Holden and Holden

FAMILY COURT OF AUSTRALIA

HOLDEN & HOLDEN

[2011] FamCA 705

FAMILY LAW – PROPERTY – Where the parties commenced cohabitation in their forties – where the wife relies upon a disparity in initial contributions and an inheritance

Family Law Act 1975 (Cth)

APPLICANT:

Mr Holden

RESPONDENT:

Ms Holden

FILE NUMBER:

TVC

217

2009

DATE DELIVERED:

30 August 2011

PLACE DELIVERED:

Sydney

PLACE HEARD:

Cairns

JUDGMENT OF:

Watts J

HEARING DATE:

21 - 22 March 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Victoirre

SOLICITOR FOR THE APPLICANT:

Robert Palethorpe

COUNSEL FOR THE RESPONDENT:

Mr McPherson

SOLICITOR FOR THE RESPONDENT:

Cope Family Law

Orders

Pursuant to s 79 Family Law Act1975 (Cth), an order be made in accordance with paragraphs 2 to 12 below
Within thirty (30) days of the date of this order, the husband and wife do all such acts and things and sign all such documents as are necessary to transfer into the wife’s sole name all of the husband’s right, title and interest in the property situate and known as Lot … , M Street, Town 1 and more particularly described as Lot … on Survey Plan Number …, County of …, Parish of … (“the former matrimonial home”).
Within thirty (30) days of the date of this order, the husband and wife do all such acts and things and sign all such documents as are necessary to transfer into the wife’s sole name all of the husband’s right, title and interest in the property situate and known as Property 2, C Street Unit, Town 1 and more particularly described as Lot … BUP …, County of …, Parish of ….
The husband shall retain to the exclusion of the wife all of his right, title and interest in the property situate and known as … P Street, Town 1, more particularly described as Lot …, Registered Plan No …, County of …, Parish of …, and indemnify the wife in respect of any liability relating to that property.
Contemporaneously with the transfers referred to in paragraphs 2 and 3, and pursuant to s 90MT(1)(b) Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the interest held by the wife in the Holden Superannuation Fund, the husband shall be entitled to be paid 100 percent of that splittable payment and that there be a corresponding reduction to the entitlement the wife would have received in the Holden Superannuation Fund but for this order.
The trustees of the Holden Superannuation Fund shall do all such acts and things and sign all documents as may be necessary to give effect to the preceding order.
The orders in relation to superannuation are to have effect from the operative time, being the date of these orders.
Contemporaneously with the transfers referred to in paragraphs 2 and 3, the husband pay to the wife the sum of $11,425.00.
Contemporaneously with the transfers referred to in paragraphs 2 and 3, the wife shall sign all documents and do all things necessary to be removed as a trustee and/or beneficiary of the Holden Family Trust.
The husband shall retain his interest in D Pty Ltd, H Pty Ltd, R Pty Ltd and N Pty Ltd to the exclusion of the wife and the wife shall forfeit all right, title and interest thereto.
Except as otherwise provided in these orders the husband and wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equity, superannuation entitlements and personal effects currently in their possession or control subject to these orders with each of them respectively.
The wife be responsible to the exclusion of the husband, for any monies she owes by way of tax and the husband be responsible to the exclusion of the wife for any monies he owes by way of tax.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of s 106A of the Family Law Act 1975 (Cth) to execute such documents on behalf of such party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: TVC 217 of 2009

Mr Holden

Applicant

And

Ms Holden

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

Both parties seek different orders to alter interests in their property.
The parties began living together some time in 1991 and married in 1993. There were two separations before the parties finally separated on or about 1 July 2008. The relationship of the parties spanned a period of approximately 17 years (including periods of time during which the parties were apart).
During the course of the hearing, the parties agreed upon the valuation of all assets, liabilities and superannuation. As a result, competing experts were not cross examined. The parties also agreed to adjust monies the parties had received after the separation by way of agreed “add backs” and consequently there is no issue relating to what adjustment should be made as a result of the parties receiving monies after separation.
The overall current net assets, including superannuation, are in the sum of $1,601,812. The parties have agreed on a distribution of almost all individual assets however both parties seek the C Street Unit and the wife seeks a further cash payment.
The central focus of the hearing related to the initial contributions that the parties made by way of assets brought into the marriage and it is primarily on that basis that the wife asserts that she is entitled to a 65 percent adjustment based on contributions.
The wife also points to the uncontested medical evidence in relation to her health as the underpinning of her submission that a 15 percent adjustment on section 75(2) factors would be appropriate.
The husband on the other hand asserts that the wife should be entitled to a division of the overall assets in the amount of 60 percent to the wife and 40 percent to the husband, based upon an assessment of contributions of 55/45 in the wife’s favour including her initial contributions and a further 5 percent adjustment for the wife on account of s 75(2) matters.

