Hanas & Jolaha
[2023] FedCFamC1F 196
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hanas & Jolaha [2023] FedCFamC1F 196
File number(s): SYC 113 of 2019 Judgment of: ALTOBELLI J Date of judgment: 28 March 2023 Catchwords: FAMILY LAW – PROPERTY –Where the Court assessed financial and non-financial contribution to be equal as at the date of the hearing – Where an adjustment was needed to reflect the husband’s greater contribution at cohabitation and the wife’s future needs – Where the weight to be attached to the husband’s initial contributions was assessed against the rubric of all the contributions subsequently made – Finding of contribution in favour of the husband and adjustment in favour of the wife for future needs.
FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks an order for periodic spousal maintenance for a finite period – Where the wife has primary care of the child – Where the husband has capacity to pay but alleges the wife has no need – Where wife is a poor historian regarding financial evidence – Where the wife’s claim for maintenance is less than her expenditure – Finding that the wife has a need for spousal maintenance – Order for spousal maintenance and rental contribution for a finite period.
Legislation: Family Law Act 1975 (Cth) ss 72, 75(2), 79 Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
G and G (1984) FLC 91-582; [1984] FamCA 60
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
MS & PS (2006) FLC 93-268; [2006] FamCA 588
NHC & RCH (2004) FLC 93-204; [2004] FamCA 633
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Trevi & Trevi (2018) FLC 93-858;[2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 73 Date of hearing: 28–31 March 2022, 11 April 2022, 30 September 2022 Place: Sydney Counsel for the Applicant: Mr Sansom SC Solicitor for the Applicant: Mills Oakley Lawyers Counsel for the Respondent: Mr O’Ryan KC Solicitor for the Respondent: York Law Family Law Specialists ORDERS
SYC 113 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HANAS
Applicant
AND: MR JOLAHA
Respondent
order made by:
ALTOBELLI J
DATE OF ORDER:
28 March 2023
THE COURT ORDERS THAT:
1.The Applicant wife (“the Wife”) shall relinquish any right, title and interest in the following properties:
(a)The property situated at and known as J Street, Sydney (“the J Street property”) being all of the land comprised in Folio Identifier … registered in the sole name of the Respondent husband (“the Husband”);
(b)The property situated at and known as K Street, Suburb L (“the K Street property”) being all of the land comprised in Folio Identifier … registered in the names of the Husband, Ms BB and Mr CC;
(c)The property situated at and known as M Street (“the M Street property”) being all of the land comprised in Folio Identifier … registered in the names of the Husband and Mr CC; and
(d)The property situated at and known as N Street, Suburb L (“N Street property”) being all of the land comprised in Folio Identifier … registered in the names of the Husband, Ms BB and Mr CC.
2.The Husband shall indemnify the Wife and keep her forever indemnified in relation to any liabilities whatsoever that arise as a result of his ownership of the properties referred to in Order 1 herein.
3.Pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) the Husband shall pay to the Wife a cash sum of $1,128,966.17 and such payment shall be made within ninety (90) days of these Orders.
4.By way of periodic spousal maintenance pursuant to s 74 of the Act until 1 December 2024, the Husband shall pay to the Wife cleared funds in the sum of $720.00 per week into an account nominated by the Wife, the first payment to be made within seven (7) days of the date of these Orders.
5.The Husband shall continue to pay the Wife's rent up to an amount of $650 per week directly to the real estate agency managing the property and such payments are to be paid in advance if required by the agency until the date of settlement of the purchase of accommodation by the Wife for herself and the children, or 18 months after the date of these orders, whichever occurs first.
6.Pursuant to s 78 of the Act and subject to the above Orders, the Wife shall be solely entitled as between the parties to her interest in:
(a)Her CBA bank account ending #...76; and
(b)Her DD Bank account ending #...06.
7.Pursuant to s 78 of the Act and subject to the above Orders, the Husband shall be solely entitled as between the parties to his interest in:
(a)His CBA bank accounts ending #...91 and #...14;
(b)His Westpac bank accounts ending #...36, #...37 and #...63;
(c)His T Bank accounts ending #...46 and #...29;
(d)His EE Bank account ending #...17;
(e)His ANZ bank account ending #...68;
(f)His shares; and
(g)His Motor Vehicle 1.
8.There be a superannuation splitting Order effecting the interest of the Husband in Superannuation Fund 1 (“the Fund”), in the following terms:
(a)That a base amount of $253,160 is allocated, as required by s 90XT(4) of the Act to the Wife out of the Husband’s interest in the Fund.
(b)That in accordance with paragraph 90XT(1)(a) of the Act:
(i)The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth); and
(ii)The Husband’s entitlement in the Fund, is correspondingly reduced.
(c)The Trustee of the Fund (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(i)calculate in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 (Cth), the entitlement created for the Wife/Husband by sub-clause (b) of this Order; and
(ii)pay the entitlement whenever the Trustee makes a splittable payment out of the Husband’s interest in the fund.
(d)This Order have effect from the operative time and the operative time is four (4) business days after the service of a sealed copy of these orders on the Trustee.
(e)This Order binds the Trustee of the fund.
9.The parties shall do all acts and things and sign all documents as may be necessary to close all joint bank accounts, with the balance remaining to be divided equally between the parties.
10.Other than as provided by these orders each of the parties shall be solely entitled as between the parties to all property and financial resources presently in his or her name, possession or control.
11.Except as otherwise provided in these orders, the Wife shall be declared solely responsible as between herself and the Husband for all liabilities in her name and shall indemnify the Husband and keep him indemnified with respect to any and all such liabilities.
12.Except as otherwise provided in these orders, the Husband shall be declared solely responsible as between himself and the Wife for all liabilities in his name and shall indemnify the Wife and keep her indemnified with respect to any and all such liabilities.
13.All other orders shall be discharged.
14.In the event that either party fails to execute any deed, document or instrument necessary to give effect to these orders, the Registrar of the Federal Circuit and Family Court of Australia at Sydney be appointed pursuant to s 106A of the Act to execute such deed, document or instrument in the name of the said party and to 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 failure by way of affidavit.
15.Either party have liberty to apply on seven (7) days' notice in the event of any difficulty arising out of the implementation and enforcement of these orders.
