs – Parties call for credit findings to be made – Sahrawi and Hadrami [2018] FamCAFC 170 considered –- Four step process followed – Necessary to adopt two pool approach to ensure that justice and equity is achieved. Legislation: Evidence Act 1995 (Cth) ss 79, 136
Family Law Act 1975 (Cth) ss 75(2), 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 7.01
Cases cited: Coghlan v Coghlan (2005) 33 Fam LR 414
Dickons & Dickons [2012] FamCAFC 154
Dovgan & Dovgan [2021] FamCA 306
EB v CT (No .2) [2008] QSC 306
Halstrom & Halstrom (2022) FLC 94-086
Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143
Kennon & Kennon (1997) FLC 92-757
Rosati v Rosati (1998) FLC 92-804
Sahrawi and Hadrami [2018] FamCAFC 170
Stanford v Stanford (2012) 247 CLR 108
Summitt & Summitt and Ors (Re-Opening) [2009] FamCA 365
Division: Division 2 Family Law Number of paragraphs: 159 Date of last submission/s: 20 January 2023 Date of hearing: 16, 17 June and 24 October 2022 Place: Canberra Counsel for the Applicant: Mr North and Mr Wong for the re-opening hearing Solicitor for the Applicant: Watts McCray Counsel for the Respondent: Mr Haddock Solicitor for the Respondent: Dobinson Davey Clifford Simpson Solicitor for the Respondent: Ms Simpson of Watts McCray for the re-opening hearing ORDERS
CAC 1748 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS HAMMOND
Applicant
AND: MR NEWTOWN
Respondent
order made by:
JUDGE MANSFIELD
DATE OF ORDER:
23 FEBRUARY 2023
THE COURT ORDERS THAT:
Net proceeds of sale of the C Town property and capital gains tax
1.The amount held in the trust account of the Respondent Husband’s solicitors attributable to the net sale proceeds of the property at B Street, C Town NSW, more particularly described as Lot … in Deposited Plan …, EE Region, C Town, Title reference … (“the C Town property”) is to be released and paid forthwith as to 100% to the Respondent or as directed by the Respondent.
2.The Respondent indemnifies and keeps the Applicant Wife indemnified with respect to the capital gains tax assessed as owing on the sale of the C Town property
Cash Adjustment
3.Within 42 days of the date of this Order the Applicant Wife pay to the Respondent Husband the sum of $330,000.
The Suburb E Property
4.Contemporaneously upon compliance with Order 3, each party shall do all acts and things and sign all documents necessary to cause the following:
(a)Transfer of the property situated at and known as D Street, Suburb E, FF Region, being the whole of the land contained in Volume … Folio … Edition … (the “Suburb E property”) to the sole name of the Applicant Wife at her cost, such that the Respondent Husband shall sign all documents presented to him by the Applicant and the Applicant shall do all other things necessary for such transfer;
(b)Discharge of all mortgages, loan accounts and encumbrances presently registered over the title to the Suburb E property at the cost of the Applicant such that the Respondent shall sign all documents presented to him by the Applicant and the Applicant shall do all other things necessary to cause such discharge(s).
5.The Applicant shall indemnify and keep indemnified the Respondent in respect of all liabilities in relation to the Suburb E property whenever and however arising from the date of these Orders.
6.Pending transfer of the Suburb E property provided for in Order 4 the Applicant shall continue to be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the Suburb E property incurred prior to the date of transfer and shall make all such payments as and when they fall due and hereby indemnifies the Respondent in respect of all other liabilities incurred prior to the date of transfer.
7.Pending transfer of the Suburb E property provided for in Order 4, the Respondent is restrained by way of injunction from withdrawing any funds from the mortgage redraw facility and/or the joint offset account, increasing the loan amount secured by mortgage, using the Suburb E property as security for any further borrowings or refinancing or otherwise encumbering the Suburb E property in any manner without the written consent of the Applicant or by way of Court Order first obtained.
Default
8.In the event that the Suburb E property has not been transferred and payment made in compliance with Order 3 then within a further 90 days each party shall do all things necessary to cause the Suburb E property to be sold by private treaty at the earliest possible date at a price to be agreed between the parties and failing such agreement to be determined by the Chair of the FF Region Office of the Australian Property Institute or his/her nominee and on completion of sale the proceeds of sale shall be disbursed as:
(a)In payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)In payment of costs incurred in relation to the nomination of a real estate agent (if any), and in payment of costs in relation to determination of listing price, reserve price, value and/or selling price by the Chair of the FF Region Office of the Australian Property Institute or his/her nominee (if any).
(c)Discharge of all mortgages secured on title of the Suburb E property.
(d)In payment of the Husband a sum of such an amount as is required pursuant to Order 3 above.
(e)The net balance then to be paid to the Wife.
9.For the purposes of Order 8, the Real Estate Agent to act in respect of the sale shall be as agreed by the parties and, failing agreement within seven (7) days of the date of these Orders, then it shall be a Real Estate Agent appointed by Chair of the Real Estate Institute of FF Region or his/her nominee.
10.For the purposes of Order 8, the Solicitor to act in respect of the sale shall be as agreed by the parties and, failing agreement within seven (7) days of the date of these Orders, then shall be a Solicitor appointed by the President of the Law Society of FF Region or his/her nominee.
Omnibus
11.As between the Applicant and Respondent, and subject to these Orders, the Applicant and Respondent shall each respectively retain all interest in and entitlement to:
(a)All personal property, motor vehicles, furniture, furnishings and effects now in his/her respective possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
12.The Applicant hereby releases and indemnifies the Respondent and forever keeps him indemnified from all liabilities of any nature, all actions, proceedings, claims, demands, suits, causes of action, arbitrations, debts, dues, costs, and interest whatsoever and howsoever arising both in law and in equity which she had or has or will have against the Respondent and/or against any third party/ies and for or by reason of or in respect of any act, cause, matter or thing arising from the past, current or future acts or actions done or omitted to be done of the Applicant.
13.The Respondent hereby releases and indemnifies the Applicant and forever keeps her indemnified from all liabilities of any nature, all actions, proceedings, claims, demands, suits, causes of action, arbitrations, debts, dues, costs, and interest whatsoever and howsoever arising both in law and in equity which he had or has or will have against the Applicant and/or against any third party/ies and for or by reason of or in respect of any act, cause, matter or thing arising from the past, current or future acts or actions done or omitted to be done of the Respondent.
14.In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
Superannuation Splitting Orders
PROVIDED THAT the trustee has been accorded procedural fairness:
15.That in accordance with Section 90XT(4) of the Family Law Act 1975, a base amount of $155,000 is allocated to the Applicant Wife, namely Ms Hammond, out of the Respondent Husband, namely Mr Newtown, Superannuation Fund 2, in the name of Mr Newtown.
16.That, in accordance with Section 90XT(1)(a) of the Family Law Act 1975:
(a)The Applicant Wife is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)The entitlement of the Respondent Husband in Superannuation Fund 1 is correspondingly reduced by force of this Order.
17.That the trustee of Superannuation Fund 2 (“the trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Applicant Wife in the immediately preceding clause of this Order; and
(b)Pay the entitlement whenever the trustee makes a splittable payment from the Respondent Husband's interest in Superannuation Fund 2.
18.That this Order has effect from the operative time and the operative time is the fourth business day following the date of service of these Orders on the Trustee.
19.That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the Applicant Wife shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Applicant Wife’s request in accordance with the SIS Regulations, for the rollover or transfer of the Applicant’s Wife interest to a complying superannuation fund of the Applicant Wife’s choosing in accordance with the SIS Regulations.
