Harbell and Smith

FAMILY COURT OF AUSTRALIA

HARBELL & SMITH

[2008] FamCA 231

FAMILY LAW – PROPERTY - Settlement in relation to marriage
FAMILY LAW – SPOUSAL MAINTENANCE - Factors considered

Family Law Act 1975 (Cth)

APPLICANT:

Ms Harbell

RESPONDENT:

Mr Smith

FILE NUMBER:

SYF

2918

2005

DATE DELIVERED:

18 March 2008

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Justice Fowler

HEARING DATE:

6-8 February 2008 and 5 March 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lethbridge QC

COUNSEL FOR THE RESPONDENT:

Mr Dura

Orders

That the wife be declared as against the husband the sole legal and beneficial owner of the property situate at and known as C property.
The husband is to pay or cause to be paid all such sums and do and cause to be done all such acts and things as may be necessary to procure the discharge of any mortgage (the C mortgage) charged upon C property within twelve months of the date of these orders.
The husband is, pending the discharge of the mortgage referred to in the preceding order, to indemnify and save harmless the wife from and against all claims, actions, suits and demands arising out of or in connection with the C mortgage.
The husband shall further pay as and when the same become due and payable all instalments of principal and interest owing and accruing under the terms of the C mortgage, together with all levies for municipal rates and charges with respect to C property and all premiums of insurance with respect to the insurance of the building erected at C for the current insured value thereof.
The husband pending the discharge of the C mortgage referred to in Order 2 hereof is to charge all his right, title and interest in and to any of the issued share capital or otherwise his interest as a creditor of M Investments Pty Ltd, T Finance Group Pty Limited and N Finance Pty Ltd, with the due performance and observance of the obligations imposed on him by the operation of Order 2 and further is to do all such acts and things as may be required to be done to procure the grant in favour of the wife of an indemnity by M Investments Pty Limited with respect to all sums owing and accruing under the terms of the mortgage charged on C property and to better secure the said indemnity is to do all such acts and things as may be necessary to procure the execution by the company of a charge in favour of the wife over all its right title and interest in and to the following property namely:
(a)The K Investment Unit (“the Investment Unit”) being the home unit known as …, K, NSW.
(b)The K Waterfront Unit (“the Waterfront Unit”) being the home unit known as …, K, NSW.
The wife shall be entitled to lodge a caveat against the title to the Investment Unit and the Waterfront Unit to protect her rights under the provisions of the indemnity and charge but shall withdraw that caveat upon discharge of the mortgage charged on C property.
Upon the discharge of the mortgage on C property, the wife will pay the husband $3,234.00.
The husband is otherwise declared as against the wife the legal and beneficial owner of his shares and the loan accounts in his name with the company.
Each of the husband and wife is otherwise declared as against the other the legal and beneficial owner of all property and superannuation entitlements in their possession, power, title or control.
The husband is to pay to the wife monthly and every month by way of maintenance the sum of $433.00. The first of such payments to be made on

1 April 2008
.

IT IS NOTED that publication of this judgment under the pseudonym Harbell & Smith is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2918 of 2005

Ms Harbell

Applicant

And

Mr Smith

Respondent

REASONS FOR JUDGMENT

Introduction

Before the Court are competing applications for orders for alteration of property interests and the wife’s application for spousal maintenance.
There are significant differences between the values attributed by the parties to the property of the parties or either of them particularly the husband’s business interests and the wife’s interests in companies controlled by her father.
The wife submits that the orders of the Court should reflect the uncertainties created by the husband’s disclosure and each of the husband and wife contend that the property of the parties of either of them is significantly different in value.