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 Hanas & Jolaha has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the orders that the Court has made in relation to alteration of property interests and spousal maintenance.
BACKGROUND
The wife is the applicant in this case (“the wife”), and the husband is the respondent (“the husband”). The wife is 34 years old and the husband is 47 years old. They commenced cohabitation from marriage in mid-2010, separated on 31 August 2018, and were divorced on 21 October 2019. They thus cohabited for just over eight years, and it has been over four years since separation. They have one child born in 2017 (“the child”), who is currently five years old. The parents both live in Sydney.
The husband describes himself as director of a firm. The wife cares full-time for their daughter and is in receipt of $552 per week in Centrelink benefits, as well as financial support from the husband in the sum of $380 per week in child support payments, $720 per week in spousal maintenance, and $650 per week in rent contributions.
On 29 March 2022, the parties entered into consent orders in relation to parenting matters. These orders provide, in effect, that the parties have equal shared parental responsibility for the child who lives with the wife and is to spend gradually increasing time with the husband. The orders further provide that the wife be permitted to change the child’s residence to an area of Sydney by the end of the 2022 calendar year, but is thereafter restrained from further changing the child’s residence to a location that is further away.
It is common ground between the parties that at the commencement of cohabitation the husband had substantial assets in accordance with paragraph 13 of his trial affidavit filed on 11 March 2022. In effect, he had net assets of $231,451 and superannuation of $107,653. It is also common ground that all of the real estate held by the husband at the time of cohabitation remains in existence.
At the date of cohabitation, the wife contends that she had a motor vehicle and some savings of about $20,000. Whilst the Court will ultimately find that the wife was unable to prove to the Court’s satisfaction that she did have the savings, nothing turns on this.
The husband is a successful businessman. He has degrees in multiple fields. The wife, likewise, has degrees in those fields and has worked in various firms. She is also undertaking studies in another field.
The wife seeks an order the effect of which would be that the husband pay to her $1.5 million, and that there be a splitting order in relation to the husband’s superannuation in an amount of $253,160.
The husband proposes a payment to the wife of $595,370, subject to a reimbursement by her to him of $23,265 for various joint costs incurred relating to the proceedings but paid initially by him. In addition, he proposes a superannuation split of $156,221. The wife also seeks an order for periodic spousal maintenance as to $720 per week, together with payment of rental of up to $650 per week, both to continue until 1 December 2025. The husband opposes this.
The costs incurred in these proceedings are, in the opinion of this Court, extraordinary, and disproportionate to the value of the assets to be divided and the issues and dispute. According to the Costs Notice filed by the wife on 29 September 2022, the total sum incurred at the date of the notice was $219,226.42, with the total estimated costs to the conclusion of the hearing expected to be $542.266.42. According to the Costs Notice filed by the husband on 29 September 2022, the total sum incurred at the date of the notice was $324,394.32, with the total estimated costs to the conclusion of the hearing expected to be $695,100.66. The total costs are thus expected to be $1,237,367.08
The issues for the Court to determine were as follows:
(1)A number of issues about the agreed joint balance sheet, which will be discussed below;
(2)Assessment of contribution to the date of the trial, having regard to the greater financial contribution made by the husband at cohabitation;
(3)Assessment of future needs; and
(4)Whether the wife has established that she is in need of maintenance, in circumstances where it is conceded that the husband would have capacity to pay.
THE APPLICABLE LAW
This is an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:
79 Alteration of property interests
(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
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(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
(ii) the relevant bankruptcy trustee (if any);
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.
(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.
Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(b)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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)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
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”), the Full Court considered the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108, which provided guidance on how s 79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”), but on the basis that it is a shorthand distillation of the words of s 79, as opposed to being a statutory edict. The four steps articulated in Hickey at [39] are:
(1)Identify and value the property, liabilities and financial resources of the parties;
(2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property;
(3)Identify and assess the other facts relevant under s 79(4)(d)–(g) including s 75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
(4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
Another legal issue that arises is whether I should notionally add back assets to the property pool. In the Full Court’s decision of Trevi & Trevi [2018] FamCAFC 173, Murphy J explains at [27]:
The Full Court held in Omacini and Omacini that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
(Footnotes omitted)
Relevant to this case is the first category – that is, the question of adding back expenditure on legal fees. In this regard, the Full Court in NHC & RCH (2004) FLC 93-204 at [55] and [57] states:
55.This decision appears to confirm the principle that where the payment of legal costs can be regarded as a premature distribution of funds (in which both parties have an interest), it is appropriate to add back those costs as a notional asset. It also confirms the principle that where funds have been borrowed to pay legal fees, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account. The decision also supports the proposition that where it is determined that a payment of legal fees should be taken into account as a notional asset, any outstanding liability in respect of those fees should also be taken into account.
…
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
Spousal maintenance is governed by s 72 of the Act. In Hall v Hall (2016) 257 CLR 490 (“Hall”) at [3], the High Court described the “gateway” requirement for the consideration of a spousal maintenance application pursuant to s 74 of the Act. The gateway requirement is set out in s 72(1) of the Act, which provides:
72 Right of spouse to maintenance
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason.
having regard to any relevant matter referred to in subsection 75(2).
As noted by the High Court in Hall, the Applicant carries the onus of satisfying the Court on the balance of probabilities that she has satisfied the gateway requirement of s 72(1) of the Act.
In MS & PS (2006) FLC 93-268, Coleman J explained at [39] that in determining whether to make an order for spousal maintenance, the Court should follow a four-step process, as follows:
(1)Can the applicant support themselves adequately?
(2)If not, what are the applicant’s reasonable needs?
(3)What capacity does the respondent have to meet those needs?
(4)What order is reasonable, having regard to s 75(2) of the Act?
THE EVIDENCE BEFORE THE COURT
In support of her case, the wife relied on the following documents:
(a)Amended Initiating Application filed 15 March 2019;
(b)Her affidavit filed 30 November 2021;
(c)Her affidavit filed 10 March 2022 (financial issues) with associated tender bundle;
(d)Financial Statement filed 9 March 2022;
(e)Single Expert Report of Ms FF dated 14 March 2022;
(f)Case outline filed 25 March 2023;
(g)Various documents jointly tendered during the proceedings, marked as exhibits J1–J2; and
(h)Document tendered during the proceedings, marked as exhibit A1.
