Holt and Edmondson

[2016] FCCA 2338

FEDERAL CIRCUIT COURT OF AUSTRALIA

HOLT & EDMONDSON [2016] FCCA 2338

Catchwords:
FAMILY LAW – Property – just and equitable – long marriage – contributions.

Legislation:

Family Law Act 1975, ss.75, 79

Evidence Act1995, s.128

Cases cited:

Stanford v Stanford [2012] HCA 52; (2012) 247 CLR 108

Bevan & Bevan [2014] FamCAFC 19
Chapman & Chapman [2014] FamCAFC 91
Scott & Danton [2014] FamCAFC 203
Black & Kellner (1992) FLC 92-287
In the Marriage of Weir (1992) 16 FamLR 154
Jones v Dunkel (1959) 101 CLR 298

Applicant: MS HOLT

Respondent: MR EDMONDSON

File Number: PAC 3490 of 2015

Judgment of: Judge Obradovic

Hearing dates: 22 and 23 August 2016

Date of Last Submission: 23 August 2016

Delivered at: Parramatta

Delivered on: 28 September 2016

REPRESENTATION

Counsel for the Applicant: Mr Heazlewood

Solicitors for the Applicant: Penhall & Co Lawyers

Counsel for the Respondent: Mr Greenaway

Solicitors for the Respondent: John Spence & Associates

ORDERS

1. That the husband must, no later than 23 November 2016:

   (a)Pay to the wife the sum of $508,043 (“the payment”); and

   (b)Do all acts and things necessary to refinance the home loan (“mortgage”) with (omitted) Bank and secured against the property at Property S, New South Wales being the whole of the land comprised in Folio ID (omitted) (“the former matrimonial home”) into his sole name and/or otherwise discharge the mortgage in its entirety such that the wife is no longer a mortgagor.

2. Upon receiving the payment the wife must no later than 30 November 2016, do all acts and things necessary to transfer to the husband all her right title and interest in the former matrimonial home.

3. If the husband fails to comply with his obligations set out in Order 1, such that the payment is not made and the refinance has not occurred by 23 November 2016, the husband and wife do all acts and things and sign all documents necessary to sell the former matrimonial home in accordance with the following:

   (a)The selling agent for the sale of Property S shall be (omitted) Real Estate of Property W and the Solicitors to act for the parties as Vendors on the sale of the former matrimonial home shall be Russo & Co Solicitors, (omitted), New South Wales or such other solicitors as the parties shall agree in writing;

   (b)The parties shall co-operate fully in relation to the sale of Property S including making the property available for inspection at all reasonable times and ensuring the property is in good and saleable condition;

   (c)Should the property fail to sell within 2 months from the appointment of the selling agent pursuant to Order 3(a), then the property shall be listed for sale by public auction at the reserve price as agreed between the parties and failing agreement as nominated by a nominee of the Real Estate Institute of New South Wales and the parties shall accept the advice of the selling agent as to the appropriate marketing period prior to the Auction;

   (d)In the event of any auction the parties shall co-operate with the auctioneer to facilitate such sale;

   (e)In the event that the property fails to sell on the first auction date or within 7 days thereafter, then the property shall be again offered for auction 8 weeks thereafter without reserve, and every 8 weeks thereafter by further auction unless and until such time as the property is sold;

   (f)At any time during the sale program for the former matrimonial home, the parties shall be entitled to agree in writing for the sale of the property by private treaty at such price and upon such terms as they agree. Further, on any auction date, the parties shall be entitled to agree in writing a different reserve price, than that which has already been agreed or is otherwise provided for in these orders;

   (g)The parties shall do all acts and things and execute all documents required to give effect to the sale of the former matrimonial home and shall vacate the former matrimonial home on completion of the sale;

   (h)The proceeds of sale shall be distributed as follows:

   (i)In discharge of any mortgage registered against the former matrimonial home;

   (ii)In payment of Agent’s commission, marketing costs and auctioneers expenses, or in reimbursement to any person who prepaid those fees;

   (iii)In payment of the vendor’s legal costs on sale;

   (iv)In payment or reimbursement of any nomination fees of Real Estate Institute of New South Wales and/or the fees of their nominee made pursuant to these Orders or any variation of these Orders;

   (v)If after making the payments referred to in sub-paragraphs (i) to (iv) above the balance of sale proceeds is $1,400,000 or more then as follows:

   1. In payment to the wife of the sum of $508,043 plus interest pursuant to s117B(1) Family Law Act to be calculated from 23 November 2016, being the date for the payment referred to in Order 1 herein;

   2.   In payment to the wife of 53% of any amount above $1,400,000; and

   3.   The balance to the husband.

   (vi)If after making the payments referred to in sub-paragraphs (i) to (iv) above the balance of sale proceeds is less than $1,400,000 (“net proceeds”) then as follows:

   1. In payment to the wife of $18,846 plus interest pursuant to s117B(1) Family Law Act to be calculated from 23 November 2016, being the date for the payment referred to in Order 1 herein;

   2. In payment to the wife of 53% of the net proceeds plus interest pursuant to s117B(1) Family Law Act to be calculated from 23 November 2016, being the date for the payment referred to in Order 1 herein;

   3.   The balance to the husband.

4. That a base amount of $60,000 is allocated as required by s.90MT(4) of the Family Law Act1975 to the wife out of the husband’s interest in (omitted) Super.