Background

The wife was born in January 1947 in Sydney and is presently 61 years of age.
The husband was born in July 1950 and is now aged 57 years.
The parties married in November 1986.
The parties separated on 12 June 2004.
The husband left the matrimonial home on the wife’s evidence on 14 July 2004 and on the husband’s evidence on 15 July 2004.
The parties were divorced on 15 November 2005.
There are no children of this marriage.
The wife was previously married and widowed and of that marriage there were two children: a daughter and a son, neither of whom resides with the wife.
The husband was previously married and divorced and of that marriage there is one adult child, a son.
The parties did not cohabit prior to the marriage.
The wife has not re-partnered.
The husband had re-partnered following the separation but gave evidence that that relationship had ceased as at the date of the hearing.
At the date of the marriage the wife had a property at C which she had purchased in January 1980 for the sum of $120,000.00. It had been valued by a single expert in the proceedings as at 1986 as having a value of $140,000.00. The wife owned furniture in the home.
C property was at that time subject to a mortgage to the Government Insurance Office in the sum of $30,000.00.
The husband had 10% of the issued shares in a company known as P Pty Limited and deposits in a bank account amounting to about $37,000.00 (as to the bank balance this was put in issue by the wife but I find no basis for not accepting the husband’s evidence on this point). He also had the whole of the shares in a company TPty Limited which had not traded.
In September 1987 a loan to the wife from the Challenge Bank in the sum of about $180,000.00 was secured against C property.
The proceeds of the advance secured on the home were applied as to $30,000.00 to repay the existing mortgage advance secured on the home and the balance was applied as part consideration to procure the shares held by one of the husband’s fellow shareholders in P Pty Ltd. The husband says that the balance of the funds utilised for that purpose as to the sum of $35,000.00 were provided by him from his savings and a loan from the wife’s father in the sum of $50,000.00. This consideration increased the husband’s shareholding in P Pty Ltd to 35%.
In September 1988 the business of P Pty Ltd was sold for the sum of $1,000,000.00
The net proceeds accruing to the husband because of the sale of his shareholding were applied:
a)as to the sum of $50,000.00 in repayment of the loan from the wife’s father.
b)as to the sum of $175,000.00 through a company T Pty Ltd of which company he was then sole shareholder, to purchase an interest from a company F Pty Limited in a new business venture. In that venture the husband held 35% of the shareholding with the balance of the shareholding distributed between the husband’s father-in-law, his brother-in-law and an employee of his father-in-law.
c)the husband applied the sum of $150,000.00 to the funding of a company … Pty Limited which became known as R Communications Pty Limited and then R Systems Pty Limited (“R Systems”).
The business operated by R Systems was sold in 1998 for $500,000.00. For a time the wife was a director of the company.
From the net proceeds of sale an amount of $180,000.00 was applied to discharge the then mortgage charged over the wife’s property at C.
The balance of the proceeds of sale were invested in an unsuccessful business venture in Fiji which incurred losses in excess of $550,000.00.
In mid 1992 the wife commenced working in a shop owned by her father.
In 1997 the husband sold his shares in T Pty Ltd to his father-in-law in consideration of the sum of $100,000.00 and a loan of $50,000.00 which the husband says was not to be repaid. The loan repayment has not in the event been since demanded. The husband says that the venture sustained a loss of $286,000.00.
In December 1988 the husband commenced working as an independent financial services provider and his evidence is that he utilised the available capital in sustaining the parties until the business commenced to earn sufficient income. The business was initially run from the home but in 2001 was moved to premises in northern sydney.
In April 1999 the wife ceased working at the shop and commenced working as in another of her father’s enterprises.
In February 2000 the wife was diagnosed as having breast cancer.
In September 2001 the wife was gifted a motor vehicle by her father which the husband subsequently sold for $15,000.00.
In November 2002 the parties borrowed a further $160,000.00 secured on C property which was applied as to $40,000.00 to purchase an Audi Motor Vehicle, and as to $100,000.00 to purchase publicly listed shares and as to the $20,000.00 (which the husband asserts was supplemented by money of R Pty Ltd to the extent of $14,000.00) to enable renovations to the kitchen in the C property.
In late 2001 the wife obtained casual work as a salesperson when the business operated by her father ceased.
In 2002 the wife was, in addition to this employment, employed by a publishing company.
In June 2002 the wife ceased her work as a salesperson which she asserts was due to ill health.
In February 2003 M Investments Pty Limited (“[M] Investments”) purchased an investment unit (the “[K] Investment Unit”). To fund the purchase a further amount was secured over C property and the balance was borrowed in the sum of $500,000.00.
The unit was tenanted.
In November 2003 the Audi was sold and the proceeds of sale of approximately $29,000.00 were paid to M Investments Operating Account.
In February 2004 a three bedroom unit on the waterfront at K was purchased for the sum of $1,010,000.00 by M Investments.
The finance for the purchase was provided as to the sum of $50,000.00 by further borrowing on the investment unit in the sum of $80,000.00. The waterfront unit was occupied by the husband who pays an undermarket rental of $400.00 per week to the company. The T Finance Group Pty Limited operated by the husband pays an amount of $200.00 per week it is understood as an office rental.
It is asserted and agreed that during the marriage - apart from one occasion on which the wife refused to borrow funds secured against the matrimonial home - she generally consented to the husband’s business decisions.