In support of his case, the husband relied on the following documents:
(a)Amended Response to Initiating Application filed 14 May 2019;
(b)Case outline filed 25 March 2022;
(c)Joint Balance Sheet filed 25 March 2022;
(d)His affidavit filed 11 March 2022 (as to financial) together with exhibits;
(e)His affidavit filed 30 November 2021 (as to parenting) together with exhibits;
(f)Financial Statement filed 9 March 2022;
(g)Affidavit of Ms GG filed 1 March 2022;
(h)Affidavit of Mr CC filed 1 March 2022;
(i)Affidavit of Ms HH filed 1 March 2022; and
(j)Various documents tendered during the proceedings, marked as exhibits R1–R49.
BALANCE SHEET ISSUES
The joint balance sheet was exhibited as a joint tender. The document is reproduced below:
ASSETS No Ownership Description Wife’s Value Husband’s Value Real Estate 1 H J Street, Sydney (“J Street property”) (Folio: …) $2,200,000.00 $2,200,000.00 2 H as to 1/3 share K Street, Suburb L (“K Street property”) (Folio: …)) (Registered owners: Ms BB, Mr Jolaha & Mr CC) $121,667.00 $121,667.00 3 H as to 1/2 share M Street, Suburb L (“M Street property”) (Folio: …) (Registered owners: Mr Jolaha & Mr CC) $212,500.00 $212,500.00 4 H as to 1/3 share N Street, Suburb L (“N Street property”) (Folio: …) (Registered owners: Ms BB, Mr Jolaha & Mr CC) $163,333.00 $163,333.00 Bank Accounts 5 H ANZ Offset account #...68 $5,506.00 $5,506.00 6 H CBA account #...91 $251.00 $251.00 7 H CBA account #...14 $1,577.00 $1,577.00 8 H Westpac account #...36 $24,844.00 $24,844.00 9 H T Bank (USA) #...29 account $2,348.00 $2,348.00 10 H T Bank (USA) Checking Account #....46 $50.00 $50.00 11 H as to 1/3 share Westpac account #...37 (Account holders: Mr Jolaha, Ms BB and Mr CC re property jointly owned) $2,256.00 $2,256.00 12 H as to 1/3 share Westpac account #...63 (Mr Jolaha, Ms BB and Mr CC re property jointly owned) NIL NIL 13 H as to 1/2 share EE Bank Deposit Offset account #...17 (Mr Jolaha and Mr CC re property jointly owned) $2,806.00 $2,806.00 14 J T Bank (Aust) account (held jointly by the parties) (account #...76) $24.00 $24.00 15 J T Bank (USA) account (held jointly by the parties) (unknown account) NIL NIL 16 W CBA Account #...65 (account closed) NIL NK 17 W CBA Account #...76 $4,523.00 $4,523.00 18 W CBA Account #...12 (account closed) NIL NIL 19 W DD Bank Account #...06 $333.00 $333.00 20 W Westpac Account #...28 (account closed) NIL NIL 21 W JJ Bank account (USA) (account closed) NIL NK Companies, Partnerships & Trusts 22 W KK Pty Ltd NIL NK Investments/Shares 23 W Commsec Trading Account NIL NIL 24 H Shares with AA Company (ASX:…) NIL NIL Motor vehicles 25 H Motor Vehicle 1 (W $68,000; H: value less novated lease nil to negative or close to NIL) NIL $40,650.00 Household Effects, Artwork & Jewellery 26 W Household items NIL Exclude 27 H Household items NK Exclude Miscellaneous 28 W Rental bond paid by Husband $2,600.00 2,600.00 29 H Funds held in trust account of LL Legal NIL NIL TOTAL $2,744,618.00 $2,785,268.00 ADDBACKS No Ownership Description Wife’s Value Husband’s Value 30 W Sale proceeds of NN Company shares NIL $10,727.00 31 W Partial property settlement $50,000.00 $50,000.00 32 H 401(k) Withdrawal (USD$25,516) Taken up in T Bank (USA) #...29 account Taken up in T Bank (USA) #...29 account 33 H Sale proceeds of H Pty Ltd Shares (23,748 USD on 28/11/18) NIL NIL 34 H Transfers from Husband’s Westpac bank account #...36 to Ms BB NIL NIL 35 H Husband's ATM Withdrawals from ANZ Bank account #...68 for the period 21.01.2022 to 21.07.2022; T Bank Checking Account number #...46 for the period 12.01.2022 to 11.08.2022, Westpac Account #...37 for the period 18.01.2022 to 18.07.2022 and CBA Bank account #...91 for the period 01.10.2021 to 31.03.2022 NIL NIL 36 H Husband's ATM Withdrawals from Westpac bank account #...36 for the period 25.01.2021 to 24.08.2022 NIL NIL 37 H Transfers from Husband’s ANZ bank account #...68 to Ms BB and Mr MM NIL NIL 38 H Husband’s drawdown on J Street property mortgage $235,589.00 NIL 39 H Husband’s drawdown on M Street property mortgage NIL NIL 40 W Legal Fees Paid (does not include payment to Counsel subject to loan and referred to at item 73) NIL NIL 40A W Legal fees paid to Counsel from OO Finance NIL NIL 41 H Legal Fees Paid to York Law in part payment of amounts owing to YL plus valuation cost $10,450 plus PP Accounting valuation $5,280 plus update property valuation $1,650 (excludes payment made by H's sister to YL of $10,000 see entry
item 51B)NIL NIL 42 H Legal Fees Paid by husband's sister/her husband on behalf of Husband by way of loans being: to York Law 10.4.2019 to
pay Mr QQ ($10,000); to barristers directly ($77,673)NIL NIL TOTAL $285,589.00 $60,727.00 LIABILITIES No Ownership Description Wife’s Value Husband’s Value Mortgages 43 H J Street, Sydney (ANZ Home loan account #...67) $718,163.00 $718,163.00 44 H as to 1/2 share M Street, Suburb L (EE Bank Home Loan account #...82) (joint mortgage with
