Hornley & Hornley
[2023] FedCFamC1F 557
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Hornley & Hornley [2023] FedCFamC1F 557
File number: WOC 840 of 2021 Judgment of: CAMPTON J Date of judgment: 7 July 2023 Catchwords: FAMILY LAW – PROPERTY – Property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) – Consideration of the value of the husband and wife’s property available for adjustment, contributions and adjustments to the contributions – Where a just and equitable division of both the superannuation and non-superannuation pools of property is found to be 60 per cent in favour of the wife and 40 per cent in favour of the husband.
FAMILY LAW – SPOUSE MAINTENANCE – Where the husband is to pay a weekly sum of $500 to the wife until the adjusting sum is paid and $200 per week for 18 months thereafter.
Legislation: Family Law Act 1975 (Cth) ss 72, 74, 75, 79
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 43
Cases cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Bevan and Bevan (1995) FLC 92-600; [1995] FamCA 95
Currie v Hamilton [1984] 1 NSWLR 687
De Angelis and De Angelis (2003) FLC 93-133; [1999] FamCA 1609
Fewster & Drake (2016) FLC 93-745; [2016] FamCAFC 214
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
Horrigan & Horrigan [2020] FamCAFC 25
Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27
Seitzinger & Seitzinger (2014) FLC 93-626; [2014] FamCAFC 244
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
White and Tulloch (1995) FLC 92-640; [1995] FamCA 127
Division: Division 1 First Instance Number of paragraphs: 152 Date of hearing: 8–9 June 2023 Place: Sydney Counsel for the Applicant: Ms Haughton Solicitor for the Applicant: Ca Williams Legal Pty Ltd Counsel for the Respondents: Mr Reeve Solicitor for the Respondents: Marsdens Law Group Counsel for the Respondents: Mr Harper Solicitor for the Respondents: Meehans Solicitors Law Group ORDERS
WOC 840 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HORNLEY
Applicant
AND: MR B HORNLEY
First Respondent
MR C HORNLEY
Second Respondent
order made by:
CAMPTON J
DATE OF ORDER:
7 July 2023
THE COURT ORDERS THAT:
Non-superannuation property
1.Within three months from the date of these orders:
(a)The husband shall pay or cause to be paid to the wife as she may direct in writing the sum of $464,897 (“the adjusting payment”); and
(b)Simultaneously with receipt of the adjusting payment, the wife shall do all such things and sign all such documents as are necessary to transfer to the husband her right, title and interest in the property at D Street, Suburb E (“the Suburb E property”) and the husband thereafter shall indemnify the wife in relation to any claim, action or liability relating to the Commonwealth Bank mortgage secured upon the Suburb E property; and
(c)Each of the parties shall do all such things and sign all such documents as are necessary for the wife to transfer and assign to the husband any interest or obligation she may have pursuant to the Deed of Family Arrangement executed on 5 November 2017, and the husband and the second respondent are to otherwise indemnify the wife against any claim, action or liability that may arise by way of the wife being a party to the deed or by way of implementation of the deed.
2.Except as specifically provided for by these orders, each party shall retain against the other all cash at bank, motor vehicles, shareholdings and personal property of whatsoever nature and kind in their respective possessions at the date of these orders.
Default orders
3.In the event the husband fails to comply with Order 1(a), the husband and wife shall forthwith upon the husband’s default do all acts and things and sign all documents necessary so as to effect a sale of the Suburb E property by public auction for the best price reasonably obtainable in the following manner:
(a)The public auction of the Suburb E property shall occur on or before 17 November 2023 (being three months from 17 August 2023);
(b)Within twenty one (21) days of 17 August 2023 (being on or before 7 September 2023), the parties shall agree in writing to:
(i)the agent to act on the sale; and
(ii)the solicitor to act on the sale;
(c)In the event the parties are unable to agree in writing as to the identity of either the agent for the auction or the solicitor to act on the sale within twenty one (21) days of the date of these orders, then:
(i)Within twenty-eight (28) days of the date of these orders, the husband shall provide to the wife in writing the identity of three proposed agents and/or solicitors, including details as to their listing and auction agreements, marketing programs and costs of and incidental to the sale and auction (including but not limited to the auction and auctioneer’s fees, the advertising and marketing and commission) and/or the solicitor’s draft costs agreements; and
(ii)Within seven (7) days thereafter, the wife shall select one of the three nominated agents and/or solicitors and shall inform the husband of her selection in writing, that agent/solicitor so selected to become the agent/solicitor for the purposes of these orders; and
(iii)In the event the wife fails or neglects to nominate an agent/solicitor in writing in accordance with this order, then the agent/solicitor will be one of the three nominated by the husband as selected in writing by him and notified to the wife.
(d)The reserve price of the Suburb E property for the purpose of such auction shall be such price as may be agreed upon by the parties in writing not less than fourteen (14) days prior to the scheduled date for the auction, or failing agreement, as nominated by the agent.
(e)The parties shall each cooperate in every way with the agent for sale including (without limiting the generality of the foregoing):
(i)Making all keys available to the agent;
(ii)Allowing inspection of the property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring the property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(v)Meeting equally all marketing and auction costs as reasonably required by the agent and legal costs and disbursements of the solicitor as and when they fall due; and
(vi)Signing all documents requested by the agent and the solicitor in relation to the listing for sale of the property except a contract or agreement for sale which has not been authorised by the parties solicitor.
4.If the Suburb E property remains unsold after the first auction process, then the parties shall do all acts and things necessary, including signing all required documents, to immediately relist the Suburb E property for sale by public auction again, on a date nominated by the agent, and for the purpose of such second auction process the reserve price shall be not more than ten (10) per cent below the initial reserve price set, or at any such price that the parties may agree upon in writing.
5.The parties shall each execute a contract for sale in the form prepared by the solicitor selected pursuant these orders.
6.On settlement of the sale of the Suburb E property, the proceeds of sale be paid in the following manner and priority:
(a)All costs and expenses of sale including legal costs and disbursements, agents commission, marketing fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties); and
(b)The amounts required to discharge any loans secured by mortgages on the Suburb E property;
(c)The amounts required to pay all council rates, land tax and other outgoings on the Suburb E property;
(d)In payment of the amount due to the second respondent pursuant to clause 1(g) of the Deed of the Family Arrangement dated 5 November 2017
(e)In payment of the balance then remaining:
(i)62 per cent to the wife; and
(ii)The balance of 38 per cent to the husband.
Superannuation splitting orders
7.That a base amount of $360,000 is allocated as required by s 90XT(4) of the Family Law Act 1975 (Cth) (“the Act”) to the wife out of the husband's interest in Superannuation Fund 1 (member number …).
8.That in accordance with s 90XT(1)(a) of the Act, the wife is entitled to be paid the amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) using the base amount, and the husband’s entitlements, and the entitlement of such other person to whom a splittable payment may be made to payments out of the husband’s interest in Superannuation Fund 1 (member number …) is correspondingly reduced.
9.That the Court notes:
(a)The value of the transferable benefits from the husband's interest to the wife's interest are calculated in accordance with Rule 7 A.12 of the Superannuation Industry (Supervision) Regulations 1994;
(b)Pursuant to Rule 14F of the Regulations, any payments from the husband's superannuation interest in Superannuation Fund 1 (member number …) made after the Trustee has rolled over or transferred the transferrable benefits pursuant to these Orders to a fund of the wife’s choosing as contemplated in Order 7 of this Order, are not splittable payments;
(c)The Trustee will be relieved of its obligations to calculate the split payments under Order 8 of these orders in the event that the transferable benefits are transferred to a Fund of the wife’s choosing in accordance with the requirements under the Superannuation Industry (Supervision) Regulations 1994;
(d)That having been accorded procedural fairness in the making of these Orders, the Trustee is bound by these Orders.