APPLICATIONS

The orders sought by the wife are annexed to her document filed 18 March 2011. The wife is living in the property known as M Street, Town 1 and there is no contest between the parties that the husband should transfer his interest in that property to the wife.
As mentioned, both parties want the property known as Property 2, C Street Unit transferred to them.
The remaining items on the balance sheet (apart from the self managed superannuation fund), will remain in the respective possession or name of the party who currently is nominated as having them on the balance sheet.
As indicated, the wife asserts that she should be entitled to a division of the overall assets, 80 percent to herself and 20 percent to the husband, based upon an assessment of contributions of 65/35 in the wife’s favour and a further 15 percent adjustment for the wife on account of s 75(2) matters.
It is the wife’s position that she should receive the whole of the superannuation fund and a further adjustment paid by the husband. In seeking an 80/20 adjustment, the wife was not able to particularise during final submissions how much money the husband would have to pay the wife to achieve that result, nor what distribution of assets would be required to achieve that result. The amount that the husband would need to pay the wife to achieve an 80/20 division of the assets in the event the wife has the C Street Unit and the superannuation, which she seeks, is in the sum of $70,697. If the husband was to retain the superannuation accounts and assets, he would need to pay the wife $251,697 to achieve an 80/20 split.
One of the units in the self managed superannuation fund is worth $90,000 and could be used to partly satisfy an adjustment in favour of the wife.
As also indicated, the husband proposes a 60/40 adjustment in the wife’s favour. However, this would mean that the husband would be unable to retain one of the two units that are held by the parties’ self managed superannuation fund. It is the husband’s position that orders should be made facilitating the transfer out “in specie” to the wife of one of the units in the superannuation fund and that he retain the superannuation fund (and the remaining unit that the superannuation would retain).
In order to create a 60/40 division and on the basis that the wife kept the real estate which is jointly owned and the husband kept the entire superannuation fund, the wife would need to pay the husband the sum of about $70,000.
The wife did not maintain her application for lump sum spousal maintenance nor was it suggested in final submissions by counsel for the wife that such an order should be made in the event that the wife received less than she claimed by way of overall property settlement.

DOCUMENTS RELIED UPON

The following documents were relied upon at the hearing:
17.1.Husband’s affidavit filed 9 March 2009;
17.2.Husband’s affidavit filed 5 July 2010 (4 pages);
17.3.Husband’s affidavit filed 5 July 2010 (13 pages);
17.4.Husband’s affidavits filed 23 June 2010;
17.5.Husband’s financial statement filed 18 March 2011;
17.6.Wife’s affidavit filed 24 June 2010;
17.7.Wife’s financial statement filed 14 March 2011;
17.8.Wife’s updating affidavit sworn 21 March 2011;
17.9.Affidavit Ms W filed 24 June 2010;
17.10.Précis of Evidence of Professor L filed 25 June 2010;
17.11.Précis of Evidence of Dr A filed 25 June 2010; and
17.12.Précis of Evidence of Dr G filed 25 June 2010.

SHORT HISTORY

The wife was born in 1945 and is currently 66 years of age.
The husband was born in 1949 and is currently 62 years of age.
The parties commenced cohabitation in late 1990. The parties married in May 1993.
There were two periods of separation during the marriage, the second of which took place between December 1998 and June 2001. The parties finally separated in July 2008.

CREDIT

Whilst both parties gave some inconsistent evidence, the wife easily volunteered that several statements that had been made in her sworn affidavits were not accurate. The husband was far more reticent in making concessions and whether genuinely or not, appeared on quite a number of occasions not being able to remember particular events or facts. If there is a contest between the parties about any fact or issue, then I prefer the version given by the wife unless her version conflicts with other objective evidence or is otherwise inherently unlikely.

