Heeney & Eynas
[2022] FedCFamC2F 1514
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Heeney & Eynas [2022] FedCFamC2F 1514
File number(s): SYC 402 of 2020 Judgment of: JUDGE KEMP Date of judgment: 11 November 2022 Catchwords: FAMILY LAW – property – initial contributions – pre-existing ownership of real property – where the parties cared for each other’s biological children – where the wife was the primary carer due to husband’s work commitments – where the wife has had medical issues associated with multiple medical conditions – just and equitable orders Legislation: Family Law Act 1975 ss 44(3), 75(2), 79, 80(1)(h), 81, 90XT(1)(B), 90XT(4) 106A, 117, Part VIIIB
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 6.01, 6.06, 6.08, 6.17
Family (Superannuation) Regulations 2001 Part 6
Cases cited: Aleksovski & Aleksovski (1996) FLC 92-705
Bevan & Bevan (2013) FLC 93-545
Chancellor & McCoy [2016] FamCAFC 256
NHC & RCH (2004) FLC 93-204
C & C (2005) FLC 93-220
Dickson & Dickson (1999) FLC 92-843
D & D (2006) FLC 93-256
G & G (1984) FLC 91-582
HDM & MM & SJM [2006] FamCA 47
Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143
Hurst & Webber [2009] FamCAFC 137
Kowaliw & Kowaliw (1981) FLC 91-092
Luciano (2000) FamCA 401 (non-reportable)
M & M (2006) FLC 93-281
M & M [1998] FamCA 42
Mallett & Mallett (1984) FLC 91-507
Marriage of Townsend [1994] 18 FamLR 505
Norbis & Norbis (1986) 161 CLR 513
Parshen & Parshen (1996) FLC 92-720
Pierce & Pierce (1999) FLC 92-844
Re Chemaisse; Federal Commissioner of Taxation (Intervener) (1990) FLC 92-133
Robb & Robb (1995) FLC 92-555
Russell & Russell (1999) FLC 92-877
Sippel & Sippel [2004] FamCA 201
Stanford & Stanford [2012] HCA 52
T & T (2000) FLC 93-023
Townsend & Townsend (1995) FLC 92-569
Vass & Vass [2015] FamCAFC 51
Walters & Walters (1986) FLC 91-733
Weir & Weir (1993) FLC 92-338
W & W (2005) FLC 93-222
Division: Division 2 Family Law Number of paragraphs: 177 Date of last submission/s: 7 July 2022 Date of hearing: 6-7 July 2022 Place: Sydney Counsel for the Applicant: Mr Scriva Solicitor for the Applicant: Swiftly Legal Counsel for the Respondent: Mr Hodgson Solicitor for the Respondent: Nash Allen Williams & Wotton ORDERS
SYC 402 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS HEENEY
Applicant
AND: MR EYNAS
Respondent
order made by:
JUDGE KEMP
DATE OF ORDER:
11 NOVEMBER 2022
THE COURT ORDERS THAT:
1.The respondent husband (“the husband”) pay to the applicant wife (“the wife”) the sum of $145,990.03 (“the settlement sum”) on or before 60 days from the date of these orders (“the due date”).
2.If the whole of the settlement sum has not been paid by the due date, then the husband shall immediately do all acts and things and sign all documents necessary to list for sale and sell the property at B Street, Suburb C, NSW (“the B Street, Suburb C property”) for the best price reasonably obtainable in the following manner except as otherwise agreed between the parties in writing:
(a)Within 14 days, the parties will appoint an agent as agreed in writing, and in default of agreement as to agent within 21 days as appointed by the President for the time being of the Real Estate Institute of NSW (or his or her nominee) (“the agent”) to list for sale and sell the B Street, Suburb C property by auction, the costs of such appointment and any costs of the President for the time being of the Real Estate Institute of NSW (or his or her nominee) to be paid by the parties in equal shares as and when such becomes due and payable;
(b)The reserve price for the purpose of such auction will be as agreed by the parties in writing or in the absence of agreement reached by 14 days prior to the date of the auction, as nominated as the fair market value thereof by a valuer appointed by the President for the time being of the NSW Division of the Australian Property Institute Incorporated (or his/her nominee) (“the valuer”) and the costs of the President for the time being of the NSW Division of the Australian Property Institute Incorporated (or his/her nominee) to be paid by the parties in equal shares when such becomes due and payable;
(c)In the event that the B Street, Suburb C property remains unsold the husband will do all acts and things and sign all documents necessary to immediately list it for sale by public auction again on a date to be nominated by the agent and at such auction the reserve price will be 5 per cent lower than the previous auction or such other amount as agreed between the parties in writing;
(d)The parties will instruct such solicitor as they agree in writing to have the conduct of the sale or, in the absence of agreement reached, the parties will instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales or his or her nominee (“the solicitor”); and
(e)For the purposes of order 2(d) above, the costs of the President for the time being of the Law Society of New South Wales (or his or her nominee) will be paid by the parties in equal shares when such becomes due and payable.
3.Upon settlement of the sale of the B Street, Suburb C property, the husband will forthwith cause the proceeds of sale to be applied as follows:
(a)First, to meet the costs and expenses of the sale including legal fees of the conveyance and the agent’s fees and commissions;
(b)Second, to discharge the ANZ mortgages secured against the B Street, Suburb C property; and
(c)Third, so much of the settlement sum as is then outstanding to the wife together with interest thereon at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) adjusted monthly from the due date, with such sum to be paid to the trust account of the wife’s solicitors, Swiftly Legal.
4.Pending the settlement of the sale of the B Street, Suburb C property:
(a)The husband has exclusive occupation; and
(b)The husband will pay as and when such fall due the council and water rates in relation to the B Street, Suburb C property and shall continue to service the ANZ mortgages secured against the B Street, Suburb C property.
5.The sum of $71,978.65 of the interest held by the husband being member number … is allocated as required by s.90XT(4) of the Family Law Act 1975 (Cth) (“the Act”), to the wife in the Super Fund 1.
6.That in accordance with s.90XT(1)(B) of the Act:
(a)The wife is entitled to be paid the sum of $71,978.65 in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)The wife’s entitlement to payments out of the interest in the Super Fund 1 and the entitlement of any such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
7.The Trustee of the Super Fund 1 (“the trustee”) do all acts and things and sign all documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Act and The Family (Superannuation) Regulations 2001 the entitlement created for the wife by this order; and
(b)Pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in the Super Fund 1.
8.Order 7 has effect from the operative time and the operative time is 4 business days after the date on which a certified copy of the final sealed and signed orders is served upon the trustee.
9.Orders 5, 6 and 7 bind the trustee.
10.Unless otherwise specified in these orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action and superannuation) in the possession of such party as at this date;
(b)Monies standing to the credit of the parties in any bank account are to become the property of the owner of the bank account; and
(c)Each party be solely liable for, and indemnify the other against, any liability in their respective sole names or encumbering any item of property to which that party is entitled either pursuant to these orders or otherwise.
11.If either party refuses or neglects to execute any deed or instrument that may be required to give effect to these orders, a Registrar of the Court be appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
12.If any party seeks costs, an appropriate written application may be made within 28 days of today’s date, (supported by any documentary material) to be filed and served within that time period and a copy forwarded to Chambers. The Court will then deal with that matter by way of written submissions, unless the parties wish to be heard orally. If no such application is made within the time period specified, there will be no order as to costs.
13.The matter is, otherwise, removed from the active pending cases list.
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 a pseudonym Heeney & Eynas has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KEMP
INTRODUCTION
The applicant wife (“the wife”) sought property orders as set out in her Amended Initiating Application filed on 31 July 2020, as updated in terms of Exhibit “A”, to the following effect:
(1)The respondent husband (“the husband”) pay to the wife the sum of $546,260.00 (“the Payment”) on or before 28 days from the date of these orders (“due date”).
(2)If the whole of the Payment has not been made by the due date, then the parties shall immediately do all acts and things and sign all documents necessary to list for sale and sell the property at B Street, Suburb C (“the B Street, Suburb C property”) for the best price reasonably obtainable in the following manner except as otherwise agreed between the parties in writing:
(a)Within 14 days, the parties will appoint an agent as agreed in writing, and in default of agreement as to agent within 21 days as appointed by the President for the time being of the Real Estate Institute of NSW (or his or her nominee) (“the agent”) to list for sale and sell the B Street, Suburb C property by auction, the costs of such appointment and any costs of the President for the time being of the Real Estate Institute of NSW (or his or her nominee) to be paid by the parties in equal shares as and when such become due and payable;
(b)The reserve price for the purpose of such auction will be as agreed by the parties in writing or in the absence of agreement reached by 14 days prior to the date of the auction, as nominated as the fair market value thereof by a valuer appointed by the President for the time being of the NSW Division of the Australian Property Institute Incorporated (or his/her nominee) (“the valuer”) and the costs of the President for the time being of the NSW Division of the Australian Property Institute Incorporated (or his/her nominee) to be paid by the parties in equal shares when such become due and payable;
(c)If bidding at the auction does not reach the reserve price the parties or such of them as attends the auction (whether in person, by telephone, or by their nominee) is entitled to negotiate with the highest bidders or any other interested person at the auction and effect a sale of the B Street, Suburb C property at such price as the parties agree upon in writing and in default of agreement by the date of the auction at a price which is not less than 5 per cent below the reserve price;
(d)In the event that the B Street, Suburb C property remains unsold the parties will do all acts and things and sign all documents necessary to immediately list it for sale by public auction again on a date to be nominated by the agent and at such auction the reserve price will be 5 per cent lower than the previous auction or such other amount as agreed between the parties in writing;
(e)The parties will instruct such solicitor as they agree in writing to have the conduct of the sale or, in the absence of agreement reached on or before the date 14 days from the date of these orders, the parties will instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales or his or her nominee (“the solicitor”); and
(f)For the purposes of order 2(e) above, the costs of the President for the time being of the Law Society of New South Wales (or his or her nominee) will be paid by the parties in equal shares when such become due and payable.
(3)That upon settlement of the sale of the B Street, Suburb C property, the husband and the wife will forthwith cause the proceeds of sale to be applied as follows:
(a)First, to meet the costs and expenses of the sale including legal fees of the conveyance and the agent’s fees and commissions;
(b)Second, to discharge the ANZ mortgages secured against the B Street, Suburb C property; and
(c)Third, so much of the Payment as is then outstanding to the wife together with interest thereon at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) adjusted monthly from the Due Date, with such sum to be paid to the trust account of the wife’s solicitors, Swiftly Legal,
(4)That pending the settlement of the sale of the B Street, Suburb C property:
(a)The husband has exclusive occupation; and
(b)The husband will pay as and when such fall due the council and water rates in relation to the B Street, Suburb C property and shall continue to service the ANZ mortgages secured against the B Street, Suburb C property.