Stage 1 - Determining the property of the parties or either of them

Issues for Determination

(a) Whether there has been a proper disclosure by the parties of the property of the parties or either of them.
(b) What can be drawn from the non disclosure of either party.
(c)What is the extent and value of the property and financial resources of the parties or either of them so far as they have been disclosed.
The parties provided after the conclusion of the evidence a balance sheet setting out their various contentions as to the assets and liabilities in the following terms:

Assets	Owner	Husband’s Value ($)	Wife’s Value ($)
C property	W	720,000	720,000
Husband’s business interests	H	166,372	583,860
ANZ Account	W	150	150
ING Savings Account	W	61	61
ING Savings Account	H	34	34
Horse and saddles	H	4,000	4,000
Household Contents	H	10,000	10,000
Household Contents and jewellery	W	32,620	12,980
Shares in private companies	W	1,100,000	0
BAB Trust Account	W	32,989	32,989
Paid legal fees and disbursements	W	88,435.96	88,435.96
Paid legal fees and disbursements	H	37,473.19	37,473.19
Husband’s inheritance	H	70,000	70,000
$2,262,135.15	$1,559,983.15

Superannuation	Owner	Husband’s Value ($)	Wife’s Value ($)
Colonial CPSL Superannuation Fund	W	51,775	51,775
ANZ Superannuation	H	24,862	24,862
$76,637.00	$76,637.00

Liabilities	Owner	Husband’s Value ($)	Wife’s Value ($)
Mortgage over C property	W	330,000	330,000
Personal Loan from wife’s father for legal/valuation fees	W	125,946	125,946
Personal Loan from wife’s father	W	3,000	3,000
Personal loan from wife’s daughter	W	7,000	7,000
NAB Visa Card	H	19,735	19,735
GE Mastercard	H	11,354	11,354
Domain Visa Card	H	8,064	8,064
Coles Myer Mastercard	W	14,088	14,088
Bank of NZ overdraft loan	H	5,063	5,063
ANZ Mastercard	W	17,013	17,013
Legal/Valuation fees outstanding	H	110,395.60	110,395.60
Legal fees unbilled	W	38,975	38,975
$690,633.60	$690,633.60

Net Assets, Liabilities and Resources	Husband’s Value ($)	Wife’s Value ($)
$1,648,138.60	$869,349.55