5. In accordance with s.90MT(1)(a) of the Act:-

   (a)That the wife (non-member spouse) is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001 (“the Regulations”); and

   (b)The husband’s entitlement to payment out of his interest in (omitted) Super and the entitlement of such other person to whom a splittable payment may be payable is correspondingly reduced by force of this Order.

6. That the Trustee of (omitted) Super (“the Trustee) shall do all such acts and things and sign all documents as may be necessary to:

   (a)Calculate in accordance with the requirements of the Act and the Regulations, entitlement created for the wife non-member spouse by Orders 4 and 5 of this Order; and

   (b)Pay the entitlement whenever the Trustee makes a splittable payment out of the husband’s interest in (omitted) Super.

7. That these Orders have effect from the operative time and the operative time for this Order is four days after service of sealed Orders on the Trustee.

8. That Orders 4, 5, 6 & 7 herein bind the Trustee of (omitted) Super.

9. As between the husband and the wife, subject to these orders, the husband and the wife shall each respectively retain all interest in, entitlement to and liabilities arising from:

   (a)All motor vehicles, personal property and chattels now in his/her respective ownership, possession or control;

   (b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts (including any personal loans and credit cards) standing in his/her sole name respectively; and

   (c)All interests in life insurance policies standing in his/her sole name respectively.

10. That in the event that either party refuses or neglects to execute any deed or instrument within fourteen (14) days of being requested to do so then the Registrar of the Federal Circuit Court be appointed pursuant to section 106A to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.

11. Remove all outstanding issues from the list of cases awaiting finalisation.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 3490 of 2015

MS HOLT

Applicant

And

MR EDMONDSON

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are proceedings for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth).

2. Even though the matter was heard over a period of three days, the issues between the parties are not particularly complex.

3. After a 21 year marriage the parties decided to part ways. While they agreed where their children would live post separation, they could not agree on a split of their assets. They each argued greater contributions during the marriage (55/45 in their favour) and they each argued a 5% further adjustment for s.75(2) factors. What the Court was left with were two competing arguments for a 60/40 split in respect of non-superannuation assets and significantly different arguments in respect of the superannuation assets.

4. A property adjustment order is of course, a discretionary decision, albeit arrived at in a judicious and reasoned manner. 

Overall Approach

1. The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth) was set out by the High Court in Stanford v Stanford,[1]where their Honours stated:

   [1] [2012] HCA 52; (2012) 247 CLR 108

   [37] … 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… 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.

   …

   [40]… 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) …

2. Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[2], Chapman & Chapman[3] and Scott & Danton[4].

   [2] [2014] FamCAFC 19

   [3] [2014] FamCAFC 91

   [4] [2014] FamCAFC 203

3. Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.

4. The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[5]

   [5] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120

5. The just and equitable requirement is “one permeating the entire process”[6].

Outline of Case

[6] Bevan supra at [86]

Documents

1. The wife relied upon the following documents:

   a)Initiating Application filed 16 July 2015;

   b)Affidavit of Ms Holt filed 6 August 2016;

   c)Financial Statement of Ms Holt filed 6 August 2016; and

2. The husband relied upon the following documents:

   a)Response filed 14 September 2015;

   b)Affidavit of Mr Edmondson filed 15 July 2016;

   c)Financial Statement of Mr Edmondson filed 7 September 2015; and

   d)Affidavit of Ms N filed 19 October 2015.