(5)That the sum of $160,303.00 of the interest held by the husband member number … is allocated as required by s.90XT(4) of the Family Law Act 1975 (Cth) (“the Act”), to the wife in the Super Fund 2.
(6)That in accordance with s.90XT(1)(B) of the Act:
(a)The wife is entitled to be paid the sum of $160,303.00 in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)The wife’s entitlement to payments out of the interest in the Super Fund 2 and the entitlement of any such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this order.
(7)That the Trustee of the Super Fund 2 being Company D (“the Trustee”) do all acts and things and sign all documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Act and The Family (Superannuation) Regulations 2001 the entitlement created for the wife by this order; and
(b)Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in the fund.
(8)Order 5 has effect from the operative time and the operative time is 4 business days after the date on which a certified copy of the final sealed and signed orders is served upon the Trustee.
(9)This order binds the Trustee.
(10)Omitted as provided for in order 6, above.
(11)Unless otherwise specified in these orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action and superannuation) in the possession of such party as at this date;
(b)Monies standing to the credit of the parties in any bank account are to become the property of the owner of the bank account;
(c)Each party be solely liable for, and indemnify the other against, any liability in their respective sole names or encumbering any item of property to which that party is entitled either pursuant to these orders or otherwise; and
(d)Any joint tenancy of the parties in any real or personal property be otherwise expressly severed.
(12)If either party refuses or neglects to execute any deed or instrument that may be required to give effect to these orders, a Registrar of the Court be appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
(13)The husband shall pay the wife’s cost of and incidental to this application.
On the first day of the hearing, the wife also sought an interim distribution of funds pursuant to ss.79 and 80(1)(h) of the Act in the sum of $50,000.00 from the husband for the purpose of undergoing a medical procedure. The Court notes that that order was not sought in terms of Exhibit “A”, as referred to in paragraph 1, above. The Court made it clear that, unless there was evidence of an urgent medical need for the wife, it would not entertain such relief on a late oral application made without notice. Mr Scriva submitted that any such entitlement should be given to the wife immediately on the basis that it was recommended that she get the medical procedure, as referred to below, in circumstances where the wife could not afford to meet any “out of pocket” expenses associated with that procedure, whereas the husband was, otherwise, “sitting on the parties’ funds”. Upon the hearing of the evidence of Professor E as referred to in paragraph 29 below, the Court accepts, as submitted by Mr Hodgson, that the wife’s claim for an interim partial property settlement was “dead in the water” as no immediate urgency was established and there was, further, insufficient evidence to support the quantum of the relief claimed by the wife, in any event.
The husband, on the other hand, sought orders, as set out in his Response filed on 26 March 2020, to the following effect:
(1)Each party shall retain all assets and entitlements including but not limited to superannuation entitlements in his or her respective possession and that, otherwise, the wife’s application be dismissed.
(2)That the wife pay the husband’s costs for these proceedings as agreed or assessed.
On the hearing, as said, Mr Scriva of Counsel appeared for the wife and Mr Hodgson of Counsel appeared for the husband.
EVIDENCE
The wife relied, subject to all proper claims as to admissibility, and after formal objections were taken, on the following:
(a)Her affidavit affirmed and filed on 26 April 2022;
(b)Her financial statement affirmed and filed on 26 April 2022; and
(c)The affidavit of Professor E affirmed on 12 May 2022 and filed on 16 May 2022. Professor E is a vascular surgeon who has treated the wife.
The husband relied, subject to all proper claims as to admissibility, and after formal objections were taken, on the following:
(a)His affidavit affirmed and filed on 26 April 2022;
(b)His financial statement affirmed and filed on 4 July 2022;
(c)The affidavit of Mr F, the husband’s brother (“Mr F”), affirmed and filed on 26 April 2022; and
(d)The affidavit of Ms G, the wife of Mr F (“Ms G”), affirmed and filed on 26 April 2022.
The Court notes that the wife had, initially, sought to rely on the affidavit of Mr H of Company J (“Mr H”) affirmed on 6 May 2022 and filed on 23 June 2022 in respect of the valuation of the B Street, Suburb C property. That valuation, as at 8 April 2022, was in the sum of $1,550,000.00. Both parties had communicated with Mr H to produce his valuation as the parties had instructed him that they were in dispute. The Court notes that the parties agreed to the valuation as provided by Mr H (see item 1 in Exhibit “Court 1”) and he was not required to give evidence and his affidavit was not, formally, read. The Court notes that neither party sought from Mr H a historical value for the B Street, Suburb C property either at the date of the commencement of the parties’ cohabitation or as at the date of their separation. The Court, further, notes that Exhibit “1”, as referred to in paragraph 11, below, was a valuation of the B Street, Suburb C property provided by Mr K of Company L which provided, as at 22 July 2020, a valuation of $825,000.00. That valuation, similarly, provided no earlier historical valuations.
The wife did not require Mr F or Ms G for cross-examination and their affidavits were, accordingly, read. The thrust of their evidence was that they supported the husband’s evidence that the parties commenced cohabitation in 1996 (the husband said in March) and separated in 2010 (the husband said in July). The Court accepts the husband’s evidence and, accordingly, the parties were in a relationship for a period of some 14 years.
Both the husband and the wife were cross-examined in person.
Professor E was also cross-examined by way of an Audio-Visual link though Microsoft Teams.
The following documents were tendered as Exhibits in the proceedings:
Exhibit No Document Tendered by Court 1 Joint Balance Sheet Court A Wife’s proposed minute of order Wife B Paragraphs 26 and 27 of the wife’s affidavit affirmed on 8 December 2019 and filed on 22 January 2020 Wife 1 Valuation of the B Street, Suburb C property dated 22 July 2002 prepared by Mr K of Company L Husband 2 Letter from Super Fund 1(A), together with a draft proposed super splitting order and letter to Super Fund 1(A) re procedural fairness Husband 3 Company M contract settlement notice with a settlement date of 2 July 2002 Husband 4 Lodgement receipts effecting 6 payments to the wife in the period 27 April 2012 to 1 May 2012 of $4,000.00, $5,000.00, $5,000.00, $500.00, $5,000.00 and $5,000.00, totalling $24,500.00 Husband 5 Motor Vehicle 1 Receipt dated 7 August 2010 (conditional upon submissions) Husband 6 Redundancy Payment from Company O (conditional upon submissions) Husband 7 Company P Line of Credit bank statement 12 June 2010 (conditional upon submissions) Husband 8 Account overview for Personal Loan with the Australia and New Zealand Banking Group Limited (“ANZ”) (account no. ending #...34) in the names of the husband and the wife with a loan start date of 20 April 2012, an original loan amount of $18,000.00 and a term of 7 years together with a Supplementary Loan drawdown with ANZ (account no. ending #...85) with a loan draw down of $27,029.28 also on 20 April 2012 Husband 9 Quote for Surgical Intervention from Professor E dated 21 August 2020 Husband
The wife made some complaint in terms of proposed Exhibits “4”, “5”, “6” and “7” to the effect that these documents should have been produced and disclosed to her prior to the husband seeking to tender the same. In relation to Exhibit “4”, that document evidenced the transfer and lodgement of monies from the husband to the wife’s credit in instalments totalling some $24,500.00. The wife, initially, did not accept the husband’s assertion that he had paid her the sum of, approximately, $25,000.00 at or around the time of the parties’ separation but maintained that such a payment was more in the order of $15,000.00. The wife, however, upon receipt of the documents (being Exhibit “4”) agreed that she had received funds in the order of $25,000.00, being $24,500.00. Mr Scriva was critical that, if this document had been produced, it may have assisted the wife in her negotiation discussions but, otherwise, identified no particular prejudice. The document, in itself, is a business record recording the payments made and would, otherwise, be admissible as such. Mr Scriva did not take any formal objection to that document, in any event.
Mr Scriva, however, maintained an objection in relation to documents which were received conditionally as Exhibits “5”, “6” and “7”. Again, the thrust of his objection was based on Rule 6.17 of the Rules which provides, in essence, inter alia, that if a party does not provide a document as required under the Rules then that party must not offer that document or provide evidence of its contents at a hearing without the other party’s consent or the Court’s permission. The question as to whether these documents were required to be disclosed needs to be assessed in terms of a party’s duty of specific disclosure under Rule 6.06 in relation, relevantly, here, to financial proceedings. Specifically, certain documents are required to be produced under Rule 6.08, including taxation returns, taxation assessments, superannuation information and financial statements, business activity statements and financial statements/business activity statements for any partnership, trust or company. Of course there is a rule of general disclosure under Rule 6.01 which provides that each party has a duty to the Court and to each other to give full and frank disclosure of all information relevant to the proceedings which applies from the start of the proceedings and continues until the proceedings are finalised. The obligations for disclosure can be fulfilled by the disclosure of the documents or contents of a document to each parties’ legal representatives. Clearly, the Court is not in a position to assess the fulfilment of disclosure obligations unless those matters are raised before the Court. There were no specific applications made for the disclosure of any particular documents, save for the Court noting that various orders were, in fact, made, during the course of the proceedings, for the disclosure of certain documents.
The Court received the above documents conditionally, subject to any formal submissions, in respect of those documents. The parties did not make any submissions about the documents so, conditionally, received. Those documents appear, on their face, to be business records, including the receipt of the final payment of $37,490.00 for the purchase of a motor vehicle being the Motor Vehicle 1 on 7 August 2010 (Exhibit “5”), the Company O redundancy payments schedule for the husband produced on 17 September 2004 (Exhibit “6”) and the husband’s Company P CreditLine monthly statement dated 12 June 2010 (Exhibit “7”) which showed an opening balance of $15,141.35. Relevantly, Mr Scriva was unable to identify any prejudice to the wife and, in those circumstances, the documents will be received unconditionally.
While Mr Hodgson submitted that there was an agreement in place for the husband to pay to the wife $25,000.00 and to transfer to her a motor vehicle in full and final settlement, he conceded that no final orders or binding financial agreement by way of property settlement had been entered into, which, as Mr Scriva submitted, exposed the husband to a risk by his failure to obtain that protection, particularly, in circumstances where he was legally represented in 2013. Nevertheless, Mr Hodgson contended that if there was no agreement, as was contended by the wife, then the question arose as to why then was the sum of, approximately, $25,000.00 paid to her and a motor vehicle provided to her and both of these were accepted by her. The wife’s response was that the husband had provided funds because she had communicated a need for financial support and the motor vehicle had been gifted to her and, accordingly, she had retained it following separation. She queried, in any event, the delay in the transfer of the title in the motor vehicle into her name, which the husband contended had occurred as a result of there being an outstanding debt owing on the motor vehicle which had to be cleared prior to any transfer being effected. Further, the wife submitted that it was her own delay in bringing the proceedings before the Court and then her prosecution of them which had led to there being a substantial market increase in the value of the B Street, Suburb C property and that, as a result, she should also share in that increase. The Court notes, in that regard, that the husband’s assessment of the $25,000.00 payment and the transfer of the motor vehicle was said to be determined as to an, approximate, 50% of the equity of the B Street, Suburb C property, then available, at that time. It was contended that the husband was well aware that a final property settlement should have been dealt with, other than by way of a contended oral agreement between himself and the wife, as asserted by him, given his previous experience in preserving the B Street, Suburb C property from the, potential, claims of his 3 previous wives and his borrowing against that property to provide for financial settlements with them. In that regard, Mr Scriva submitted that the increase in the equity available, at the time of the hearing, should also be dealt with on a 50/50 basis as between the husband and the wife.