Mr CC)$80,126.00 $80,125.00 45 H as to 1/3 share N Street, Suburb L (RR Finance #...56) (joint mortgage Ms BB, Mr Jolaha & Mr CC) $40,158.00 $40,158.00 Credit Card 46 H ANZ credit card #...20 nominal nominal 47 H ANZ credit card #...38 nominal nominal 48 H CBA Credit Card #...31 (account closed) nominal NIL 49 H T Bank credit card #...05 (USA) nominal NIL 50 H T Bank Credit Card #...29 (H: checking account not credit card account) nominal nominal 51 J T Bank Credit Card #...75 (H: this was a joint checking account) nominal nominal 52 W ANZ Frequent Flyer #...50 credit card nominal NIL 53 W ANZ Frequent Flyer #...99 credit card nominal NIL 54 W HECS Debt $69,981.00 NIL/exclude Personal and Company Loans 55 H as to 1/3 share Personal loan from Ms GG and Mr SS (personal loan obtained by Mr Jolaha; Mr CC and Ms BB) (for purposes of this hearing) NIL NIL 56 H as to 1/3 share Personal loan from Mr TT (personal loan obtained by Mr Jolaha; Mr CC and Ms BB) (for purposes of this hearing) NIL NIL 57 H UU Bank (H:- Value of Motor Vehicle 1 less novated lease) NIL $51,016.00 58 H Ms BB and Mr MM loan owing NIL $32,673.00 59 W Personal loan from sister, Ms VV NIL NIL 60 W Personal loan from Mr WW NIL NIL 61 W Personal Loan from Ms XX NIL NIL 62 W Personal loan from Ms YY NIL NIL Taxation & Other Liabilities 63 H Income Tax for FY2020 NIL NIL 64 H Income Tax for FY2021 NK NIL 65 H Overdue PAYG Tax NIL NIL 66 H Income tax due re USA income for period up to 31.12.18, tax due March 2019 but not paid because tax return yet to be lodged E$USD6,970 NIL
$9,957.00 67 H Income tax due re USA $401K withdrawal E$USD10,000 NK $14,285.00 68 H Division 293 LEVY for FY2022 NIL $3,750.00 Miscellaneous 69 H Legal fees owing to York Law Family Law Specialists @ 20.9.22 $231,906.34 plus WIP $16,374.60) + anticipated invoice for Stephen O'Ryan QC up to conclusion of trial 30.9.22 $130,000 NIL NA 70 W Legal fees owing to ZZ Legal NIL NA 71 W Legal fees owing to Mills Oakley (To be updated prior to hearing in accordance with Costs Notice to be filed on 29.09.2022) NIL NA 72 W Legal Fees owing to Q Law Office (US Lawyers) (USD$4,985) NIL NIL 73 W OO Finance NIL NIL 73A H agent commission (E$48,400), selling costs (E$3,300) re J Street apartment ( estimate) NK $51,700.00 73B H agents commission (E$14,025) and selling costs ($1,650) – re M Street property - Husband's share - estimate NK $15,675.00 73C H Capital Gains Tax on sale of M Street - (purcahsed 2004 for over $250,000) - Husband's share of Gain is $82,500. CGT is payable on 50% of gain at highest marginal tax rate - estimated CGT payable by Husband is NK $20,006.00 TOTAL $908,428.00 $1,037,508.00 SUPERANNIATION No Member Name of Fund & Type of Interest Wife’s Value Husband’s Value 74 H Superannuation Fund 1 (Account #...40) $495,315.00 $495,315.00 75 W Superannuation Fund 2 $26,368.00 $26,368.00 TOTAL $521,683.00 $521,683.00 FINANCIAL RESOURCES No Ownership Description Wife’s Value Husband’s Value 76 H Plan Shares in AA Company (see note) $547,030.00 $547,030.00 77 H Capital Gains Tax payable on AA Company Plan shares assuming vested and noting the cost base versus the price as per the single expert report and assuming husabnd on highest marginal tax rate -$241,142.00 -$241,142.00 TOTAL $305,888.00 $305,888.00 GROSS ASSETS $2,744,618.00 2,785,268.00 LESS LIABILITIES $908,428.00 $1,037,508.00 NET ASSETS $1,836,190.00 $1,747,760.00 ADDBACKS $285,589.00 $60,727.00 NET ASSETS & ADDBACKS $2,121,779.00 $1,808,487.00 ADD SUPERANNUATION $521,683.00 $521,683.00
In item 25 there is a dispute between the parties about the value of the husband’s car, Motor Vehicle 1. The determination of this is related to item 57, a liability relating to the vehicle. The Court rules that both items 25 and 57 should be noted as nil on the balance sheet. There was no admissible evidence of the value of the husband’s motor vehicle. The parties were unable to agree as to the value of the same. The reference by the parties to a RedBook value is not admissible evidence of value when there is a contest between the parties about this issue. The best the Court can do, therefore, is to pragmatically treat both the asset and liability as having a nil value. It is curious to the Court that in a case that was so robustly litigated by the parties who seemingly had no hesitation in incurring vast amounts of legal fees, they could neither agree to the value of the car nor engage a single joint expert in this regard.
There is an issue in relation to item 30, being the sale proceeds of NN Company shares. The Court is satisfied that the wife used the sale proceeds to fund her legal fees. They should be added back. There was only the faintest resistance to this in her case.
There is an issue about item 38. It is clear from the evidence that the husband extended the mortgage over one of his properties by $235,589. The wife contends this amount should be added back. She contends that for all practical purposes it was used to pay his legal fees, and that it amounted to a premature distribution of matrimonial assets. The Court agrees. The conclusion is supported as follows. He agreed that he paid lawyers $183,588.33. He agreed that he paid $25,000 to his sister and her husband in repayment of loans that were used to meet his legal fees. The balance was left in his offset account, however, the Court is satisfied from the cross-examination of the husband that the most likely use of these funds was to pay legal fees. On the husband’s own evidence it is very difficult for the Court to see why, at the very least, he did not make a concession of an add-back of $183,588.33. This is merely the tip of the iceberg, the Court observes, in relation to conduct of litigation that was both inefficient and ineffective.