Counsel for the wife, Mr Lethbridge, opened the case by saying that the husband had not properly disclosed his financial position and at the end of the day I would be satisfied there are other assets which were available to him. In addition he said that subject to cross examination there would be an assertion of waste. Later in the proceedings, Counsel for the wife did not assert that the husband was guilty of reckless expenditure and in that sense guilty of waste. However, he was critical of the husband’s stewardship of the assets, particularly in his failure to recoup any cost from his partner for her occupancy jointly with him of the waterfront K apartment. The husband in his cross examination said that he did not impose any rental upon her since she had provided advances to him at a better than normal rate. I am not in a position on the evidence to determine whether, if this occurred, it was a fair and just trade off.
Following the cross examination of the husband I formed the view that he had not properly disclosed his financial position. Much of that non disclosure was in the form of information not supplied and information supplied which although strictly correct did not assist the Court in having an accurate and easily explained picture of his financial position.
This non disclosure or lack of full disclosure had occurred on more than one occasion and in relation to his interim application to force a sale of the former matrimonial home and was in my view designed to deceive. He did not for example lay out the income stream available to him through his various corporate entities or fully disclose his loan account transactions.
He did not also for example disclose, as he should have, that he had a partner living with him, and her financial position.
It is noted that on his interim application hereinbefore referred to he asserted he could not continue with his payments of the mortgage on C property. This was notwithstanding the use to which the money advanced on that mortgage had been put, and notwithstanding that he was servicing as and when they became due and payable the interest payments on borrowings in excess of one million dollars. The extraordinary nature of his assertion is brought further into sharp relief when one considers that the husband has met and continues to meet those mortgage payments as and when they become due and payable. In addition, the husband has had the liability for interim spousal maintenance which also he has met.
The husband failed to disclose the extent of his loan account with the company as an asset. This was important not only because it was an asset but because it was the basis on which the husband received cash flow. True that cash flow was not taxable income but he took money from the company in repayment of his loan in preference to taking wages he says because of the tax advantage. This was not something about which he enlightened the wife or the Court fully until the hearing.
Even at the hearing one was led to the inescapable conclusion that if it was possible to cloak or dissemble on some issue to his advantage he would do so. Thus in answer to a question about payments on a Lexus motor vehicle he said quite accurately that those payments had ceased. What he did not say until pressed on the issue was that they had ceased because he had traded that model in on a current model Lexus.
His disclosure was not full, free and frank. Notwithstanding that robust cross examination of the husband and the conclusions that I came to as a result I was not much enlightened about the value and nature of any other assets. The overall result was that one would be cautious in determining the matter based on his assertions as to his financial position. I came to the conclusion that there had not been a full and frank disclosure from time to time of the cash flow available to him. I am left with an uncomfortable feeling that there may also be assets not fully disclosed, although I cannot determine their extent.
Counsel for the husband asserted that the wife had not until recently properly disclosed her assets and that she was in fact the owner of assets of significant value.
The wife is also not immune from criticism in relation to disclosure. Shortly before the hearing the wife filed an affidavit disclosing shares she held in her father’s companies. She averred that she had been unaware of these shares. She recalled that she had signed papers for her father but said on a number of occasions that she believed that she was signing papers in relation to a number of horses which he owned. The wife’s father was however called and gave unequivocal evidence that he had explained to his daughter that she held interests in the form of shares and was a director of his companies. He asserted that she had signed consent to act as a director.
The wife’s non disclosure was at least not continuing. I am now comfortable that all property in her name has been disclosed and subject to valuation. I believe I have an accurate picture of her position. It was conceded by the husband that the wife was not a business person and although she could have a general grasp of things she was certainly not as adept as he said that he was. The wife did not impress me as a witness of good recall nor of great understanding of business affairs.
The business interests were valued by the single expert Mr G. In valuing those interests he included an amount due to the husband on loan account and included a value of his “loan book”, that is the value of income producing loans brokered through his business in respect of which trailing commissions were payable. This gave rise to two issues, namely whether the loan book valuation should be included in the valuation and whether, and at what value, the husband’s loan accounts should be included.
The husband conceded that the loan book had a saleable value. He asserted that the value was less than that found by Mr G by reason of the multiplier applied by Mr G to income derived from that loan book. That multiplier was 2.5 times the present income.
The husband asserted that a lower multiplier should be used but there was no acceptable evidence that that was so. Mr G in my view justified in his evidence the appropriateness of the multiplier giving reasons why it should be chosen as a mid point in a range of multipliers which should be applied to loan books of this type.
He referred to the factors which would make the multiplier higher and those that would make it lower and gave reasons for the adoption of his particular figure having regard to the nature, term, and amount of the loans in the loan book.