CHRONOLOGY

Unless otherwise indicated, statements made are to be taken as findings of fact.
The parties agreed on the following chronology.
The wife was born in 1945 and is currently 66 years of age. The husband was born in 1949 and is currently 62 years of age.
Between 1970 and 1988, the wife’s former husband purchased jewellery as gifts for her.
In 1989 the wife and her children moved to Town 1. The husband said the parties met this year while the wife said they met in early 1990. Nothing of significance turns on this difference in their evidence.
In 1990 the husband worked for Company 1 as a manager and the husband purchased an interest in Company 1 during this year.
In January 1990 the husband and Mr P purchased Property 1, G Street, Town 1 for $86,000 which the wife said was without her knowledge (husband’s share $43,000).
The husband also says he bought a one third share in Property 2, G Street, Town 1 in 1990 for $60,000. There is no record of the purchase date or price.
In 1990 there was a robbery at the wife’s home at S Street. Some of the wife’s jewellery was stolen. The husband had two watches stolen at this time.
The parties commenced cohabitation some time in 1991. The wife’s two children from a previous marriage, M aged 5 and C aged 3 also lived with the parties. The wife’s older son B lived in Sydney with his father and visited in school holidays.
In 1992 the wife received a property settlement from her first husband and purchased outright:
33.1.Property 1, E Street, Town 1 for $298,000 (27 April 1992);
33.2.Property at B Street, Town 1 for $140,000 (12 May 1992); and
33.3.Property at T Street for $96,000 (2 June 1992).
On 25 July 1992, unbeknownst to the wife, the husband and Mr P sold Property 1, G Street, Town 1 for $106,200.
On 7 September 1992 the husband purchased the property at H Street which the wife said was without her knowledge.
In 1992/1993 the parties lived at the wife’s property at T Street. The wife alleged the husband collected and kept rental from Property 1, E Street. The wife collected rental from the property at B Street.
On 1 December 1992 the parties jointly purchased Property 2, E Street for $80,000.
The wife’s affidavit filed 24 June 2010 gives evidence as to what happened with Property 1, E Street, Town 1 in the early part of the parties’ cohabitation. The property was acquired by the wife on 27 April 1992. In paragraph 30 of her affidavit she says that after the purchase the husband’s brother continued to live in the property for about two years and during that time paid rent to the husband. At paragraph 24, the wife says that in December 1992 the husband and wife moved into the residence at E Street. It is unclear to me as to whether or not the husband’s brother continued to reside in the property after the parties moved into it, but that is the only inference that could be drawn that would resolve any difference contained in those two paragraphs.
The parties married in May 1993.
On 6 July 1993 the parties sold Property 2, E Street for $95,000.
The wife said the husband did not lodge a tax return in the financial years of 1993 to 2009.
In 1995 the husband established Company 2. The wife loaned the husband and Mr HH $20,000 to do this. This has consequently been repaid. In 1995/1996 the wife allowed the husband and partner to use the B Street property rent free for Company 2.
The husband said the parties separated for a short time in 1996.
In 1996 the wife was diagnosed with Basal Cell Carcinoma on the right eye which required surgery.
In 1996/1997 the husband paid the wife $35,000 for a share in the wife’s E Street property (purchase price was $298,000). The husband said he paid the wife $146,000 by 30 October 1997.
From 1992 to 1997 the husband was collecting the rental from the T Street Unit. The wife paid the body corporate fees. In 1997 the wife set up accounts in her name through a rental agency so that she could receive the rental income which she then used to pay the rates on the property.
On 11 July 1997 Property 2, G Street was sold. This property had been jointly owned by D Pty Ltd and another company. The husband received $191,405.
In 1998 the husband sold Company 2 for $30,000 to $40,000. He never received full payment.
The husband sold the H Street property but his case about this was particularly confusing. In his Affidavit he says it sold in August 1988 for $85,000. This can not be so. As indicated above he did not buy the property till 1992. The Husband’s chronology says the sale took place both 17 August 1993 for $85,000 and 17 August 1998. Exhibit 3, a title search document, seems to show the sale in 1998 for $200,000.
In 1998 the husband purchased a boat and sold it in 1999 for $27,000.
In 1998 the wife says she paid $35,000 for renovations to the E Street property, while the husband said he paid close to the full cost of renovations, being $20,000. I accept the wife’s account.
On 18 November 1998 the husband repaid the wife a $17,000 loan for the Toyota vehicle.
The parties separated for the second time in December 1998 (according to the wife) or 2000 (according to the husband). Again, I accept the wife’s evidence.
In the second half of 1999 the husband sold his interest in Company 1 for $182,500.
On 27 August 1999 the husband purchased the MM Property for $135,000.
In September 1999 the husband commenced working at Company 3, Town 1.
On 22 December 1999 the husband said he bought a half interest in the wife’s t Street property for $68,000 and the consideration recorded on the transfer was $56,000.
The wife bought her son B two cars in 1999 for approximately $5,000 each.
The husband said in 1999 he contributed $68,000 to the wife’s new Mercedes. It was registered in the husband’s name.
On 6 March 2000 the wife’s daughter, C, moved back with her biological father.
In March 2000 the wife’s son, B, died in a motor vehicle accident.
The husband said the mother bought an $8,000 car for her son M in 2000.
On 8 October 2000 the wife had eye surgery.
The husband says he paid out a loan of the wife’s from Westpac of $6,585.
On 14 April 2001 the husband sold the MM Property for $190,000.
In 2001 the parties reconciled. The husband moved back into the E Street property and renovated the B Street property. The husband said the sale proceeds from the MM Property were used to fund the B Street construction and he paid the wife $95,000 to be registered as a joint owner.
In 2002 the parties moved into the property at B Street.
In 2002 the E Street property was rented out. The husband collected and retained the rental.
In 2004 the wife and her brother shared an inheritance of $10,000 from their father’s estate. In 2004 the wife received a sum of $10,000 inheritance from her mother’s estate (the husband says this was in 2006). The husband said the wife also received a total of $148,502.85 from her Aunt’s deceased estate. The wife said she received $250,000 from her Aunt and that at separation, the amount of $124,000 of this inheritance remained in a term deposit. I accept the version given by the wife.
The husband said that in 2004 the wife bought a car for her daughter for $12,000 and one for her son for $22,000. These funds came from inherited money. This same year the wife sold her Mercedes for $32,000 in a private sale and purchased another for $95,650 which the husband said was sourced from her inheritance.
In April 2004 the husband was involved in the incorporation of the company R Pty Ltd. The husband was one of three shareholders. The two other shareholders were unrelated persons.
In May 2004 R Pty Ltd purchased the property at P Street for $550,000.
In October 2004 Property 1 at E Street was sold for $475,000. The parties disagree about whether a commission was paid to the husband and it is not necessary for me to resolve that dispute.
On 30 September 2004 the Property 1, C Street Unit was purchased for $400,000, using part of the proceeds of sale of the property at E Street. The husband retained $75,000 of the balance proceeds of sale of Property 1, E Street.
In 2004 the husband said he established a Business 1 partnership.
In June 2005 the husband’s daughters, J and K, each purchased a unit at Town 2 Units.
On 17 November 2005 the parties, as trustee for the superannuation fund P Superannuation, purchased a unit at Town 2 Units for $98,000.
In 2006 the husband purchased a Toyota vehicle and caravan.
In February 2006 the wife’s daughter, C, became engaged and the wife gave her a 2 carat diamond ring.
On 29 August 2007 the wife sold the property at T Street for $197,500. The amount of $100,000 was used for a deposit on the property at M Street and the amount of $35,000 was used for renovations to that property.
In 2007 the wife traded a 3ct diamond ring for a better quality ring using $11,000 from the sale of the T Street unit.
In 2007 the husband purchased a Suzuki hatch and motorbike.
In February 2008 the parties sold the property at B Street for $1,340,000 (the purchase price paid by way of cash and land at Z Street, Town 1 which was valued at $490,650). The proceeds of sale were used to complete the purchase of the property at M Street and pay out the mortgage and Business 1 loan.