(e)The operative time for Order 7 of these Orders if four (4) business days after service of a copy of the sealed Orders on trustee of Superannuation Fund 1 (member number …).
Spouse maintenance
10.The husband pay to the wife into such account as she nominates in writing spousal maintenance of $500 per week, first payment to be made within seven days of this order, until compliance with Order 1(a) hereof or completion of the sale of the Suburb E property, whichever is the earlier, and thereafter $200 per week until 7 January 2025.
Costs
11.Should any party wish to make an application for costs of or incidental to this proceeding, they are to file and serve within twenty-eight (28) days of the date of these orders an Application in a Proceeding specifying the orders sought as to costs, and any affidavit in support thereof.
Extant applications
12.Save and except as provided for by these orders all extant applications and responses are dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hornley & Hornley has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
INTRODUCTION
Ms Hornley (“the wife”) by way of an Initiating Application filed on 21 July 2021 in the Federal Circuit Court at Wollongong sought orders for the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) between herself and Mr B Hornley (“the husband”) and for her periodic spouse maintenance. By way of a Response to an Initiating Application filed on 18 August 2021, the husband sought different orders pursuant to s 79 of the Act. The second respondent, Mr C Hornley (“the husband’s father”), was joined to the proceeding by an order of a senior judicial registrar made on 18 August 2021. The husband’s father filed a Response to an Initiating Application on 8 October 2021.
The husband and wife commenced cohabitation in 2000, while living in City F. Their only child, Ms G was born in 2000. Ms G is now 22 years old. In 2002 the husband and wife married in Australia.
The husband and wife exchanged contracts to acquire a property at D Street, Suburb E (“the Suburb E property”) in 2016. They paid over $1,200,000 for the property (not including legal costs and stamp duty).
On 5 November 2017, the husband, the wife and the husband’s father entered a deed of family arrangement (Exhibit 2) (“the deed”). It broadly records that the husband’s father paid $559,125 to the husband and wife to secure a right of residence to the wing of the Suburb E property and that the husband’s father cannot require the property to be sold. In the event the husband and wife wish to sell the Suburb E property, they are required to give the husband’s father six months’ written notice. Upon completion of the sale the husband’s father is to receive a sum of money calculated in accordance with clause 1(g) of the deed. The parties are in dispute as to the calculation of that sum.
The husband and the wife separated in February 2020, although they remained living in the Suburb E property. In late August or early September 2020 the wife vacated the Suburb E property and commenced living in rental accommodation. An order for divorce was made in early 2022. Ms G lives with the father and the husband’s father at the Suburb E property.
Over the course of the proceeding and until 24 March 2023, each of the husband and the wife adopted different positions as to the intersection of their interests in the Suburb E property and the deed including, but not limited to that:
(a)The deed ought to be set aside; and
(b)The deed be rectified or varied such that the husband’s father would have capacity to resist any orders for sale of the Suburb E property; and
(c)The husband’s father has a legal or equitable interest in the Suburb E property that arises from deed. If he had such an interest, dispute also existed as to the nature, terms and value of that interest; and
(d)The husband’s father having some equitable interest in the property not reflected in the terms of the deed; and
(e)The husband retaining the Suburb E property himself with no provision being made as part of these proceeding for the husband’s father to have any interest in the property.
The husband’s father broadly sought relief for rectification of the terms of the deed (insofar as it might be necessary) and made a series of alternate claims for equitable relief.
On 24 March 2023, each of the husband and the wife withdrew any challenge to the fact or terms of the deed.
On 28 April 2023, with the consent of all parties, the husband’s father’s Amended Response to an Initiating Application filed 10 March 2023 was withdrawn and dismissed as were all extant applications and responses as to any challenge to the deed. An order was made that there be no costs in favour of or against the husband’s father arising from or relating to any challenges to the deed.
The husband’s father remained a party to the proceedings. He agreed that he could not oppose an order for the sale of the Suburb E property, but retained an interest in proceeding:
(a)Should an order for sale be contemplated or made, as to the value he would receive on completion of the sale implementing the terms of the deed; and
(b)In the event orders were made for the wife to assign to the husband all of her interest in the Suburb E property, she also would assign to the husband her interests and obligations pursuant to the terms of the deed.
For the reasons that follow, orders are made adjusting the superannuation and non‑superannuation property interests of the husband and wife. A superannuation splitting order of will be made in favour of the wife from the husband’s accumulation member entitlement. The husband will have the opportunity to pay to the wife the sum of $464,897, and upon receipt of that sum the wife will transfer to him her interest in the Suburb E property and in the deed. In the event the husband fails to pay the wife that sum, the Suburb E property will be sold and the proceeds of sale distributed between the parties as follows:
(a)In payment of an amount sufficient to discharge mortgage and to pay selling costs; and
(b)In payment of an amount to the husband’s father calculated in accordance with clause 1(g) of the deed; and
(c)Of the balance of the proceeds of sale then remaining as to 62 per cent to the wife and 38 per cent to the husband.
The husband will pay to the wife spousal maintenance of $500 per week until payment to the wife of the adjusting sum of $464,897 or completion of the sale of the Suburb E property, whichever is the earlier, and thereafter $200 per week until 7 January 2025 being 18 months from the date of these orders.
THE DOCUMENTS RELIED UPON
The wife relied on the following documents:
·Her Amended Initiating Application filed 24 February 2023;
·Her Financial Statement filed 23 May 2023;
·Her affidavit filed 19 May 2023; and
·Her Case Outline filed 5 June 2023 (Exhibit 3).
The husband relied on the following documents:
·His Amended Response to an Initiating Application filed 3 March 2023;
·His Financial Statement filed 21 May 2023;
·His affidavit filed 21 May 2023; and
·His Case Outline filed 2 June 2023 (Exhibit 4).
The second respondent relied on the following documents:
·His Case Outline filed 5 June 2023 (Exhibit 11). He did not read his affidavit filed 26 May 2023.
Each of the husband and wife additionally relied upon the report of the single real property expert valuer, Ms H of J Valuers (Exhibit 5) (“the J Valuers report”). They agreed that the Suburb E property is currently valued as opined by the expert at $1.95 million. The expert was not required for cross-examination.
THE COMPETING RELIEF OF THE HUSBAND AND WIFE
For the purposes of the trial the husband and the wife agreed:
(a)The husband should have the opportunity to pay the wife an adjusting cash sum, and upon such payment, the wife would transfer to him her interest in the Suburb E property (or in the deed, insofar as it was necessary). The husband would indemnify the wife in relation to the deed. Insofar as it affected his interests, the husband’s father consented to such orders.
(b)If the husband defaulted in paying the wife an adjusting sum, then the Suburb E property would be sold. The proceeds of the property, after discharging the mortgage and meeting any selling costs, would be paid to meet the amount owing to the husband’s father pursuant to the deed, and the balance thereafter divided between the husband and wife as determined by the Court;
(c)There ought to be a superannuation splitting order from the husband’s member entitlement in favour of the wife; and
(d)Each of the husband and wife would otherwise retain the property in their respective possession and control.
Having regard to the above, and the scope of the remaining issues in dispute between the husband and wife, I find that it is both appropriate and necessary to determine current value of any payment due to the husband’s father in the event the Suburb E property is to be sold. This also grounds the determination of the husband and wife’s interest in the Suburb E property, being a necessary aspect of the assessment of their entitlements pursuant to s 79 of the Act. It is further consistent with the mandate in s 43 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), requiring the Court to determine all matters in controversy completely and finally.
HISTORY AND FINDINGS
The second respondent was born in 1942 and is currently 80 years of age.
The husband was born in 1966 and is currently 56 years of age.
The wife was born in the United Kingdom (“the UK”) in 1973 and is currently 49 years of age.