20.In the event the trustee has not been accorded procedural fairness, Orders 15-19 are stayed and, the wife is to accord procedural fairness to the trustee and thereafter has liberty to provide to the Court by email to …@... a Minute of Orders and confirmation of procedural fairness in order to give effect to the splitting order described in Order 15.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hammond & Newtown has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MANSFIELD:
INTRODUCTION
The parties met in 2000 as students and commenced cohabitation in 2001 or 2003. The parties married in 2012, separated in 2014 and divorced in 2018. The period of cohabitation was 11 or 13 years and the parties have been separated for 8 years.
The Applicant wife at 35 and the Respondent husband at 29 years of age in 2003 were not particularly young. Upon completing their studies, the parties jointly endeavoured to start and raise a family and progress their respective careers.
There are three children of the marriage aged 19, 16 and 13. The property pool consists of the former matrimonial home in which the wife and children continue to live, the net proceeds of sale of an investment property obtained and sold by the husband post-separation, the parties respective superannuation entitlements and some lesser assets and liabilities.
The parties have been in conflict since 2016 and there were many disputes of fact on both specific issues and of a general nature such as conduct throughout the relationship and since separation. Determination of these issues feeds into the ultimate issue for determination which is what, if any, alteration in property interests is just and equitable.
The orders provide for a division of the non-superannuation property pool of 55/45 per cent in the wife’s favour and a division of the superannuation property pool of 55/45 per cent in the wife’s favour.
ORDERS SOUGHT
The wife sought orders to the effect that:
(a)There be an alteration of property interests to result in an overall division of 70 per cent to the wife and 30 per cent to the husband.
(b)The wife obtain sole title to the Suburb E property.
(c)The husband retain sole title to the C Town property.
(d)The base amount of $124,937 be allocated to the wife out of the husband’s superannuation interest.
(e)There be a cash adjustment from the husband to the wife of $521,865.
The wife contended that the contributions ought to be assessed as to 60 per cent in her favour and there be a further adjustment in her favour for future needs such that an overall adjustment of 70 per cent in her favour is just and equitable.
The husband sought orders to the effect that:
(a)There be an alteration of property interests to result in an overall division of 55 per cent to the husband and 45 per cent to the wife.
(b)The wife obtain sole title to the Suburb E property.
(c)The husband sell the C Town property and any capital gains tax liability be accounted for in the overall division.
(d)There be a cash adjustment from the wife to the husband.
The husband contended that the contributions be assessed as to 60 per cent in his favour and that there be an adjustment in the wife’s favour of 5 per cent for future needs.
THE HEARING
The matter was heard across two days on 16 and 17 June 2022.
The following material was received into evidence during the trial on the applicant wife’s case:
(a)Affidavit of Ms Hammond filed 19 May 2022 (Exhibit A1);
(b)Financial Statement of Applicant dated 2 June 2022 (Exhibit A2);
(c)Screenshot of Applicant’s myGov account (Exhibit A3);
(d)Affidavit of Mr F filed 27 May 2022 (Exhibit A4);
(e)Affidavit of Dr G filed 23 May 2022 (Exhibit A5);
(f)2016 Electronic Lodgement Declaration form of Mr Newtown dated 18 May 2017 (Exhibit A6);
(g)2016 H Family TrustTax return (Exhibit A7);
(h)H Family Trust 2017 Profit and Loss statement year ending 30 June 2017 (Exhibit A8)
(i)Purported H Family Trust Discretionary Trust Deed dated 1 May 2016 and unsigned (Exhibit A9);
(j)Purported H Family Trust Discretionary Trust Deed dated 1 May 2018 and unsigned (Exhibit A10);
(k)2020 Electronic Lodgement IITR Mr Newtown (Exhibit A11);
(l)Tax Documents of Mr Newtown for the year ending 30 June 2018 including Notice of Assessment and IITR (Exhibit A12); and
(m)Bundle of Documents titled ‘Section A 5 FYE 2017 Index’ (Exhibit A13); and
(n)Joint balance sheet received on 4 July 2022.
Other material referred to and relied upon by the applicant wife was:
(a)Case outline of Applicant filed 14 June 2022 (which included a minute of orders sought);
(b)Written submissions in closing received 4 July 2022; and
(c)Written submission in reply received 25 July 2022.
The following material was received into evidence during the trial on the respondent husband’s case:
(a)Affidavit of Mr Newtown dated 1 June 2022 (Exhibit R1);
(b)Financial Statement of the Respondent dated 10 June 2022 (Exhibit R2); and
(c)Affidavit of Ms J filed 3 June 2022 (Exhibit R3).
Other material referred to and relied upon by the respondent husband was:
(a)Case outline of the Respondent filed 14 June 2022;
(b)Minute of Final Orders sought filled 15 June 2022; and
(c)Written submissions in closing and response received 18 July 2022.
The affidavits of Mr F and Dr G were objected to by the husband on the grounds that they purported to be expert opinions but did not comply with section 79 of the Evidence Act 1995 (Cth). The wife relied upon Rule 7.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) as to the basis for their admission into evidence. For reasons given ex tempore, the affidavits were admitted into evidence but limited pursuant to section 136 of the Evidence Act 1995 (Cth) in two ways:
(a)Firstly, the evidence was only to be used as it related to:
(i)the results of an examination, investigation or observation made;
(ii)a description of any treatment carried out or recommended;
(iii)expressions of opinion limited to the reasons for carrying out or recommending treatment and the consequences of the treatment, including a prognosis.
(b)Secondly, the evidence was only to be used as it related to:
(i)The opinions of the person that are wholly or substantially based on their knowledge.
FACTS, MATTERS & CIRCUMSTANCES
In 2000, the parties met as students at K University and started their relationship. They both moved to City L in or around 2001 to complete their final two years of training. The wife had previously qualified and worked as a health professional and was about 35 years old. The husband had previously qualified and worked as a technical professional and was about 29 years old. The wife had recently separated from her previous husband of six years.
The wife says they had commenced cohabitation in 2001. The husband says they did not commence cohabitation until moving in together to a property in City M, NSW in 2003.
In 2003, the wife finished study and the parties first daughter was born (now 19 years old). Also in late 2003, both parties completed their six week work placement requirement and the parties mothers took turns in assisting with the care of their daughter.
In mid-2004, the parties purchased the property they were living in at City M, NSW. They renovated and improved the City M property.
In 2006, the parties second daughter was born (now nearly 17 years old).
In 2007, the parties purchased a property in Suburb E, FF Region and sold the City M property.
In 2009, the parties third daughter was born (now 13 years old).
From 2006, the husband completed a series of work placements while the wife continued to be the primary carer of the children. In 2010, he spent six months in N Town, GG Region.
In 2012, the parties married.
In 2013, the family lived in O Town, NSW for six months while the wife completed her work placements in P Town, NSW.
In 2014, the husband went to Melbourne, VIC to pursue further qualifications. The wife was working part-time as a health professional.
On 11 August 2014, the parties separated. The children were 10, 8 and 5 at the time.
In January 2015, the husband returned from Melbourne and lived in the Suburb E property with the family. The parties continued to be financially interdependent and operated a joint account after separation. In early 2015, an apartment in Suburb Q, FF Region was purchased in the husband’s sole name. He moved into it for a period of time and then rented it out.
In mid-2015, the husband was elected to his industry’s professional organisation. Also in 2015, the wife was elected to her industry’s professional organisation.
In early 2016, the husband purchased a property in C Town, NSW as an investment and to use on weekends and holidays.