BACKGROUND FACTS
The following are the, substantially, agreed background facts:
(a)In 1956, the husband was born and he is, currently, 66 years of age.
(b)In 1958, the wife was born on and she is, currently, 54 years of age.
(c)In 1976, the husband purchased the B Street, Suburb C property which was, then, vacant land.
(d)In 1979, the husband completed the construction of a home on the B Street, Suburb C property.
(e)In or around late 1981, the husband effected a property settlement with his first wife and, thereafter, retained ownership of the B Street, Suburb C property.
(f)In or around late 1985, the husband effected a further property settlement with his second wife and, thereafter, retained ownership of the B Street, Suburb C property.
(g)In 1989, the wife’s son of a previous relationship, Mr N (“Mr N”) was born and he is, currently, 32 years of age.
(h)In 1992, the husband’s son of a previous relationship, Mr Q (“Mr Q”) was born and he is, currently, 30 years of age.
(i)In or around late 1993, the husband effected a further property settlement with his third wife and, thereafter, retained ownership of the B Street, Suburb C property.
(j)The husband maintained that he had to refinance various loans over the B Street, Suburb C property a number of times in order to make payments to his past wives so as to retain that property in his ownership, as referred to in (e), (f) and (i), above.
(k)In or around 1994, the husband and the wife first met at the wedding of Mr F, the husband’s brother. At that time, the husband was living at the B Street, Suburb C property and the wife was living at Town R in her mother’s residence with her mother, her stepfather and Mr N.
(l)In or around early 1996, the wife moved with Mr N from Town R to a rented property in Suburb S, NSW.
(m)In or around 1996, the parties commenced cohabitation and resided, together with Mr N who was, then, 6 years of age, at the wife’s rental residence in Suburb S, NSW. The husband rented out the B Street, Suburb C property.
(n)In 1997, the child of the parties’ relationship, Ms T (“Ms T”) was born and she is, currently, 25 years of age.
(o)Between 1996 and 1998, the parties lived in various rented properties in Suburb S, NSW.
(p)In 1998, the husband and the wife moved into the B Street, Suburb C property.
(q)In early 2000, Mr Eynas spent some weekends travelling to the B Street, Suburb C property to build an interior wall with a door and to gyprock in the front of an open area on the mezzanine level, next to the main level, of the B Street, Suburb C property. The wife also maintained that she assisted in the building of an additional bedroom at the B Street, Suburb C property.
(r)In or around 2002, the husband sold employee shares with the Company U (1,174 shares) for the sum of $22,038.99 inclusive of GST (see Exhibit “3”). The husband asserted that those shares were sold to pay the parties’ then debts.
(s)In 2003, the parties were married.
(t)In or around 2004, the husband was made redundant from his employment with Company U (which was then in a joint venture with Company O) after working there for some 14 years. The husband received a redundancy payment of $147,605.20, comprising of annual leave ($17,985.51), long service leave ($23,822.06), redundancy ($46,455.00) and an E.T.P payment ($59,342.63) (see Exhibit “6”). The husband maintained that he applied these monies towards mortgage and credit card payments, debt reduction and the payment of other expenses accrued during cohabitation. He, subsequently, commenced employment with Company V (“Company V”).
(u)In 2007/2008, the wife and the wife’s father assisted renovating the kitchen at the B Street, Suburb C property by removing carpet, demolishing the existing kitchen, preparing floors and studs to refit the kitchen and installing flooring.
(v)In 2009, the wife assisted in further demolition works to enable flooring to be installed downstairs at the B Street, Suburb C property.
(w)In or around July 2010, the parties separated and continued to live separately and apart under the same roof at the B Street, Suburb C property, until the wife moved out of that property on 1 April 2011, as referred to in (z) below.
(x)In or around August 2010, the husband purchased a Motor Vehicle 1 motor vehicle for the sum of about $38,000.00, made up of a $500.00 down payment and a final payment of $37,490.00 (see Exhibit “5”).
(y)In late 2010, the husband’s employment with Company V was terminated and he received a termination payment of $65,000.00. The husband was then unemployed for 7 months and, from his termination payment, he continued to pay all the living expenses for the wife and himself including meeting the ongoing mortgage repayments on the B Street, Suburb C property and the expenses of Ms T.
(z)On 1 April 2011, the wife left the B Street, Suburb C property and removed what she said were various items of property belonging to Ms T. She also removed a laptop computer, together with its various accessories, which had been purchased for the amount of $5,500.00. The wife moved into rented premises at Suburb W. Following separation, the wife’s son, Mr N, then aged 21 years, remained living with the husband at the B Street, Suburb C property.
(aa)In or around 2011, the husband obtained employment with his current employer, Company X.
(bb)In or around late 2011, the husband asserted that the wife proposed an informal final property settlement on the basis that he pay her $25,000.00 and transfer to her the 2010 Motor Vehicle 1 and in terms of a conversation between them where he said she said words to him to the effect of: “If you pay me $25,000.00 cash and I can keep the car. That will be it. I just want to get on with my life and you can get on with yours. That will be it for a property settlement.” The husband said that he agreed to that settlement when he replied: “I’ll have to get a loan but okay”. The wife disputed that such an agreement had been concluded in those terms.
(cc)In late 2011, the wife moved to rented premises in Sydney.
(dd)In 2012, the husband signed over ownership of the Motor Vehicle 1, unencumbered, to the wife, which she has retained in her possession since the parties’ separation. The husband had continued to solely meet the loan repayments for that motor vehicle until full repayment of the monies owing on it had been made.
(ee)From 1 April 2011 to about January 2012, the parties had a shared care time arrangement in relation to Ms T. The husband provided financial assistance to the wife for Ms T for the periods of 3 to 4 days each week when Ms T spent time with the wife.
(ff)Between 27 April 2012 and 1 May 2012, the husband paid the wife the sum of $24,500.00. The Court accepts that, at that time, there was no established known value of the B Street, Suburb C property.
(gg)Up until October 2012, the husband paid additional superannuation payments of $300.00 per week by way of salary sacrifice to his superannuation fund.
(hh)For the period of January 2012 to 2018, Ms T lived with the husband and would spend some time with the wife. During this period, the wife did not pay any child support or provide any other significant financial assistance for Ms T.
(ii)Following separation and until May 2013, the husband asserted that he continued to pay private health insurance for himself, the wife and Ms T. In May 2013, the husband reduced these payments to include himself and Ms T only. The husband also asserted that he had paid health insurance for the wife’s son, Mr N, until he reached the age of 21 years and had paid the wife’s gym membership of, approximately, $64.00 per month until May 2013 and her car insurance of, approximately, $96.00 per month until March 2013. The wife disputed the duration of those payments but acknowledged some payment of these sums had been made.
(jj)In 2012, the husband paid $6,000.00 for Ms T’s attendance at the Y School. He also paid, approximately, $3,000.00 per annum for Ms T’s dance classes at Location Z and continued to pay these until in or around 2014.
(kk)In or around 2013/2014, the wife entered into a relationship with “Mr AB”. The wife asserted that that relationship lasted for, approximately, 18 months but that they had only cohabitated for, approximately, 12 months of that period. The wife was subjected to some domestic violence in that relationship.
(ll)In or about late 2015, the husband and Mr N helped the wife move out of the residence that she had been sharing with Mr AB.
(mm)In or around 2015, the wife received the amount of $14,000.00 by way of inheritance from the estate of her late father. The husband agreed but said that this had occurred sometime earlier in 2012 but after the parties’ separation.
(nn)In 2016, the wife received the sum of $5,000.00 by way of criminal compensation. The wife maintained that she used these funds to secure accommodation for herself after separating from Mr AB.
(oo)In or around late 2017, the husband paid, approximately, $30,000.00 to refurnish the main bathroom in the B Street, Suburb C property.
(pp)On 17 May 2018, a divorce order was made, which took effect on 18 June 2018.
(qq)In 2018, Mr N, who was then aged 28 years, relocated from the B Street, Suburb C property.
(rr)On 22 January 2020, the wife commenced these proceedings by way of her Initiating Application.
(ss)For the period of January to March 2020, the husband spent, approximately, $10,000.00 on improvements at the B Street, Suburb C property, including on soil delivery and plants. The husband also completed extensive landscape gardening work on that property, himself.
(tt)On 22 July 2020, a valuation was prepared by Company L, Registered Valuers, for the B Street, Suburb C property, giving it a market value of $825,000.00. The valuer was, jointly, instructed by the parties pursuant to Court orders. The mortgage over the B Street, Suburb C property was then, approximately, $657,000.00, leaving an equity of, approximately, $168,000.00, at that time.
(uu)On 30 October 2020, leave was granted to the wife, pursuant to s.44(3) of the Act to commence these proceedings out of time with such time extended to 22 January 2020, being the date set out in (rr), above.
(vv)In 2021, the husband’s father died. The husband, together with his 2 brothers, were the equal beneficiaries of the husband’s father’s estate.
(ww)In 2021, the husband received the sum of $316,667.00, by way of inheritance, from the estate of his late father, as referred to in (vv), above.
(xx)In around 2021, the husband obtained a partner visa to support the Australian residency of Ms AC, with whom he has now commenced a de-facto relationship.
THE LAW
The decision of the High Court of Australia in Stanford & Stanford [2012] HCA 52 (“Stanford”) makes it clear that the starting point for the exercise of the Court’s jurisdiction under s.79 of the Act to alter the property interests of parties to the marriage is the identification of the existing legal and equitable interests of each of the parties in their property.
The plurality in Stanford warned against conflating requirements of s.79(2) and s.79(4) and highlighted the Court must first consider whether it is just and equitable to make an order rather than consider whether the orders are just and equitable in the 4 steps, as referred to below.