In March 2008 the wife’s daughter, C, married. The wife gave her 3ct diamond ring to C.
On 28 March 2008 the parties completed the purchase of the property at M Street, Town 1 for $600,000 (using part T Street Property for deposit and part of the B Street proceeds as the balance). The parties commenced the renovations immediately and they were completed by the wife after the separation.
In May 2008 the wife sold the Property 1, C Street Unit for $525,000. The proceeds of sale were applied to purchase Property 2, C Street Unit which was purchased for the amount of $300,000. The parties disagree as to whether commission was paid to the husband (again, little turns on this).
In July 2008 the husband’s remaining partner, Ms X, sold a 49 percent interest in Business 1 for $220,000. The husband retained his 51 percent.
On 1 April 2008 an amount of $104,698.27 was deposited in the Equity Access Loan account. The wife says a further amount of $10,000 was subsequently deposited.
On 16 May 2008 the parties established a term deposit of $130,000 (part proceeds of the property at B Street).
In June 2008 a term deposit of $130,000 was withdrawn by the husband to Classic account … . The wife denies signing the withdrawal.
On 27 June 2008 an amount of $99,963.51 was withdrawn from the Classic account … to purchase unit A, Town 2 Units for $98,000 for the superannuation fund (the second unit for the fund).
On 30 June 2008 the husband’s PAYG disclosed a net income of $60,000.
The parties’ final separation occurred in July 2008.
In August 2008 the husband cancelled the wife’s credit card and health insurance.
In August through to December 2008 the husband paid the wife $300 per week on six occasions.
On 15 August 2008 the wife withdrew $19,970 from her Westpac account and used these funds for day to day living, renovations and household accounts.
On 19 August 2008 the wife withdrew the amount of $88,000 from the Equity Access Loan account after consultation with the bank manager.
On 31 October 2008 the wife transferred inheritance monies of $124,753 from the Term Deposit to her NAB account … .
In November 2008 the wife lent Ms SS the amount of $130,000. This was paid back to the wife in July 2009.
In February 2009 the husband became a director of N Pty Ltd (as did Mr & Ms JJ).
In May 2009, the parties’ application for a loan (in accordance with orders made on 20 April 2009) was rejected.
On 6 August 2009 the wife’s Centrelink application for age pension was rejected.
As indicated above, in July 2009 Ms SS repaid the loan to the wife.
On 28 December 2009 the property at Z Street sold in accordance with interim orders and proceeds were divided between the parties.
In February 2010 the wife lodged tax returns for 1992 to 2009 inclusive. A debt of $77,085.11 became owing to the Australian Tax Office due in the main to Capital Gains Tax (note no tax payable for year ending 30 June 2009). The husband did the same and he received a $66,040 refund.
In March 2010 the wife had eye surgery.
On 20 April 2010 interim consent orders were made for an interim property distribution.
In June 2010 the wife had nodules removed from her neck.
In October 2010 the wife had a cancerous growth removed from her eye.

APPROACH TAKEN

In this matter my task is to:
110.1.Identify and value the property, assets, financial resources and liabilities of the parties;
110.2.Identify relevant contributions and assess them;
110.3.Consider relevant matters referred to in Section 79(4)(d) – (g) FLA;
110.4.Ensure my order adjusting the property, assets and liabilities of the parties is just and equitable.

BALANCE SHEET

By the end of the hearing the parties had agreed on the identification of their property, assets, financial resources and liabilities. That agreement can be summarised in the following balance sheet.

Assets
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
1	J	M Street, Town 1	$600,000.00	$600,000.00	Agreed	$600,000.00
2	J	Property 2, C Street Unit	$235,000.00	$235,000.00	Agreed	$235,000.00
3	H	1/3 share P Street, Town 1	$153,333.00	$153,333.00	Agreed	$153,333.00
4	H	Proceeds of sale of Z Street, Town 1	$115,782.00	$115,782.00	Agreed	$115,782.00
5	W	Proceeds of sale of Z Street, Town 1	$85,783.00	$85,783.00	Agreed	$85,783.00
6	J	Wife's furniture and chattels	$21,680.00	$21,680.00	Agreed	$21,680.00
7	W	Mercedes	$42,400.00	$42,400.00	Agreed	$42,400.00
8	W	Jewellery items in wife's possession	$4,738.00	$4,738.00	Agreed	$4,738.00
9	W	Diamond ring	$8,500.00	$8,500.00	Agreed	$8,500.00
10	H	Toyota vehicle	$10,000.00	$10,000.00	Agreed	$10,000.00
11	H	Caravan	$17,000.00	$17,000.00	Agreed	$17,000.00
12	H	Box trailer	$250.00	$250.00	Agreed	$250.00
13	H	Tools and camping gear	$390.00	$390.00	Agreed	$390.00
14	H	Honda motorcycle	$1,200.00	$1,200.00	Agreed	$1,200.00
15	W	Monies held by wife	$68,768.00	$68,768.00	Agreed	$68,768.00
16	W	Other monies held by wife at separation	$8,466.00	$8,466.00	Agreed	$8,466.00
17	H	Vehicle sold by the husband after separation	$3,500.00	$3,500.00	Agreed	$3,500.00
18	H	Husband's tax refund received for YE 30 June 2003 - 30 June 2009	$42,933.00	$42,933.00	Agreed	$42,933.00
19	J	Laptop removed from M Street post separation (H)	$50.00	$50.00	Agreed	$50.00
20	W	Monies owned by wife. Interest on loan funds taken. 1/2 costs of C Street excess to income costs	$0.00	$0.00	Agreed	$0.00
21	W	C Street account (… 38)	$31,503.00	$31,503.00	Agreed	$31,503.00
22	H	D Pty Ltd account (… 24)	$2,130.00	$2,130.00	Agreed	$2,130.00
23	H	Business 1	$85,250.00	$85,250.00	Agreed	$85,250.00
24	H	Addback equity access loan monies (… 88)	$32,908.00	$32,908.00	Agreed	$32,908.00
25	H	Addback - H paid to Law Firm V from funds item 26	$30,000.00	$30,000.00	Agreed	$30,000.00
26	H	Addback - H paid from Ms SS	$25,000.00	$25,000.00	Agreed	$25,000.00
27	H	Addback - H paid to Law Firm V from super fund account from wife	$18,000.00	$18,000.00	Agreed	$18,000.00
28	J	Super - real property	$180,000.00	$180,000.00	Agreed	$180,000.00
29	J	Holden super fund bank account (… 10)	$1,000	$1,000	Agreed	$1,000.00
Total assets			$1,825,564.00
Liabilities
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
30	H	Equity access loan account at Westpac	$0.00	$0.00	Agreed	$0.00
31	H	Mortgage on P Street	$146,667.00	$146,667.00	Agreed	$146,667.00
32	H	Tax liability	$0.00	nk	Determined	$0.00
33	W	Tax liability	$77,085.00	$77,085.00	Agreed	$77,085.00
Total liabilities			$223,752.00
Total net assets			$1,601,812.00