At item 54, the wife contends that her Higher Education Contribution Scheme (“HECS”) debt should be included as a liability on the balance sheet. The husband opposes this. The evidence indicates that the HECS debt in question relates not just to the wife’s completed degrees, but to her more recent studies as she seeks to retrain as a health professional.
The high point of the husband’s case in opposing this balance sheet item is found at paragraph 126 of his senior counsel’s written closing submissions dated 30 September 2022. This states:
126.The wife seeks to include in the balance sheet her HECS debts for the 2010, 2011, 2012 and 2013 academic years when the wife achieved the qualifications and capacity to engage in income earning personal exertion as a [professional in multiple fields]. The husband is being asked to contribute to a liability that was a complete waste of time and money and in those circumstances the wife should be solely responsible for the debt.
On the most generous interpretation of the husband’s trenchantly critical submissions, he seems to be contending that the debt is wasteful and speculative in the sense that the wife may never gainfully work as a professional. He also seemingly infers that the HECS debt may never be repayable because the wife would never earn enough money such that her HECS debt would be repaid by way of deduction from her pay. This is curiously, and ironically, inconsistent with the thrust of the husband’s case in opposition to the wife’s claim for spousal maintenance. His case is that the wife is able to support herself adequately and thus unable to meet the threshold requirement of s 72(1) of the Act. Even in the wife’s case for maintenance, it was conceded that if the Court made an order it would be for a fixed and relatively short period, up until 1 December 2025. Thus, both the husband and the wife’s cases clearly contemplate that the wife will return to employment at some time, whether as a health professional, professional or in some other capacity.
Item 54 should read “$69,981”. This issue should never have been litigated. It is yet another example of the ineffective and inefficient conduct of litigation.
There is a dispute about item 58, a loan to the husband from relatives, which he contends should be included on the balance sheet. The husband’s own evidence concedes that the amount outstanding represents funds used to pay his legal costs. The inclusion of this liability on the balance sheet would result in the wife, in effect, contributing to the husband’s legal fees. This issue should never have been taken. It is yet another hallmark of ineffective and inefficient litigation. Determining issues such as this one was a waste of the Court’s time, and public resources.
At items 66–68, the husband contends that certain liabilities be included on the balance sheet. The wife opposes this. Item 66 is described as “income tax due but not paid because tax returns have not been lodged”. There is no present liability. Item 67 has not been established to the Court’s satisfaction. If the liability were as clear as the husband contends, then he could easily prove it. He has not done so. Item 68 is described as a “Division 293 Levy” for the 2022 financial year. Even if the husband could prove this liability, it clearly relates to his financial circumstances in the post-separation period. None of these items should appear on the balance sheet, but the Court will treat them all as potential liabilities for the purposes of s 75(2) of the Act.
There is a dispute in relation to items 73A, 73B and 73C. In effect, the husband’s case is that he will need to sell real estate in order to pay the wife her entitlement under any orders made. That is plausible and the expenses are foreseeable. They are not, however, quantifiable. They are not liabilities that the Court is prepared to allow onto the balance sheet for present purposes. Nonetheless, as with items 66–68, the Court will take these potential expenditures into account in a general sense under s 75(2) of the Act.
Accordingly, the Court finds the balance sheet to be as follows:
ASSETS No Ownership Description Value Real Estate 1 H J Street, Sydney (“J Street property”) (Folio: …) $2,200,000.00 2 H as to 1/3 share K Street, Suburb L (“K Street property”) (Folio: …)) (Registered owners: Ms BB, Mr Jolaha & Mr CC) $121,667.00 3 H as to 1/2 share M Street, Suburb L (“M Street property”) (Folio: …) (Registered owners: Mr Jolaha & Mr CC) $212,500.00 4 H as to 1/3 share N Street, Suburb L (“N Street property”) (Folio: …) (Registered owners: Ms BB, Mr Jolaha & Mr CC) $163,333.00 Bank Accounts 5 H ANZ Offset account #...68 $5,506.00 6 H CBA account #...91 $251.00 7 H CBA account #...14 $1,577.00 8 H Westpac account #...36 $24,844.00 9 H T Bank (USA) #...29 account $2,348.00 10 H T Bank (USA) Checking Account #9…46 $50.00 11 H as to 1/3 share Westpac account #...37 (Account holders: Mr Jolaha, Ms BB and Mr CC re property jointly owned) $2,256.00 12 H as to 1/3 share Westpac account #...63 (Mr Jolaha, Ms BB and Mr CC re property jointly owned) NIL 13 H as to 1/2 share EE Bank Deposit Offset account #...17 (Mr Jolaha and Mr CC re property jointly owned) $2,806.00 14 J T Bank (Aust) account (held jointly by the parties) (account #...76) $24.00 15 J T Bank (USA) account (held jointly by the parties) (unknown account) NIL 16 W CBA Account #...65 (account closed) NIL 17 W CBA Account #...76 $4,523.00 18 W CBA Account #...12 (account closed) NIL 19 W DD Bank Account #...06 $333.00 20 W Westpac Account #...28 (account closed) NIL 21 W JJ Bank account (USA) (account closed) NIL Companies, Partnerships & Trusts 22 W KK Pty Ltd NIL Investments/Shares 23 W Commsec Trading Account NIL 24 H Shares with AA Company (ASX:…) NIL Motor vehicles 25 H Motor Vehicle 1 (W $68,000; H: value less novated lease nil to negative or close to NIL) NIL Household Effects, Artwork & Jewellery 26 W Household items NIL 27 H Household items NIL Miscellaneous 28 W Rental bond paid by Husband $2,600.00 29 H Funds held in trust account of LL Legal NIL TOTAL $2,744,618.00 ADDBACKS No Ownership Description Value 30 W Sale proceeds of NN Company shares $10,727.00 31 W Partial property settlement $50,000.00 32 H 401(k) Withdrawal (USD$25,516) Taken up in T Bank
