Idoni and Idoni
[2013] FamCA 874
FAMILY COURT OF AUSTRALIA
| IDONI & IDONI | [2013] FamCA 874 |
| FAMILY LAW – PROPERTY – Contributions – loss of large sum of money as a consequence of the Global Financial Crisis - add-backs – dissipation of parties’ superannuation – specified sum allowed in respect of legal costs expended by husband pursuant to s 75(2)(o) of the Family Law Act 1975 (Cth). |
| Family Law Act 1975 (Cth) ss 75(2) and 79 |
| Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70 Bevan & Bevan [2013] FamCAFC 116 |
| APPLICANT: | Mr Idoni |
| RESPONDENT: | Ms Idoni |
FILE NUMBER: | MLC11440 of 2010 |
| DATE DELIVERED: | 30 October 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 7, 8 & 9 August 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr I Mawson SC |
| SOLICITOR FOR THE APPLICANT: | Mr Peter Royston of Lander & Rogers |
| COUNSEL FOR THE RESPONDENT: | Mr R Edmunds |
| SOLICITOR FOR THE RESPONDENT: | Ms Suzanne Paolini of Aberdeen Lawyers |
Orders
BY DETERMINATION
Within twenty eight (28) days from the date of this order the husband pay to the wife the sum of $14,036.
Within twenty eight (28) days from the date of this order the husband and wife do all acts and execute all documents necessary to cause the monies held by Callea Pearce Solicitors on behalf of the husband and wife in the Westpac Bank account no. …617 to be paid to the wife to the extent of $343,895 and the balance be paid as to 32 per cent to the husband and 68 per cent to the wife. The husband shall be responsible for tax on the interest accrued in respect of that account as to 32 per cent and by the wife as to 68 per cent.
Each party be solely entitled to the exclusion of the other to all other property, chattels and superannuation in their respective names and possession as at the date of these orders, and each party indemnify the other in relation to any debt associated with any asset that is kept by each of them respectively, in particular with regard to debt, the husband is:-
(a)to be responsible for and indemnify the wife against his joint loan with his mother and the Commonwealth Bank of Australia;
(b)the T Company loan;
(c)the husband’s personal loan from Mr R;
(d)the husband’s person loan from his brother Mr I; and
(e)the husband’s hire purchase lease in respect of his … motor vehicle.
In the event that the T Company appeal is successful and the liability of the husband is reduced from about $43,100 the husband shall pay to the wife 68 per cent of such reduction within twenty one (21) days of the determination of the reduced liability.
The husband do all acts and things and sign all documents to transfer to the wife the … motor vehicle in her possession.
BY CONSENT
Superannuation
In accordance with s 90MT(1)(b) of the Family Law Act 1975:
(a) The wife is entitled to the specified percentage, being 100 per cent of each splittable payment made out of the husband's interest in the self-managed superannuation fund, the V Superannuation Fund (‘the Fund’);
(b) The husband's entitlement is correspondingly reduced.
Paragraph 6 has effect from the operative time.
The operative time is the date of transfer of the transferable benefits.
FR Pty Ltd, being the Trustee of the Fund ("the Trustee") do all such acts and things and sign all such documents as may be necessary to:
(a) Calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement created in paragraph 6 of these Orders; and
(b) Pay the entitlements whenever a splittable payment becomes payable.
After service of the payment split notice pursuant to reg 7A.03 of the Superannuation Industry (Supervision) Regulations 1994 the wife do all such acts and things and sign all such documents as are necessary, including but not limited to exercising the request pursuant to reg 7A.05 of the Superannuation Industry (Supervision) Regulations 1994, to create a new interest in her name in a Fund nominated by the wife.
The husband and the wife do all such acts and things and sign all such documents, including but not limited to the signing of trustee minutes, rollover requests and related documents, that may be necessary to rollover or transfer the entitlement of the wife in the Fund to another complying superannuation fund of the wife’s choosing.