Shortly after Ms G’s birth in 2001, the family relocated from the UK to Australia.
In 2006, the husband and wife acquired a property at 2 K Street, Suburb L (“the Suburb L property”) for the purchase price of $280,000. The husband gave unchallenged evidence, which I accept, that he paid a deposit on the property in the range of $14,000 (comprising his savings and a government grant). The balance of the purchase price was funded by a loan secured by mortgage from the Commonwealth Bank of Australia (“the CBA”), in the sum of $265,980.
The husband and wife undertook significant renovations to the Suburb L property. The husband contended in his affidavit that he was primarily responsible for performing those renovations, and that the associated costs were met solely by him. He said that his father assisted at times, and that some work was undertaken by a tradesperson. The wife disputed that any tradespeople were hired to work on the renovations and said that she assisted in all of the work done. During cross-examination the husband conceded that both he and the wife applied their labour to the renovations of not only the Suburb L property. I so find.
In 2010, the husband’s father acquired the property at 1 K Street, Suburb L, near the property to the husband and wife’s Suburb L property.
In 2015, the husband received an inheritance from his mother’s estate in the sum of $70,000 (see paragraph 24 of his affidavit). It was the husband’s unchallenged evidence and I find that he applied these monies to the renovations of the Suburb L property and to discharge a credit card debt.
In mid-2016, the husband and wife increased their home loan by $100,000 and used those funds to reduce credit card debts.
As was recorded, contracts were exchanged for the acquisition of the Suburb E property by the husband and wife in mid-2016 for a price of over $1,200,000. They paid a deposit of 10 per cent on that date, being $125,200, from funds advanced by the husband’s father.
In mid-2016, the CBA approved a home loan for the husband and wife in the sum of $1,252,400 (“the Suburb E mortgage”).
The following month, the husband and the wife exchanged contracts on the sale of their Suburb L property for $550,000. They received the deposit of $55,000.
In mid-2016, the husband and wife settled on the purchase of the Suburb E property. The settlement statement annexed to the husband’s affidavit records that additional acquisition costs were paid on settlement, being stamp duty of $54,370 and legal costs of $2,476, generating an agreed total acquisition cost for the Suburb E property of over $1,300,000.
In late 2016, the husband’s father sold his property at 1 K Street, Suburb L for over $500,000.
The husband and wife settled on the sale of the Suburb L property two days later. Upon settlement they discharged the mortgage in favour of CBA secured on their Suburb L property. After payment of sale costs they received proceeds of sale $226,220.
The husband and wife applied the funds received from the proceeds of the sale of the Suburb L property to the Suburb E property mortgage. The husband’s father also applied funds from the proceeds of sale of his property at 1 K Street, Suburb L to the Suburb E mortgage. Collectively, in late 2016, the husband, the wife and the husband’s father paid $757,400 to the Suburb E mortgage, reducing its value to $495,000.
The following month, the husband drew $106,000 from the Suburb E property loan. He then transferred $127,200 to his father to reimburse him for the deposit (see paragraph 44 of the husband’s affidavit).
The net sum paid by the husband’s father to the acquisition of the Suburb E property was $559,125 as recorded in clause 1(b) of the deed.
In late 2016 the parties installed a kitchen in the wing occupied by the husband’s father at the Suburb E property. The husband gave evidence that he paid for the full costs of such renovations, which he said totalled $8,000 (see paragraph 47 of his affidavit).
The husband, wife and the husband’s father each signed the deed on 5 November 2017.
In late 2017, the husband’s father paid for and installed the solar system to the Suburb E property. It was the husband’s unchallenged evidence that the costs of doing so were $18,885 and were met from his father’s savings (at paragraph 50 of his affidavit).The husband’s father later purchased a replacement hot water system for the Suburb E property costing him $2,095.
In early 2020, husband commenced employment with M Company on a contract basis. This employment was and is currently characterised by periods where he works on a full-time basis, and other periods when he does not receive any remuneration for undertaking work and applying his efforts to assist his employer in winning contracts that he thereafter performs and completes.
Upon separation in February 2020, the wife moved into a spare room in the Suburb E property. She and the husband remained living under the same roof for about six months after separation.
It was uncontroversial that the husband and his family provided the wife with financial support upon she moving out of the Suburb E property. The wife said that the husband paid for a removalist and that he or his sister purchased a washing machine and fridge for her rental property (at [28] of her affidavit). The wife retained some of her personal effects. The husband’s father additionally provided the wife with funds to pay the bond on the rental property, as well as to pay two weeks’ rent in advance. The husband continued to meet the loan repayments on the wife’s Motor Vehicle 1 after separation, which he said comprised weekly repayments of $131 and a final fee of $288. The loan on the vehicle was paid in full in September 2021.
Upon the wife leaving the Suburb E property in late August 2020, the husband began to voluntarily pay her the sum of $1,050 per week. In June 2021, the husband reduced those payments to $500 per week.
The wife filed her Initiating Application in (what was then) the Federal Circuit Court of Australia on 22 July 2021. The husband filed a Response to that Initiating Application on 18 August 2021. On that same date, an order was made by a senior judicial registrar for the husband to pay the wife urgent spouse maintenance of $1,050 per week pursuant to s 77 of the Act.
On 18 February 2022, an order was made by consent discharging the order of the senior judicial registrar as to spouse maintenance made on 18 August 2021, and further providing that pursuant to s 74 of the Act, the husband pay to the wife a sum of $1,050 per week “until the finalisation of these proceedings”.
On 1 June 2022, the matter was referred for assessment for transfer to Division 1 and was subsequently transferred to this court.
On 21 and 22 November 2022 the parties undertook a two-day mediation with Mr N of counsel as the mediator. They were unable to compromise the litigation.
In early 2023 the husband received notice that his employment would be reduced to two days per week. His current reduced contract has a scheduled end date in late 2023.
The matter came before me for the first time on 17 February 2023. Orders were made for the parties to file material particularising their respective claims to the Suburb E property and the deed.
On 10 March 2023 the husband filed an Application in a Proceeding seeking to discharge the order made on 18 February 2022 for him to pay the wife $1,050 per week by way of spouse maintenance.
When the matter was before me on 24 March 2023, after a series of exchanges, it emerged that neither the husband nor wife sought to maintain any challenge to the deed. The husband’s father said that he sought relief by way of “rectification of the terms” of the deed, however all of the parties agreed that it was not to be set aside. At that time, the wife contended the husband was in arrears of the spouse maintenance pursuant to the orders made on 18 February 2022 in the sum of $4,600.
On 28 April 2023 the proceedings were before me for hearing of the husband’s application to discharge or vary the interim spouse maintenance and the wife’s application to enforce such payment. On that date, by consent, orders were made that all applications seeking to challenge the deed were withdrawn and dismissed without costs. Order were also made by consent in relation to ongoing spouse maintenance, as follows:
4.The husband pay the wife $500 per week, by way of spousal maintenance, with the first such payment to be made on 28 April 2023 into the wife’s Commonwealth Bank of Australia account, BSB […], Account Number […] (“the wife’s CBA bank account”).
5.That Order 2 of Annexure A made on 18 February 2022 is discharged as and from 17 February 2023.
6.Within 14 days of the date of these orders, the husband shall pay to the wife the sum of $4,500, being $500 per week by way of spousal maintenance for the nine-week period from 24 February 2023 into the wife’s CBA bank account.
The proceedings were then listed for trial over two days, commencing on 8 June 2023. Directions were made on 28 April 2023 for the preparation for trial, including setting out a timetable for the filing of material to be relied upon and the preparation of a joint balance sheet.