Agreed Chronology

1. While no agreed chronology was handed up by the parties at hearing, the events noted below are common to both parties’ cases:

Date	Event
(omitted) 1968	Husband born
(omitted) 1972	Wife born
(omitted) 1993	Parties marry
1993	Husband commences work with (employer omitted) as a (occupation omitted)
(omitted) 1993	Child of the parties X born
1994	Parties purchase Property E
(omitted) 1995	Child of the parties Z born
1997	Parties sell Property E property
(omitted) 2000	Child of the parties Y born
2001	Parties purchase Property R, they knock down the house and build a new house
(omitted) 2001	Child of the parties W born
2002	Wife receives an inheritance (amount not agreed)
(omitted) 2009	Parties sell Property R and net proceeds are invested in a (omitted) Bank Term deposit account
(omitted) 2010	Parties purchase Property S for $750,000 utilising $500,000 from the proceeds of Property R and borrowing the balance from (omitted) Bank
2011	Parties separate under one roof[7]
June 2014	Parties reconcile
20 December 2014	Parties separate; wife moves out of former matrimonial home
24 May 2016	Parties divorce

[7] See paragraph 43 of Reasons

Agreed Balance Sheet

1. An ‘agreed’ balance sheet was handed up by the parties during the hearing. It was agreed in the sense that it was a single balance sheet, with a common list of assets and liabilities but there was no agreement about the majority of the values.

2. The Agreed Balance Sheet was as follows:

Assets

Ownership

Description

Wife’s Value

Husband’s Value

Joint

Property S

$1,400,000.00

$1,400,000.00

Wife

(omitted) Bank

$2,434.25

Wife

(omitted) Bank

$72.00

Wife

Mercedes (omitted)

$24,000.00

Wife

Business Assets

$1,000.00

Wife

Jewellery

$1,000.00

Husband

Toyota (omitted)

$27,000.00

$27,000.00

Husband

Contents

$10,000.00

$10,000.00

Husband

(omitted) account

$50.00

Total:

$1,465,556.25

$1,437,000.00

Liabilities

Ownership

Description

Wife’s Value

Husband’s Value

Joint

Mortgage

$476,987.51

Wife

Mr I Loan

$10,000.00

Wife

Mr M

$28,000.00

Wife

(omitted) Bank

$2,325.00

Wife

(omitted) Credit Card

$25,221.99

Husband

Income Tax Liability

$6,500.00

$6,500.00

Husband

(omitted) Bank credit card

$9,362.00

$9362.00

Total

$558,396.50

$15,862.00

TOTAL NETT

$907,159.75

$1,452,862.00

Superannuation

Member

Name of Fund

Type of Interest

Wife’s Value

Husband’s Value

Wife

(omitted) Super

Accumulation

$7,065.86

Husband

(omitted) Super

Accumulation

$134,681.00

$134,681.00

Total

$141,746.86

$134,681.00

TOTAL OF ALL ASSETS

$1,048,906.61

$1,587,543.00

Evidence

1. The Affidavits filed in each of their cases were lengthy, the wife’s particularly – with many tens of pages of Annexures and Exhibits, the relevance of which was not identified. 

2. The evidence of both of the parties was in parts not entirely satisfactory. While there were some contradictions and unsatisfactory evidence, overall issues of credit are not of overwhelming importance. This is so, not only because most of the major facts are not in dispute but also because there was so little cross-examination and forensic examination of the facts which are in dispute that the Court can do little but take a broad brush approach in respect of the evidence.

3. Both parties are obliged to make full and substantive disclosure of their financial affairs. [8] Where there is clear evidence of non-disclosure, the Court should not be unduly cautious about making findings in favour of the innocent party.[9]

   [8] Black & Kellner (1992) FLC 92-287

   [9] In the Marriage of Weir (1992) 16 FamLR 154

4. The husband sought for the Court to accept that the wife had been dishonest in her evidence, and that a Black & Kellner argument was established.

5. The Court is not satisfied that the wife has not made full and substantive disclosure of her financial affairs as submitted on behalf of the husband such that the Court would make findings in the husband’s favour for that reason only. These matters are discussed in more detail further in these reasons.

6. There was no expert evidence.

The wife

1. The wife is 43 years old.

2. She completed Year 12 in 1989 and then completed a one year (omitted) course through TAFE. She commenced full-time employment in early 1992 at 19 years of age and shortly before she met the husband.

3. By the time the parties were married the wife had some savings and a motor vehicle. She estimated that at the commencement of the marriage, she brought in about $11,000.

4. The wife’s parents contributed to the cost of the parties’ wedding.

5. Prior to the birth of the parties’ first child, the wife was in full-time employment. She then took three months maternity leave and then returned to full-time work.[10]

   [10] The husband’s evidence regarding how much the wife worked is set out in paragraph 64 of these reasons. The wife was not cross examined about her hours and patterns of work pre 2011

6. The wife resigned from her employment a few months before the birth of the parties’ second child.

7. After about one year, the wife returned to full-time work and continued working for a period of time it appears with two different employers. It is not clear whether she worked continuously or if there was a hiatus of some months particularly while the parties and the children went to (country omitted) on a family trip in 1998.

8. In mid-1998, the parties and their children lived with the wife’s mother for a short period of time.

9. The wife resigned from employment again in early 2000, before the birth of the parties’ third child in (omitted) 2000.  The parties’ fourth child was born in (omitted) 2001.