The husband and the wife do all such acts and things and sign all such documents, including but not limited to the signing of trustee minutes, rollover requests and related documents, that may be necessary to rollover or transfer the entitlement of the wife in the Fund to another complying superannuation fund of the wife’s choosing.
Upon completion of the rollover or transfer as provided in paragraphs 5 and 6 the wife, within fourteen (14) days, resign as a Trustee of the Fund and/or relinquish any position or shareholding she has in F Pty Ltd.
Qantas Frequent Flyer Points
Within twenty eight (28) days of the Orders, the wife establishes a Qantas Frequent Flyer account and within fourteen (14) days of notifying the husband of the said account, the husband transfer one half of the current balance of the Frequent Flyer points available to the wife.
All outstanding applications are otherwise dismissed.
All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage senior counsel and counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Idoni & Idoni has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC11440/2010
| Mr Idoni |
Applicant
And
| Ms Idoni |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings pursuant to Part VIII of the Family Law Act 1975 (Cth) (‘the Act’); they relate to if and how the parties’ interest in their property should be adjusted. There is disagreement as to some aspects of the pool of the assets. The wife seeks either significant add-backs by way of claim for notional property or other property adjustment as a consequence of what the wife asserted was risky investments made by the husband after separation and a resultant loss of about $520,000 of the parties’ assets. In addition the wife contends that the husband directed or permitted investments in the parties’ superannuation fund to be reduced in value from between $200,000 and $300,000 to somewhere between $20,000 and $30,000. There was agreement that the balance of the superannuation fund ought to be split to the wife. I have adopted that agreed course.
Applications
The husband’s case is that the net pool of (non-superannuation) property has a value of about $597,000 and that the superannuation assets total between $20,000 and $30,000. He submitted that the property ought to be divided as between the parties as to 45 per cent to the husband and 55 per cent to the wife.
The husband submitted that the respective contributions of the parties are equal and there should be a modest adjustment in respect of the other factors under the Act.
The wife’s case was that there are a significant number of add-backs which should be included as part of the pool of assets giving a net (non-superannuation) total of $733,822.
The wife asserted that the non-superannuation property should be divided on the basis of 35 per cent to the husband and 65 per cent to the wife.
The wife submitted that there should be a significant adjustment in respect of the other factors having regard to the husband’s capacity to earn an income in excess of $210,000 per annum and the wife having the capacity to earn an income of about $35,000 per annum.
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is clear from the context of the statement.
Issues
There are a number of add-backs which the wife contends should be added as part of the parties’ property.
There is a question about how to treat shares investments made by the husband.
The parties each have a different approach to how the relative and respective contributions ought to be treated.
The quantum of the adjustment/s pursuant to the other factors is an issue between the parties.
There is a factual issue as to the date the parties separated. The wife deposed that she and the husband separated under the same roof from about January 2007. The husband deposed that the parties cohabitated and lived together as spouses until their physical separation in January 2009.
Background and some findings of fact
At the date of hearing the husband was in good health and was aged 44 years. At the same date the wife was in good health and was aged 45 years.
The parties met in 1989 and formed a relationship, they were each aged about 25 or 26. They commenced pooling assets. The husband conceded in evidence that at the time he and the wife met he had virtually no property of any significant value and that the wife had assets totalling about $20,000. I have had regard to this in terms of considering the question of contribution.
In 1995 the parties became engaged and they married in February 1997. There are no children of the marriage.
In 1999 the husband acquired an interest in a financial services professional practice. That practice merged with another practice in 2003 and there have been a series of changes to the practice until about 2007.
In 2007 the husband sold equity in his practice to two other professionals and reduced his interest in the practice to 23.75 per cent. The husband’s interest in the practice is agreed at $670,000. The husband’s interest in the practice is controlled by F Pty Ltd as trustee for the Idoni Family Trust (‘the Trust’).
As was indicated earlier there is an issue about the date the parties separated. The wife asserts that separation occurred in January 2007. The husband asserts that the parties separated in January 2009. There was contradictory evidence between the parties as to the date of separation.