In late 2018, the parties divorced.
On 4 September 2019, the wife commenced property proceedings. The husband’s response initiated parenting proceedings.
In late 2019, the apartment at Suburb Q was sold for a loss and the husband has been renting accommodation since.
The children have lived with the wife since separation and have spent overnight time with the husband on only a few holiday occasions.
The last occasion when the eldest daughter spent time with her father was in or about 2014. The last occasion when the second daughter spent time with her father was in June 2019.
On 21 December 2021, final parenting orders were made by consent providing for the children to continue to live with the wife and for the youngest daughter to spend time with her father two times per week during the day with no overnights except during school holidays. The children are healthy and progressing well academically.
The wife is 57 years of age and works full-time as a health professional.
The husband is 50 years of age and works part-time at LL Organisation.
APPLICATION IN A PROCEEDING TO RE-OPEN THE HEARING
The hearing of evidence concluded on 17 June 2022 and the last submissions were received on 25 July 2022.
On 12 September 2022, the Court listed the matter for delivery of judgment on 14 September 2022.
On 13 September 2022, the husband filed an Application in Proceedings seeking to re-open the proceedings for the purposes of adducing further evidence of:
(a)The sale (and therefore value) of the C Town property; and
(b)The husband’s capital gains tax liability consequently arising from the sale.
The application was opposed by the wife and heard on 24 October 2022. The following material was received into evidence on the application:
(a)Affidavit of Mr Newtown made 13 September 2022 (Exhibit AIP1);
(b)Affidavit of Mr Newtown filed 29 September 2022 (Exhibit AIP2);
(c)Affidavit of Ms R [the selling agent] filed 28 September 2022 (Exhibit AIP3);
(d)Affidavit of Mr S [local real estate agent/expert] filed 28 September 2022 (Exhibit AIP4);
(e)Affidavit of Mr T [accountant] filed 28 September 2022 (Exhibit AIP5);
(f)Affidavit of Ms Hammond made 12 October 2022 (Exhibit AIP6).
Other material referred to and relied upon was:
(a)Applicant’s Outline of Case Document filed 21 October 2022; and
(b)Wife’s written submissions filed 21 October 2022.
FURTHER FACTS, MATTERS & CIRCUMSTANCES
In the joint balance sheet of 4 July 2022, the value of the C Town property was agreed at $1,460,000 in accordance with the unchallenged opinion of the joint expert valuation from May 2022.
The husband had put a Capital Gains Tax (“CGT”) liability in relation to the C Town property in issue by seeking orders that accounted for it. Orders 6-10 of the Minute of Final Orders sought by the husband included that the C Town property be sold and that CGT be calculated and accounted for in the distribution of the proceeds of sale. Neither party originally sought or submitted that CGT be taken into account in the balance sheet value of the asset or that CGT should be added back onto the balance sheet. There was no evidence as to the potential amount of any CGT liability.
The relevant evidence from the husband in his trial affidavit (Exhibit R1) in relation to a potential CGT liability, on which he was not cross-examined, was:
[134].[In early] 2016, I purchased the [C Town] property ([B Street], [C Town]) as an investment and to use on weekends and holidays.
[139].On occasions, I have rented the property out, on a seasonal basis. This is currently not the case and I do not intend to do so for the foreseeable future.
[178].Since the sale of the [Suburb Q] property in 2019 I have been unable to secure finance to purchase a house in [City L] to reside in. I have therefore lived in rental properties for the last three years. This is not my preference.
In closing submissions, counsel for the wife submitted:
The property is owned by the husband. No order is sought with respect to it by the wife. There is no reason for the court to order its sale. The husband is free to sell it or retain it as he chooses. … The orders 6, 7 and 8 in the minute of order relied upon by the husband are entirely unnecessary. He is to retain the property. What he does with it is a matter for him and requires no intervention by the court.
In closing submissions, counsel for the husband submitted:
It is an investment property. The husband has sought its sale. It is plain that there will be costs and CGT liabilities which need to be included. The husband was not cross-examined on his minute. The Husband’s Minute provides mechanisms to properly ascertain the value of the pool available between the parties. It is difficult to see how if the Wife says that the Husband should be required to retain a property hours away from his workplace and the child with whom he spends regular time.
Having regard to counsel for the husband’s submissions together with the minute of order sought, I was satisfied as at the conclusion of the closing submissions in July 2022 that the sale of the C Town property was inevitable either by Order of the court or by the husband’s proven circumstances. I was further satisfied that the principles established by the Full Court in Rosati v Rosati (1998) FLC 92-804 applied such that allowance should be made for any capital gains tax payable upon such a sale.
Further facts, matters and circumstances arising from the husband’s application in proceeding are as follows.
Upon receipt of the report containing the valuation in mid-2022, the husband had reservations the valuation was inflated and that he could not afford to retain it. On 10 June 2022, prior to the commencement of the trial, he instructed his lawyers to write to the wife’s lawyers seeking a sale of the property which was his position at hearing.
His concerns not being allayed after the hearing, on 12 July 2022 he wrote to the wife notifying her of his intention to place the property on the market and the wife replied. As to that correspondence, I accept the wife’s submissions that the wife did not proffer consent and expressed her scepticism about his motivation. I also accept the husband’s submissions that she was invited to express her view and to be involved in the process.
In mid-2022, the property was listed for sale at $1,460,000. A short time later, the husband accepted the best offer of $1,050,000. I find that the husband sought and relied on professional advice and kept the wife informed throughout all of the process. I do not find that the husband acted recklessly or negligently. The wife took no steps by way of engagement or prevention.
In late 2022, the husband confirmed to the wife that he had exchanged contracts and suggested that she consider obtaining an updated valuation of the Suburb E property.
Determination of Application to re-open
In Summitt & Summitt and Ors (Re-Opening) [2009] FamCA 365 Murphy J referred to the decision of Applegarth J in EB v CT (No .2) [2008] QSC 306 where he summarised the authorities which included:
[4]In Reid v Brett (2005) VSC 18 the criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered, was said to be as follows:
(a)The further evidence is so material that the interests of justice require its admission;
(b)the further evidence, if accepted, would most probably effect the result of the case;
(c)the further evidence could not by reasonable diligence have been discovered earlier;
(d)no prejudice would ensue to the other party by reason of the late admission of the further evidence.
On the evidence before me, I comfortably find in the positive with respect to each of the four criteria above.
More recently, the Appellate Jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) in Halstrom & Halstrom (2022) FLC 94-086 confirmed that the primary guiding principle in deciding whether to grant leave for a party to re-open evidence was “whether or not the interests of justice are better served by allowing or rejecting the application” as stated by Applegarth J in EB v CT [at 2].
The reality of the circumstances concerning the C Town property, and the CGT liability, is that the Court was left in a hole where there was a dispute and neither of the orders sought by the parties at hearing were available to be made. Attempting to proceed otherwise would have left the Court with an inability to be satisfied what orders would be just and equitable, or, would likely have necessitated yet further proceedings to set aside or rectify unenforceable Final Orders.
I was persuaded that the interests of justice were better served by allowing the application to re-open the proceedings for the purpose of adducing further evidence of:
(a)The sale (and therefore current value) of the C Town property; and
(b)The husband’s CGT liability with respect to the C Town property; and
(c)The current value of the Suburb E property.
Orders were made accordingly on 24 October 2022. On 23 November 2022, the parties provided an updated joint balance sheet. On 29 November 2022, the parties confirmed that no further evidence in the proceedings was sought to be admitted. On 13 December 2022, further written submissions were received on behalf of the Wife. On 22 December 2022, further written submissions were received on behalf of the husband. On 20 January 2023, written submission in reply were received on behalf of the wife.