THE ISSUES REMAINING IN CONTENTION
By the end of the trial, the parties remained in dispute as to the value of the cash adjustment to be paid by the husband to the wife. The wife sought that it be a sum of $500,000. The husband proposed to pay her the sum of $224,480, being what he said was 47 per cent of the non‑superannuation pool using the values proposed by him.
The wife sought a splitting order in respect of the husband’s interest in Superannuation Fund 1 in the sum of $460,000 in her favour. The husband proposed a superannuation splitting order in the wife’s favour of 47 per cent of his interest in Superannuation Fund 1 being in the range of $282,000. The trustee of Superannuation Fund 1 has been occasioned procedural fairness and was on notice of the superannuation splitting order sought (Exhibits 6 and 7).
The wife’s affidavit evidence contained contentions as to her contributions being made more onerous than they ought to have been grounded from the principles identified by the Full Court in Kennon v Kennon (1997) FLC 92-757. The wife abandoned this aspect of her case during the trial.
As to spouse maintenance, the wife sought that the husband pay her $1,050 per week for a period of five years. During submissions she reduced this to $850 per week. The husband sought that the wife’s application for spouse maintenance be dismissed.
THE LAW
In determining claims for alteration of property interests between married couples, I am required to:
(a)Make findings as to the identity and value of the property (including superannuation interests), liabilities, and financial resources of the parties, or either of them, at the time of the final hearing, and determine the legal and equitable interests of the parties in such property;
(b)Consider, identify and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non‑financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end; and
(c)After consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to either of the parties on account of the matters set out in s 79(4)(d)–(g) of the Act, including any relevant considerations under s 75(2); and
(d)Ensure that any order made is just and equitable.
In Bevan and Bevan (1995) FLC 92-600, the Full Court held that:
… in making the maintenance orders, the Court was bound to consider the proposed property orders and their effect, either on the wife’s needs or the husband’s capacity to pay maintenance.
It is therefore appropriate to determine first the property adjustment dispute between the parties, before turning to the determination of the wife’s spouse maintenance claim.
The balance sheet – identifying the property of the parties
By the time of the conclusion of submissions, the joint balance sheet identifying the property of the parties (Exhibit 25), except for the items that were not agreed appearing in bold as determined in the following table:
Ownership
Description
Wife’s value ($)
Husband’s value ($)
Determination ($)
ASSETS
1
Joint
The Suburb E property
1,600,000
1,055,700
1,296,600
2
Wife
CBA Account #...15
4,853
4,853
4,853
10
Wife
Motor Vehicle 1
15,000
15,000
15,000
11
Wife
Haberdashery Equip/Supplies/Jewellery
3,500
3,500
3,500
12
Husband
Hobbies and Tools
35,000
35,000
35,000
13
Husband
Household items
5,000
5,000
5,000
14
Wife
Household items
2,500
2,500
2,500
Total
1,665,853
1,121,553
1,362,453
LIABILITIES
18
Joint
CBA Mortgage #...68
544,536
544,536
544,536
20
Husband
CBA MasterCard
24,301
24,301
0
Total
568,837
568,837
544,536
Total assets – liabilities
817,917
SUPERANNUATION
Member
Name of Fund
Type of Interest
Wife’s value ($)
Husband’s value ($)
Determination ($)
22
Husband
Superannuation Fund 1
Accumulation
600,000
600,000
600,000
23
Wife
Superannuation Fund 2
Accumulation
176
176
176
24
Wife
Superannuation Fund 3
Accumulation
366
366
366
Total
600,542
600,542
600,542
Total assets – liabilities + superannuation
1,418,459
Item 1 - The Suburb E property
The husband and the wife agreed that the value of the Suburb E property for the purpose of the proceedings was its market value as recorded in the J Valuers report being $1.95 million less the value of the of the interest of the husband’s father by operation of the terms of the deed. They each agreed that this methodology determined the “net value” of this property interest to them. They were in dispute as to the calculation of that net value arising from the husband’s father’s interest by way of the deed.
The deed provides:
1. Right of residence and obligations of parties
(a) The owner grants to the resident a right to reside in the wing until this deed is terminated.
(b) The resident has paid to the owner a grant fee of $559,125.00.
(c) In addition to the grant fee the resident shall pay to the owner an amount each month for the resident's one third share of outgoings. The resident’s share of outgoings shall be calculated by dividing the following expenses by three:
(i) Electricity;
(ii) Gas;
(iii) Water rates;
(iv) Water usage;
(v) Council rates; and
(vi) Necessary repairs to any part of the property.
…
(g) In the event that the owner wishes to sell the property, they must give the resident 6 months written notice. Upon settlement of such sale, the resident is to receive one third of the purchase price of the property plus 5% per annum of the profit made by the owners.
(h) The resident has no right to require the sale of the property.
(As per the original, bold emphasis added)
The wife submitted that the Court could find in the alternative that the value of the husband father’s interests in the Suburb E property could be established by:
(a)The opinion of the expert in the J Valuers report (Exhibit 5); or
(b)By ordering a sale of the property and applying the terms of the deed to the proceeds of sale remaining after payment an amount to discharge the mortgage and selling costs.
It was her case that of those options, the first was preferable and appropriate.
As to the first contended alternate, the wife relied on the opinion of the expert that the husband and wife’s interests in the Suburb E property was valued at $1.6 million. That foundations for that opinion is recorded in the J Valuers report as follows:
In line with the instructions received, I have been requested to incorporate the effect (if any) of the life estate on the value of the property.
[The husband’s father] was born [in] 1942. This makes him 80 […] years old. The Australian Bureau of Statistics has the average age of a male who lives in New South Wales to be 81.4 years of age. The assumption has been made that [Mr C Hornley] may live a further 5 years for the purpose of this valuation.
We researched five year term deposit interest rates for St George/ Westpac, ANZ, CBA and NAB who were offering rates from 3.95% to 4.05%.
The accepted formula to determine the Present Value of the estate in remainder is:
PV = The FV divided by (1 + r) n where PV is the Present Value, FV is the Future Value, r is the discount rate and n is the number of years.
4.0 % discount rate (1.04) 5 = 1.217 (rounded up)
Therefore the present value of the remainder for a 5 year life expectancy is:
$1,950,000/1.217 = $1,602,300
Say, $1,600,000
Valuation of property with a life tenancy is highly speculative with numerous variables including: the length of the life tenancy, future value of the freehold, changes in interest rates over time, changes in outgoings over time, and appropriate rates of return. Risk factors should also be considered with limited marketability of properties with life interests. It is considered that the purchase of a property with a life estate is highly speculative.
Our valuation has not considered inflationary factors as inflation is impossible to predict. A prospective purchaser may pay over and above the calculated remainderman, or remaindermen’s interest value, should they speculatively consider future appreciation and inflation. If the client wishes to consider inflationary factors then we recommend an actuary or actuarial tables are consulted. 1
Reference: Smartasset Rosemary Carlson 28/12/2021: A remainderman (or men in a plural sense), is a term used in estate and property law, and is the person who will inherit property after a life estate is dissolved.
No documentation has been provided in regard to the life tenancy agreement, any outgoings associated with the property nor the health of the life tenant. Our valuation is based on the assumption that the life tenant is in good health, that all outgoings are paid by the life tenant and that the life tenant is not required to pay rent. The valuer reserves the right to amend our valuation should our assumptions be found to be incorrect.
Marketability is considered to be extremely limited for property's with a life tenancy in place. Furthermore the age of the life tenant in the subject's case would further limit the property's marketability with long term investors being the most likely purchasers. An extended selling period of 6-12 months may be applicable.
(The [J Valuers] report pg. 17–18, as per the original)
The expert was instructed to opine as to the effect of a “life estate” on the value of the Suburb E property. The finding sought by the wife as to the value of she and the husband in the Suburb E property was that of the expert valuing a ‘remaindermans’ interest in the property.