In 2007 the husband arranged for a margin loan (‘the first margin loan’) from Macquarie Bank of one million dollars to enable him to invest in ‘blue chip’ shares. That borrowing was in the name of the husband through his family trust and was secured against a property owned by the husband and his mother.
The husband also arranged with a friend, Mr R, to borrow a further sum of one million dollars from Macquarie Bank to invest in the shares (‘the second margin loan’).
The husband subsequently increased the amount of the first margin loan by $300,000 to 1.3 million dollars and at the same time reduced the extent of the second margin loan with Mr R to $700,000.
Having heard the evidence of the husband I am satisfied the purchase of shares and demands on margin were at all times undertaken by the husband for his purposes.
Unfortunately for the husband these share acquisitions took place shortly before the significant economic events of 2007/2008 colloquially known as the ‘Global Financial Crisis’. These shares were highly geared and as such were vulnerable to the very high share market fluctuations at that time. The values of the shares fell sharply with the economic events of that time and I accept the evidence of the husband that he was required to make payments in accordance with margin calls and eventually in about October/November 2008 sold his shares (he had endeavoured to trade them earlier in the year). The husband’s share activities made a loss of about $518,863.
The husband did not inform or seek the wife’s approval in respect of these investments and that the husband was informed by Macquarie Bank of the high risk nature of acquiring shares with highly geared margin lending. It exposed the husband (and consequently the wife) to a risk of losses and it also provided an opportunity of high profit.
The investments were primarily shares in ANZ Banking Group, Westpac Banking Corporation and BHP Billiton shares. The wife was only informed of the losses after they had been incurred.
The husband did not notify the wife of the share purchases and the borrowings. However, I am satisfied that he was left to manage the financial affairs of the parties and I accept that the acquisitions were done in what he considered to be a relatively safe investment, having regard to the history of the share market over years before that time.
The husband’s approach in not informing the wife of these transactions, whilst unfortunate in the particular circumstances at that time, was the way the parties operated in terms of his business and their finances.
The husband monitored the share market for at least one year prior to the investments and like many did not anticipate the impact of the fall in the stock markets in 2007 and 2008. The husband endeavoured to trade shares and hoped to hold on in the belief that the stock market would improve. He was correct in that belief, but the time and margin levels worked against him.
The husband eventually, in his words, ‘drew a line in the sand’ and sold the shares. On the evidence I am satisfied that the husband engaged in a commercial risk but it was neither reckless nor wanton on his part, having regard to his qualifications and his expertise at that time.
The wife asserted that the loss on the shares of about $518,000 should have been treated as income losses not capital losses. The husband gave evidence that in his view the losses could only be treated as capital losses. He gave cogent reasons from his own knowledge of his state of mind as to the purpose of the investments and his expertise as a financial services professional in that area. The husband was asked why it could not have been said he was trading in shares. The husband said he traded in shares to try to minimise his loss but it was only an after investment aspect and that he did not deal with it on a full time basis and could not be regarded as a share trader. He said the share trading was to try to limit his losses. He was challenged on this in cross-examination but his evidence in that regard was not impeached. There was no other evidence to that end and I accept that the losses ought to have been treated as capital losses. I accept his evidence in that regard.
In July 2007 the husband sold part of his share of his financial services business to two new partners. The husband gave evidence, and I accept, that he applied these funds towards the losses that the Trust was suffering in terms of the impact of the Global Financial Crisis.
The parties had invested their superannuation into a self-managed superannuation fund. The husband transferred his superannuation entitlement of about $166,000 and the wife’s of $40,000 into that fund. There was at least $200,000 in the parties’ self-managed superannuation fund.
The husband and wife controlled the fund via its corporate trustee. The husband arranged for the investment of the funds, through his partner, Mr Z. Over the years that fund has fallen from having an asset base of somewhere between $200,000 and $300,000 to its present level which is now about $22,000.
The husband was cross-examined in relation to the fund. He said he trusted his partner Mr Z and the husband was, in this aspect of his evidence, not impressive. The husband said the fund fell in accordance with the stock market (the fund fell 85 per cent and the husband conceded that the market did not fall anywhere near that sum). The losses arose from the arrangement to trade in options.