In relation to item 32, the husband did not present any evidence about any outstanding tax liability.
The parties’ self managed superannuation fund owns two pieces of real estate at Town 2 Units, each worth $90,000. The parties are the only members and trustees of the superannuation fund.

CONTRIBUTIONS

The chronology set out above provides a basis to understand the myriad of contributions that each party made during the 17 years they were together. There were a considerable number of dealings in real estate by each of the parties during the marriage.
During the marriage, the husband was the principal personal exertion income earner. The wife notes that she did have a small business at one time, conceding it produced little income. Until 2008 the parties had the benefit of the rental from properties owned by the wife. The wife said she was the main non financial contributor.
There was a dispute about the details surrounding the registration of Property 1, E Street into joint names. The wife said she received $35,000 only from the husband in consideration of the transfer, while the husband said he contributed further sums to the wife until an amount corresponding with half the value of the property was received. The husband said the confirmation of these payments was destroyed by water damage. Given that the monies for any payment to the wife by the husband must have been heavily generated by the husband’s earnings during the marriage, little turns on this argument.
The husband conceded that at all times when the parties were together, they resided in a property owned by the wife.
The primary focus and argument during the hearing was what each party had at the commencement of the cohabitation or brought into the relationship in the early years of the cohabitation. This is dealt with in detail below.
The wife also received a significant inheritance in 2004.

Wife

The wife’s position in relation to initial contributions is relatively straight forward. I find that in our about 1992, which was early in the cohabitation, the wife completed a property settlement with her first husband. She received various assets as a result of that property settlement. Those detailed at paragraph 23 of her affidavit filed 24 June 2010 total more than $652,500. There is controversy over the “cash” of $90,000 which the wife claimed she had. The husband has attached to his affidavit filed 5 July 2010 (13 pages) an extract from an affidavit that he says the wife filed in proceedings with her former husband. In that affidavit she deposes to the fact that at separation she had $12,000 in cash and owed her mother $7,000. I find that by mid 1992, the assets that the wife had received as a result of the property settlement with her first husband had been converted into the following assets:
120.1.Property 1, E Street which was purchased for an amount of $298,000 from the husband’s brother. There was no encumbrance on this property and the home became the principle place of residence of the parties at that time;
120.2.B Street, which was purchased for a price of about $140,000. There was no encumbrance on this property;
120.3.A unit at T Street which was purchased for a price of about $96,000. There was no encumbrance on this property; and
120.4.Cash of $5,000 ( $12,000- $7,000)
At the very start of the relationship, on the evidence of the husband, the wife also contributed:
121.1.A Mercedes car worth $8,000 (which the wife said was worth $20,000);
121.2.Jewellery which was stolen shortly after cohabitation; and
121.3.Furniture worth $10,000;
Consequently, in total it can be said that the wife introduced to the cohabitation assets in the sum of at least $557,000.

Husband

There was an inconsistency in assertions made by the husband about what assets he had at the commencement of the cohabitation. The assets asserted at page 13 of his Case Outline and submissions document differed from the evidence in his affidavit.
The wife asserted in her Case Outline document that the husband’s assets at the date of cohabitation could only have been $140,000 at the most. During submissions, this estimate was downgraded to $43,000.
I need to consider the evidence that the husband has given about the assets that he had at the commencement of cohabitation.
At paragraph 21 of the husband’s affidavit filed 9 March 2009, he says the following:
“Upon cohabitation I owned the following assets:
(a)Unit […] at [T Street, Town 1]. I paid $86,000 for this unit purchased in April 1989;
(b)Half share [Company 1] business which, to the best of my recollection, I sold in 1999 for $182,500. The full sale price was $365,000;
(c) One-third share in a high density block of land situated in [G Street, Town 1]. This property sold for $426,000 in July 1998. My share of the net proceeds was $141,660;
(d)A block of land at [H Street, Town 3] which I sold in August 1998 for $85,000;
(e)A new Ford station wagon vehicle;
(f)Tools and camping gear;
(g)Superannuation accumulated over a period of 20 years whilst I was [employed in the education field]. I believe this was worth approximately $50,000 at the time.
I will deal with each of the husband’s assertions that he had these and other assets below.
The husband’s Case Outline sets out the following table:

Land: [Property 2, G Street, Town 1] (1/3 share)

$60,000

[Property 1, G Street, Town 1] (1/2 share)

$43,000

Half interest in [Company 1]

$90,000

Station Wagon (new)

$20,000

Tools and Camping gear

$3,000

Superannuation

E $50,000

I pause to note that there was no evidence from the husband to support the values ascribed to the third, fourth and fifth items.