10. The wife returned to paid employment in about mid 2005 on a part-time basis. She worked for various employers, part-time and doing varied hours, until setting up her own (omitted) business in mid-2014.

11. In her Affidavit the wife asserted she was earning a set sum each week. During cross-examination she said that the amounts she was earning were not set amounts each week, her hours varied and she earnt different amounts depending on the hours she worked. Ultimately, the Court is not able to make any determination of the quantum of the wife’s income.

12. It is possible that she was, via her Affidavit, trying to embellish the evidence, such that her financial contributions might be viewed as higher than they in fact were. However, the evidence was not sufficient for me to make any findings of that nature.

13. While the wife did seek and was granted a Certificate pursuant to s.128 Evidence Act1995 (Cth), in relation to not declaring certain amounts of her income to the Australian Taxation Office, such income was utilised for the purposes of the parties. No evidence was called as to what difference, if any, there ultimately was with respect to the wife’s taxable or net income.

14. Whether the husband knew about the wife not declaring all of her income is not something either of the parties was asked any questions about.

15. Whether the wife was earning $450 per week or only $150 per week, the moneys she earnt was for the benefit of the family. It was not suggested to the wife that she hid such moneys, used them for things other than the family, or that she wasted any of it.

16. The wife received an inheritance from her late father during the parties’ relationship in early 2002. The wife says the inheritance was $20,000 received in two lots. The husband says he is only aware of the wife receiving $7,000. In any event, whatever the wife received was utilised for the benefit of the parties and their family.

17. By about 2002, the wife had managed to save approximately $16,000 in cash. Such moneys were kept hidden in the family home. The husband found the money and it was then used by the parties towards Property R [11] which the parties were then building.

    [11] See below, under hearing “Purchase of Properties”

1. There was no evidence in either party’s case as to who looked after the children while the parties were at work.

2. During the parties’ relationship, the wife attended to the cooking and cleaning, caring for the children and doing the shopping. She also managed all of the financial matters.

3. In 1999, for a period of three months, the husband’s cousin lived with the parties in their home. During this period, the wife continued to attend to the household duties, such as cooking and cleaning, including for the husband’s cousin.

4. The husband’s brother, Mr S, lived with the parties for a period of not less than 8 years. During this period, the wife continued to attend to the household duties, such as cooking and cleaning, including for the husband’s brother. The husband knew for a number of years (but less than three) that the wife was very unhappy about Mr S remaining in the home and had wanted him to leave.

5. Between July 2013 and when the wife left the former matrimonial home, the husband’s nephew, Mr A, was living with the parties. During this period, the wife continued to attend to household duties, such as cooking and cleaning, including for the husband’s nephew.

6. The parties both submit that they separated, albeit under the one roof in 2011, when the wife commenced sleeping on the lounge.

7. Apart from the sleeping arrangements, not very much else changed in the parties’ relationship from the date of separation until the wife left the former matrimonial home in late 2014. The parties reconciled for a short period towards the end of 2014.

8. In the period of the first separation, the wife did however, start making some arrangements to separate her finances from those of the husband but the parties remained utilising a joint bank account and a joint credit card. For example, in April 2011 the wife filed for separation with Centrelink and then notified them in June 2014 that the parties had reconciled.

9. After the wife moved out of the former matrimonial home in late 2014, she moved into rented accommodation.

10. There was suggestion made by the husband that the wife has had, and perhaps still does have, an interest in some investments with a Mr M. In fact, it was submitted outright that the wife has not given a true and honest account of her property investments with Mr M and that her Affidavit was at the very least disingenuous but more probably dishonest in that it was an attempt to prevent the Court from being made aware of the true situation. No submissions were made as to what that true situation might be.

11. The wife denied any personal relationship with Mr M, except that he was a friend and that he had helped her.

12. In late 2014 the wife invested $20,000 with Mr M which he repaid in January 2015. The wife lived in a property owned by Mr M between December 2014 and January 2015, which property was purchased in part with the money the wife invested with Mr M. 

13. The wife’s (omitted) business is now sub-contracted to a business which Mr M is involved in. She is paid to (business omitted). Her business leases a car from Mr M (or his business).

14. While some of these matters, referred to in the preceding three paragraphs, came out during cross-examination, others were contained in the wife’s Affidavit. The Affidavit does not of itself fairly and squarely put these issues before the Court.

15. However, the suggestions that there appears to be more than meets the eye in respect of the wife’s business and financial transactions involving Mr M does not permit the Court to speculate as to what that might be. The evidence goes no further than noted earlier.