(USA) #...29
account33 H Sale proceeds of H Pty Ltd Shares (23,748 USD on 28/11/18) NIL 34 H Transfers from Husband’s Westpac bank account #...36 to Ms BB NIL 35 H Husband's ATM Withdrawals from ANZ Bank account #...68 for the period 21.01.2022 to 21.07.2022; T Bank Checking Account number #...46 for the period 12.01.2022 to 11.08.2022, Westpac Account #...37 for the period 18.01.2022 to 18.07.2022 and CBA Bank account #...91 for the period 01.10.2021 to 31.03.2022 NIL 36 H Husband's ATM Withdrawals from Westpac bank account #...36 for the period 25.01.2021 to 24.08.2022 NIL 37 H Transfers from Husband’s ANZ bank account #...68 to Ms BB and Mr MM NIL 38 H Husband’s drawdown on J Street property mortgage $235,589.00 39 H Husband’s drawdown on M Street property mortgage NIL 40 W Legal Fees Paid (does not include payment to Counsel subject to loan and referred to at item 73) NIL 40A W Legal fees paid to Counsel from OO Finance NIL 41 H Legal Fees Paid to York Law in part payment of amounts owing to YL plus valuation cost $10,450 plus PP Accounting
valuation $5,280 plus update property valuation $1,650 (excludes payment made by H's sister to YL of $10,000 see entry
item 51B)NIL 42 H Legal Fees Paid by husband's sister/her husband on behalf of Husband by way of loans being: to York Law 10.4.2019 to
pay Mr QQ ($10,000); to barristers directly ($77,673)NIL TOTAL $296,316.00 LIABILITIES No Ownership Description Value Mortgages 43 H J Street, Sydney (ANZ Home loan account #...67) $718,163.00 44 H as to 1/2 share M Street, Suburb L (EE Bank Home Loan account #...82) (joint mortgage with
Mr CC)$80,126.00 45 H as to 1/3 share N Street, Suburb L (RR Finance #...56) (joint mortgage Ms BB, Mr Jolaha & Mr CC) $40,158.00 Credit Card 46 H ANZ credit card #...20 nominal 47 H ANZ credit card #...38 nominal 48 H CBA Credit Card #...31 (account closed) nominal 49 H T Bank credit card #...05 (USA) nominal 50 H T Bank Credit Card #...29 (H: checking account not credit card account) nominal 51 J T Bank Credit Card #...75 (H: this was a joint checking account) nominal 52 W ANZ Frequent Flyer #...50 credit card nominal 53 W ANZ Frequent Flyer #...99 credit card nominal 54 W HECS Debt $69,981.00 Personal and Company Loans 55 H as to 1/3 share Personal loan from Ms GG and Mr SS (personal loan obtained by Mr Jolaha; Mr CC and Ms BB) (for purposes of this hearing) NIL 56 H as to 1/3 share Personal loan from Mr TT (personal loan obtained by Mr Jolaha; Mr CC and Ms BB) (for purposes of this hearing) NIL 57 H UU Bank (H:- Value of Motor Vehicle 1 less novated lease) NIL 59 W Personal loan from sister, Ms VV NIL 60 W Personal loan from Mr WW NIL 61 W Personal Loan from Ms XX NIL 62 W Personal loan from Ms YY NIL Taxation & Other Liabilities 63 H Income Tax for FY2020 NIL 64 H Income Tax for FY2021 NIL 65 H Overdue PAYG Tax NIL Miscellaneous 69 H Legal fees owing to York Law Family Law Specialists @ 20.9.22 $231,906.34 plus WIP $16,374.60) + anticipated invoice for Stephen O'Ryan QC up to conclusion of trial 30.9.22 $130,000 NIL 70 W Legal fees owing to ZZ Legal NIL 71 W Legal fees owing to Mills Oakley (To be updated prior to hearing in accordance with Costs Notice to be filed on 29.09.2022) NIL 72 W Legal Fees owing to Q Law Office (US Lawyers) (USD$4,985) NIL 73 W OO Finance NIL TOTAL $908,428.00 SUPERANNUATION No Member Name of Fund & Type of Interest Value 74 H Superannuation Fund 1 (Account #...40) $495,315.00 75 W Superannuation Fund 2 $26,368.00 TOTAL $521,683.00 FINANCIAL RESOURCES No Ownership Description Value 76 H Plan Shares in AA Company (see note) $547,030.00 77 H Capital Gains Tax payable on AA Company Plan shares assuming vested and noting the cost base versus the price as per the single expert report and assuming husband on highest marginal tax rate -$241,142.00 TOTAL $305,888.00 GROSS ASSETS $2,744,618.00 LESS LIABILITIES $908,428.00 NET ASSETS $1,836,190.00 ADDBACKS $296,316.00 NET ASSETS & ADDBACKS $2,132,506.00 SUPERANNUATION $521,683.00 ASSESSMENT OF CONTRIBUTION
Now that the pool of assets has been established, the practical effect of the husband’s proposal that he pay the wife $595,370 and a super split of $156,221, and the wife’s proposal that she receive $1.5 million and a super split of $253,160, may be assessed. These calculations will exclude, of course, items 76 and 77, which the parties have agreed are financial resources. On the wife’s proposal she would receive 66 per cent of the total pool, and on the husband’s proposal the wife would receive 28 per cent of the total pool.
In closing submissions, senior counsel for the wife contended that contribution would be assessed as to 47.5 per cent in her favour and 52.5 per cent to the husband. In the husband’s closing submissions, his senior counsel contended that it would be 35 per cent to the wife, but it is not entirely clear to the Court whether this included any s 75(2) assessment.
There is no doubt that the husband made a greater financial contribution at the date of cohabitation. The Court also accepts that all of the properties he owned at cohabitation remain on the balance sheet. The Court takes this into account.
The Court rejects the wife’s contention that she had about $20,000 in savings at cohabitation. As a result of the meticulous cross-examination of the wife the Court concludes that she is a poor historian in relation to financial matters. This will become evident in relation to other contribution and future needs findings. The Court does not find that the wife was intentionally deceitful in giving evidence about her financial affairs. Her recollection was poor, and in the absence of documents on which she could rely on in giving financial evidence, the Court finds that her evidence was coloured by a desire to enhance her case. The Court found her cross-examination about the $20,000 cash savings unconvincing.