In Stanford, the High Court warns at paragraph [40] of its judgment that:
Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down"[28]. To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
The husband contended that, given his implementation of, what he contended was a final property settlement pursuant to the parties’ agreement (as set out in 16(bb), above), that the wife did not satisfy the Stanford threshold. Mr Scriva submitted, however, and the Court accepts that, as at the date of the final hearing, given the increase in the value of the B Street, Suburb C property, the wife satisfied the principles in Stanford and that, further, her future needs were relevant in that assessment. Further, the Court accepts that the substantial disparity in terms of the parties’ superannuation interests which had not been the subject of any discussion between them (see paragraph 99, below), weighs in favour of the principles in Stanford having been satisfied.
Mr Hodgson submitted that, given the elapse of some 11 years since the parties’ separation, one had to consider whether it was just and equitable to have any adjustment to the parties’ property in relation to the particular circumstances of this matter. In that regard, Mr Hodgson submitted that the B Street, Suburb C property was owned by the husband and, substantially, developed by him well prior to the parties’ relationship and that this asset remained the most significant asset of the parties in the balance sheet, as referred to in paragraph 42, below, and that this had been affected by the substantial increase in value of $725,000.00, as referred to in paragraph 75, below.
Further, Mr Hodgson submitted that leaving aside the B Street, Suburb C property the parties’ post separation circumstances, in light of the decision in Chancellor & McCoy [2016] FamCAFC 256 (“Chancellor & McCoy”), weighed against any need for judicial interference. That submission was based on the fact that post separation in July 2010 the parties did not operate any joint bank accounts, the wife lived in a separate relationship with Mr AB for some 12 – 18 months (see paragraph 16(kk), above), each party earned their own incomes, could use the money earned as they chose, each was liable for their own debts and each made no other financial contribution to the others’ property over that period of time. Mr Scriva submitted and the Court accepts that the wife did become a joint borrower in April 2012 (see Exhibit “8”) to facilitate the husband’s payment to her of some $24,500.00 and that this did amount to some intermingling of their financial circumstances and a distinguishing factor in terms of Chancellor & McCoy. Further, Mr Hodgson submitted that the husband’s compliance with an asserted agreement (albeit unenforceable) in implementing a payment to the wife of $24,500.00, the transfer of a motor vehicle to her and the taking over of joint debts at or around the time of the parties’ separation had to be considered. The Court accepts that submission.
The preferred approach to the determination of an application under s.79 of the Act is as set out by the Full Court of the Family Court of Australia in the case of Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 at p 39, which sets out the following 4 inter-related steps:
1.Identify and value, as at the date of hearing, the parties’ property, liabilities and financial resources;
2.Identify and assess the contributions under s.79(4)(a),(b) & (c) (“the first limb – the contribution factors”) of the parties and express them as a percentage of the net value of the property (examined on either a global approach or an asset by asset approach, depending on the circumstances of the case);
3.Identify and assess the other factors relevant under s.79(4)(d)(e),(f) & (g), (“the second limb – ongoing needs and effect of orders”) including, because of s.79(4)(e), the matters referred to in 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 of the case.
In undertaking the first step outlined above, the Court must act with reasonable precision in both identifying and valuing the property pool. However, in the subsequent steps, the Court is not required to assess contributions with mathematical precision: G & G (1984) FLC 91-582 (Nygh J).
In Mallett & Mallett (1984) FLC 91-507, the High Court of Australia held that there was no rule or principle that the property built up by the parties’ joint efforts should be assumed as being equally contributed to.
Section 79(4) of the Act [Matters to be taken into account]
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 75(2) of the Act [Matters]
The matters to be so taken into account are:
a) the age and state of health of each of the parties;
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;
c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
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;
e) the responsibilities of either party to support any other person;
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;
g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
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;
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;
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;
l) the need to protect a party who wishes to continue that party's role as a parent;
m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
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;
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.
q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
EVIDENCE
The wife referred to her medical needs and, in particular, her intention to have a medical procedure in which she asserted she would not be able to meet its costs. She stated that she had had some Covid-19 related sick leave which had impacted upon the balance of leave available to her for any such procedure and that she would be required to take time off work in the future. The wife’s medical condition, clearly, required some expert evidence. This was provided by Professor E.
Professor E produced a report on 29 April 2022 (see Annexure “A” to his affidavit) following a request to provide answers to specified questions as sought by the wife on 4 April 2022. Professor E was cross-examined with respect to that report but also with respect to an earlier report prepared by him on 21 August 2020 which had been attached to an earlier affidavit of the wife filed on 28 August 2020. That report also responded to specific questions raised by the wife’s solicitors in their letter dated 14 August 2020. In that report, Professor E provided a quote for surgical intervention which was said to be attached to the report. The quote was not attached. The quote was, however, attached to a further affidavit of the wife filed on 31 August 2020. That quote has become Exhibit “9”. The quote refers to the medical procedures, totalling $5,510.00 made up of marking ($250.00), surgeon fees for Professor E ($3,300.00), assistant surgeon’s fees ($660.00) and an anaesthetist’s fees ($1,800.00). In his oral evidence, Professor E confirmed that any surgical procedure would require general anaesthetic and that the figures provided in 2020, as referred to above, would also still be applicable as his current estimate of costs. Mr Hodgson cross-examined Professor E who confirmed that the wife has had multiple medical conditions since her pregnancy in 1997 and that these were associated with several medical conditions. He stated that her prognosis was one of a gradual deterioration in function with an increase incidence of recurrent medical conditions, an increased incidence of the development of secondary medical conditions. He considered that the wife’s condition was likely to deteriorate with symptoms of progressive medical conditions, and occasional difficulty with walking related to her medical conditions. The Professor confirmed that the wife would need to continue with treatment for the rest of her life, the continued use of some form of compression stockings and the future use, potentially, of some form of medical devices with the requirement for ongoing exercise, physiotherapy and the like. He described these treatments as “conservative” treatments but he also indicated that the wife had the potential to benefit from surgical intervention. In terms of the non-surgical intervention, he considered that the wife’s costs of ongoing treatment could range from $2,000.00 to $3,000.00 to many thousands per annum. When questioned about surgical intervention, he noted that while this was discussed in 2020 with the wife, the wife had not undertaken such surgery but that his recommendation was that such surgery had “the potential to decrease her medical conditions, improving all of her symptoms and, more importantly, decreasing potential deterioration…”. He acknowledged, however, that the wife’s condition had not deteriorated significantly, since 2020, so as to require urgent immediate surgical intervention. As Mr Hodgson submitted, that evidence, substantially, undercut the wife’s opening application, as referred to in paragraph 2, above, in terms of an urgent payment form the husband to provide for such surgery. Indeed, the wife, after hearing Professor E’s evidence, indicated that it was different from her understanding when she stated that she had “required” surgery. The Court confirmed that the wife’s position, in this regard, would be considered in its final determination and declined her oral application for interim relief.
Mr Hodgson cross-examined the wife over her approaches to Professor E and the timing of such approaches, being at around the time of these proceedings. Professor E’s report of 21 August 2020 noted that he had received a referral in about March 2020 from Dr AD. He did not have notes before him to indicate when he first saw the wife, however, the wife confirmed that she first saw him in or around March 2020 but that she had received treatment from other persons for many years before that as her medical issues arose in or around 1997, following the birth of Ms T. Professor E’s report in August 2020 confirmed that, while the wife had this history, she had seen him as a result of “the recent onset” of several medical conditions. The Court accepts the wife’s evidence that Professor E was referred to her as a highly qualified specialist in the area, notwithstanding, that she had received treatment from other professionals. Professor E was asked in both reports to opine on the effect on the wife in terms of her ability to earn an income and undertake household work and similar functions. In both reports, Professor E referred to the wife as experiencing difficulties in terms of a decreased capacity to stand or sit for long periods of time which, he said, could be in the range of 30 minutes to an hour and that she had and has the need for any employer to be suitably accommodating which may limit the employment market available to the wife. Similarly, he said that the wife could experience problems in doing housework, such as ironing, standing and washing.
The Court notes the wife’s evidence that she, during the course of the parties’ relationship, had some 6 jobs and that she was, currently, working full-time in her employment as an Administrative Assistant with Company AE and she has, at times, when required to do so and when work was available, carried out part-time, casual, work, largely, as a customer relations officer to supplement her income. In that regard, her current health matters do not appear to have, adversely, impacted upon her earning capacity given her undoubted work ethic.
The Court notes that the wife, during her cross-examination, appeared to become quite emotional and was unable to recount events in response to some of Mr Hodgson’s questioning. Notwithstanding that, the Court accepts that she sought to tell the Court the truth from her perspective. The Court, however, accepts that the husband had a better recollection of events and produced documentation which supported his recollection.
GENERAL
It must be noted that an entitlement to make an application pursuant to s.79 of the Act does not create any legal or equitable right in property. Property rights come into existence only upon the making of an order: Re Chemaisse; Federal Commissioner of Taxation (Intervener) (1990) FLC 92-133.
SUPERANNUATION
The Full Court of the Family Court of Australia’s decision in C & C (2005) FLC 93-220 (“C & C”) also requires the Court to consider the parties’ superannuation interests as a separate species of property.
Where the parties have superannuation, the preferred approach for the Court to adopt, as discussed in C & C, is to prepare, as a separate pool, a list of the superannuation interest/s, and where a splitting order is sought under Part VIIIB of the Act (or if no such order is sought, it being prudent to do so), carry out the following exercise:
a)Value the superannuation interest/s (according to the Regulations, if a splitting order is sought, or if no such order is sought, then according to the Regulations or otherwise).
b)Identify and assess the contributions under s.79(4)(a),(b) & (c), (“the first limb – the contribution factors”) of the parties and express them as a percentage of the superannuation interest/s (examined on either a global approach or an interest by interest approach, depending on the circumstances of the case);
c)Identify and assess the other factors relevant under s.79(4)(d)(e),(f) & (g), (“the second limb – ongoing needs and effect of orders”) including, because of s.79(4)(e), the matters referred to in s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable (in relation to the parties’ property and superannuation interests) in all the circumstances of the case.
C & C also set out in the context of a Court’s consideration of the matters set out in paragraph 35(b) and (c) above, the following relevant matters:
The relationship between years of fund membership and cohabitation, actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present or future entitlements under the fund.
The above statement, was the subject of further analysis by the Full Court of the Family Court of Australia in its decision in M & M (2006) FLC 93-281, where the Court said:
In our view it is clear from those comments that the majority in [C & C] (supra) was concerned with a consideration of actual contributions where they were ascertainable. The relationship between years of fund membership and cohabitation might be relevant in a defined benefits scheme whereas actual contributions made by the fund member at the commencement of the cohabitation might be relevant to an accumulation fund where in both cases the marriage was of short duration. However, in our view there is nothing said by the majority in [C & C] (supra) that would give any support for the application of some kind of a formula or that contributions to superannuation whatever the nature of the fund, should be treated in a different way from contributions to other property under s 79(4). This is so in our view whether the superannuation is considered as part of one pool of assets or in a separate pool.