Effect of the further evidence
At trial the C Town property had an agreed value of $1,460,000. The C Town property was sold for $1,050,000, being a reduction of $410,000. After payment of the loan account of $309,865 and sale costs there remains $712,271 net proceeds of sale presently held in the husband’s solicitor’s trust account. The agreed CGT liability arising from the sale is $129,831.
At trial, the Suburb E property had an agreed value of $1,600,000. The updated and agreed valuation is $1,475,000, being a reduction of $125,000.
The combined effect of the further evidence was a reduction of the non-superannuation pool of $664,831.
The wife submitted that an allowance ought to be made in the wife’s favour. Against the wife’s submissions, I found that the husband had not acted recklessly or negligently so the allowance on that ground falls away. Notwithstanding, out of the post mid-2022 circumstances the wife still seeks an adjustment pursuant to section 75(2)(o) of the Family Law Act 1975 of an additional 5 per cent or on a dollar basis in the order of $145,540. Counsel for the wife submitted:
The Full Court in Varnham & Moses (2021) FLC 94-006 made it apparent (at 60) that the Court had to analyse the effect of the adjustment in “real money terms”. In Wallis & Manning (2017) FLC 93-759, the Full Court noted (at 169) the “dollar value is, in turn, dependent upon the value of the interests of the parties”. That value of the interests of the parties is now significantly less than presumed in the former joint balance sheet, hence the dollar value of the adjustment changes. This occasions mathematical consequence in “real money terms”.
Having found that the husband’s application to re-open was in the interests of justice, the further evidence adduced thereafter had the consequence of decreasing the overall value of the property of the marriage to the objective disadvantage of both parties. Thus, the balance sheet is what it is. The application was not determined on the basis that the interests of justice were only achieved if there was an adjustment in favour of the wife pursuant to s 75(2)(o) to restore her interests, at the expense of the husband, towards the level of her contended interests in the penultimate balance sheet.
I have however taken into account the now smaller than expected overall size of the pool when considering the parties contentions at trial about the assessments of contributions and future needs on a percentage basis.
THE LEGAL PRINCIPLES
Section 79 of the Family Law Act 1975 (‘the Act’) sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), at [35] confirmed that before an order is made adjusting the parties’ property the court is required to make a determination that it is just and equitable to do so. That determination is to be made, however, not as a discrete or preliminary issue but requires the Court to consider the matters set out in section 79(4) of the Act.
In Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143 (“Hickey”), the Full Court held at [39] that, in considering the matters set out in section 79(4) of the Act the preferred approach was to adhere to the following four steps:
(a)Identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)Identify and assess each of the parties financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)Assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)Step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
The High Court noted at [35] in Stanford, section 79(2) of the Act provides that the Court shall not make an order altering the interests of the parties to the matrimonial property, “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the Court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property.
Is it just and equitable to make a property adjustment?
Both parties contend that it is just and equitable for the parties property interests to be adjusted. I am satisfied that this should occur in circumstances where the parties relationship is at an end and they no longer have the common use of their property. The express or implicit assumptions which underpinned their relationship, including that they would be able to consensually adjust their interests in such property, are at an end. (See Stanford at [42]).
THE BALANCE SHEET
The updated joint balance sheet contended for by the parties as at 23 November 2022 is attached at Annexure A. Findings with respect to disputed items are as follows.
H Family Trust
The husband was extensively cross-examined as to the absence of balance sheets to the financial statements, taxable expenditures and anomalies as to the signing and dating of the trust deed or deeds. These were not able to be explained by the husband from the witness box who said he relied on his accountant to prepare his tax returns and the trust financial statements. I do not find that this amounts to evidence of hidden assets or deliberate non-disclosure. I accept the husband’s evidence as to the state of affairs and financial circumstances of the H Family Trust as declared by him in his financial statement and as represented at items 9 and 14.
Cash
The husband seeks to include $20,000 from the proceeds of sale of a motor vehicle plus $85,000 and $15,000 withdrawn by the wife over time from bank accounts. I accept the wife’s use of these monies is put in issue by the husband but that is dealt with when considering post separation contributions. They are not contended for as addbacks. I am not satisfied that these monies still exist and are being hidden by the wife such as to include them as assets attributable to her in the balance sheet. Items 18, 19 and 20 are nil.
The same rationale applies to items 23-28 claimed by the wife.
Household contents
The husband declared $20,000 as the value of his household contents in his financial statements and confirmed this amount under cross-examination. The wife declared the value of her household contents in her financial statement as “nominal.” Neither party contended at trial that the other party had household contents of significantly more or less value than the other, save perhaps for the additional description in the balance sheet for the husband of “and sporting gears and equipment.”
I would be open to persuasion that: the wife’s (non) value of “nominal” amounts to non-disclosure; the husband’s unparticularised value of $20,000 means the same as nominal; and, respective household contents are modest or of no value to the other party and ought to be deemed equivalent. However, on the state of the evidence it seems that the only values that can be included are $20,000 to the husband and nil to the wife. On either account it is relatively minimal to the overall outcome.
Unpaid tax
The wife’s financial statement declares her total income tax assessed and unpaid for the last financial year at $29,380 and a due date of May 2022. The wife seeks to include a liability to the amount of $29,380 for unpaid tax as at 14 June 2022. There is no evidence in her trial affidavit about unpaid tax. Led in evidence in chief was a print out of a screenshot said to be taken by the wife from her online tax records (Exhibit A3). It purports to show tax due of $28,081.43 and $7,191.00. According to the wife in oral examination in chief, the figures are as at 14 June 2022. There is no evidence as to why she had not paid her previous year’s income tax and I do not find that she lacked capacity to do so. Whatever the exact amount may be, and whatever it may be for exactly, it is clearly a post-separation liability incurred solely by and attributable solely to the wife some six or seven years after separation. I decline to include item 31 in the balance sheet. To do so would be an injustice to the husband who also has been earning income since separation and has met his own income taxation liabilities.
Husband’s unpaid income
There is no evidence referable to item 37 for $11,120 or item 39 for $42,000 contended for by the wife. I am not satisfied as to what they are or the reality of them. I decline to include them in the balance sheet.
Superannuation
As to the value of superannuation entitlements, there is no evidence of valuation pursuant to the Family Law (Superannuation) Regulations 2001. The husband attaches to his affidavit superannuation statements as at 30 June 2021. The values ascribed to the balance sheet, as at 10 January 2022 for the wife and as at 2 June 2022 for the husband, are agreed as between the parties.
Final Balance sheet
I find the final Balance Sheet to be:
Assets
Ownership
Pool
Suburb E property
Joint
$1,475,000
Net proceeds of sale of the C Town property
Husband
$714,271
ANZ …81
Joint
$10
Wife’s bank accounts
Wife
$19,965
H Family Trust
Husband
$6,300
Husband’s bank accounts
Husband
$4,438
Boat
Husband
$10,000
Motor Vehicle 1
Husband
$16,300
Motor Vehicle 2
Wife
$65,000
Household contents and sporting gear and equipment
Husband
$20,000
Household contents
Wife
Nil
Total Assets
$2,331,284
Liabilities
Home loan Suburb E property
Joint
$3,478
U Financial Services car loan
Wife
$38,668
Visa Credit Card
Wife
$9,718
Visa Credit Card
Husband
$6,513
CGT liability
Husband
$129,831
Total Liabilities
$188,208
Net Non Super
$2,143,076
Superannuation
Superannuation – Superannuation Fund 1
W
$230,288
Superannuation – Superannuation Fund 2
H
$469,879
Total Superannuation
$700,167
Combined Total
$2,843,243
CREDIT
I was called upon by the parties to consider Sahrawi and Hadrami [2018] FamCAFC 170 and to make credit findings in this case.