The husband pointed out that were he to sell the loan book he would be deprived of the income it thus generated and his earning capacity from the clients comprising that loan book who borrowed (and at times refinanced) their loans would cease by reason of the usual terms upon which such a sale took place. Those terms included restraints on dealing with those persons but not restraints on trade generally. I accept that if the loan book were sold that the income generated by it would cease. I accept also that the husband would be unable to further deal with those borrowers. That is a matter which would go to his future income and not to the value of the loan book.
I find that the loan book should be included in the valuation of the husband’s business interests at the value attributed to it by Mr G.
This would give a value to his interests as determined by Mr G of $583,860.00.
There is however a further dispute between the parties on the valuation of the husband’s interests. Mr G has written down the value of the husband’s loan accounts in the group in order to take into account the fact that there is a deficiency of assets in the balance sheet and in that regard has reduced the loan payable to the husband to $289,860.00.
It was urged on me by Mr Lethbridge that I should take the loan accounts in at full value.
He pointed to the husband’s non disclosure. He asserted that the husband notwithstanding his protestations to the Court at the time of the hearing of the interim applications had been able through his entities not only to pay interest on high levels of debt, but also had been able to meet his living costs and the mortgage interest payments on the wife’s property. He had not been so stressed financially that he had had to ask his partner to contribute an amount to the outgoings of the unit they shared. He caused to be met all the outgoings of his residence and the investment unit.
Counsel for the wife submitted that given the husband’s proven capacity to meet debt as and when it fell due and the husband’s admission that he was for effective tax management, repaying his loan rather than taking a salary from the company I should find that the loan account should not be included at discounted value because of deficiency of assets. This assertion is made on the basis that the company has a capacity to repay the loan account albeit that repayment would be over a period of years.
No evidence is before me as to the rate at which it could be repaid. My suggestion was that that evidence should be before me together (if I am to ascertain a current capital value of the amount if so paid) with evidence of an appropriate discount rate to apply to determine the current capital value of an amount paid over a period of time.
The evidence not being there I proposed to adopt as the current value of the loan accounts for the purpose of calculation the amount found to be its value by Mr G.
I do however believe that there is a financial resource available to the husband in his capacity to receive non taxable income to the extent of the difference in a tax effective way and that the value of the resource is indeterminate.
The wife’s interests in her father’s business enterprises were the subject of a report by the single expert Mr G and the husband’s shadow expert Mr R. Mr G and Mr R met and agreed to certain matters in a joint statement which was admitted into evidence.
They agreed that the wife had no interest of any value in a number of her father’s entities, and no direct shareholding or interest in a number of other entities.
They agreed that the value of the wife’s shareholding in Harbell Pty Limited (“Harbell”) and Harbell Holdings Pty Limited (“Holdings”) would be different depending on the assumptions adopted with respect to the ability of the wife’s father to control the companies and the ability of the wife to cause the companies to be liquidated.
In his affidavit filed in relation to these companies Mr G says, the wife’s father had the full power and control of Harbell Pty Ltd and Holdings. He has the full discretion as to the timing and amount of any future dividends as well as the individuals that will receive the dividends through his ability to issue new shares in the company. He also has the ability to pass on this power and control to any individuals he chooses.
Mr G summarises that the shares have therefore no right or entitlement to any future dividend and therefore have no value.
There was no evidence of dividends having been paid on the wife’s shares in the past.
Mr G did say that if there was to be a winding up of the company the wife would receive an amount on her shares assuming there was at that time an excess of assets over liabilities but given the event is an assumed future event he did not do any calculations on it.