As the Full Court of the Family Court of Australia said in D & D (2006) FLC 93-256, in carrying out the exercise referred to in paragraph 35(d) above, the Court must also have specific regard to a consideration of the mix of superannuation interests and other property with which each party will be left as a result of the Court’s proposed orders. It may be that even though no party seeks a splitting order, it will become clear to the Court that the only just and equitable order which can be made, in a particular case, will be for such a splitting order to be made. The Court must then afford the parties an opportunity to be heard in relation to that, and provide to any trustee of the superannuation fund, appropriate notice and a formal valuation of any superannuation interest under the Regulations may be required.
In W & W (2005) FLC 93-222, the Full Court of the Family Court of Australia (Bryant CJ, Finn, Coleman, Warnick and O'Ryan JJ) held that an increase in a parties’ superannuation since separation requires judicial intervention necessitating the Court considering the parties’ relevant contributions.
Notwithstanding the preferred approach, the Full Court of the Family Court of Australia in C & C also stated that the Court had discretion to include a superannuation interest as an item of property (whether or not a splitting order is sought) and not consider it as part of a separate pool. The Court indicated that such an approach could be adopted, where:
a)The parties agreed; or
b)The superannuation interest itself fell within the definition of property contained in s.4(1) of the Act; or
c)If the interest did not fall within the definition of property, it was of small value when compared to the value of the items of property; or
d)There are features about the superannuation interest which make this appropriate.
In relation to superannuation, Mr Scriva submitted that had there been a proper financial settlement in 2011 or thereabouts, the wife would have obtained a superannuation split from the husband’s superannuation in terms of the allocation of some base amount. Mr Scriva conceded that he did not know what that is now as there were no historical valuations of the parties’ superannuation interests and no assessment as to how any base amount, if it had been allocated, would have performed over the next decade. Notwithstanding that, it would appear that even on the husband’s evidence, as to the discussions with the wife in terms of a property settlement (see paragraph 16(bb), above), there was no discussion about superannuation, noting that during the course of the parties’ relationship, the husband’s employment had contributed to the build-up of his superannuation, which exceeded that of the wife.
WHAT WERE THE PARTIES’ PROPERTY, LIABILITIES, SUPERANNUATION AND FINANCIAL RESOURCES AT THE TIME OF HEARING?
The following schedule contains all items which the parties have each identified as their property, superannuation, liabilities and financial resources as extracted from Exhibit “Court 1”.
PROPERTY H/J/W VALUE $ Non-superannuation 1 The B Street, Suburb C property H $1,550,000.00 2 ANZ Account BSB …03; Acc. No. …93
(from part of the monies received from the husband’s deceased father’s Estate)H $150,000.00 3 AM Account BSB …00; Account No. …10 H $50.00 4 Crypto Currency Shares H $30,963.00 5 ASX Share Portfolio (Company AF) – 5,000 Shares H $1,000.00 6 Company AG Shares 4,055 Shares H $1,966.00 7 Company AH – 31,249 Shares H $1,187.00 8 Motor Vehicle 2 H $2,000.00 9 Household contents H $5,000.00 10 Scooter H $500.00 11 Account with Bank O:BSB …00 Account …84 W NIL 12 Account with Bank O:BSB …00 Account …59 W $97.00 13 Motor Vehicle 1 W $10,000.00 Addbacks 14 Funds borrowed by the husband secured against the B Street, Suburb C property following the parties’ separation H $192,000.00(W)
$0.00 (H)Superannuation 15 Super Fund 1(A) H $23,521.53 16 Super Fund 1 Pension Fund H $324,978.66 17 Super Fund 3 W $76,917.55 LIABILITIES 18 ANZ Home Mortgage- Accounts …49 & …96 H $647,855.00 19 ANZ Visa Card H $2,500.00 20 Residual debt on motor vehicle H $5,786.00 21 HECS debt W $19,434.00 22 Company AJ W $6,125.00 23 AK Finance CBA W $5,201.00 FINANCIAL RESOURCES N/A
The Court notes that the husband has a residual debt on a motor vehicle of $5,786.00 referred to in item 20, above. This may appear to relate to the husband’s weekly liability of $445.00 in respect of a Motor Vehicle 3 salary packaged with an entity known as “Company AL”. The vehicle, itself, does not appear in the list of property owned by the husband in his financial statement, nor does it appear in the joint balance sheet, as referred to, above.
The value of each of the various items of property and liabilities referred to in the above schedule is not, largely, in contention. The reference to the value of the wife’s Bank O account at item 11 as “nominal” will be treated as $0.00. There is, however, a contention about whether item 14 should be treated as an addback to the husband’s credit in terms of funds borrowed by him secured against the B Street, Suburb C property following the parties’ separation.
The Court will now turn to this contentious matter, so that the first stage in the analysis can be concluded, with the Court’s findings as to the property and liabilities to be included in the pool.
ADD BACKS
The question of what can and what cannot be, legitimately, “added back” notionally to the pool of available property was the subject of authoritative treatment by the Full Court of the Family Court of Australia in HDM & MM & SJM [2006] FamCA 47, where it was held that the following 3 clear categories applied to notional add-backs:
(a)Where the parties have expended monies on legal fees;
(b)Where there has been a premature distribution of matrimonial property; and
(c)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092.
In Kowaliw & Kowaliw (1981) FLC 91-092 (“Kowaliw”), Baker J stated, at 76,644, the following:
As a statement of general principal, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) Where one of the parties has embarked up on a course of conduct designed to reduce or minimise the effected value or worth of matrimonial assets; or
(b) Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
However, the High Court of Australia’s decision in Stanford and the Full Court of the Family Court of Australia’s subsequent decision in Bevan & Bevan (2013) FLC 93-545 (“Bevan”), have cast some doubt on the practice of adding back items or monies into the property pool that no longer exist. However, regard must be had to exactly what was said in these decisions.
In Stanford, the High Court was not considering the legitimacy of add backs per se. However, in obiter, it was stated:
First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”. The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
In Bevan, Bryant CJ and Thackray J, while also not specifically considering the legitimacy of add backs, in obiter, stated:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
In Vass & Vass [2015] FamCAFC 51, the Full Court of the Family Court of Australia, did consider the issue of add backs post Stanford and Bevan. Again this matter was not resolved decisively given the nature of the appeal before it but the following was stated by way of clarification:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford (2012) 247 CLR 108 - is authority for any necessary contrary solution. Some statements made by the High Court may lead to the conclusion that references to “notional property” as have been referred to in decisions of this court and at first instance may need to be reconsidered.
The decisions referred to seek to remind the Court that, however the exercise of discretion might seek to deal with property that is said to be the subject of “add back”, proper consideration must be given to existing interests in property, and the question posed by s 79(2) as a separate inquiry from any adjustment to property interests by reference to s 79(4) if a consideration of s 79(2) reveals that it is just and equitable to alter existing interests in property.
The rationale for adding back property exists where the matrimonial property no longer subsists as a form of property. If the property continues to exist, there would be no occasion for an add-back: Townsend & Townsend (1995) FLC 92-569; NHC & RCH (2004) FLC 93-204 (“NHC & RCH”).
With regard to add-backs, the Full Court of the Family Court of Australia in NHC & RCH, concluded that “the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule”. The Court accepts that position, here.
The wife maintained that, as at the date of the hearing, the husband’s mortgage over the B Street, Suburb C property was $647,885.00 and that, at separation, the debt was in the order of some $455,855.00 and that, accordingly, the differential of $192,000.00 should be added back to the property pool to be treated as a payment received for the benefit of the husband only. The husband’s evidence was that he had consolidated debts and had used borrowings for renovation and improvement costs on the B Street, Suburb C property. No challenge was made to the husband in cross-examination that he had spent such monies, as borrowed, other than on the expenses as asserted by him. There is, therefore, no allegation of spending of these monies in a manner as is necessary to attract the operation of any add back principles: Marriage of Townsend [1994] 18 FamLR 505; Kowaliw; M & M [1998] FamCA 42. The Court accepts Mr Hodgson’s submission that it would not be appropriate to implement an add back which had the potential for a “double counting”, in these circumstances.
The Court is, therefore, of the view that there was no evidence to support any premature distribution to the husband or any waste argument as against him, in terms of this disputed item.
FINDING
Accordingly, the Court finds that the parties’ property, superannuation, liabilities and financial resources, as at the date of the hearing, available for distribution between them, are:
PROPERTY H/J/W VALUE $ Non-superannuation 1 The B Street, Suburb C property H $1,550,000.00 2 ANZ Account BSB …03; Acc. No. …93
(from part of the monies received from the husband’s deceased father’s Estate)H $150,000.00 3 AM Account BSB …00; Account No. …10 H $50.00 4 Crypto Currency Shares H $30,963.00 5 ASX Share Portfolio (AF Ltd) – 5,000 Shares H $1,000.00 6 AG Ltd Shares 4,055 Shares H $1,966.00 7 AH Ltd – 31,249 Shares H $1,187.00 8 Motor Vehicle 2 H $2,000.00 9 Household contents H $5,000.00 10 Scooter H $500.00 11 Account with Bank O:BSB …00 Account …24 W $0.00 12 Account with Bank O:BSB …00 Account …59 W $97.00 13 Motor Vehicle 1 W $10,000.00 Addbacks 14 Funds borrowed by the husband secured against the B Street, Suburb C property following the parties’ separation H $0.00 Superannuation 15 Super Fund 1(A) H $23,521.53 16 Super Fund 1 Pension Fund H $324,978.66 17 Super Fund 3 W $76,917.55 LIABILITIES 18 ANZ Home Mortgage- Accounts …49 & …96 H $647,855.00 19 ANZ Visa Card H $2,500.00 20 Residual debt on motor vehicle H $5,786.00 21 HECS debt W $19,434.00 22 Company AJ W $6,125.00 23 AK Finance CBA W $5,201.00 FINANCIAL RESOURCES N/A
The Court intends to deal with items 2 and 4 in a separate pool (Pool 1) being funds acquired by the husband in 2021 post the parties’ separation following the administration of his late father’s estate. The husband’s acquisition of cryptocurrency shares were facilitated by his access to his inheritance monies.
PROPERTY H/J/W VALUE $ Non-superannuation 2 ANZ Account BSB …03; Acc. No. …93
(from part of the monies received from the husband’s deceased father’s Estate)H $150,000.00 4 Crypto Currency Shares H $30,963.00 TOTAL PROPERTY $180,963.00
The Court accepts, as submitted by the husband, that his inheritance and what is left of it was received many years after the parties separated and the wife made no contribution to those monies or shares.
The Court, however, notes that the funds and shares, as set out in paragraph 57, above, are still property available to the husband.
The Court will deal with the superannuation of the parties within a separate superannuation pool (Pool 2).