Company 1 business

Whilst initially putting in issue the fact that the husband had an interest in a Company 1 franchise, during cross examination, after being shown a document, the wife readily conceded that he did so. The information about the sale of that business in the husband’s affidavit, some eight years later, does little to help me assess the value of the initial contribution. I do not know anything about the increase in value of the business (if any) during the course of the cohabitation. I simply note that the husband had a half share in the business (unknown value) at date of cohabitation, bought from his brother. The wife notes that the only other person who could provide that information would be the husband’s brother, who was not called as a witness by the husband. No expert evidence was adduced by the husband as to the value of this asset at cohabitation.

T Street, Town 1

This is the same property as one of the three properties which the wife claims she acquired with monies from her property settlement.
The T Street property is not on the list of properties which are asserted in the husband’s Case Outline and submissions as being one of the properties that the husband had at the commencement of the cohabitation. Although it is set out in his written evidence, the husband did not mention this property when he was initially asked in cross-examination about the assets he initially contributed to the relationship.
Exhibit 5 and Exhibit 7 appear to be RP Data Ltd printouts about the history of the title of this property. Exhibit 7 indicates that the husband, along with his first wife, acquired this property for $86,000 on 27 April 1989. Exhibit 5 however indicates that the property was sold to Mr Q by ‘…’ on 27 April 1989 for an amount of $86,000. The RP Data Ltd records therefore are inconsistent but putting them at their highest for the husband, they do not confirm that the husband was the sole purchaser of the T Street property in April 1989. Exhibit 7 says he purchased it in equal shares with his former wife. The husband did not provide any court orders or other documents that would indicate how it might have been that he would have received the whole of the interest in the T Street property.
The husband said in oral evidence that this property was transferred to him in full upon property settlement with his former wife.
The husband’s evidence in relation to this property is unsatisfactory. One might suspect from Exhibit 5 that the property was sold by the husband to Mr Q on 2 June 1992 for $96,000 but that is speculation and I am not confident I can accept anything the husband says about the transaction. The property search (Exhibit 5) then shows the property going into the wife’s name on 25 October 1996 for no consideration and then being sold by the wife on 29 August 2007 for $197,500. What the wife says in her affidavit is that she purchased this property from Mr Q on 2 June 1992 for $96,000 (see paragraph 27 of her affidavit filed 24 June 2010). That statement is consistent with her uncontested evidence at paragraph 24(c) of her affidavit filed 24 June 2010.
Given the confused state of the evidence, I am unable to confidently accept the husband’s assertion in his affidavit that he had a whole interest in the T Street property coming into the cohabitation. I am prepared to accept as at that date he at least had one half of an interest in that property worth $48,000 ($96,000 ÷ 2).

Property 2, G Street, Town 1 (1/3 share)

As set out above, in paragraph 21(c) of his affidavit filed 9 March 2009, the husband asserts he had a one third interest in land in G Street at the date of cohabitation.
Exhibit 4 is a letter detailing the sale of Property 2, G Street in August 1997 for $450,000 from two vendors that are not the husband, and are the two other men who held shares in the property. That letter was exhibited to show that the mortgage paid out of the sale price was in the sum of $155,000. The property was originally purchased for $180,000.
The oral evidence during the hearing regarding this letter was that the husband said this property was encumbered by way of a principle and interest loan. Given it was established that at the date of sale by the co-owners, the loan was $155,000 and making some inferences about the rate of reduction of the principle of the loan, it could be reasonably inferred that there was not a great deal of equity in the property at the time it was acquired and therefore not a great deal of equity in the property at the time of cohabitation. The husband’s evidence was that he put some cash into the purchase of the property but he was not specific about the amount of the deposit.
The husband has not provided any records to show the financing of this property and we are left to guess at what the equity was in the property at the date of cohabitation.

H Street, Town 3

This property was included in the husband’s affidavit material but was left out of the husband’s Case Outline document. The husband did not refer to it when asked to detail his initial contributions to the relationship.
Exhibit 3 shows that the husband purchased the property at H Street, Town 3 in 1992 for $60,000 and sold it in 1998 for $200,000. The husband conceded in cross-examination that the purchase of this property may have been after cohabitation but before marriage.
Confusion about this property may have had something to do with the husband’s affidavit recording that he sold the property in 1988, when in fact the title search documents show that date of the sale was 1998. The husband doubts the accuracy of what is recorded on Exhibit 3 and does not recall the dates on that document to be the correct dates, nor the identity of those he bought it from, and he said he sold the property for about $90,000 to $95,000 – not $200,000.
This property was not mentioned in final submissions, and in any case, it is clear the property was obtained and disposed of during the period of cohabitation and was not owned at the date of cohabitation and was not an initial contribution by the husband.