The expert was not instructed with the deed. She was unaware of its terms, including that the husband’s father did not achieve a “life estate” interest in the real property. Rather, he paid a grant fee and achieved a right to reside in the wing until the deed is terminated. That right of residence is personal and cannot be assigned or otherwise dealt with, and is (if not expressly, then implicitly) for the sole use and benefit of the husband’s father alone. The expert’s own assessment that her opinion as to the value of any interest subject to a life estate was highly speculative in any event. The expert was not called to give oral evidence to consider the impact of the incorrect assumptions grounding her opinion, and specifically to consider the terms of the deed.
For those reasons, the wife’s primary contention to determine the value of the husband’s and her current interest in the Suburb E property grounded from the J Valuers report as to a contended ‘life estate’ and consequential remainderman interests is rejected.
The wife’s alternate contention that the value of the parties’ interests in the Suburb E property would be calculated on its sale by applying the terms of the deed was supported by the husband and his father, although they contended for a different interpretation of the deed to that proposed by the wife.
Clause 1(g) of the deed governs the calculation of the payment owing to the husband’s father upon the settlement of the sale of the Suburb E property. It provides that the husband’s father is to receive “one third of the purchase price of the property plus [five per cent] per annum of the profit made by the [husband and wife]”. The following questions as to the interpretation of that clause arose:
(a)What does “purchase price” mean?
(b)How should “profit” be calculated?
The wife contended that clause 1(g) of the deed should be interpreted as follows:
·“Purchase price” is the contracted price for the property being over $1,200,000, which does not include the stamp duty or other costs upon its acquisition;
·“Profit” is calculated as being:
·If the husband retains the property, then the agreed market value of the property ($1.95 million), less the “purchase price”, less stamp duty and legal costs incurred paid by the husband and wife when acquiring the property; or
·If the property is sold, then the price at which the property is sold, less any sale costs, less the “purchase price”, less stamp duty and legal costs incurred paid by the husband and wife when acquiring the property.
Hence she said that a proper implementation of the formula would yield a value of the husband’s father’s interest in the Suburb E property of $634,666, comprising (as per the wife’s calculations in Exhibit 29):
·One third of the “purchase price” (the wife used the figure $1.25 million) – on her calculation being $416,666; and
·Five per cent of the “profit” is calculated as being market value $1,950,000, less the purchase price of $1,250,000 (using the wife’s figure), less stamp duty and legal costs of $56,846 (see [31] above), giving $642,154 at five per cent being $88.10 per day over 2,474 days, equalling $217,967.
The husband submits that in the event he acquired the interests of the wife in the property and the deed by paying her a sum of money, clause 1(g) of the deed has the following interpretation:
·“Purchase price” has the meaning articulated in Currie v Hamilton [1984] 1 NSWLR 687 (“Currie v Hamilton”). This was a concession in oral submissions from his original position that “purchase price” means the value achieved by the husband and wife on the purchase of the Suburb E property by a third party;
·“Profit” would mean the difference between that disposal price and the price paid by the husband and wife to acquire the property, but would not including sale or acquisition costs.
Hence the husband said that a proper implementation of the formula would yield a value of the husband’s father’s interest in the Suburb E property of $895,000, comprising:
·One third of the “purchase price” being $1.95 million, on his calculation being $650,000; and
·Five per cent of the “profit”, on his calculation being $245,000. It was difficult to distil how the husband contended profit was calculated.
The husband’s father contended the interpretation of “purchase price” as meaning the “contracted sale price of the property on the default sale” – reflecting the initial interpretation of the husband. He contended that “profit” should be calculated (in the event a sale is effected) as being the difference between the “contracted sale price of the property on [its sale] less [$1,250,000]”. His primary submission was that he did not consider either the acquisition costs or the sale costs (if any are to be incurred) would be integers in the calculation of “profit”). He provided a series of alternate calculations of various outcomes dependant on determinations as to interpretation of the terms of the deed in Exhibit 27.
I find that:
(a)Clause 1(g) contains two pivotal terms defining the calculation of the amount payable by the husband and the wife to the husband’s father, being “purchase price” and “profit”. Neither are defined in the document;
(b)The starting point as to the construction of the deed is the words of the text itself (see Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109). The meaning of the clause in the deed is objectively found in its plain words, construed in their totality and in the context of the document;
(c)I do not accept the husband and his father’s contention that, as a matter of construction of this deed, the term “purchase price” in reality means “sale price” or the value of the property when sold. The fact that the deed was entered after the purchase of the Suburb E property was completed and hence, if minded, the parties could have included the purchase price in the document, is of little moment. No probative submission was made as to a construction of the document such that sale price in reality means purchase price. Putting it another way, the reality is that the husband and wife would be selling the property after giving notice to the husband’s father, not purchasing it.
(d)This conclusion is supported by consideration of the other undefined item grounding the calculation of the amount payable to the husband’s father – “profit”. Profit is defined in the 7th Edition of the Macquarie Dictionary relevantly as the “pecuniary gain resulting from the employment of capital in any transaction”, being the gain “less costs”. Used in the context of the construction of the entire document, if profit is given is ordinary meaning, then “purchase price” could not mean the value achieved on disposal of the property. If the husband and his father’s construction is correct, what then, rhetorically, is the base value to commence to calculate profit other than being that for which the property was acquired – its “purchase price”? If “purchase price” is, on the construction of the document submitted by the husband and his father already a function of the uplift in value, what then what else is “profit”?
(e)In my view the construction promoted by the husband and his father as to “purchase price” in the context of the construction of the entire document is nonsensical and is rejected.
(f)Applying the principles identified Currie v Hamilton, I find that the acquisition cost of the Suburb E property is the aggregate cost to the husband and wife, including incidental costs such as stamp duty and legal fees. It is the cost of the conveyance to the purchasers rather than the benefit to the vendor. Hence, I find for the purposes of interpretation of the deed that the “purchase price” is $1,308,846 (see at [28] above). Such an approach promotes consistency in the construction of the document and specifically the clause as to purchase price and profit – the later being the uplift in value achieved less acquisition costs and less disposal costs. As to this deed, profit means the gain which arises from the sale of the Suburb E property where the sale price exceeds the purchase price less other expenses incurred in both processes.
(g)The current value is $1.95 million and hence, not allowing for selling costs, the sum payable to the husband’s father pursuant to the deed in the event the husband acquires the wife’s interest in the Suburb E property and the deed is:
·One third of the purchase price (being $1,308,846) = $436,282;
·Plus five per cent, per annum of profit = $217,116, being:
·The agreed market value of the property less the purchase price (being $1.95 million less $1,308,846) = $641,154;
·Profit at five per cent = $32,057;
·Profit “per annum” (being $32,057 divided by 365) = $87.83 per day for 2,472 (being the number of days between the settlement in 2016 and the trial in June 2023) = $217,116.
·Total of $436,282 + $217,116 = $653,398 (rounded to $653,400).
Implementing the agreed method of the husband and the wife, I find that the value of their interest in the Suburb E property should it be acquired by the husband, is $1.95 million less $653,400, being $1,296,600.
In the event of a sale of the Suburb E property, the value of the payment to the husband’s father will be calculated pursuant to the deed being a product of the sale price of the property applying the above. As a party to this proceeding, the husband’s father is bound by the determinations made herein.
Item 2 – The wife’s savings
The husband and wife agreed as to the value of the wife’s savings. The wife sought that they be excluded from the balance sheet. It was her submission that the funds held by her in savings were funds received from the husband pursuant to Order 6 made on 28 April 2023 for the payment of arrears in spouse maintenance. The husband said that the funds advanced to the wife in compliance with Order 6 were borrowed from his father. There was no evidence that the husband had such a loan still owing to his father.