PROPERTY H/J/W VALUE $ Superannuation 15 Super Fund 1(A) H $23,521.53 16 Super Fund 1 Pension Fund H $324,978.66 17 Super Fund 3 W $76,917.55 TOTAL SUPERANNUATION $425,417.74
The third pool (Pool 3) will be the remaining property and liabilities as set out in the schedule below.
PROPERTY H/J/W VALUE $ Non-superannuation 1 The B Street, Suburb C property H $1,550,000.00 3 AM Account BSB …00; Account No. …10 H $50.00 5 ASX Share Portfolio (AF Ltd) – 5,000 Shares H $1,000.00 6 AG Ltd Shares 4,055 Shares H $1,966.00 7 AH Ltd – 31,249 Shares H $1,187.00 8 Motor Vehicle 2 H $2,000.00 9 Household contents H $5,000.00 10 Scooter H $500.00 11 Account with Bank O:BSB …00 Account …84 W $0.00 12 Account with Bank O:BSB …00 Account …59 W $97.00 13 Motor Vehicle 1 W $10,000.00 Addbacks 14 Funds borrowed by the husband secured against the B Street, Suburb C property following the parties’ separation H $0.00 TOTAL PROPERTY $1,571,800.00 LIABILITIES 18 ANZ Home Mortgage- Accounts …49 & …96 H $647,855.00 19 ANZ Visa Card ($2,500.00) H $0 20 Residual debt on motor vehicle H $5,786.00 21 HECS debt ($19,434.00) W $0 22 Company AJ ($6,125.00) W $0 23 AK Finance CBA ($5,201.00) W $0 TOTAL LIABILITIES $653,641.00 TOTAL NET PROPERTY $918,159.00 FINANCIAL RESOURCES N/A
The third pool (Pool 3) will exclude the husband’s ANZ Visa card of $2,500.00 in item 19, the wife’s HECS debt of $19,434.00 in item 21, the wife’s debt of $6,125.00 to the Company AJ in item 22 and the wife’s debt of $5,201.00 to AK Finance CBA in item 23 as all of those debts occurred post separation and related to each of the parties’ own living arrangements, which should not be the subject of division between the parties, however they are still debts ($2,500.00 for the husband and $30,760.00 for the wife) which the parties will need to pay and those will be considered in s.75(2)(o), below.
WHAT WERE THE PARTIES’ FINANCIAL (DIRECT AND INDIRECT) AND NON-FINANCIAL (DIRECT AND INDIRECT) CONTRIBUTIONS?
The Court must then consider all the contributions (direct and indirect), both financial and non-financial to the acquisition, conservation and improvement of the parties’ property, superannuation and financial resources as well as to the welfare of the family before and after separation. The Full Court of the Family Court of Australia said in Aleksovski & Aleksovski (1996) FLC 92-705 (at 83,437):
It is therefore necessary…[to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties.
The Court must consider the contributions in an overall sense both before and after separation: Sippel & Sippel [2004] FamCA 201.
One matter the Court must consider is whether to adopt a global or asset-by-asset approach to contribution. In the case of Norbis & Norbis (1986) 161 CLR 513 at 534-5, the High Court of Australia held that either approach is available to the Court in part or in whole. The discretion as to which approach is to be adopted should be exercised having regard to the facts of the particular case. The Court is of the view that a global approach should be adopted in each of the identified pools, as referred to, above.
As the Full Court of the Family Court of Australia said in Parshen & Parshen (1996) FLC 92-720:
In the absence of evidence to the contrary, it should be inferred in proceedings pursuant to… s.79 [of the Act] that monies howsoever received by a party during the course of the parties cohabitation are used by that party for the benefit of the family unit [and] ….thus constitute a financial contribution by the party who received the monies.
In terms of the funding of the wife’s payment, Mr Scriva submitted that the husband and the wife had, even in the post separation period, intermingled their finances as the wife had been placed as a co-borrower on the facility arranged by the husband to effect the payments to her of the sum, approximating, $25,000.00.
The husband asserted that he had complied with the asserted agreement between himself and the wife by providing the sum of, approximately, $25,000.00 to her and allowing the wife to have exclusive use of the Motor Vehicle 1 until it was transferred to her. The wife said that this transfer took some time coming. The husband, however, maintained that he had effected the transfer when the monies, which were still outstanding in respect of its purchase, were repaid. In any event, the wife conceded that she had received a transfer of the title in the motor vehicle. The husband also maintained that it was part of the agreement with the wife that he would take over the payment of any outstanding joint liabilities, although that aspect was not, specifically, included in paragraph 35 of his affidavit when he deposed as to the terms of the parties’ agreement.
The wife asserted that the husband had, to some extent, complied with her asserted agreement by placing the B Street, Suburb C property on the market for sale. She maintained that the husband had, subsequently, reneged from that agreement when he removed the said property from the market. The husband agreed that he had placed the B Street, Suburb C property on the market with a local real estate agent but said that he had, deliberately, put a reserve price on it higher than he thought it was worth as he did not, genuinely, want to sell the property as he wanted to retain it. The husband said that the best offer he had received was $550,000.00. The wife maintained that the husband’s actions in placing the B Street, Suburb C property with a local real estate agent evidenced his agreement, at the time, to sell the property and to divide its net proceeds of sale with her. The husband disputed that position. The husband said that, at the time of separation, he believed that the B Street, Suburb C property was worth, approximately, $550,000.00 to $560,000.00 (although his affidavit referred to a value of $500,000.00) and had a mortgage debt of some $460,356.00 (see Annexure “C” to the wife’s affidavit filed on 25 April 2022, being an ANZ home loan statement for the period 29 June 2010 to 29 December 2010), leaving an equity, he said, of some $80,000.00 to $100,000.00. Both parties acknowledged that there was no independent evidence of the value of the B Street, Suburb C property at that time. Notwithstanding that, the husband appears to have then sought to pay out the wife a sum of money which, at that time, appeared to equate to 50% of his asserted equity in the B Street, Suburb C property, being in or around $50,000.00. The husband maintained that he did not have available funds to make such a payment immediately but calculated that $25,000.00, the Motor Vehicle 1 and the release from any joint liabilities (which, he said, included $15,000.00 on an ANZ credit card and $10,000.00 on a Company P Creditline facility) would have been in that monetary order. No specific sum was provided for in relation to any adjustment to the parties’ superannuation interests. The husband said that he needed to approach the bank to borrow the $25,000.00 cash payment to be made and he did that by way of 6 instalments due to limitations on daily transfer limits imposed by the bank. The husband said that he had used an $18,000.00 personal loan and a $7,000.00 supplementary loan to effect those payments. The husband’s asserted agreement with the wife did not seem to deal with what, he said, was the balance of his superannuation funds with Company U of $148,372.11 and Company AM (previously known as Company V) of $49,092.46, totalling then $197,464.57.
Following the parties’ separation, Ms T spent, approximately, 4 days per week with the wife and 3 days per week with the husband. This continued for a period of up to 9 months when Ms T commenced spending more time with the husband. In late 2011, when the wife moved to Sydney, Ms T resided with her. In early 2012/2013, Ms T then relocated to live with the husband in the B Street, Suburb C property on a full-time basis and resided with him from the age of 14 years until 20 years of age. The wife agreed that Ms T had so moved as, she said, this was in line with some family therapy recommendations due to a risk of violence that the wife was facing from Ms T. In that regard, the wife agreed that she had been physically attacked by Ms T. The husband maintained that this had occurred after a particular disputation between the wife and Ms T, whereupon the wife had requested him to come to Sydney to pick Ms T up as she was “out on the street (with her luggage) and [was] waiting for [him]”. The wife disputed this conversation. No evidence was called from Ms T. In any event, from that date, Ms T resided with the husband and, from early 2012, she would spend one (1) night every 2 to 3 weeks with the wife in Sydney and the wife would see Ms T when she travelled to the Region AT. The wife did agree that she had had a volatile relationship with Ms T, at that time, and that Ms T was a “troubled teenager” with various behavioural issues, including using drugs. The Court accepts that, in those circumstances, the husband had a greater role in dealing with Ms T’s teenage issues including her drug use and behavioural problems and some weight is attached to that in his favour.
The wife agreed that, while Ms T was living with her, the husband paid child support. She conceded that when Ms T was living with the husband she did not pay child support to him. In that regard, the husband, substantially, financially supported Ms T. The wife did say that she purchased clothes for Ms T and met some of her expenses when with her. The Court is of the view that the husband’s post separation contribution, in this regard, weighs in his favour.
Following the parties’ separation, Mr N continued to reside full-time with the husband until he obtained the age of 28 years. During the course of his minority, the husband made a significant contribution in circumstances where he was under no legal obligation to do so, as discussed further below.
Following separation, in or around 2013/2014, the wife entered into a relationship with “Mr AB”. The wife said that this relationship lasted for, approximately, 18 months and that they had only cohabitated for, approximately, 12 months. The wife conceded that, during that relationship, she and Mr AB had both contributed to their joint rent and expenses but that he had met holidays, including a trip to the United States and to Country AU. The wife was subjected to domestic violence from Mr AB and, in 2016, she received the sum of $5,000.00 by way of criminal compensation. The sum of $5,000.00 appeared to be divided as to $1,800.00 for compensation and $3,200.00 for reimbursement of her expenses. Mr Hodgson was critical of the wife’s expenditure of this sum. Nevertheless, the Court accepts that it could not be regarded as a post separation contribution or a financial resource given its compensatory nature.
Following separation, and in about 2017, the husband expended about $30,000.00 to re-do the main bathroom on the B Street, Suburb C property. While Mr Scriva submitted that this was an incredible amount to spend on a bathroom, there was no evidence before the Court as to whether this sum was unreasonable or not. In about January 2020, the husband arranged for landscaping work to be done on the B Street, Suburb C property and other home maintenance works costing about $10,000.00.
Following separation, until May 2013, the husband continued to pay private health insurance for himself, the wife and Ms T. In May 2013, the husband reduced those payments to include himself and Ms T only. The husband also paid health insurance for Mr N, until he reached the age of 21 years and paid the wife’s gym membership of, approximately, $64.00 per month until March 2013 and her car insurance of, approximately, $96.00 per month until May 2013. The wife agreed that he had made such payments but did not recall when they stopped. Given her lack of recollection, the husband’s evidence is accepted, in that regard.
Following separation, the husband asserted that he increased his superannuation contributions by way of salary sacrifice in the order of some $300.00 per week, as referred to, above. In late 2010, he was retrenched from his employment with Company V and was unemployed for some 7 months until July 2011. The husband maintained that there should be no adjustment in respect of his superannuation as he had, significantly, increased it post the parties’ separation. Similarly, he submitted that the wife had also contributed to her own superannuation and that, given their age differential, she was likely to be able to grow her superannuation into the future more than he could. Mr Hodgson agreed that the husband was ahead on their current superannuation balances.