In his subsequent joint statement on this subject he agreed that if (emphasis added) the wife could force a winding up, the value of the shares in Harbell Pty Ltd would be $165,580.00 and in Holdings $388,224.00. That value did not take into account any legal or related costs that might be associated with forcing a liquidation.
The experts agreed that in the event that there was no ability to force a liquidation until the father’s death (and assuming this was post that event) and based on the average figures in the Australian Life Tables the amount of the value should be discounted. It was agreed that the Australian Life Tables predicted a 5 year life expectancy. The experts set out the valuations at differential discounts. The discount applied and argued for convincingly in my view by Mr G was 55% and that proposed by Mr R was between 35 and 40 %.
However, in my view the proper valuation to place on the wife’s interests for the purpose of these proceedings is nil. The reason I adopt that position is that there is no evidence of the wife or indeed the other shareholders agreeing to a liquidation now or in the future. Indeed the wife’s father says that he would wish to continue to operate the companies for long as he is able.
There is therefore no evidence before me that there is likely to be any proximate winding up of the companies.
Whilst I accept that a right given to a governing director is not a licence to oppress shareholders there is also no evidence that the person holding the power in the company (presently the wife’s father) has or will operate the company in a manner oppressive of the interests of the wife and perhaps give her ground to make application for winding up for that cause as was suggested by Counsel for the husband.
There is in addition no indication that there is any current market from among the shareholders or otherwise for her shares and of course the person governing the company would have the power to approve or disapprove of any transfer of shares. There is no evidence that the present incumbent of that office would agree to any such transfer. Anyone buying the shares would do so at present knowing that they only carried those benefits that the Governing Director saw fit to bestow on them (if any) and that there had been none of them in recent time. The rights attaching to the wife’s shares are so speculative and qualified that in my view it is not possible to place any current value upon them. It currently provides no benefit to her and may not provide any benefit to her in her lifetime. I accordingly take it in at a “nil” valuation as an asset. I do not think that it has any value that I can attribute to it as a financial resource in circumstances where its realisation by liquidation or sale is speculative as to event, timing, and then value.
The husband’s father died in late 2007 and he is a beneficiary in his late father’s estate. This matter was listed before me on the 5 March 2008 (to receive certain further submissions following a receipt of a revised balance sheet and further submissions). I thus proposed that having regard to the recent nature of the inheritance and the fact that the wife made no contribution to it and that the will of the late father has not yet been probated that the appropriate course was that this amount although strictly property be taken into account as a financial resource of the husband, to which proposition those representing the parties agreed. I accordingly remove it from the proposed balance sheet but take it into account in my considerations of the matters required to be considered under section 75(2).
It was also agreed on that mention that notwithstanding the values attributed to the wife’s furniture and jewellery, by each party, there was no evidence before me as to their value. Accordingly I proposed that I would take into account that the wife had a financial resources of furniture and jewellery of indeterminate value and remove the item from the balance sheet and this course was agreed.
Submissions were made that an amount borrowed by the wife for legal fees and largely reflected in her paid legal fees and amount held to her credit by her lawyers should be included in the balance sheet. I proposed that neither the paid legal fees nor the amount borrowed for that purpose should be included in the balance sheet since as a credit and a debit they would be in balance to the extent at least of the paid fees. I also proposed that the amount held by the wife’s solicitors on account of costs and not applied be also removed from the balance sheet since it was part of the sum so borrowed. This course was agreed to.
I decline to take into account the liability for unpaid legal fees of both parties in the balance sheet although I note that they are in a general way taken into account in the considerations of matters under section 75(2). I also take into account the wife’s liability on loans for legal fees under the considerations in that section.