What is clear from the totality of the evidence, however, is that both the husband and the wife worked and derived an income during their marriage. The wife worked between 2011 and 2016, before their child was born. The husband worked, and at all relevant times derived a significantly greater income. The Court is satisfied that both parties worked to their capacity. Moreover, and despite the assertion to the contrary, the Court is satisfied that each applied their income for the benefit of their family. The assertion made by the husband, directly or indirectly, that the wife did not apply her income for the benefit of the household is not accepted by the Court. Whether the wife’s income was used towards the payment of weekly household expenses, or towards their annual holidays, makes not the slightest difference in terms of assessment of contribution. Regrettably, at times, the Court formed the view that the husband’s case about assessment of contribution was pernickety and myopic. The broad-brush approach adopted in family law jurisprudence to the assessment of contribution is well-established and yet, at times, it almost felt like the husband had reverted to an antiquated mathematical approach to identifying, valuing, and then assessing discrete aspects of contribution: G and G (1984) FLC 91-582 at 980; Norbis v Norbis (1986) 161 CLR 513 at 523.
The corollary of the husband being engaged in the challenging and responsible work through which he derived a significant income, is that he worked long hours and was thus less available to make non-financial contributions, such as towards homemaking and parenting. The non-financial contributions he made in this regard were valuable, but the Court does not accept, for example, that after the wife ceased work to care full-time for their daughter, his contributions were equal to hers. His contention that after their daughter was born, he “continued to do the majority of the home duties …” is simply implausible and, indeed, a mischievous assertion that contributed to the inefficiency, and ineffectiveness of the way in which his case was conducted.
In accordance with well-established authority, contribution should be assessed holistically: Jabour & Jabour (2019) FLC 93-898. Apart from the greater financial contribution made by the husband through the assets that he brought into the relationship, the Court assesses contribution, both direct and indirect, financial and non-financial, to be equal as at the date of the hearing. The Court acknowledges that there was a substantial period between the date of the hearing, and the date of cohabitation, but their respective contributions continued, albeit differently.
The real issue in this case is how, precisely, contribution should be assessed to reflect the greater financial contribution made by the husband. The wife contends that his greater financial contribution is reflected in the five per cent differential which results from an assessment in his favour of 52.5 per cent. By contrast, the husband contends that it should be 70 per cent in his favour leading to a 40 per cent differential.
The Court accepts that the weight to be attached to the husband’s initial contributions must be assessed against the rubric of all the contributions subsequently made.
The value of the husband’s contribution to the assets in this case must be considered. His equity in the properties owned at cohabitation has increased significantly, in circumstances where there is little evidence of any meaningful improvements to the properties that would contraindicate the suggestion that it was market forces, and not some other factor, that caused the values to increase. As always, however, the risk is that focussing purely on the value of assets invites a comparison of quantifiable, measurable contribution, against unquantifiable, immeasurable contribution.
Having regard to all the evidence, this Court assesses contribution in favour of the husband at 60 per cent, which produces a differential of 20 per cent, the dollar value of which on the pool is $530,837.80. The Court is satisfied that this is as just and equitable as the circumstances of the case allow.
AN ASSESSMENT OF FUTURE NEEDS
The wife proposed an assessment in her favour of 25 per cent, and the husband conceded a five per cent adjustment.
There is nothing about the age or state of health of the parties that either indicates, or contraindicates, making an adjustment.
The husband is in well-paid employment. The Court found him to be highly intelligent, articulate (including financially articulate), and possessed an eye for detail that is well-suited in his professional industry. He performs well at work, as is reflected in the evidence about the significant commission payments received in 2022. There is no suggestion that any of this will change. Indeed, his relatively youthful age, combined with an established skillset, suggests that the income earning capacity of the husband for the future is positive. The Court rejects any attempt made by the husband in his case to suggest anything to the contrary.
The wife is currently not in employment and is, for all practical purposes, dependent on the husband’s financial support and government benefits. The Court is satisfied, however, that she does have the capacity for employment, a matter reflected in her own case about spousal maintenance, in the sense that it should be time limited to 1 December 2025. She is retraining to be a health professional, but it is not clear to the Court why she does not have the capacity to return to her professional fields. The Court accepts, however, that her professional career has been interrupted by the move overseas and the birth of their daughter, and the understandable desire on her part to parent her child until she starts school, which is likely to be in 2023. On the wife’s evidence, however, the Court is satisfied that even if she returns to work, it is not likely to immediately be full-time work, given the reality that her daughter lives with her and spends quantitatively lesser time with the father. Based on the evidence before the Court, it is highly unlikely that the wife will ever earn on a consistent basis the high income that the husband earns. The mere presence of comparable academic qualification does not, ipso facto, indicate comparable earning capacity. The difference in earning capacity between the husband and the wife is likely to remain a permanent feature of their lives for the foreseeable future.
The husband also has the benefit of financial resources that the wife does not have by way of employment-related incentives.
The wife has the primary care of their daughter. She will have an immediate need to finance suitable accommodation so that she is no longer renting. In this regard, the Court notes that in the consent parenting orders of 29 March 2022 the parties agreed that, for all practical purposes, she would continue to reside in an area of Sydney, which may involve more significant expenditure than, for example, other suburbs of Sydney. The husband’s criticism of the increased rental paid by the wife in this regard is unwarranted.
The Court finds the wife presently has an earning capacity above that which she discloses. The evidence about her alleged hobby, which will be discussed in more detail below in the context of maintenance, leads the Court to conclude that if the wife turned her mind to it, she could derive income from this hobby without significantly interfering with her primary parenting role. There is no evidence before the Court to suggest, however, that the present earning capacity of the wife is a meaningful one. Indeed, the wife foreshadowed wanting to complete her studies and then seek employment as a health professional, possibly as early as 2024. The Court accepts this evidence.
The husband pays child support, as assessed. There is no evidence to suggest that this either does, or does not, meet all, or even a significant part of the costs of the child. He also currently pays current spousal maintenance ($720) and rental contributions ($650).