The Court concludes that, excluding initial contributions, the parties’ contributions during cohabitation should be regarded as equal.
The husband has met and serviced all the mortgage payments in respect of the B Street, Suburb C property, however he has received the benefit of remaining in the home on that property, notwithstanding that there was no evidence before the Court as to the quantification of that benefit while the wife had to source and fund her own accommodation.
The Court is satisfied that the husband’s post separation contribution was, significantly, greater than that of the wife. The Court gives this finding weight.
WHAT WERE THE PARTIES’ CONTRIBUTIONS TO THE WELFARE OF THE FAMILY, INCLUDING THOSE IN THE CAPACITY OF HOMEMAKER OR PARENT?
The Court accepts that both parties looked after the child of the other from a previous relationship. The wife agreed that the husband had done so more for her child than she had done for his, given the time periods in which those children lived in the household of the parties. Mr Scriva submitted that not every contribution requires an adjustment and the contribution to assist a parent who has the legal financial obligations, if a partner elects to do so, does not necessarily sound in an adjustment. The history of the discretionary contributions, in that regard, he maintained had to be considered in light of the motivations of the parties. In that regard, the husband’s evidence was that Mr N lived with him and he forgave any payment of rent. He accepted Mr N as a member of his family and that attitude had developed very early on. The husband adopted Mr N as a part of his family.
Following separation, the husband paid $6,000.00 in 2012 for Ms T’s attendance at the Y School and $3,000.00 per annum for 2 years for Ms T’s dance classes at Location Z (totalling $12,000.00). It was put to the wife that this would have been of some assistance to Ms T given that it provided a positive focus for her, when she described her as having some serious behavioural issues. The wife was reluctant to concede any such benefit and maintained that she was unaware of such enrolments and that the husband owed some responsibility for not being as proactive as she thought he could have been to prevent Ms T’s behavioural issues. The Court accepts Mr Hodgson’s submission that the husband, in seeking to promote Ms T’s interests in these activities, was suitably focused on dealing with her behavioural issues.
The extent of the husband’s contribution to caring for the children was, to an extent, minimised by the wife. Mr Hodgson queried the wife as to whether, when she was looking after the children, she was “babysitting” them. The wife did not regard either parent’s care for the children as “babysitting” and maintained that that such care was within the normal scope of parental responsibility.
In relation to Pool 2, the husband submitted that if the wife had approximately 15 – 20% compared to his 80 – 85%, then this would total between $64,000.00 and $85,000.00 to the wife. Her current superannuation with Super Fund 3 was $76,917.55, which would fall within that range and, accordingly, there would be no adjustment out of the husband’s superannuation. The husband forwarded to his superannuation trustee, then Super Fund 1(A), a proposed superannuation split which would see a basic sum of $70,000.00 split for the benefit of the wife. This would calculate at approximately 34.5% of the superannuation pool.
The Court is of the view that a 35% adjustment in the superannuation pool of $425,417.74 should be made for the benefit of the wife. This would equate to $148,896.20, of which the wife already has $76,917.55 and, accordingly, a base amount should be split from the husband’s superannuation with Super Fund 1 Pension Fund (being the larger superannuation fund) of $71,978.65.
Weighing all of the factors relating to contributions, both financial and non-financial, the Court assesses the wife’s contribution entitlement in Pool 1 at 0% and the husband’s at 100%, being $0.00 and $180,963.00, respectively.
Weighing all of the factors relating to contributions, both financial and non-financial, the Court assesses the wife’s contribution entitlement in Pool 3 at 15% and the husband’s at 85%, being $137,723.85 and $780,435.15, respectively.
NON-DISCLOSURE
The Court must make findings with respect to a party’s non-disclosure, not just his/her credit.
As set out in the Full Court of the Family Court of Australia’s decision in Weir & Weir (1993) FLC 92-338 (at 79,593):
[O]nce it has been established that there has been a deliberate non-disclosure … then the Court should not be unduly cautious about making findings in favour of the innocent party…
[T]he Court’s jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The Court went on to say that:
This Court has pointed out in a line of cases leading up to the relevant decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs.
In the matter of Luciano (2000) FamCA 401 (non-reportable), O’Ryan J included the following in his summary of principles emerging from this line of authority (at paragraph 373):
The obligation [of each party to make a full and frank disclosure] arises because of the necessity for the court in such proceedings to consider all aspects of the financial circumstances of each party;
If there is non-disclosure, in the relevant sense, then the failure to disclosure undermines the whole process of adjudication of the proceedings in relation to financial matters;
A finding of non-disclosure may, in appropriate cases, depending upon the circumstances, result in the other party being granted, without more, the relief sought.
While Mr Hodgson submitted that there was a non-disclosure by the wife as to some $407.00 in her surplus income and, accordingly, a non-disclosure as to where such surplus funds had gone, there was no identifiable asset or bank account reflective of that surplus. The wife’s position was that the surplus funds has been, simply, expended on her living expenses. The Court is of the view that there was not a sufficiently established failure to disclosure, in these circumstances, to be so taken into account as a s.75(2)(o) factor, later in the reasons.
WHAT IS THE EFFECT, IF ANY, OF ANY PROPOSED ORDER UPON THE PARTIES’ EARNING CAPACITY?
The proposed orders do not impact on the earning capacity of either the husband or the wife.
ANY ADJUSTMENT UNDER S 75(2) OF THE ACT?
The husband and the wife submit that adjustment or no adjustment should be made referable to the following factors.
a) the age and state of health of each of the parties;
The husband is 66 years of age and says that he suffers from high blood pressure for which he takes prescription medication and has received some surgical treatment for cancers. None of the husband’s asserted health issues have, otherwise, impacted on his employment and his income generation therefrom.
The wife is 54 years of age and has the health issues, as referred to in paragraph 28 and following, above. The Court accepts that while her health issues have been very problematic for her, they do not appear to have adversely impacted on her current ability to earn an income. In fact, the wife acknowledged that, at times, she was working 2 jobs.
The wife maintained that notwithstanding the 12 year age disparity between her and the husband, the husband could continue to work and restructure his employment at a lower level with lower pay and that he had, therefore, the capacity to support himself into the foreseeable future. Accordingly, there should be no adjustment in his favour. Similarly, the wife maintained that as her employment continued there should be no adjustment in her favour. The Court accepts that this factor does not weigh in favour of an adjustment.
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;
The husband earns, approximately, $147,500.00 per annum plus superannuation, together with the opportunity to receive performance based incentives of up to $5,000.00 per annum. The husband has indicated that he would like to retire “last year” but agreed that he was more likely to continue in some remunerative employment, albeit, potentially, reducing to a part-time capacity, if he was able to arrange for the same, noting that his financial obligations in terms of funding his representation may have impacted on this position.
The husband’s financial statement deposed to him receiving weekly salary before tax of $2,846.00 and $460.00 by way of a weekly payment from his Super Fund 1(A). He also deposed to potentially receiving additional remuneration based on his performance and satisfaction of targets which may be as high as $5,000.00 per annum (as referred to, above) but had not been assessed and, accordingly, had been given a “NIL” weekly sum. The husband’s total weekly income was, therefore, in the order of $3,306.00 but potentially higher by the sum of $100.00 per week. His weekly expenses totalled $2,890.00 which included, inter alia, superannuation payments of $284.00, tax of $780.00, mortgage payments of $415.00 (reduced due to mortgage off-set account) and debt payments in respect of his Motor Vehicle 3 of $445.00 together with $650.00 which related to food and household expenses. The husband has, therefore, a net surplus of weekly income over weekly expenses of $416.00 and potentially up to $516.00, if in receipt of bonus income.
The wife earns, approximately, $90,000.00 per annum plus 10% superannuation.
The wife was cross-examined over her financial statement filed on 26 April 2022. She was also cross-examined with respect to an earlier financial statement filed on 22 January 2020. The wife agreed that, in respect of her earlier financial statement, she had made no reference to her casual employment, stating only that she was, then, employed full-time by Company AJ, earning $2,300.00 per week with a personal expenditure of $1,968.00. Similarly, her financial statement of 26 April 2022 stated that she was, then, in full-time employment as an Administrative Assistant with Company AE with a weekly income of $1,903.00 and personal expenditure of $1,496.00. The wife made no reference to any secondary employment, however, she explained that there had been some negative impact on that employment by Covid-19. The Court has also had regard to Exhibit “B”, being paragraphs 26 and 27 of the wife’s earlier affidavit filed in January 2020 which stated that, in addition to her principal work for Company AJ as an Administrative Assistant, she also did work as a customer relations officer at the Company AV to supplement her income, earning, approximately, $300.00 per week. The wife’s more recent evidence as to her earnings from this secondary employment was that such earnings were, in the order of, about $100.00 per week. It was put to the wife that she could not explain where the differential between her income and expenses of $407.00 per week had gone, even without the input of her second employment. Mr Hodgson maintained that there was no property reported by the wife which could explain that position and the wife’s incurring of legal fees indicated that she owed about $29,152.00 to date with a further liability of $29,000.00 for the final hearing, totalling, about, $58,000.00 which she had not paid any money towards. The wife’s evidence was that, notwithstanding her financial statement, she had no funds available to her and that she expended all of her income, saying that “it goes out as quickly as it comes in”. Mr Hodgson submitted that given the wife appeared to have $407.00 per week surplus of income over expenditure, there did not appear to be any financial need established.
On 22 January 2020, the wife had debts to Company AJ of $7,700.00, to CBA Mastercard $7,800.00 and to HECS of $6,000.00, totalling $21,500.00. The wife’s financial statement of 26 April 2022 indicated that her liabilities had increased to $37,392.00 made up of the Company AJ which had reduced to $6,125.00, a loan from a friend, being Ms AW, of $6,632.00, a personal loan from AK Finance CBA of $5,201.00 and her HECS debt which had increased to $19,434.00. The wife could not explain why her HECS debt had, substantially increased, noting that she was in full-time employment and that income from that would usually have gone in reduction of such a debt but she was of the view that the increase may have been attributable to interest. No documents were produced to support these matters and the Court is unable to make any finding, in this regard. The Court, however, accepts that the wife’s debt position compared to the husband’s does weigh in favour of an adjustment to her.
c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There is no child of the parties’ relationship under the age of 18 years.
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;
The husband resides in the B Street, Suburb C property which is owned by him.