The fact that the funds are the product of maintenance payments does not detract from the fact of it being the current property of the parties. The item will be included.
Item 20 – The husband’s CBA MasterCard
Again, each of the husband and wife agreed as to the value of the husband’s current credit card liability, however the wife sought that it be excluded from the balance sheet. It was her contention that the liability was accrued post-separation.
Two bundles of statements for the husband’s CBA MasterCard were tendered into evidence, the first being for the period 14 August 2020 to 14 September 2020 (Exhibit 12), recording the value of the liability at $26,077 on 14 August 2020 (about two weeks after the wife moved out of the Suburb E property), and the second being for the period 15 April 2023 to 12 May 2023 (Exhibit 13) recording the current value of the liability in the shadow of the trial at $24,063.
It was the wife’s evidence that she had no knowledge of the husband’s CBA credit card and that she did not use it. The husband said that he used the credit card during the parties’ relationship to meet joint household expenses. While an examination of some of the items recorded in Exhibit 12 and Exhibit 13 reveal the incurring of debt for unremarkable household expenses, the same cannot be said for all of the items. Exhibit 13 records that at 15 April 2023, the liability had been reduced $12,904.88, and that an additional $11,416.96 had been incurred in the following month period to 12 May 2023. The husband could have given direct evidence on the topic of his use of the credit card post separation and how its balance was affected from time to time by his financial circumstances. He elected not to do so. In those circumstances, Item 20 will be excluded from the balance sheet. This liability will be taken into account in the assessment of the adjustments to the contribution findings.
Is it just and equitable to adjust property?
In Stanford & Stanford (2012) 247 CLR 108 the High Court observed that it is necessary for me to be satisfied that justice and equity will be achieved as part of the adjustment process pursuant to s 79 of the Act. The requirements identified in the High Court are readily satisfied in this matter having regard to:
(a)The long period of the relationship of the parties and the myriad of contributions made over that period;
(b)The parties’ relationship having broken down and them now living apart;
(c)The concession of each party as to property being adjusted to one another and the inability of the parties to continue to jointly own the Suburb E property and each seeking a superannuation splitting order from the husband’s member entitlement; and
(d)Title to property needing to be changed or adjusted when consideration is given to the contribution and other factors identified below.
Contributions
At the commencement of cohabitation the husband’s unchallenged affidavit evidence records and I find that he made by way of direct financial contributions to the relationship:
(a)Interests in superannuation of $4,471; and
(b)Cash in the bank in the range of $40,000; and
(c)A car, personal effects and an interest in a business trading as P Company of unknown value
There is no evidence to suggest that these initial direct financial contributions were applied otherwise than for the benefit of the family and I so find.
The wife did not make any direct financial contribution at the date of cohabitation.
The wife ceased employment prior to Ms G’s birth and did not engage in significant employment over the balance of cohabitation. From Ms G’s birth until the conclusion of their relationship the husband assumed a role as primary income earner for the family and the wife assumed a role as the primary homemaker. It was uncontroversial that the wife undertook the majority of the parenting responsibilities for Ms G, supplemented by the husband when he was not working, and that she undertook the vast majority of household and domestic tasks. I find that each of the husband and wife equally contributed in their respective spheres within the dynamic of their relationship.
The husband contributed the sum of $70,000 he received by way of bequest from the estate of his late mother in 2015 for the benefit of both himself and the wife. I so find.
The husband conceded in cross-examination that the wife received gold coin as a gift from her parents. I find this was a contribution made by the wife’s parents on behalf of the wife.
Having regard to each of their evidence, I find that the husband and wife contributed to the best of their respective capacities in making non-financial contributions over the period of their cohabitation, including to the renovations of the Suburb L property and the Suburb E property.
After separation the husband continued to live in the Suburb E property while the wife rented modest accommodation. The husband paid the mortgage instalments and rates albeit he obtained a COVID 19 deferral of the home loan repayments owing to CBA on the Suburb E mortgage between 7 May 2020 and 11 November 2020. The wife was critical of the husband obtaining this moratorium post-separation. The value of the Suburb E mortgage when the wife moved out of the property was $571,729 (on 30 August 2020, see Exhibit 24). Its agreed value as at the trial was $544,536. It has reduced by $27,193 in the almost three years since separation. The wife’s criticisms are misguided.
When the wife left the Suburb E property, Ms G was 20 years old. Ms G has engaged in tertiary studies over a number of years both before and after separation. She was financially supported by the husband over this period. It was uncontroversial that she has recently obtained employment and increasingly meets her own costs of self-support.
It was uncontroversial and I find consistent with each of their evidence that the husband has made financial contributions to the wife’s maintenance from when she left the Suburb E property to date. He and his family financially assisted the wife in establishing herself in rental accommodation in August 2020, including by paying for removalists, for the bond and the first two weeks of her rental payments, and providing a washing machine and fridge for her rental appointment. The husband thereafter paid to the wife a sum in the range of $140,000 for her maintenance up to the date of the trial (see husband’s Case Outline filed 2 June 2023).
The wife contended a finding of equality of contributions should be made in respect of both the non-superannuation and superannuation pools of property up to the date of the trial. She submitted that over the long period of cohabitation and post-separation, the superior direct financial contributions of the husband have been offset by her significant non-financial and homemaking and parenting contributions. It was her submission that her contributions permitted the husband to improve his qualifications and income earning capacity, including those improvements he has achieved post-separation enabling him to achieve a significant annual income and hence having the capacity to pay spouse maintenance
The husband contends a contribution finding in respect of each of the superannuation and non‑superannuation pools as to 58 per cent in his favour, and 42 per cent in favour of the wife. He submitted that the differential in contribution findings in his favour arose from his greater direct financial contributions at cohabitation, the use and application of the inherence received from his mother’s estate in 2015, his post-separation financial contributions to the wife, including the value of the spouse maintenance he paid, and his post-separation contributions to his superannuation.
The Full Court in Horrigan & Horrigan [2020] FamCAFC 25 emphasised that the proper approach to the assessment of contributions is:
35.…well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment
Taking into account all of the contributions identified in these reasons contributions in respect of the non-superannuation pool are assessed as favouring the husband as to 52.5 per cent and the wife as to 47.5 per cent. This will see a disparity between the parties in dollar terms as to that pool that equates to $429,406 to the husband and $388,111 to the wife, a difference of $40,896. Contributions as to the superannuation pool are assessed as equal.
Adjustments to the contribution findings
The wife is 52 years of age. She did not engage in regular paid employment between 2000 and 2022. It was her evidence that she has undertaken some work after separation, but did not receive significant or regular income from this work.
At the time of swearing her Financial Statement on 18 May 2023, she said was not currently working. The financial statement records that she receives a disability support pension of $610 per week, being an income tested commonwealth benefit. She said in her Financial Statement that she has earnt an average of $48 per week from work over the 18 months prior to the trial.
The wife worked part time in hospitality from late 2022 until May 2023. She has now commenced working in a new contract role in hospitality. She said in her oral evidence that she earns between $22 and $23 per hour, and undertakes three shifts per week totalling (on average) 19 hours.
It was submitted on the wife’s behalf that she lives with from depression and a medical condition. She gives evidence in her affidavit of her current medication regime and her symptoms, which she describes as “chronic fatigue” and “widespread pain” being a constant in her daily life. She gives unparticularised evidence that she has “flare-ups” of symptoms from time to time, and suffers from migraines that are made more intense when she feels anxious or depressed. The wife was not materially challenged on this evidence. I accept the wife’s evidence and so find.
The wife has been attending upon clinical psychologist since November 2018. Documents tendered into evidence from her clinical psychologist dated October 2022 and General Practitioner dated September 2021 were relied upon to assist the wife in her application to Centrelink for a Disability Support Pension from November 2022. Exhibit 28 is a letter from Dr Q, who is a consultant practitioner attended upon by the wife, directed to the wife’s General Practitioner dated August 2019. It broadly records that at that time the wife reported “chronic widespread pain” and that her presentation was consistent with her medical condition.