The husband had effective control of this fund from separation and has overseen its decimation to the sum of about $22,000. The husband could have at any time taken steps to sell the options and reduce the losses. He did not, as he did with the other investments, draw a line in the sand. He stood mute while the fund was reduced the sum to where it is now. I have dealt with this loss in terms of transferring the whole of the balance of the fund to the wife and having regard to the husband’s poor management of it in the percentage adjustment in terms of contribution and the other factors pursuant to s 75(2) of the Act.
In relation to the date of separation the husband said that the wife left, unannounced, shortly after the death of her father, in January 2009. The wife asserted that separation had occurred in January 2007.
The husband’s evidence was that from at least early 2007 the parties were having disputes and the marriage was rocky. He said they had had a series of discussions and subsequently had a family meeting.
The husband denied that he formed a view or expressed a view that the marriage was at an end. He said he and the wife continued living together, he would ring her morning and night and generally slept in the matrimonial bed. The husband said from time to time he would sleep in the spare bedroom.
In December 2008 the husband said that the parties travelled to Queensland and had a holiday together, and during that holiday they shared a bed. He said it was an intimate relationship. They had a number of trips and attended family functions together. When the wife’s father died in early 2009 the husband gave the eulogy at his father-in-law’s funeral.
The husband initially said the parties had a romantic weekend away at a hotel but later frankly conceded, in cross-examination, that this could have occurred a year before.
The parties displayed public expressions that they were still living together.
The husband said he was made godfather to one of the wife’s nephews and that he (the husband) considered the marriage on foot until the wife told him the marriage was over on 12 January 2009.
The wife’s evidence was that the parties lived together from January 2007 to January 2009 on the basis that they were trying to protect her father from knowing the marriage had failed.
The wife’s brother, Mr M, provided an affidavit of a meeting in May 2007 of a discussion about whether the marriage would continue or not. From his evidence it is seems that he was not initially aware of the purpose of the meeting, despite working with the wife at that time.[1] Mr M’s evidence was that the husband had said to the wife and him at the meeting that ‘he was no longer happy in his marriage and was ending it’.[2] There was discussion about protecting the wife’s father about the parties’ martial unhappiness. It seems that the wife continued to live with the husband until October 2007 when she stayed with her brother for five weeks. This was at a time Mr M’s wife was pregnant with twins. It seems that at the conclusion of five weeks the wife returned to her matrimonial home. The evidence of Mr M is evidence of marital unhappiness and discussions but provides little evidence about the surrounding circumstances, including the husband and wife holidaying together and the husband giving the eulogy at the funeral of the wife’s father.
[1]Paragraph 4.
[2] Paragraph 6.
After January 2007 the husband and wife attended a number of family occasions including Christmas, the wife’s fortieth birthday and christenings. The husband and wife attended a wedding of a friend in Queenscliff where they stayed together.
On 10 December 2010 the wife filed an application for dissolution of marriage[3] in the Federal Magistrates Court (as it then was). In that application the wife deposed that separation occurred on 15 January 2009. In that application she asserted that the parties had not been living together under the same roof.[4] The wife gave an explanation for these assertions but those explanations were unconvincing given my assessment of her evidence including that when a query was raised on behalf of the husband about the date of separation her then solicitor sent a letter confirming that the separation date was 12 January 2009 not 15 January 2009.[5] No plausible explanation is given as to why the wife picked that January 2009 date for separation or why she agreed to alter the date from 15 January 2009 to 12 January 2009.
[3] Exhibit H5 – application for dissolution of marriage filed 10 December 2010.
[4]Paragraph 16a.
[5] Exhibit H4 Letter 2 February 2011 from Barbayannis Lawyers.
The wife said that she and the husband presented publically as a married couple and they continued to live together, socialise together and have meals together. The husband purchased a car for the wife after the alleged 2007 separation. The wife was engaged in writing on credit card sheets and the parties went into a hospitality business. The parties lived together and the wife cooked meals for the husband. They had a good relationship.