Property 1, G Street, Town 1 (1/2 share)

This property was not referred to in the husband’s affidavit evidence, only the Case Outline document, though the husband mentioned this item first in cross-examination when asked to describe the assets he held at the commencement of cohabitation.
Exhibit 6 shows the sale of this property to the husband and Mr P in January 1990 for $86,000 and the sale by the husband and Mr P in July 1992 for $106,200.
In cross-examination the husband denied the wife’s assertion that she had no knowledge of ownership or sale of this property. The husband gave evidence there was never any mortgage over this property. Although suggesting the money for the half share of the property came from his bank account, the husband admitted that he produced no documents to show what the source of funds was to purchase this property. He claimed that although the wife and her legal representatives had been requesting information, he thought this issue was ‘irrelevant’ and so does not recall making enquiries of the bank or the real estate agent, but said he made a verbal enquiry with the solicitor overseeing the transfer. Given the focus on initial contributions in this case, I find the husband’s assertion that evidence from these sources was irrelevant, difficult to accept.

Nonetheless, I am prepared to accept that in January 1990 the husband contributed $43,000 towards the acquisition of this property.

Ford station wagon

There is no documentary evidence of the value of this vehicle at the date of cohabitation, but the wife estimates it was only worth $5,000.

Tools and camping gear

There is no documentary evidence of the value of these items at the date of cohabitation.

Superannuation

The wife did not object to the evidence of the husband’s belief that at cohabitation his superannuation had a value of $50,000.
There is otherwise no documentary evidence of the value of this superannuation at the date of cohabitation. The husband said in 2005 or 2006 he used the super acquired through employment in the education field before cohabitation, and that acquired from employment in the education field after cohabitation, to buy Unit B, Town 2 Units for $79,000. The husband has not provided any document which supports his assertion.

Conclusion in relation to initial contributions

In summary, I find that the wife brought capital into the cohabitation in a sum of at least $557,000.
The husband had the following capital:

1.

Half share in Company 1 business. This business provided the husband with employment and was the source of his personal exertion income.

Indeterminative value

2.

T Street (one half of $96,000)

$48,000

3.

One third of Property 2, G Street, Town 1

Little equity

4.

H Street, Town 3

Nil as at the date of cohabitation

5.

Property 1, G Street, Town 1

$43,000

6.

Motor vehicle

$5,000

7.

Superannuation

$50,000

Consequentially I have identified that the husband had capital of $146,000 plus one half interest in his Company 1 business.
The husband in his Case Outline document asserted that his half interest in Company 1 at the date of cohabitation was worth $90,000. As I have noted, there is no evidence from the husband to support that assertion. If I accepted that assertion by the husband as defining the other limits of his claim about initial contributions, I would be able to say that at the very best on the husband’s case he brought into the relationship assets to the value of $236,000 ($146,000 + $90,000). On that assumption, the overall capital of the parties at the date of cohabitation was $793,000 ($557,000 + $236,000). The wife’s proportion on that assumption is 70 percent of the initial capital. This however only provides a rough starting point as I have no evidence that the Company 1 business was actually worth anything at the date of cohabitation in 1990. All I know is that it was worth $182,500 in 1999.
I note that the parties now have in excess of double the net assets that they held at the commencement of their relationship.

Other contributions

As I have already indicated, the relationship between the parties lasted (with some interruption by two separations) for a period of 17 years and the parties made a myriad of contributions including an extensive involvement in trading in real estate during the time they were together.
It is not controversial that during that period of time the husband involved himself in income producing activities by way of being involved in the property industry.
Monies were earned by way of rent from the initial capital that the parties brought into the marriage (which as already discussed, was mainly capital brought in by the wife).
The parties enjoyed a comfortable standard of living during the time they were together.
In July 2004 the wife received an inheritance from her uncle of approximately $250,000 and an additional amount of $10,000 from her mother’s estate. The wife says that that money was primarily used for the purchase of motor vehicles for her children and to pay for numerous trips overseas for herself and her husband. She says at the time of separation there was about $124,000 left in a term deposit with Westpac. The wife still has $108,000 (see items 15, 16 and 21 on the balance sheet).
The wife was not in paid employment during the relationship.
The wife gave evidence that she prided herself on being a good “housewife” and I find that she fulfilled that traditional role throughout the time the parties were together.

Conclusion in relation to contributions

The wife asserts that she should be entitled to a division based on contributions of 65/35. Taking into account the disparity in the initial contributions and the introduction of her inheritance late in the relationship, I am satisfied that the evidence supports that submission. I find it is appropriate to divide the assets 65/35 based on the contributions of the parties.