In all the circumstances, the Court assesses the wife’s future needs at 15 per cent, conscious that this is productive of a differential of 30 per cent which in this case is equivalent to $796,256.70 in the context of a comparatively small pool. This is a life-long, one-off adjustment in the wife’s favour, and yet it represents approximately only two year’s income for the husband, rounding off his income at $400,000 per annum, though noting that his evidence in cross-examination suggested that his 2022 income would be significantly greater. The Court thus considers this adjustment to be just and equitable.
However, the Court has referred, in its discussion of various balance sheet items, to the likelihood that the husband will incur costs in future including taxation, realisation expenses relating to property, and other expenses, which cannot be presently quantified. These are a s 75(2)(o) adjustment in his favour which this Court assesses at two percent.
Thus, the net adjustment in the wife’s favour will be 13 per cent.
A JUST AND EQUITABLE ORDER
The Court is satisfied that to the extent that the evidence permits, the orders proposed are just and equitable to both parties.
The entitlement to the wife of 53 per cent results in a payment to her of $1,406,720.17 based on the assets excluding the financial resources.
On the basis, therefore, that the wife would retain those assets on the balance sheet attributed to her, and that she would keep her own superannuation, as well as receive the super split proposed by her of $253,160, she would have $277,754 which is a shortfall of $1,128,966.17. The husband would therefore need to pay her the difference, namely $1,128,966.17.
THE WIFE’S SPOUSAL MAINTENANCE CLAIM
The wife seeks an order for periodic spousal maintenance as to $720 per week and rental up to $650 per week, both to continue until 1 December 2025. The husband opposes this, not on the basis that he does not have the capacity to pay, but rather that the wife is not in need.
It was common ground that the onus was on the wife to establish to the Court she is in need of maintenance. A number of findings have already been made about the wife’s earning capacity in the context of assessing her future needs. These findings will not be repeated. The Court’s finding that the mother is a very poor historian in relation to financial matters will also not be repeated.
A number of observations became apparent during the wife’s cross-examination. These lead to findings. Her statement of financial circumstances is not a reliable document. It was very hard to understand how the evidence about the wife’s use of PayPal to meet her expenses can be reconciled with the expenses that she deposes to. The same difficulty arises with her use of the Afterpay scheme. There was no plausible explanation given by the wife as to the differences in her income and expenditure as between various financial statements sworn in the proceedings. It is possible, though the Court makes no finding in this regard, that the wife failed to disclose to Centrelink the full extent of the maintenance benefits she received pursuant to the orders of the Deputy Chief Justice made on 26 July 2019. That is not directly pertinent to the present issue, but it adds to the Court’s doubts about the accuracy and completeness of the evidence the wife gives about her financial circumstances. In the broader context of this case, however, it must be recognised that if the metaphorical magnifying glass were applied to the husband’s discretionary expenditure, the observation might not be flattering to him. Nonetheless the wife bore the onus of proof in her maintenance claim.
At paragraph 51 of the final submissions of the husband’s senior counsel, he submits that the wife has either inflated the amount of her expenditure, or has other sources of funds which she had not disclosed. The Court finds that the former is far more likely than the latter. The evidence suggests that the wife engaged in expensive hobbies, but the Court can make no finding that, in fact, she is working, or what she is in fact earning. As the Court has already found, she probably has a capacity for employment greater than that which she presently exercises, but it is nowhere near that of the husband. It is more likely that the wife has been ambiguous in relation to her expenditure. The Court is satisfied that this is probably due to ambivalence and lack of attention to detail, rather than to malevolence.
In the wife’s financial statement filed 9 March 2022, she deposes to a weekly income of $1,652, and expenditure of $2,324. Her weekly income consists entirely of Centrelink benefits, child support, and the $720 per week in spousal maintenance and $650 per week in rental contributions paid by the husband. For present purposes the former must be ignored.
Most of the detailed expenditure of the wife is outlined at part N of the financial statement, where she claims expenditure totalling $2,140 for herself.
It must be borne in mind, however, that the wife’s claim for maintenance totals $1,370 per week, which is $770 less than what she claims as expenditure. The rationale for this is unclear, but it is consistent with the Court’s impression about the unreliability of the wife’s evidence about her expenditure.
Whilst it is true that the wife will receive the sum of money identified earlier in these reasons, it is also clear from her evidence that this is intended to provide accommodation for her daughter, and herself. Once she purchases and moves into this accommodation, the maintenance comprised of rental is no longer applicable and should cease on settlement.
Until then, however, the wife has satisfied the Court that she is in need of maintenance. Her claim is only for part of her deposed expenses. Thus, even if the evidence of her expenses is unreliable, the basic fact remains that the Court is satisfied that she is unable to work for the time being, and even if the Court considers that she has an unrealised earning capacity at the moment, there is no evidence which quantifies this.
Accordingly, the Court will order the husband to pay $650 per week as a contribution towards the wife’s rental, but only until the date of settlement of the purchase of accommodation by the wife for herself and the child, or 18 months after the date of this order, whichever occurs first.
The wife’s needs must be balanced with the importance of financial closure for both parties. The Court is satisfied that she is in need of the $720 per week that she claimed, though the Court readily acknowledges that it has extended to the wife the benefit of the doubt in this regard.
The significance of the date for the expiration of the orders proposed by the wife, 1 December 2025, is unclear given her own evidence about returning to work as a health professional in 2024. By no later than December 2024, the Court is satisfied that the wife will have both completed her studies and that their daughter will be at school, indeed, possibly primary school. The evidence demonstrates the wife’s capacity to complete units in her degree with considerable alacrity, when she so chooses. The order for maintenance will expire, therefore, on 1 December 2024.
THE ORDERS
Orders will be in terms of those proposed by the wife, adjusted to reflect findings of the Court, but the husband will have 90 days to make payment to the wife rather than the 60 proposed by the wife.
The husband sought a number of orders adjusting in his favour payments he made during the course of the proceedings. The Court declines to do so. He was at all relevant times in a far superior financial position as compared to the wife.
The Court observes that the orders proposed by the wife did not contemplate the consequences of any potential non-payment of a cash sum by the husband. The Court further observes that the husband contemplated being able to raise $595,370 within three months from the date of orders to pay to the wife. The Court is satisfied the three months is enough for him to raise the higher figure which has in fact been ordered.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 28 March 2023
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