16. Since the wife moved out of the former matrimonial home in late 2014, the children have remained living with the husband. The wife has however, continued to attend the home on a regular basis, she says a daily basis the husband says less so, to assist the children. She still cooks and cleans for the children from time to time and she still takes them to school or after school activities as required.

17. The children have stayed with the wife overnight on very few occasions since separation.

The husband

1. The husband is 48 years old. He commenced living in Australia in September 1992 at age 24.  

2. The husband’s brother paid for the parties’ honeymoon.

3. After their honeymoon, the parties lived with the husband’s brother for a period of eight months.

4. Upon his arrival in September 1992, the husband commenced working as a (occupation omitted) in his brother’s business. He remained working for that business (now known as (employer omitted)) throughout the parties’ relationship and continues working in that business.

5. The husband is both an employee of (employer omitted) and a sub-contractor for that company. His remuneration is broken up into his wages and payments received pursuant to invoices which he issues (or which are recipient created). The husband claims a number of business expenses as tax deductions thus reducing the taxable income he receives from the work he performs for (employer omitted). It was submitted by the wife that this was a sham arrangement.

6. The arrangement for the husband’s remuneration with (employer omitted) has been in place for a long time.[12] If the husband received and continues to receive his remuneration in a tax effective way this has then likely resulted in a higher net income than otherwise might have been the case.

   [12] Although it is not clear for how long, however the wife gives evidence about such matters prior to final separation

7. Whether the payment arrangement is a sham arrangement or not[13], such remuneration structure, while the parties were together, benefited the parties.[14] The fact that the husband will likely retain his tax effective earnings into the future, is a matter which the Court will take into consideration pursuant to s.75(2).

   [13] About which the Court makes no findings

   [14] In the same way that the wife’s failure to declare the income she received from the ‘cash’ jobs benefited the parties

8. During the parties’ relationship, the husband did some of the household work, by assisting the wife with such work. He would help take the washing out, do some heavy lifting as required, vacuum and clean the floors.

9. The parties also had a cleaner come to their home once per fortnight, paid for by the parties.

10. The husband says that the wife, during the relationship, worked only on a part-time basis[15]. He further says that he is not aware of how her income from her employment was applied but does know that on occasion such income paid for some groceries and household expenses.

    [15] There was no cross examination on this issue

11. When the parties built their house in Property R, [16] the husband organised the tradesmen and did all of the sandstone, landscaping and clearing of the block, he also did the footings. The husband provided labour.

    [16] See below “Purchase of Properties”

12. The husband and his brother, who was living with the parties, undertook renovations to the parties’ home in Property S.[17]

    [17] See below “Purchase of Properties”

Purchase of Properties

1. In about mid 1994 the parties’ purchased their first home at Property E. The deposit was paid for by joint savings and the balance of the purchase price was funded by a loan from (omitted) Bank. When the Property E property was sold in 1998, the net sale proceeds of approximately $140,000 were put in a joint term deposit.[18]

   [18] About $40,000 was spent by the parties on a family trip to Lebanon in 1998

2. In late 1998, the parties invested either $90,000 or $125,000 with the husband’s brother. In early 2001, the parties received either $320,000 or $370,000 from the husband’s brother. There are no documents which are in evidence to show the exact amount of the money invested, nor how much profit was made by the parties through investing this money with the husband’s brother. Whatever the exact amount was, it enabled the parties to purchase their next property unencumbered.

3. In 2001, the parties purchased Property R . They then knocked down the old existing house and with moneys which they borrowed from (omitted) Bank of some $360,000, they built a new home for themselves.  The balance of the money for the build came from the parties’ joint savings.

4. In November 2009, the parties sold Property R, netting approximately $550,000.

5. In April 2010, the parties purchased Property S for $750,000 utilising $500,000 from the proceeds of Property R, and borrowing the balance from (omitted) Bank. The parties renovated Property S, at a cost of approximately $70,000.

6. The current value of Property S is agreed between the parties at $1,400,000. The property is encumbered, with the balance of the loan being just under $477,000 at the date of hearing.  The husband has remained living in this house post separation.

7. It is conceded by the husband that the property will likely need to be sold, although his primary application is that he retain the property. The husband has not put on any evidence about his ability to refinance the loan or to pay the wife any amount pursuant to a property adjustment order.

Non-Superannuation Assets

1. As noted earlier in these Reasons, not all of the items on the ‘agreed’ balance sheet were ‘agreed’, nor was there evidence before the Court in support of the parties’ assertions as to the value of the non-agreed assets and liabilities. 

2. This may not be of particular significance given that some of the asserted values are relatively minor and it will not necessarily have a significant impact in respect of the overall adjustment. 

3. The wife asserted that she had business assets worth $1,000. She was not cross-examined about this, nor was there any independent valuation evidence led in respect of such value.