Under cross-examination, the wife conceded that she remembered reading the affidavit at the front part of the financial statement and that she was aware of her obligation to make full and frank disclosure, but nevertheless conceded that despite having not had to pay it since December 2021, she had included an estimated expense of $353 per week towards the Suburb E mortgage. She confessed it was an “inadvertent omission” having prepared many financial statements. She then conceded that only two financial statements had been prepared in these proceedings but added she’d filed many in terms of mortgage applications and various other things. There is no other evidence of her need to prepare mortgage applications, or various other things, but for the purposes of these proceedings I accept the wife’s explanation and do not find that she is a dishonest witness.
As well as in relation to the H Family Trust, the husband was also extensively cross-examined on tax deductions within his tax returns. In particular, he was extensively cross-examined on investment property expenses claimed with respect to the Suburb Q property when he was probably living in it and what appeared to be excessive deductions for materials and supplies. These were not able to be fully explained by the husband from the witness box who said he relied on his accountant to prepare his tax returns.
Counsel for the wife submitted that the husband lies for financial gain, that he is not a witness who can be accepted without corroboration and his demonstrated dishonesty infects the reliability of all his evidence particularly in relation to financial matters.
I do not accept that anomalies within the husband’s historical tax returns amount to the husband being a dishonest witness. For the purposes of these proceedings, I accept his explanation and do not find that taken as a whole his evidence is so unreliable that I am unable to give any aspect of it weight unless independently corroborated. I do not find that the husband is a witness contemplated by the Full Court in Sahrawi and Hadrami [2018] FamCAFC 170 at [65].
Despite the above findings, the balance sheet largely speaks for itself and is largely agreed. If I were to reject the husband’s uncorroborated evidence, it would not greatly alter the outcome of the case. Items 24-27 claimed by the wife in the trial balance sheet might have been accepted provided they withstood a greater investigation of her post-separation contributions which are themselves largely uncorroborated by her. Items 37-39 are prima facie not proved by the wife to the requisite standard. General credit of the parties in this case is largely inconsequential to the finding of facts necessary to determine the outcome.
CONTRIBUTIONS
The Court is required to make an assessment of the nature and quality of the totality of the parties contributions throughout the entirety of their relationship, together with their contributions in the period subsequent to their separation. Dickons & Dickons [2012] FamCAFC 154. See also Dovgan & Dovgan [2021] FamCA 306 at [347], which restates the need to holistically assess contributions following the case of Dickons, and that ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.
Initial contributions
The husband deposed that at the commencement of the relationship, he had nominal savings, some superannuation, Motor Vehicle 8 and some Australian shares. He also had a HECS debt for his degree, and a small amount of credit card debt.
The wife deposed that at commencement of the relationship that she had cash savings of at least $100,000, bank shares in Australia and the UK, Motor Vehicle 3, some superannuation and other personal items. She says the $100,000 was expended towards paying her HECS debt, the welfare of the family and acquisition of property throughout the relationship. There is no independent or documentary evidence in support of this evidence. The wife agreed to the absence of records under cross-examination. She then volunteered that they exist but haven’t been produced.
The husband conceded that to the best of his recollection she had told him that she had received from her previous marriage a cash settlement of $80,000 and equity in a managed fund. He says though that he does not know and never did know for certain and therefore does not now accept the wife’s assertions as to her initial contributions. I proceed on the basis that: i) there was an initial contribution from the wife arising out of the end of her previous marriage, and ii) there is no evidence as to any reason why the wife would state an untrue amount to the husband at that time such that, on the balance of probabilities, I accept it was $80,000 or $100,000.
Contributions during the course of the relationship
The wife deposed:
[56].At this time [late 2003] we were operating a joint bank account with [sic] and we applied to job share during our intern year to share the care of [their daughter]. When we eventually started earning, both our salaries were being deposited into that account which we used to pay rent, utility bills, groceries and food, entertainment and other day-to-day expenses. Our salaries were often insufficient and that is when [Mr Newtown] told me that I needed to sell some of my shares. I estimate that I sold $20,000 worth of shares.
The husband provides a similar description to the financial arrangements at the time but disputes the $20,000 and says the wife didn’t have any shares.
In mid-2004, the wife contributed at least $10,250 as the deposit for the purchase of the City M property and later a $40,000 and a $10,000 lump sum to the City M mortgage. The husband says he contributed $6,365 as the stamp duty for the purchase of the City M property. He concedes the wife’s lump sums totalling $50,000. In mid-2004, he received a graduation gift from his parents of $50,000 which was paid off the mortgage. This early contribution somewhat but perhaps not fully offsets the wife’s initial contribution (depending on how much she spent on her HECS debt which is not known).
The husband deposed that his parents gifted him $100,000 in mid-2008 which was deposited into the joint offset account and attaches the bank statement to his affidavit.
The wife deposed:
[82].I am aware [Mr Newtown] asserts that he received a gift of $100,000 from his parents in mid-2008. I am not aware of this; if he did, it must have been paid into his own bank account not the joint one and he would have spent it on his sports and recreational activities. Later on, when [Mr Newtown’s] parents wanted to gift some money to us, they gave those funds directly to me.
In June 2012, the parties received a gift from the husband’s parents of $210,000. Specifically, $10,000 towards their wedding expenses and $200,000 towards the mortgage of the Suburb E property. The wife says they gave the money specifically to her by way of a cheque. Strangely, that is immediately after describing and attaching to her own affidavit the email from the husband’s mother saying she had found the record of it being transferred into their joint account. This was confirmed by the husband who attached the bank statement to his affidavit and went on to deny that there is any inference that his parents believed him to be a spendthrift compared to the wife.
The husband’s mother deposed:
[6].While some of the funds given by my husband and I were directed to both [Mr Newtown] and [Ms Hammond], those amounts were intended to benefit their entire family …. The application of those funds to [Mr Newtown] and [Ms Hammond] was motivated by our desire to assist our children and their families. We would not have given money to [Ms Hammond] but for her relationship with [Mr Newtown] and because she is the mother of [Mr Newtown's] children.
I am satisfied that the gifts from the husband’s parents are appropriately treated as contributions on behalf of the husband.
Generally, the husband says:
(a)There was always ongoing discussions about living to a budget and working out allowances for each of them for personal and incidental expenses. Money had been tight for years, as they juggled the demands of finishing their training and raising children. The husband often held two jobs at a time and the wife was for many years at home with the girls and working reduced hours.
(b)The wife chose to work less and spend more time caring for the girls. He supported this decision and was appreciative of it in a practical way, despite his own desire to spend more time at home caring for the children. They could not afford for both of them to do this concurrently and he deferred to the wife's wishes.
(c)Both parties were committed to and worked hard for their family. The husband earnt the majority of the family income and the wife provided the majority of care for the children. From his perspective, it was a team effort and things were often challenging for them financially and as result of working long and not core (family friendly) hours.
Generally, the wife says:
(a)She decided to sacrifice a career opportunity, which had always been her goal, for the sake of the family and to support the husband's career progression and to be able to look after the children.
(b)The husband worked and studied and devoted all of his time to his training and pursuing his own interests.
(c)Meanwhile, the wife undertook almost all of the parenting and home duties while working and earning an income.