I therefore find the assets and liabilities of the parties or either of them for the purpose of these proceedings as follows:

Asset	Owner	Value ($)
C property	w	720,000
Husband’s Business Interests	h	583,860
ANZ Account	w	150
ING Savings Account	w	61
ING Savings Account	h	34
Horses and Saddles	h	4,000
Household Contents	h	10,000
Household Contents and Jewellery	w	Indeterminate
Shares in Private Companies	w	0
Total	$1,318,105
Liabilities
Mortgage over C Property	w	330,000
Personal Loan from wife’s father	w	3,000
Personal Loan from wife’s daughter	w	7,000
NAB Visa Card	h	19,735
GE Mastercard	h	11,354
Domain Visa Card	h	8,064
Coles Myer Mastercard	w	14,088
BNZ overdraft Loan	h	5,063
ANZ Mastercard	w	17,013
Total	$415,317
Net Assets	$902,788

It is submitted by Mr Lethbridge that for the purpose of calculating the way in which interests of the parties should be altered I should ignore except for the purpose of determining their relative wealth for the purpose of section 75(2) those liabilities comprising for the husband:

Value ($)
NAB Visa Card		19,375
GE Mastercard		11,354
Domain Visa Card		8,064
Bank of New Zealand Overdraft Loan		5,063
Legal and Valuation fees outstanding		110,395
Total	$154,251

He puts that submission as to the legal fees that it has not been customary to add back those fees not paid and I agree with that submission and decline to do so.
The balance of the exclusions for the husband are argued to be excluded on the basis that there is little evidence of the amount outstanding on these accounts at the date of separation and that it seems that they represent personal expenses of the husband. He puts that if I were to so exclude them I would also exclude the like figures for the wife being:

Value ($)
Coles Myer Mastercard	14,088
ANZ Mastercard	17,013
Total	$31,101

It was urged on me by Mr Dura that so much of the credit card debt as was raised by the husband for the purpose of meeting the Mortgage interest on the home occupied by the wife should remain as a liability. I decline to do this as the sum so borrowed on the mortgage was used for the most part by the Company to acquire assets and was paid by the company and a taxation deduction was provided to it.
I believe that Mr Lethbridge’s submission has merit and I accordingly exclude those items. The effect of this is to increase the net assets by an amount of $185,352.
There are on that basis net assets of $1,088,140.00
In addition each of the parties has superannuation benefits, the wife in the sum of $24,862.00 and the husband in the sum of $51,775.00. Neither party seeks a splitting order and it was the joint submission of the parties that the amounts should be added to the assets and credited to each party.
The total therefore of net property and superannuation amounts to $1,164,777.00.

Add Backs

To this net balance I add back the costs of the husband that are paid, of the amount $37,473.00.
On so doing the total pool of assets amounts to $1,202,250.00.

Contributions

The C property owned by the wife at the commencement of the relationship was pivotal to the acquisition of assets during the marriage. Had it not been for the ability of the parties to raise funds on that property in the name of the wife to acquire or extend investments which either were successful or failed, those investments could not have been acquired. In addition, those funds were used to fund improvements to the home and in part to acquire a motor vehicle.
The husband has met from his earnings and capital derived from successful business ventures expenses on those borrowings in the form of interest.
The wife worked part time in paid employment in two shops and at her father’s business. Even after the wife was forced to cease work whilst undergoing treatment for cancer she was paid on a continuing basis by her father from 2000 to 2001. She thereafter worked as a salesperson working three to four days per week. That latter employment subsisted for a period of six months.
The wife deposes and I accept that the income derived from her during the marriage was used by her for some of the living expenses for the husband and herself and for her children and grandchild. She always paid for the personal expenses of the two children and herself save that the husband paid for some of the groceries and holiday and entertainment expenses.
It is noted that some of the wife’s expenses for physiotherapy following her cancer and related conditions were paid for by her father. She notes that her father also paid for the most part the private school fees of the children of the wife by her prior marriage and he also paid the University fees of one of her daughter. The wife’s daughter left the matrimonial home at the age of 18 years and the wife’s son at the age of 15 years.
It is clear however that the husband made a significant contribution to the support of the wife’s son in circumstances in which he ran afoul of the law.
The husband contributed to the maintenance and renovation costs of the home including some cleaning costs and mowing costs. His evidence is that he paid for some tradespersons to effect maintenance on the property. He assisted in the care of the children when they were young.
He came into the marriage with a 10% holding in P Pty Ltd of indeterminate value and $37,000.00 in a bank account and a non trading company.