The wife did not seek to adduce direct evidence from any of her treating health practitioners or clinicians pursuant to r 7.01 Rules relevant to her current diagnosis, prognosis or treatment. She did not make application to adduce single expert evidence as to the impact of her current health and prognosis upon her capacity to engage in employment.
The wife sought a finding that she is unable to work full time (her affidavit records no more than 15 hours per week), arising from her physical and mental health issues.
In submissions, notwithstanding her affidavit evidence that she could work no more than 15 hours per week and her oral evidence that she presently works about 19 hours per week, the wife submitted that a finding ought to be made that she currently works approximately nine hours per week and therefore earns in the range of $200 per week. I reject that submission. I find consistent with her oral evidence that she currently works about 19 hours per week over three shifts in her contract hospitality role, generating about $430 per week, and a further $200 per week from her sporadic work. I therefore find the wife is currently undertaking employment with a capacity to earn in the range of $620 per week (on average).
The wife said in her oral evidence that she is “really enjoying her [hospitality] role”, and that she undertook a skills course to increase her employment options. She said that she is “otherwise trying to look after [herself] in the future”. The wife impressed as motivated to achieve greater hours of work (and hence income) than she currently undertakes each week. I find that it is more likely than not she will be able to transition to full-time employment at some time in the next 12 to 18 months. That said, even if the wife was engaged in full-time employment, her likely future income earning capacity, if paid at her current rate of pay from both of her current endeavours, would be no greater on her current hourly rate than $40,000 or thereabouts per annum. I so find.
I find that the wife’s assumption of the role as primary carer for Ms G and primary homemaker throughout her and the husband’s relationship has impacted her income earning capacity. I weigh this factor in her favour.
The husband is 56 years of age. His Financial Statement discloses that he works two days per week, for which he is paid $3,465. His annual income is currently about $180,000. The husband said he suffered an injury in 2022, and that he takes multiple medications for pain management and to allow him to remain engaged in employment. He did not establish that either of his injury nor his use of medication has any impact on his future earning capacity.
The husband’s taxation returns for the financial years ending 30 June 2019 to 30 June 2022 are Exhibit 14. In the financial year prior to separation (being the year ending 30 June 2020), the husband’s taxable income was $325,713. In the most recent financial year (being the year ending 30 June 2022), the husband’s taxable income was $404,544.
The husband has historically received a substantial income. The wife submitted that her contributions during the marriage as homemaker and primary caregiver for Ms G facilitated the husband achieving his current income earning capacity. In support of this submission, she highlights that the husband completed a postgraduate degree in 2003 and commencing another postgraduate degree in 2018 (which was completed post separation in 2022). I accept that submission and so find.
It was conceded by the husband that he has historically received a “good income” but that there is an aspect of uncertainty as to his future income, given that his current employment contract is scheduled to cease in late 2023. His affidavit evidence on this issue was as follows:
87. Whilst I am now employed (and paid for) two days per week, I spend significant further time working for my employer in order to stay on top of my responsibilities. Obtaining new contract work in my industry often involves a lengthy and complex tender process and is obviously not always successful.
88. While it may be possible for me to return to full-time employment in a similar role to the roles I previously held with [other companies], it would not be possible to earn the kind of salary I have earned in my current contract consulting role.
89. I am of course hopeful that I will be able to shortly obtain further employment but I cannot say when that may occur.
In cross-examination, the husband confirmed that he has historically been successful in winning contracts on behalf of his employer, which in turn extends or increases his employment contracts.
The husband impressed me as a resourceful and motivated person with the skills to assist his employer obtaining future contracts as he has done historically. Hence, I am satisfied that he will be able generate future employment and earn an income in a similar range to that earnt by him in the 2019–2020 financial years. This finding is buttressed by the fact of the husband making enquiries of finance providers to obtain funds to refinance or extend the existing mortgage secured upon the Suburb E property, so as to make an adjusting payment to the wife. On his evidence as contained in his financial statement as to his current income, he could not achieve these objectives, requiring the Suburb E property to be sold.
I find that the husband’s current and future income earning capacity is vastly superior to that of the wife. This is an important factor favouring the wife.
The husband has the benefit of a resource by way of his father who may be in a position to provide additional funds (potentially by way of loan or an acquisition in the real property) in an effort to secure his own objective continued right of occupation of the Suburb E property.
I find that it is more likely than not that the husband will use his best endeavours to retain ownership of the Suburb E property for his, Ms G’s and his father’s benefit. If he is required to sell, he will receive significant funds upon its sale. I am satisfied that he will be capable of repaying his MasterCard liability (Item 20 on the balance sheet), any outstanding legal fees and meet repayments on the Suburb E mortgage from his significant future income earning capacity, not dissimilar to that as he has been able to do historically.
The wife will receive a payment of cash, and will otherwise retain her car and personal items. She will also be required to pay her legal fees from any adjusting payment received.
The superannuation property will be adjusted by way of a splitting order. The husband, by way of his vastly superior current and future income earning capacity, will have greater opportunity looking forward to make contributions to superannuation in anticipation of retirement from the workforce than the wife.
Ms G, continues to live with the father. As recorded at [95] she earns an income and is increasingly self-sufficient. I place no weight on the elections of the husband to continue to meet Ms G’s expenses.
The wife’s submission that the fact and terms of the deed of family arrangement are a form of “early inheritance” for the husband is rejected. The wife was invited to and did not identify any of the matters recognised by the Full Court in both White & Tulloch (1995) FLC 92-640 or De Angelis and De Angelis (2003) FLC 93-133 to support that submission. A multitude of speculations are possible as to the future health and conduct of each of the husband’s father and the husband in addition to potential changes to their future financial relationship.
The wife submitted that the adjustments to the contributions findings are not static, and depend on the findings as to the value of the property available for adjustment and the contribution findings. She said that if both of these issues were determined as she asserted, then she would seek an adjustment in her favour of seven per cent of both the superannuation and non‑superannuation pools. If these issues were determined as sought by the husband, then she contended an adjustment finding of 15 per cent in her favour of both pools. The husband conceded a five per cent adjustment to the wife was warranted as to each of the superannuation and non-superannuation pools if the property available for adjustment was determined as he contended. If the wife’s contended balance sheet was accepted, he submitted a three per cent adjustment as to both pools in her favour was appropriate.
Considering all of the matters identified by the husband and wife as are relevant, I find a consideration holistically of these factors warrants an adjustment from the contribution findings as to the non-superannuation property in favour of wife of 12.5 per cent, and as to the superannuation property of 10 per cent. By way of cross-check in dollar terms, this represents an adjustment of the non-superannuation pool to the wife of $102,240 (or a difference of $204,479), and of the superannuation pool of $60,054 (or a difference of $120,108).
Accordingly, the wife would receive 60 per cent of each of the non-superannuation property and 60 per cent of the superannuation property.
JUSTICE AND EQUITY
Non-superannuation pool
The wife has an overall entitlement of 60 per cent of the non-superannuation property identified in the balance sheet above. This equates to a sum of $490,750.
The wife currently has in her possession or will receive the following:
Ownership
Description
Determination ($)
2
Wife
CBA Account #...15
4,853
10
Wife
Motor Vehicle 1
15,000
11
Wife
Haberdashery Equip/Supplies/Jewellery
3,500
14
Wife
Household items
2,500
Total
25,853
The adjusting sum the husband is required to pay to him is $464,897, so as to achieve $490,750. Accordingly, the husband will be given the opportunity to pay her that sum and concurrently upon him making payment, the wife will be required to transfer to him her interest in the Suburb E property and the deed.