4. The wife asserted that she had jewellery worth $1,000. Once again, this was not a topic of cross-examination nor expert evidence.

5. The minor balances of the parties’ individual bank accounts are disregarded for the purposes of any property adjustment order.

6. The value of the wife’s Mercedes is discussed below at paragraphs 90 - 91.

Superannuation

1. Both parties have superannuation. The balance of the husband’s superannuation account as at the date of hearing is almost 20 times that of the wife.

2. The husband commenced living in Australia shortly before the parties were married and I therefore infer that his pre-relationship superannuation balance was minimal, if not completely negligent.

3. While the husband sought an order that each party retain his/her own superannuation, no submissions were made as to why this was an appropriate order.

4. The wife sought an order for a split of the husband’s superannuation which would have an effect of an even split (or close to it). No submissions were made as to why this was an appropriate order.

5. The Court does not propose to treat the superannuation separately to the balance of the assets, that is, the Court will treat the pool of assets as a single pool.

Liabilities

1. The wife included on her side of the balance sheet, a number of liabilities. The husband sought to have these liabilities excluded, on the basis that the Court would not be satisfied that the wife has in fact incurred such liabilities.

2. It was submitted on behalf of the husband that because the wife did not call any corroborating evidence, even though the witnesses were available, that the Court would not only draw a Jones v Dunkel[19] inference but that the Court would not accept such loans as genuine.  The Court does not accept that the loans ought to be excluded because there is no corroborating evidence. The reason as explained below, why the alleged loans are excluded, is that there is no probative evidence that they exist.

   [19] (1959) 101 CLR 298

3. The wife says she borrowed $10,000 from her uncle Mr T to purchase a motor vehicle in March 2016 for $13,500, with the balance coming from her savings. The terms of the alleged loan are not stated, nor are the circumstances which are said to give rise to the loan. It is simply an assertion, or rather, an opinion which is not based on any admissible evidence.[20]

   [20] The evidence does not fall within the exception to the opinion rule

4. Although the wife then sold the motor vehicle for $6,000 in May 2016, she has not repaid her uncle back any of the money he allegedly lent to her. The wife now, through her business, leases this vehicle back from its current owner, Mr M.

5. The Court is not satisfied that there is any debt owing to the wife’s uncle arising from the purchase of this vehicle as asserted by the wife in her affidavit.

6. In April 2016, the wife says she borrowed $28,000 from Mr M to purchase a car, which she estimates is worth $24,000 at the date of hearing. The terms of the alleged loan are not stated, nor are the circumstances which are said to give rise to the loan. It is simply an assertion, or rather, an opinion which is not based on any admissible evidence.[21]

   [21] The evidence does not fall within the exception to the opinion rule

7. There was no evidence of the value of the car. The Court accepts the wife’s assertion as to its value, particularly as there is no evidence by the husband in respect of the value asserted by the wife nor was there any cross-examination in this regard. The Court notes however that there is no explanation why the car would be worth $4,000 less four months after it was purchased, particularly noting it is a second hand car.

8. The Court is not satisfied that there is any debt owing to Mr M arising from the purchase of this second vehicle as asserted by the wife in her affidavit.

9. The wife also gives evidence both in her Affidavit and Financial Statement of two credit cards. She says these are ‘maxed’ but does not give any explanation as to what the debt on the credit cards relates to.

10. The total debt alleged is over $27,500. The amount of the debt was not disputed by the husband. The wife was not cross-examined as to how the credit card debt arose and what she spent the money on. 

11. The parties have a “joint” credit card which has a balance of $9,362[22]. The husband says this was a debt of the wife’s – he did not use this account. The difficulty with the husband’s argument is that the statements which are annexed to his Affidavit are for January 2014 to January 2015, covering in part the period from June 2014 to December 2014 when the parties had reconciled.

    [22] This credit card appears as the husband’s liability on the agreed balance sheet and while referred to as ‘joint’ in paragraphs 95-98 of the reasons, the Court notes that parties agreed to this liability as being in the husband’s name (on the basis of the agreed balance sheet)

12. The period January 2014 to June 2014 is a period during which while the parties remained living under the one roof their finances remained intermingled. The balance of the credit card statements relates to dates when the parties were together. 

13. The wife says that on 24 December 2014, she purchased some whitegoods for her home to the value of $1050.  

14. The wife was not cross-examined in any detail about any transactions in respect of this credit card. There was no submission made that there should be amounts added back, or that there was waste or negative contribution by the wife. The Court does not accept that the wife utilised the “joint” credit card for her own purposes (except to purchase the whitegoods post the December 2014 separation in respect of which there was no add back argument).