(d)The parties often disagreed about how money should be spent. They had separate accounts as well as a joint account and Visa card.
Under cross-examination, the wife said that her mother also provided financial assistance but tended to do it in smaller amounts and whenever they needed it. There is no independent or documentary evidence in support of this evidence. Despite it being the wife’s case that the husband was predominantly in control of the finances, the wife also volunteered in cross-examination that if they needed to move money from her mother’s account – which she had enduring power of attorney over – to buffer them before their pay came in, then she would do that and then return it.
I have difficulty accepting all of the wife’s evidence for a number of reasons.
Her evidence is focussed on diminishing the husband’s contributions at every opportunity. Even for what should be unremarkable evidence such as the $100,000 transfer from the husband’s parents in 2008 the wife would not readily concede despite it showing in a bank statement in a joint account. That approach makes distinguishing what might be strong assertions from lesser assertions that much harder to the effect of lessening the weight of all of her evidence.
There is a dearth of documentation or supporting evidence to the transactions the wife describes. There are also some inherent inconsistencies. The wife’s evidence of her naivety and suppression around financial affairs is at odds with the specificity of her evidence of historical financial events despite the absence of records. It is at odds with her evidence that the husband’s parents specifically gave her the $210,000 by cheque as she would be trustworthy in applying it to the mortgage and the husband would not be when the evidence shows the payment was made directly into their joint account. It is at odds with the parties continuing to consensually be financially interdependent post separation from August 2014 up to June 2016.
In my view, the parties made joint life and joint financial decisions together using joint resources. I find that the parties respective contributions during the relationship reflected the reality of their circumstances. With three young children, they had no way for both parents to pursue their careers to the maximum extent. The husband primarily contributed financially and assisted non-financially. The wife primarily contributed non-financially and assisted financially. I find that the evidence with respect to the parties contributions during the relationship was equal.
However, there is an unequal financial contribution attributable to the husband by way of the lump sum gifts received from his parents of $100,000 in 2008 and $200,000 (of the $210,000) in 2012. Those funds are wholly encapsulated in the property of the marriage.
Family violence
There is a persistent current of grievances and accusations throughout the wife’s affidavit about shocking words and appalling attitudes of the husband towards the wife. The relevance and ultimate use of this category of evidence was in issue when considering the husband’s objections to it in chief and then when the wife was being cross-examined. Counsel for the wife pronounced that no submission would be made on behalf of the wife in reliance upon Kennon & Kennon (1997) FLC 92-757 or the principles stated therein. I therefore have regard to this category of evidence as being part of the wife’s narrative. I also have regard to the husband’s denial of it. I am relieved of having to make factual determinations about it in the circumstances where the wife does not submit that: there was a course of violent conduct that had a significant adverse impact on her contributions; or, made the wife’s contributions significantly more arduous than they ought to have been. I do not take family violence into account when assessing the parties contributions.
Post-separation contributions
Between the date of separation (being 11 August 2014) and June 2016, the parties continued to live financially interdependently. In June 2016, the parties separated financially and since then there has been increasing levels of distrust and disharmony. The wife’s evidence relating to the next six years up to the hearing contains many irreconcilable accusations and claims of unequal contributions. Under cross-examination, she explained the rationale of withdrawing large amounts of cash from her bank account was to avoid the husband tracking her spending. She accepted the total was $66,180 in 2018 including two holidays to City V and one to Melbourne along with day to day expenses.
The husband’s evidence as to post-separation finances offers considerably more detail and is supported by bank statements.
I am satisfied that since September 2016 the wife has met the mortgage payments for the Suburb E property. The last payment she made was in December 2021 reducing it to a nominal amount. The Suburb E property is 63 per cent of the non-superannuation pool.
I am satisfied that the Suburb Q property was bought and sold by the husband with the wife’s agreement using some equity from the Suburb E property and the loan repayments were made by the husband.
I am satisfied that the C Town property was bought by the husband using funds from the joint account for the deposit and purchase costs and has been serviced solely by him using his own earnings. It appreciated in value from $410,000 in 2016 to its sale value of $1,050,000 in September 2022 (and a CGT liability of $129,831).
I am satisfied that the wife has had the sole care and responsibility of providing for the care of the children. I am also satisfied that the husband has financially contributed well in excess of what he is obliged to under assessment.
I am satisfied that the post separation inheritance of $129,000 received by the wife from her mother has already been applied to her exclusive benefit and is reflected in the trial balance sheet with a current balance of $434.
I find that since 2016 the parties worked and earned, they lived and spent, mortgages were paid, rent was paid, vehicles were bought and sold, private school fees were paid, there were school excursions, school expenses, laptops, wisdom teeth extractions and holidays all paid for. I am satisfied that there is insufficient evidence to find that either party has deprived the asset pool by way of unreasonable, excessive, lavish or wanton expenditure. I am not satisfied that either party has converted matrimonial property into some other form of asset or resource outside of the pool. I am not satisfied that either party has hidden monies such as to exclude them from the pool.
I find that there is insufficient evidence to warrant any adjustments on account of post-separation contributions.
Evaluation of contributions
I do not agree with the wife or the husband that contributions ought to be assessed at 60 per cent in their respective favour. My findings are that there is $80,000 to $100,000 contributed by the wife initially. Attributable to the husband is $50,000 early on in the relationship, plus $100,000 mid way through the relationship, plus $200,000 late in the relationship. All other financial and non-financial contributions are sufficiently equal. As such there should be a loading in the husband’s favour of five per cent.
RELEVANT SECTION 75(2) FACTORS PURSUANT TO SECTION 79(4)(E)
Subsections (2)(a) and (b) – the age and state of health of each of the parties; and, the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife at 57 years of age is six years older than the husband. The husband is likely to have an ability to work and earn for more years into the future than the wife. Their proximity to typical retirement age is a relevant consideration particularly for the wife.
The husband’s view is that both parties experience physical and mental health conditions but they do not significantly impact on their future income earning capacity. I do not accept the husband’s contention that the parties state of health is not in issue as a relevant consideration.
The husband deposed to a number of health issues including a chronic auto-immune condition. The wife deposed to a number of health issues including:
(a)Bilateral wrist pain;
(b)Left hip pain;
(c)A medical condition;
(d)High cholesterol;
(e)Neck and shoulder pain and regular headaches;
(f)Anxiety and depression.
The wife’s evidence is to the effect that the wrist pain is contributed to by her work and it will prevent her from doing that work. There is no useful evidence as to quantum or time.
The wife’s evidence is to the effect that the left hip pain is osteoarthritis contributed to by her work and will prevent her from doing that work and that she will need a left hip replacement soon. This evidence is supported by her orthopaedic surgeon Professor HH, her physiotherapist Dr F and her osteopath Dr G. She says it will require a minimum of six to eight weeks off work post-surgery.
As a contractor, the wife works full time as a health professional and also for a company called JJ Company. She earns approximately $190,000 per annum. It is not in evidence what one of roles encompasses or what it pays. She says due to her health issues, she has had to start decreasing some of her work.
I find that the wife suffers from the medical conditions and I find that they have a detrimental effect on her scope of work and quantum of work. I also find that the effect is likely to increase. I also find that as a contractor any time off for treatment is not supported by paid personal leave.