The husband has an overall entitlement of 40 per cent of the non-superannuation property identified in the balance sheet above. This equates to a sum of $327,167.
The husband currently has in his possession or will receive the following:
Ownership
Description
Value ($)
ASSETS
1
Joint
The Suburb E property
1,296,600
12
Husband
Hobbies and Tools
35,000
13
Husband
Household items
5,000
Total
1,336,600
LIABILITIES
18
Joint
CBA Mortgage #...68
544,536
Total
544,536
Total Non-Superannuation Property
792,064
After payment of the adjusting sum to the wife, he will have $327,167.
The husband’s father received notice of the husband’s alternative relief to sell the Suburb E property by way of the husband’s Amended Response to an Initiating Application filed 3 March 2023. The deed requires that he be given six months’ notice of the intention to sell the property. Hence the property cannot be sold before 3 September 2023.
If the husband fails to make the payment of $464,897, then the Suburb E property will be sold and the net proceeds of sale (after discharge of the mortgage and payment of sale costs) applied in the following priority:
(a)To the husband’s father, in the sum calculated in accordance with clause 1(g) of the deed;
(b)The balance then remaining:
(i)61.82 per cent to the wife – rounded to 62 per cent; and
(ii)38.18 per cent to the husband – rounded to 38 per cent.
The default order for sale will incorporate timeframes that ensure the sale does not occur prior to the expiration of six months form the date of the husband’s Amended Response to an Initiating Application filed 3 March 2023, so as to ensure compliance with the terms of the deed.
Superannuation pool
The value of the wife’s superannuation is de minimis when cast against the value of the husband superannuation. It is 0.09 per cent of the superannuation pool and is disregarded in determining the base amount of the superannuation splitting order in favour of the wife from the husband’s member entitlement.
The value of the base amount payable to the wife to achieve 60 per cent of the husband’s member entitlement of $600,000 in Superannuation Fund 1 is $360,000. This will leave the husband with superannuation valued at $240,000. By way of cross-check, this is a difference of $120,000, representing less than half a year of gross income achieved by the husband post separation in the years up to 30 June 2022. An order will be made to that effect.
Hence the wife will receive a value of $490,750 by way of non-superannuation property and $375,542 of superannuation property, a total of $850,750 or 60 per cent of the combined property. The husband will receive $327,167 by way of non-superannuation property and $240,000 of superannuation property, a total of $567,167 or 40 per cent of the combined property.
Standing back I am satisfied that the proposed adjustment is just and equitable.
SPOUSE MAINTENANCE
To his credit the husband:
(a)Conceded from the date of separation that the wife achieved the “gateway” requirement set out in s 72(1) of the Act (See Hall v Hall (2016) 257 CLR 490 at [496]), by way of his voluntary payments of $1,050 per week (at [43]) and thereafter by way of the consent orders made on 18 February 2022 in the same sum (at [45]) and in the sum of $500 per week by way of the consent order made 28 April 2023 (at [52]) ; and
(b)During submissions did not oppose that the current order that he pay to the wife $500 per week should continue after the delivery of these reasons until the payment to the wife of the capital sum pursuant to s 79 of the Act or the wife receiving her adjusted share of the proceeds of sale of the Suburb E property, whichever is the earlier.
Section 74 of the Act contains the basal principle that in proceedings with respect to the maintenance of a party the Court may make such order as it considers proper. Reasonableness in the circumstances is the guiding principle.
The expenses in the wife’s Financial Statement of $1,133 per week were not the subject of challenge. I find them to be adequate and reasonable for her self-support. She pays $560 rent per week. Her other weekly expenditure totals $573, comprising her car registration, food, household supplies, petrol and maintenance, and other health expenses.
The current income of the wife is in the range of $620 per week subject to some tax being payable. I disregard her receipt of the Centrelink disability benefit. She currently encounters a shortfall in the range of $513 per week. At present that shortfall is met by way of the existing interim order of $500 paid each week by the husband.
By way of the s 79 orders the wife will receive $464,897 in cash and have the benefit of superannuation of $375,542.
The husband contends that the payment of the s 79 sum to the wife coupled with she exercising her full income earning capacity will provide her with sufficient income, property and resources to meet the current shortfall between her income and her expenses, and hence she will no longer be unable to adequately support herself. I do not accept that submission for the reasons that follow.
The wife submitted she “should not be required to deplete the capital received by the s 79 adjustment” I do not accept that submission. It is an erroneous overstatement and oversimplification of relevant principle. In Fewster & Drake (2016) FLC 93-745, the Full Court identified that the possible need to retain capital and not use it for day-to-day support is a relevant consideration to take into account (at [106]–[107]) in determining spouse maintenance.
A claim for maintenance is not limited by reference to current expenses because an applicant applying for maintenance may not have the ability to pay for commitments necessary to support themselves (s 75(2)(d) of the Act) and thus avoid incurring what otherwise would be a reasonable expense. Therefore, the focus is on what is necessary for support. Often, and conveniently, the identification of reasonable needs may be done by reference to expenses that are currently being incurred but obviously, that will not be possible or lead to adequate support in all cases. It is reasonable to claim that you need more money than you are currently spending (Seitzinger & Seitzinger (2014) FLC 93-626 at [53]).
Some of the s 79 capital fund to be received by the wife will be applied to pay her legal fees. It was broadly her case that she would apply the balance, coupled with a small mortgage, to acquire a modest residence. Upon that occurring, she will no longer have to pay rent, making a saving of $560 per week, but will pay a mortgage instalment and rates. The quantification of these future expenses are speculative at this time. I take into account wife’s adjusted s 79 property payment broadly including how it is likely to impact on her capacity for self-support.
An important consideration is that the wife left the workforce to adopt a primary role of homemaker and parent within this marriage dynamic. She has exercised very limited employment skills during the marriage. She is now progressing those skills by way of her increasing personal exertion income and improving health. The wife in submissions implicitly acknowledged an expectation of having a capacity to adequately support herself in the future, contending the limitation as to the period of payment of future spouse maintenances as sought was to provide her with “an opportunity to get back on feet”. I have found that she will be able to transition to full-time employment at some time in the next 12 to 18 months (see [109]). The wife will, within the outer limit of that time frame, achieve an income in the range of $40,000 per annum ( around $770 per week less tax), and hence the conclusion of that period will have the capacity to adequately meet her reasonable costs of self-support by way increased income and the application of her s 79 capital sum. I find it reasonable that the shortfall between her prospective reasonable costs of adequate self-support and her anticipated increasing future income and coupled with her receipt of the adjusting sum over the next 18 month period to be in the range of $200 per week.
The husband submitted that he will incur increased mortgage costs in raising funds to make the s 79 adjusting payment to the wife and that having regard to his current income working two days per week, he would not have capacity to make future periodic payments of spouse maintenance sum. I reject this submission. The husband’s capacity to maintain the wife arises from his income, property and resources. The finding made at [115] as to the likelihood of his income returning to the range he enjoyed between 2019 and 2022 of itself gives him a generous capacity to make a payment of $500 per week for the next three months, and thereafter payment of $200 per week for 18 months. Putting this second period payment into perspective, it would be an annualised payment of $10,400.
Having regard to the above, and the findings made as relevant to s 75(2) of the Act as recorded earlier in these reasons, I conclude that the husband ought to pay to the wife spouse maintenance of $500 per week until payment to the wife of the s 79 adjusting sum of $464,897 or completion of the sale of the Suburb E property, whichever is the earlier, and thereafter $200 per week until 7 January 2025.
Orders will be made to that effect.
CONCLUSION
For all of the above reasons, I make the orders as set out in the forefront of this judgment.
I certify that the preceding one hundred and fifty-two (152) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 7 July 2023
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