Contributions were made by the wife in the role of homemaker and parent. She attended to the upkeep of the home and up until the time of her illness was responsible for most of the household chores of cooking, washing, ironing and most of the cleaning. Upon her becoming ill the husband attended to his own ironing.
She was generally supportive of the husband’s ventures and was the person who suggested that he borrow on the home to buy the interest in shares in P Pty Ltd which subsequently sold at a profit.
The wife’s father assisted the parties from time to time including the provision of a non repayable loan and the provision of a motor vehicle. These contributions must fall in my view to the wife’s credit.
The wife maintained the garden including weeding and watering but otherwise the husband paid for the cost of lawn mowing. She deposes and I accept that she carried out most meal preparation and attended to the household purchases although the husband assisted her when she became ill. The wife concedes that the husband supported her emotionally through the difficult times she experienced with her son.
The husband was the person who identified the business opportunities and formulated investments sometimes successfully.
On the whole of the evidence I assess the overall contribution of the parties to the acquisition, conservation and improvement of the property of the parties or either of them in the proportion of approximately 63% for the wife and approximately 38% for the husband.
I propose that there should be a variation of that taking into account the matters which are referred to in section 75(2) of the Family Law Act 1975. The wife is not in the best of health and although the husband is older, he has a demonstrated capacity to earn significant income in his present occupation. It appears unlikely that the wife will again work on a full time basis.
In the circumstances where I am uncertain that all the income and resources of the husband have been revealed and where the husband’s past disclosure as to his available resources has been less than satisfactory I assess that there should be an adjustment between the parties to take into account their differential earning capacities and resources of at least 3%. In making that calculation I take into account the matters herein referred to and the prospective inheritance of the husband and also his liability for unpaid legal fees and the unpaid legal fees of the wife. The wife will therefore receive assets to a net value of $768,753.

The wife will retain therefore the following:

Value ($)
C property	720,000
ANZ account	150
Savings Account	61
Household Contents and Jewellery	Indeterminate
Superannuation	51,775
Total	$771,986

I have considered that result as a just an equitable redistribution of the parties’ property in this case and I see no need for any further adjustment to it.

Spouse Maintenance

I am asked by the wife to make an order for her maintenance. There is an existing order made on an interim basis in the sum of $300.00 per week.
I have considered those matters relevant under Section 75(2). The wife relies in support of her claim her disclosed need set out in her financial statement filed herein on 21 January 2008 which demonstrates expenses in the sum of $800.00 per week and income in the sum of $523.00 before tax. I find that she has a net need of about $300.00 per week and I have considered the wife unlikely to earn at a higher level.
The husband has had taken into account the value of his loan book which, having been taken into account cannot again be taken into account as to the income it produces since its income production capacity has been capitalised in the calculations on the division of property. To take that income into account would be to count it twice.
The husband has been ordered to pay or cause to be paid a significant capital sum within one year and to meet the obligations pursuant to the mortgage and for rates and other outgoings on the matrimonial home on which that mortgage is charged.
Whilst I continue to have disquiet as to the fullness and frankness of the husband’s disclosure I cannot ignore the additional demands on his resources created by this judgment, and the matters referred to above.
In my view it is proper that the husband pay a contribution by way of maintenance for the wife in the sum of $433.00 per month to assist her with her expenses.

I certify that the preceding one-hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate:

Date: 18 March 2008

[2008] FamCA 231

18 March 2008

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Property Law

Legal Concepts

Constructive Trust

Remedies

Charge

Fiduciary Duty