However, there is no evidence from the wife as to what is her current mix of income i. The supporting evidence as to the mix of hours and the decline of some work is at her annexure MH-4 which is her “rosters over the years.” The rosters appear to be self-authored, are high level and do not convey detail or data. There is little evidence from the wife as to what may ameliorate the effects for any of her three roles (beyond a hip replacement for some of the work) or what alternatives there may be, or if it all really is just an unavoidable decline to incapacity. There is no evidence as to what the treatments may cost. These are all considerable inhibitors to the process of determining what an appropriate adjustment may be on account of the wife’s state of health.
Subsections (2)(c) and (e) - whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and, the responsibilities of either party to support any other person.
The wife continues to be the main parent and caregiver to all three children including the eldest at 19 years of age who resides with the mother. The other two children are aged 16 and 13 one of which attends private school.
Subsection (2)(g) – where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable.
The standard of living for both parties since separation is comparable to each other and to pre-separation. The circumstances are that there are sufficient assets and income to provide for a reasonable standard for both parties across two residences.
Subsection (2)(j) and (k) - the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and, the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
When the parties first cohabitated in 2003 the wife and husband were 35 and 29 years of age respectively. They were changing careers such that their earning capacity as graduates was equivalent. The duration of their financial interdependency was from 2001 or 2003 to 2014-2016 – some 11 to 15 years.
In 2015, the wife was elected to her industry’s professional organisation in the same year that the husband was elected to his industry’s professional organisation. There is no evidence as to what the comparable incomes are and limited evidence of what the opportunities are for either fellowship.
The wife deposed that:
[89]I decided to sacrifice my career opportunity of becoming a cardiac surgeon, which had always been my goal, for the sake of our family; to support [Mr Newtown's] career progression and to be able to look after our children.
There is no evidence as to what the wife might be earning if she had of gone on to a higher level in her profession. There is no evidence as to what sacrifices in time or earnings or costs would have to have been made over the years in order to further her career. There is evidence to the effect that her present physical conditions are contributed to by some of her work and they will prevent her from doing that work. There is also evidence that her physical conditions are not contributed to or exacerbated by her other work. Ultimately, it seems that the wife’s earning capacity as a health professional will exceed any sort higher level work.
The wife deposed that as at 2016, she was working four to five days per week earning $80,000 per annum. She currently earns $190,000 per annum as a contractor.
The husband deposed that for the 2015/16 financial year his taxable income was $163,800. He currently works part-time (20 hours per week) earning $182,000 per annum for the W Unit of LL Organisation. He says he is on a year to year contract and will aim to continue similar work arrangements to preserve and develop his relationship with the youngest daughter and his ongoing need to manage burnout.
The husband deposed:
[229].[Ms Hammond] and I both provide […] services with [LL Organisation] via [an] arrangement. This is a […] contractual arrangement.
[230].As of 1 July 2021, the […] remuneration rates are:
(a) [Ms Hammond] - […]: $231.90 per hour, and
(b) [Mr Newtown] - […]: $258.65 per hour.
The wife submits that the husband choosing to work part-time understates his earnings and earning potential. The husband submits the range of work and opportunities available to the wife are greater than what she says.
Taking all of the above into account, I find that there is a minor differential in current earnings and earning capacity in favour of the husband compared to the wife due primarily to his part‑time status. There is insufficient evidence to find that the wife would be currently earning more as at a higher professional level but for the duration of the marriage.
Subsection (2)(na) - any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;
The father has been assessed to pay child support of $15,336 per annum but voluntarily pays $27,000 per annum plus 50% of the school fees. This goes a considerable way to offsetting the wife’s responsibilities towards the support of the children by virtue of them living with her. However, I take into account that the additional payments are a voluntary arrangement to which the husband is at liberty to cease.
Evaluation of section 75(2) factors
The wife submitted that there be an adjustment for the section 75(2) factors of 10 per cent in her favour. The husband conceded an adjustment of 5 per cent in the wife’s favour. I am persuaded that due primarily to the combining effects of the wife’s: age and relative proximity to retirement; her declining health and its probable impact on her earning capacity; and, her responsibility towards the support of the children by virtue of them living with her, there ought to be an adjustment in the wife’s favour of 10 per cent.
SUPERANNUATION
Along with a cash settlement from the husband, the wife seeks a superannuation splitting order in her favour as part of her pursuit of 70 per cent of the overall division of property. The husband does not seek a superannuation splitting order such that the mechanism to give effect to his pursuit of 55 per cent of the overall division of property is a cash settlement from the wife.
The majority of the full court in Coghlan v Coghlan (2005) 33 Fam LR 414 said at [65]:
In summary, then, the trial judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a)value the superannuation interest (according to the regulations if an order under Pt VIIIB is sought or according to the regulations or otherwise if no order is sought);
(b)consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c)consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d)ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Pt VIIIB in relation to superannuation interests are just and equitable.
In the circumstances of this case I consider that it is necessary, or extremely prudent, to make superannuation the subject of a separate pool in order to ensure that justice and equity is achieved.
Both parties had nominal superannuation interests at the commencement of their cohabitation. The wife’s superannuation entitlements with Superannuation Fund 1, according to the benefit statement to 30 June 2014, was $46,066. The husband’s superannuation entitlements with Superannuation Fund 2, according to the benefit statement to 30 June 2014, was $115,212.
On 21 March 2016, a contribution of $34,420 was made from the joint offset account to the wife’s superannuation fund as a voluntary member contribution. Attributable to his higher income, since 2015/16, the husband has made voluntary member contributions of $49,476 in total to his superannuation fund in order to ‘top up’ his employer contributions to the maximum ‘concessional cap.’
The wife’s superannuation entitlements with Superannuation Fund 1, according to the account summary as at 30 June 2021, was $220,156. The husband’s superannuation entitlements with Superannuation Fund 2, according to the annual super statement at 30 June 2021, was $480,162.
According to the parties’ financial statements and the balance sheet, the value of the wife’s superannuation entitlements as at 10 January 2022 has risen since 30 June 2021 to $230,288 and the husband’s as at 2 June 2022 has fallen to $469,879. The combined value is 25 per cent of the total pool which is a significant component.
Assessed holistically, I find that the parties’ contributions to the aggregate superannuation pool are equivalent.
The wife at 57 years of age is six years older than the husband. The wife has health issues that are likely to decrease the length of her working life. The husband is likely to have an ability to work and earn for more years into the future than the wife. For these reasons, there ought to be an adjustment in the wife’s favour of 5 per cent.
OTHER FACTORS
Other factors under section 79(4) that I have taken into account but are of minimal or no relevance in this case are:
(a)There is no effect of any proposed order upon the earning capacity of either party (s 79(4)(d)).
(b)The balance of the factors in s 75(2) not addressed above (s 79(4)(e)).
(c)The other orders made under this Act affecting a party to the marriage or a child of the marriage (s 79(4)(f)).
(d)The child support as assessed under the Child Support (Assessment) Act 1989 that the husband has provided, is to provide, or might be liable to provide in the future, for the children of the marriage (s 79(4)(g)).
JUSTICE & EQUITY
Having identified the asset pool, assessed each party’s contributions, and assessed how future events may have a financial impact on either of the parties, pursuant to the fourth step in Hickey it is necessary to “step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.”
The above findings as to contributions and future needs, with respect to non-superannuation and to superannuation, arrive at a determination that the property of the parties to the marriage or either of them ought to be altered such that the wife’s interest amount to a total value of 55 per cent.
In relation to superannuation, a splitting order of $155,000 in the wife’s favour will be required to bring the wife’s entitlements to $385,288 (55 per cent) and the husband’s to $314,879 (45 per cent). I am satisfied that is a just and equitable result.