15. The husband also alleges that the wife drew down on the parties’ joint mortgage account post separation. There was a draw-down on the parties’ mortgage of $60,000 on 5 September 2014. These moneys were utilised by the parties to a large extent for the benefit of both of them. The parties had reconciled at this stage. The husband says he does not know what the wife did with all of the loan proceeds. The wife accounts for $40,000 in her Affidavit.

16. On 16 September 2014, $26,000 was transferred from this $60,000 loan into the parties’ joint account. On the same day, there was a $14,000 cash withdrawal at (omitted) and a deposit into the wife’s personal account of $14,000. The wife accepted during cross-examination that this money came from the loan. She also said that moneys would go in and out of accounts. She was not asked how she spent the money. It was submitted that the money was appropriated by the wife for her own personal use.

17. The wife’s bank statement for this period[23] shows that there were further deposits of close to $90,000[24] coming into the wife’s account and debits of over $90,000 coming out of the account. The wife was not cross-examined about any of these transactions which all occurred while the parties were together[25]. 

    [23] Exhibit 4

    [24] Making the total deposits almost $103,500

    [25] During a period of reconciliation

18. The Court does not accept the submission that the wife appropriated the $14,000 in question for her own personal use.

Determination

The Pool of Assets

1. The Court finds the following pool of assets[26]:

   [26] Figures have been rounded to the nearest dollar

Assets
Ownership	Description						Value
Joint	Property S				$1,400,000
Wife	(omitted) Bank				$2,434
Wife	Mercedes (omitted)				$24,000
Wife	Business Assets				$1,000
Wife	Jewellery				$1,000
Wife	Superannuation				$7,066
Husband	Toyota (omitted)				$27,000
Husband	Contents				$10,000
Husband	Superannuation				$134,681
Liabilities	Total:					$ 1,607,181
Ownership	Description							Value
Joint	Mortgage							$476,988
Wife	(omitted) Bank							$2,325
Wife	(omitted) Credit Card							$25,222
Husband	Income Tax Liability							$6,500
Husband	(omitted) Bank credit card							$9,362
Total:							$520,397
TOTAL NETT ASSETS			$ 1,086,784

Just and equitable

1. In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the common use of property by the parties.

2. In this matter, the parties’ major asset is the former matrimonial home owned by the parties as joint tenants of which they are joint mortgagors. The majority of the superannuation assets are in the husband’s sole name.

3. Both parties seek orders as to the division of their property and in particular both parties urge it upon the Court that in all of the circumstances it is just and equitable to make an order adjusting the property interests of the parties. It is appropriate that the Court do so.

Contributions

1. It is open to the Court to assess contributions globally, or on an asset by asset approach, or on a two pool basis. The Court is satisfied on the evidence before it, that a global assessment of contributions is appropriate.

2. Each of the parties came into the marriage with minor assets.

3. Throughout the relationship, the husband worked full time and relatively long hours. He provided for the family.

4. The husband, together with his brother at one stage, worked on the renovations to the family home as they were undertaken by the parties from time to time.

5. The parties had four children together. As at the date of hearing, two of the children are minors, they are almost 15 and 16 ½ years of age respectively. The children have remained living with the husband post separation, that is, they have remained living in the former matrimonial home.

6. Since separation the husband has had the benefit of living in the former matrimonial home. He has been paying the mortgage and the outgoings. The wife has lived elsewhere and has had to pay rent. Both parties, post separation, have made some financial contributions towards the children.

7. The wife has, post separation, attended the former matrimonial home and provided care for the children. As she said during her evidence, she left the husband, not their children.

8. The wife who was the main homemaker and parent also worked during periods of the parties’ relationship. Her income was always significantly lower than that of the husband; however, her earnings too were used for the benefit of the family.

1. Throughout the parties’ relationship the husband has undertaken work through his brother’s business. The parties were also able to invest money with the husband’s brother’s which had a very good return.

2. Although the submission was made that the opportunity made available to the husband of investing money through his brother’s business was a contribution on behalf of the husband, the Court was not taken to any authority for this proposition.

3. The investment of money with the husband’s brother is no different to the employment which the husband has had throughout the relationship. The husband’s brother employed and paid the husband, the husband says, legitimately.

4. While as noted earlier in these reasons, the submission was made that the husband’s employment was some sort of sham arrangement to minimise tax, that submission was not developed. On behalf of the husband it was said that there was no evidence which could lead the Court to such a conclusion and the Court accepts that there is no such evidence.

5. The husband works hard. He works as an employee and as a sub-contractor.

6. The wife opened up the family home to the husband’s extended family: first the husband’s cousin;[27] secondly, for 8 or 9 years[28], the husband’s brother; and lastly, for over a year, the husband’s nephew.