SECTION 75(2) MATTERS

The wife is 66 years of age and in poor health. The husband concedes this is the case.
The husband is 62 years of age and in reasonable health, though complains of some “aches and pains”.
The wife has not worked for about 40 years other than a small business which made minimal income. She has no earning capacity through her own personal exertion. The wife is now in receipt of a partial age pension in the sum of $571.73 per fortnight ($286 per week). The wife lives alone in the former matrimonial home. At the time of the hearing, she had just spent about three months staying with her daughter in Sydney as her daughter gave birth to a child last year.
The husband has a 51 percent interest in a property industry business and has worked for or owned businesses in that industry for the entirety of the relationship. Both parties relied upon valuations of the husband’s business from different valuers. The valuers filed a joint affidavit which they swore on 14 and 15 March 2011. Ultimately the value of the husband’s interest in Business 1 was not a matter of controversy. It is clear from the expert evidence that both valuers adopted an asset backing basis as a method of valuing the property industry business with income earned from the rent roll of the property industry business being capitalised by a multiple of 2. The husband’s personal exertion earnings were not taken into account as the property industry business without the rent roll was not making a profit. The husband’s business was consequently valued without any allowance for the husband’s involvement in the business. The valuation is based upon income generated from a rent roll. Given that I am accepting the whole value of the business as stated in the balance sheet, I discount the future income the husband will receive from that rent roll (this is income earned from capital and the wife will have a larger capital base). The husband still however has some continuing earning capacity from conducting the property industry business. The husband’s earning capacity, untested in the hearing, was stated to be $736 per week.
The parties have a self managed super fund which owns two properties worth jointly about $180,000 and has a small bank balance of about $1,000. At the age of 66 the wife would be able to access any superannuation to which she was entitled.
It is important to note the disparity in capital in the wife’s favour that is produced by the conclusion I have reached about the appropriate adjustment based upon contributions. That disparity, in favour of the wife, is 30 percent of the assets (or about $480,000).
The parties lived a more than comfortable lifestyle whilst they were together.
Post separation the wife’s evidence is that the husband has been living in properties owned by his de facto partner and that their standard of living is extremely comfortable. This is denied by the husband and was not the subject of any meaningful exploration during the hearing.
The wife’s children from a previous marriage lived with the parties. The wife says they were financially supported by the rental income from her properties and child support payments.
Although the husband has a greater personal earning capacity than the wife for what might be left of his working life, the wife will have a significantly greater capital base. Overall, I find that no further adjustment should be made based upon s 75(2) factors.

JUST AND EQUITABLE

Based upon findings made in relation to contributions and s 75(2) factors, the overall distribution between the parties would be 65 percent to the wife and 35 percent to the husband.
A distribution of the assets on that basis could be achieved as set out in the following table:

Husband gets 35.0%
Assets
Item No.	Description	Percentage	Value
3	1/3 share P Street, Town 1	100%	$153,333
4	Proceeds of sale of Z Street, Town 1	100%	$115,782
10	Toyota vehicle	100%	$10,000
11	Caravan	100%	$17,000
12	Box trailer	100%	$250
13	Tools and camping gear	100%	$390
14	Honda motorcycle	100%	$1,200
17	Vehicle sold by the husband after separation	100%	$3,500
18	Husband's tax refund received for YE 30 June 2003 - 30 June 2009	100%	$42,933
19	Laptop removed from M Street post separation (H)	100%	$50
22	D Pty Ltd account (… 24)	100%	$2,130
23	Business 1	100%	$85,250
24	Addback equity access loan monies (… 88)	100%	$32,908
25	Addback - H paid to Law Firm V from funds item 26	100%	$30,000
26	Addback - H paid from item 13 Ms SS	100%	$25,000
27	Addback - H paid to Law Firm V from super fund account from wife	100%	$18,000
28	Super - real property	100%	$180,000
29	Holland super fund bank account (**7710)	100%	$1,000
Liabilities
Item No.	Description	Percentage	Value
30	Equity access loan account at Westpac	100%	$0
31	Mortgage on P Street	100%	$146,667
32	Tax liability	100%	$0
Husband pays Wife			$11,425
Net Assets to Husband			$560,634
Wife gets 65.0%
Assets
Item No.	Description	Percentage	Value
1	M Street, Town 1	100%	$600,000
2	Property 2, C Street Unit	100%	$235,000
5	Proceeds of sale of Z Street, Town 1	100%	$85,783
6	Wife's furniture and chattels	100%	$21,680
7	Mercedes	100%	$42,400
8	Jewellery items in wife's possession	100%	$4,738
9	Diamond ring	100%	$8,500
15	Monies held by wife	100%	$68,768
16	Other monies held by wife at separation	100%	$8,466
20	Monies owned by wife. Interest on loan funds taken. 1/2 costs of C Street excess to income costs	100%	$0
21	C Street account (… 38)	100%	$31,503
Liabilities
Item No.	Description	Percentage	Value
33	Tax liability	100%	$77,085
Wife receives			$11,425
Net Assets to Wife			$1,041,178

It was submitted by the husband that there should be an adjustment at the “fourth stage” so that no monetary payment is made by him to the wife. The husband asserted that his business was struggling. Adjustments at the fourth stage are only made in special circumstances. I do not consider that the circumstances in this case warrant such an approach and the husband will be ordered to pay to the wife the amount of $11,425.
Standing back, I consider the distribution of assets, liabilities and financial resources set out in the above table to be one that achieves a just and equitable distribution between the parties.

I certify that the preceding One hundred and seventy-nine (179) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 30 August 2011.

Associate:

Date: 30.8.2011

[2011] FamCA 705

30 August 2011

Key Legal Topics

Areas of Law

Family Law

Property Law

Equity & Trusts

Legal Concepts

Remedies

Jurisdiction

Injunction

Costs

Procedural Fairness

Statutory Construction

Land: [Property 2, G Street, Town 1] (1/3 share)	$60,000
[Property 1, G Street, Town 1] (1/2 share)	$43,000
Half interest in [Company 1]	$90,000
Station Wagon (new)	$20,000
Tools and Camping gear	$3,000
Superannuation	E $50,000

1.	Half share in Company 1 business. This business provided the husband with employment and was the source of his personal exertion income.	Indeterminative value
2.	T Street (one half of $96,000)	$48,000
3.	One third of Property 2, G Street, Town 1	Little equity
4.	H Street, Town 3	Nil as at the date of cohabitation
5.	Property 1, G Street, Town 1	$43,000
6.	Motor vehicle	$5,000
7.	Superannuation	$50,000