In relation to the non-superannuation pool, both parties seek orders that the wife obtain sole title to the Suburb E property and it is appropriate to make orders to provide for that to occur. The net proceeds of sale of the C Town property of $714,271, along with the CGT liability of $129,831, may be wholly attributed to the husband. Thereafter, a settlement sum of $330,000 is required to be paid by the wife to the husband to achieve an overall division of 55/45 per cent in her favour.
Taking into account the lesser assets and liabilities, the non-superannuation net result for the husband is $964,965 predominantly in cash. The net result for the wife is in $1,178,111 being the Suburb E property at $1,475,000 and probably a loan of $330,000. I have regard to the wife’s recent ability to pay down the Suburb E property mortgage from August 2019 to December 2021 in the order of $111,000. I also have regard to the wife’s provision for mortgage payments of $353 per week in her Financial Statement. I am satisfied that the effect of the overall division of 55/45 per cent in the wife’s favour is a just and equitable result.
THE ORDERS
For the reasons set out above:
(a)Orders 1 and 2 provide for the net proceeds of sale of the C Town property to be released to the husband and for the husband to indemnify the wife with respect to the CGT liability.
(b)Order 3 provides for the cash adjustment to be paid by the wife to the husband.
(c)Orders 4-7 provide for the orderly transfer of the Suburb E property to the wife.
Orders 8-10 provide for the sale of the Suburb E property in the event of default by the wife of payment of the cash adjustment. They are in the terms sought by the husband.
Orders 11-14 are uncontroversial and are made in the terms sought by both parties.
Orders 15-19 are made in the terms sought by the wife. It is not clear whether or not the trustee has been accorded procedural fairness. Order 20 provides a mechanism for the wife to deal with that.
I certify that the preceding one hundred and fifty-nine (159) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansfield. Associate:
Dated: 23 February 2023
Annexure A
BALANCE SHEET
Ownership Description Wife's Updates as at 6 Sep 2022 Husband's Updates as at 6 Sep 2022 Wife's value ($) - June Trial Husband's value ($) - June Trial ASSETS 1 Joint D Street, Suburb E, FF REGION (W: Single Expert Valuation Report by Z Company as at 6 September 2022 - released 10 November 2022) $1,475,000 $1,475,000 $1,600,000 $1,600,000 2 Husband B Street, C Town (W: Single Expert Valuation Report by Z Company dated […]2022)
(H: net proceeds of sale […] 2022, held in trust - DDCS)$1,460,000 $714,271 $1,460,000 $1,460,000 3 Joint ANZ Offset account …81 (as at 8.6.2022) $10 $10 $10 $10 4 Wife ANZ …54 (as at 8.6.2022) $3,134 $3,134 $3,134 $3,134 5 Wife CBA …53 (as at 9.6.2022) $16,339 $17,839 $16,339 $17,839 6 Wife ANZ Investment account …34 (8.6.2022) $1 $1 $1 $1 7 Wife ANZ …08 (as at 2.6.2022) $47 $47 $47 $47 8 Wife Estate of Wife's late mother, ANZ account …59 (as at 8.6.2022) $434 $434 $434 $434 9 Husband Business account …27 (as at 07/06/2022) (*Only asset of the H Family Trust) `D $6,300 `D $6,300 10 Husband ANZ …11 (as at 07/06/2022) $4,100 $4,100 $4,100 $4,100 11 Husband ANZ - Ms BB …98 (07/06/2022) $112 $112 $112 $112 12 Husband ANZ - X …55 (07/06/2022) $114 $114 $114 $114 13 Husband ANZ - Y …44 (07/06/2022) $112 $112 $112 $112 14 Husband H Family Trust NK Addressed at No. 9 NK Addressed at No. 9 15 Husband Boat $10,800 $10,000 $10,800 $10,000 16 Husband Motor Vehicle 1 $16,300 $16,300 $16,300 $16,300 17 Wife Motor Vehicle 2 $65,000 $65,000 $65,000 $65,000 18 Wife Proceeds of sale of Motor Vehicle 4 $0 $20,000 $0 $20,000 19 Wife Cash withdrawn from Wife's CBA account …53 held by the Wife $0 $85,000 $0 $85,000 20 Wife Cash withdrawn from Wife's ANZ account …24 held by the $0 $15,000 $0 $15,000 21 Husband Household content and sporting gears and equipment (estimate) $20,000 $20,000 $20,000 $20,000 22 Wife Household Content (estimate) Nominal $20,000 Nominal $20,000 23 Husband Proceeds of sale of the Suburb Q Property $990 September 2019 - applied to bank account $990 September 2019 - applied to bank account 24 Husband Proceeds of sale of Motor Vehicle 5 $18,200 appplied to bank account $18,200 appplied to bank account 25 Husband Proceeds of sale of Motor Vehicle 6 (sold […]2019) $9,950 applied to bank account $9,950 applied to bank account 26 Husband Proceeds of sale of Motor Vehicle 7 ([…]2020) $8,300 applied to bank account $8,300 applied to bank account 27 Husband Insurance proceeds of Motor Vehicle 8 ([…]2016) $11,896 applied to bank account $11,896 applied to bank account 28 Wife Traded in: 2016 Motor Vehicle 9 ([…]2019) value captured in the current Motor Vehicle 2 $0 Not applicable $0 Not applicable Total $3,120,839 $2,472,774 $3,245,839 $3,343,503 ADDBACKS Ownership Description Wife's value ($) Wife's value ($) Husband's value ($) Total $0 $0 $0 $0 LIABILITIES Ownership Description Wife's value ($) Wife's value ($) Husband's value ($) 29 Joint Home loan of Suburb E property …21 (15/06/2022) $3,478 $3,478 $3,478 $3,478 30 Wife U Financial Services car loan (as at 17/09/2021) $38,668 $38,668 $38,668 $38,668 31 Wife Unpaid tax (as at 14/06/2022) $29,380 NK $29,380 NK 32 Wife Visa Credit Card …77 (as at 08/06/2022) $9,718 $10,390 $9,718 $10,390 33 Husband Home loan - C Town property …04(07/06/2022)
H: home loan discharged with sale of property$309,685 $0 $309,685 $309,685 34 Husband ANZ Visa Credit Card …26 (as at 05/06/2022) $6,513 $6,513 $6,513 $6,513 Husband CGT $129,831 $129,831 Total $527,273 $188,880 $397,442 $368,734 SUPERANNUATION Member Name of Fund Wife's value ($) Husband's value ($) Wife's value ($) Husband's value ($) 35 Wife Superannuation Fund 1 (as at 10.1.2022) $230,288 $230,288 $230,288 $230,288 36 Husband Superannuation Fund 2 (as at 02/06/2022) $469,879 $469,879 $469,879 $469,879 Total $700,167 $700,167 $700,167 $700,167 FINANCIAL RESOURCES Ownership Description Wife's value Husband's value Wife's value Husband's value Wife Nil Nil 37 Husband Outstanding invoice - work at CC Hospital Oct 2019 (not current) $11,120 Nil - banked in 2019 $11,120 Nil - banked in 2019 38 Husband Total value of unclaimed and unpaid wages NK NK 39 Husband Unlogged hours into DD Financial Service $42,000 $42,000 Total $53,120 $0 $53,120 $0 SUMMARY Total NET property (Assets LESS Liabilities) $2,593,566 $2,283,894 $2,848,397 $2,974,769 Total addbacks $0 $0 $0 $0 Total superannuation $700,167 $700,167 $700,167 $700,167 Total financial resources $53,120 $0 $53,120 $0 TOTAL $3,346,853 $2,984,061 $3,601,684 $3,674,936
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