The wife deposed to residing in a 3 bedroom house in Suburb AX for a rental of $750.00 per week, although, she said, one (1) room was in the roof space and was “hardly a room”. The wife maintained that she required a home with at least 2 bedrooms to accommodate Ms T when she stayed over. The wife’s evidence was that Ms T was, currently, staying with her. The Court is of the view that this factor does not weigh in favour of an adjustment.
e) the responsibilities of either party to support any other person;
The husband maintained that he had the financial responsibility of supporting his partner, Ms AC, aged 56 years, with whom he lives in a de-facto relationship. His financial statement reveals that she does not earn an income and that she is seeking to qualify as a retail assistant and relies on him for her financial support. The husband deposed to paying $100.00 per week to his partner as part of his expenditure in item 32 of his financial statement. The Court accepts he has this financial exposure but upon her qualification and employment, it has the potential to be, substantially, reduced.
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;
No relevant matter was put to the Court concerning this factor.
The husband by reason of his age was in a position or would shortly be in a position if he desired to do so, to access his superannuation entitlements. By contrast, the wife could not access her superannuation entitlements for some little time. This weighs in favour of the wife, particularly noting her liability position, as referred to, above.
g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
No relevant matter was put to the Court concerning this factor.
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;
No relevant matter was put to the Court concerning this factor.
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;
No relevant matter was put to the Court concerning this factor.
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;
No relevant matter was put to the Court concerning this factor.
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;
The wife maintained that given that she had been, primarily, responsible for Ms T’s care, she was unable to work full-time for a period of, approximately, 12 years and that the arrangement of the parties’ affairs, which saw the husband primarily advance his career, was a detriment to her career aspirations. No independent evidence has been called to support this assertion. The wife continued her employment and has generated, and continues to generate, an income in the post separation period.
l) the need to protect a party who wishes to continue that party's role as a parent;
No relevant matter was put to the Court concerning this factor.
m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
The husband lives in a de-facto relationship with his partner, Ms AC. No affidavit was filed by her. The husband said that she is a Country AY national but has Australian residency and that he supports her financially as she does not earn an income and is, presently, undertaking a course to qualify as a retail assistant. The Court repeats the matters set out in paragraph 135, above.
The wife is not in a de-facto relationship with any person.
n) the terms of any order made or proposed to be made under section 79 in relation to: the property of the parties; or vested bankruptcy property in relation to a bankrupt party;
No relevant matter was put to the Court concerning this factor.
naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to: a party to the marriage; or a person who is a party to a de facto relationship with a party to the marriage; or the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii);
No relevant matter was put to the Court concerning this factor.
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;
No relevant matter was put to the Court concerning this factor.
o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The Court accepts the parties have the debts, as set out in paragraph 62, above. The Court also accepts that the wife has obtained funding from a friend, being Ms AW, in the sum of $6,632.00 in February 2022 (as set out in a statutory declaration attached to the wife’s affidavit as Annexure “A”) which the wife used to repair her motor vehicle and the wife would seek to repay those monies out of any monies she receives in these proceedings.
The Court also accepts that the wife has incurred legal fees for her lawyers to date of $29,152.00 and their costs disclosure letter dated 22 June 2022 indicated that she was likely to be liable for a further $29,000.00 for the conduct of a 3 day hearing (although the Court notes that this estimate may be reduced as the matter concluded in 2 days). These costs were outstanding and were said to be likely to be met by way of her property settlement.
The Court accepts that the husband has received accounts from his legal representatives totalling $37,770.66 (including GST) and has paid Counsel fees of $1,980.00 (including GST) with unbilled costs totalling $35,000.00 (inclusive of GST) and further costs for the 3 day hearing, including Counsel’s fees, estimated to be in the range of $38,000.00 - $40,000.00 (including GST) (although the Court notes that this estimate may be reduced as the matter concluded in 2 days).
The costs of the parties disentangling their financial affairs is a matter where the impact of such costs (where there is no order as to costs) will have a much greater effect on the wife over the husband and should be given some weight given the disparity of property between the parties: Hurst & Webber [2009] FamCAFC 137, which currently advantages the husband over the wife.
The husband’s greater contribution to the raising of the wife’s child over her raising of his, given that neither was under a legal obligation to do so, see Robb & Robb (1995) FLC 92-555, weighs in favour of the husband.
The Court has also had regard to the payment made by the husband to the wife of $24,500.00 referred to in paragraph 16(ff), above, in terms of weight in his favour.
p) the terms of any financial agreement that is binding on the parties;
No relevant matter was put to the Court concerning this factor.
q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage;
No relevant matter was put to the Court concerning this factor.
Considering then all of the above s.75(2) factors, the Court is of the view that there should be an adjustment of 2% made in favour of the wife in Pool 3 which equates to, approximately, $18,363.18. This, the Court regards, as a proper adjustment given the parties’ ages, health and current earning positions and reflects the cumulative outcome of the findings made pursuant to s.75(2): T & T (2000) FLC 93-023 as referred to, above. The Court is of the view that there should be no adjustment in terms of Pools 1 and 2.
His Honour Lindenmeyer J in Walters & Walters (1986) FLC 91-733, when commenting about limitations upon the power of the Court and, in particular, limitations with regard to distribution of property, said:
The wording of section 79(1), itself, in my opinion clearly limits the application of the Court’s power to property existing at the time of the hearing.
In my opinion, section 79(1) does not give the Court a power to order a settlement out of property which does not exist and could only be brought into existence by the exercise of an alleged borrowing capacity.
Accordingly, the wife would be entitled to receive the sums set out in paragraphs 115 and 116, together with the adjustment sum set out in paragraph 157, above, totalling $156,087.03.
Accordingly, the wife would be entitled to receive a superannuation split as set out in paragraph 114, above.
ARE THE PROPOSED ORDERS JUST AND EQUITABLE?
Section 79(2) of the Act provides that:
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.
It is the justice and equity of the actual orders that the Court must consider: Russell & Russell (1999) FLC 92-877.
As the Full Court of the Family Court of Australia said in Dickson & Dickson (1999) FLC 92-843:
Whilst it may, as a matter of individual circumstance, be correct to say that the mere existence of disparity of wealth ought not of itself justify a settlement of property to one party at the expense of the other, it may often, in the overall circumstances of a case, call for further adjustment beyond that assessed on contributions alone, so that the final order is just and equitable…
Section 81 of the Act requires the Court, as far as practicable, to finalise the financial relationship between parties when making orders for property settlement.
Section 79(5) of the Act needs to be exercised very sparingly and only in appropriate circumstances. This is not one of those circumstances.
While the wife asserted that it is just and equitable that she take a benefit in the somewhat amazing increase in value of the B Street, Suburb C property, it may be that the order which would be required to effect such payment may not be a just and equitable order if it, unfairly, impacts on the husband. For example, if the only source of monies to effect a payment to the wife required the sale of the B Street, Suburb C property, then that had to be considered against the husband’s history of preserving that property. It would appear that the husband had used the B Street, Suburb C property as security to effect a number of payments to his former wives so as to keep that property in his ownership. There is no evidence before the Court as to the husband’s current capacity or incapacity to borrow monies as against the security of the B Street, Suburb C property, noting that borrowing is assessed not simply by the provision of security but by the capacity to meet any ongoing borrowing costs including interest payments. In that regard, the Court notes the age of the husband at 66 years, would have the potential to impact on his future income stream to meet borrowing costs. However, the Court also notes that the husband has funds available in Pool 1 to meet or assist him in meeting the payment to the wife of the settlement sum as referred to, below.
The wife and husband will, therefore, receive the property and be liable for the debts, as extracted from Pool 3, and as set out in the following tables:
Property to be retained by the husband $ The B Street, Suburb C property $1,550,000.00 AM Account BSB …00; Account No. …10 $50.00 ASX Share Portfolio (AF Ltd) – 5,000 Shares $1,000.00 AG Ltd Shares 4,055 Shares $1,966.00 AH Ltd – 31,249 Shares $1,187.00 Motor Vehicle 2 $2,000.00 Household contents $5,000.00 Scooter $500.00 TOTAL $1,561,703.00 Less payment from the husband to the wife $145,990.03 TOTAL $1,415,712.97 Liabilities to be met by the husband ANZ Home Mortgage- Accounts …49 & …96 $647,855.00 ANZ Visa Card ($2,500.00) $0 Residual debt on motor vehicle $5,786.00 TOTAL $653,641.00 TOTAL NET PROPERTY $762,071.97 Property to be retained by the wife $ Account with Bank O:BSB …00 Account …84 $0.00 Account with Bank O:BSB …00 Account …59 $97.00 Motor Vehicle 1 $10,000.00 TOTAL $10,097.00 Plus payment from the husband to the wife $145,990.03 TOTAL $156,087.03 Liabilities to be met by the wife HECS debt ($19,434.00) $0 Company AJ ($6,125.00) $0 AK Finance CBA ($5,201.00) $0 TOTAL $0 TOTAL NET PROPERTY $156,087.03
The Court accepts that the wife will have the liabilities set out on the left-hand side of the above table, together with legal costs, as referred to, above, noting that the zero dollar figures referred to in the above schedule relates to the sum sought to be adjusted between the husband and the wife.
Accordingly, the sum to be paid by the husband to the wife will be $145,990.03 (the settlement sum).
The husband will retain the property set out in Pool 1. This will, potentially, provide him with funds to meet the payment to the wife of the settlement sum. If the husband is unable to pay the wife the settlement sum, then the B Street, Suburb C property should be sold and the settlement sum (or any part of it) paid out of its net proceeds of sale. The orders promoted by the wife to achieve this outcome (save for proposed order 2(c)) appear reasonable and appropriate, but require modification as the husband is the sole registered proprietor of the B Street, Suburb C property and as to various timing issues. The Court would provide a period of 60 days for the payment of the settlement sum. Otherwise, the orders sought by the wife for each parties’ property to vest in that party can be made. The Court will make the usual order under s.106A of the Act in terms of authorising the Registrar of the Court to execute any deed or instrument required to give effect to these orders if any party neglects or refuses to do so.
While the wife sought an order (11(d)) that any joint tenancy of the parties in any real or personal property be otherwise expressly severed, this order will not be made as no property falls within that description.
In assessing whether or not this is a just and equitable outcome, it would result in a situation where each party has superannuation which they will be able to access at some future date. Each party will have access to a motor vehicle. Both parties are able to earn an income.
The Court is, further, satisfied that the husband’s relevant superannuation trustee of the Super Fund 1 Pension Fund has been afforded procedural fairness (see Exhibit “2” – noting its reference to Super Fund 1(A)) and that a superannuation split can be implemented in the wife’s favour with the amended base sum referred to paragraph 114, above, in accordance with the orders as promoted by her, as set out in paragraph 1, above.
The Court is satisfied that, in all the circumstances of this case, the orders proposed are just and equitable.
Costs
Section 117 of the Act sets out that each party shall bear his or her own costs subject to the considerations in sub-section 2.
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is, naturally, something that can only be addressed after judgment is delivered.
The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth above.
I certify that the preceding one hundred and seventy-seven (177) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kemp. Associate:
Dated: 11 November 2022
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