   [27] For a short period of 3 months

   [28] The parties lived together from 1993 to 2014 (although separated under the one roof in 2011), this means that the husband’s brother lived with the parties for approximately half of their relationship

7. If there was to be an adjustment in the husband’s favour for the contributions said to have been made on his behalf by the fact that he was able to invest money with his brother or indeed to work with his brother, such adjustment would be balanced by an adjustment in the wife’s favour for the support she provided to the husband’s cousin, brother and nephew. These are the swings and roundabouts of married life.

8. The Court is not persuaded by the evidence that the parties’ contributions were as submitted by each of them at the conclusion of the hearing.

9. The parties’ contributions are assessed as 50% to the wife and 50% to the husband.

Section 75(2) Factors

1. Both the husband and wife are relatively young. They are both in good health.

2. The husband remains employed with the same company but also works privately as a contractor. There is no evidence which would suggest that he would not continue working in accordance with his current arrangements, nor that his current employer is anything but financially healthy. No evidence was before the Court that might lead to a conclusion that the husband would not be able to find similar remuneration or working conditions with a different employer if the need arose.

3. The wife works privately. She runs a (omitted) business. If she was to expand her business, she would need to obtain further licences and perhaps qualifications.

4. The husband’s future earning capacity is assessed as significantly higher than that of the wife. Such assessment is made based on the parties’ past earnings as well as their qualifications and experience.

5. The parties’ have two children who are under 18 years of age. While the children have remained living with the husband post separation, there is no evidence as to what the proposal is if and when the former matrimonial property is sold. The husband submits that they will remain living with him. The youngest of the children is almost 15 years old.

6. A careful consideration of the 75(2) factors warrants an adjustment in the wife’s favour of 3% for her future earning capacity balanced against the husband’s ongoing care of the children.

Conclusion

1. Section 79 empowers the Court to make such order as is appropriate after taking into consideration the totality of the factors set out in s79. The exercise of discretion is not generally an accounting exercise nor is it analogous to an award of damages or compensation which might call for a division into component parts.[29]

   [29] Marriage of Brandt FLC 92-758

2. In this instance a broad brush approach to assessing both the contributions and the 75(2) factors has been taken.

3. Overall, an adjustment of 53% is to be made in favour of the wife and correspondingly an adjustment of 47% in favour of the husband is to be made.

4. Based on a net pool of $1,086,784 and a 53/47 adjustment in the wife’s favour:

   a)the wife is to receive by way of adjustment of property orders assets to the value of $575,996; and

   b)the husband is to receive by way of property adjustment orders assets to the value of $510,788;

   in the manner described in the paragraphs below.  

5. The wife is to receive:

Assets
Ownership	Description						Value
Husband	Cash payment[30]				$508,043
Wife	(omitted) Bank				$2,434
Wife	Mercedes (omitted)				$24,000
Wife	Business Assets				$1,000
Wife	Jewellery				$1,000
Wife	Superannuation				$7,066
Husband	Superannuation				$60,000
Liabilities	Total:					$ 603,543
Ownership	Description							Value
Wife	(omitted) Bank							$2,325
Wife	(omitted) Credit Card							$25,222
Total:							$27,547
TOTAL NETT ASSETS			$ 575,996

[30] Subject to the proviso that the husband can refinance the property; if there is to be a sale of the property then the adjustment is made to the net proceeds of sale

1. The husband is to receive:

Assets
Ownership	Description						Value
Joint	Property S				$1,400,000
Husband	Toyota (omitted)				$27,000
Husband	Contents				$10,000
Husband	Superannuation				$74,681
Liabilities	Total:					$ 1,511,681
Ownership	Description							Value
Joint	Mortgage							$476,988
Husband	Income Tax Liability							$6,500
Husband	(omitted) Bank credit card							$9,362
Husband	Cash Payment to Wife							$508,043
Total:							$1,000,893
TOTAL NETT ASSETS			$ 510,788

1. As noted earlier in these Reasons, the husband has sought to retain the former matrimonial home. The orders provide for a period of 56 days from the date of these orders for the husband to pay the wife an amount of $508,043 and retain the home. If the husband is not able to refinance the home loan and pay out the wife, the former matrimonial home is to then be sold. 

2. If the former matrimonial home is to be sold, there is provision made in the orders for payments to the husband and wife in accordance with a 53/47 overall adjustment taking into consideration the possibility of the net proceeds of sale being either less or more than the agreed value of the home, plus interest to the wife after 56 days from the date of these orders in respect of some of the payments to be made to the wife.

3. The result in all the circumstances is appropriate and just and equitable.

4. Orders will thus be made accordingly as set out at the forefront of these Reasons for Judgment.

I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Date: 28 September 2016