The husband maintained his relationship with his father-in-law or then father-in-law and then brother-in-law.
I have considered all of the evidence of the wife, her brother and the husband, both orally and in affidavits and I prefer the evidence of the husband. I am satisfied that the parties separated in January 2009.
Evidence of husband
The husband relied upon his affidavit filed 31 May 2013, his oral evidence given in chief and his financial statement filed 31 May 2013. The husband was cross-examined by counsel for the wife.
The husband made admissions against his interests such as the initial contributions of the wife, that he had not discussed the two million dollar margin loans and share purchases with the wife in advance, or at all until such time as the losses became extreme.
The husband was criticised for not being frank in loan applications. The criticisms of the husband were of a limited nature and in many respects were properly explained. There were some aspects of his evidence in respect of the loan application where they could be regarded as an element of exaggeration or providing detail which was accurate in terms of the information sought but could be construed as misleading, such as the interest in his mother’s home.
The husband was cross-examined in relation to his income that he disclosed in his May 2013 financial statement. In that financial statement his income was about $150,000 per year and yet in a loan application he lodged in respect of a home he is purchasing with his new partner, he discloses income at about $210,000. I accepted the husband’s evidence that his income in the loan application was seen to be prospective rather than retrospective as the business was growing and he purported to provide details of the income that he would earn in the first year of the loan. The income that the husband declared in his financial statement was the income he had earned in the current financial year.
At separation the husband and wife had two Volkswagen cars. The husband retained one. The wife retained the other. In 2010 the parties swapped cars and the husband has since paid out the liability of the motor vehicle which the wife retained.
The husband is a qualified financial professional and has been involved in the financial services industry since 1989. The husband had borrowed money secured against his mother’s home which assisted him in acquiring an interest in the professional practice. The amount outstanding under that loan fluctuated between $300,000 and $460,000 between January 2007 and January 2009. The husband took a very small interest in his mother’s home so that the loans could be taken out in joint names rather than having difficulties with guarantors.
The husband received monies from the sale of his interest in the financial services business which he used to top up the margins with the economic difficulties at that time.
The husband gave evidence about the arrangement with Mr R and that Mr R did not wish to pursue the investment and the husband did. The husband used the equity provided by Mr R. As I indicated earlier, I accept this evidence of the husband.
The husband has re-partnered and he and his present partner are purchasing another property. In May 2013 they contracted to buy property ‘off the plan’ and the husband’s partner is to pay, or has paid, a deposit of $280,000 to $300,000 toward that home. The husband’s evidence is that he has no equity in that sum and will borrow his one half interest in that home entirely. The husband’s partner earns an income of about $133,496 per annum.
The husband was cross-examined in relation to the difference between his minimum expenses set out in his loan application and the expenses set out in his financial statement.
The husband adequately explained this difference by saying that the minimum amount did not include rent and would be on the basis that he was sharing accommodation with his partner. Further, that there would be a deduction in living expenses as both were living together. His partner currently resides in a separate property.
I am satisfied that the loan application[6] by the husband and his present partner whilst optimistic is, in the circumstances outlined by the husband, accurate.
[6] Exhibit W14- Westpac loan document 7 May 2013.
I accept the evidence of the husband that he received $12,982 from the sale of the H property and from this amount applied $10,973 to pay out the motor vehicle lease.
A statement of the husband’s financial position[7] was tendered on behalf of the wife. The husband was not entirely frank in that application. I do not accept that he wilfully mislead the financial institutions although some of his answers to the questions were problematic. I was concerned about the accuracy contained in that document and I have given that aspect weight in determining the creditability and reliability of the evidence of the husband.
[7] Exhibit W13.
I am satisfied of the husband’s explanation as to the difference in the 2009 tax return as being different from the Trust. The difference was his business expenses which were deducted from that sum.
I am equally satisfied that the husband’s financial statement filed in May 2013 in these proceedings is also accurate.
Whilst somewhat coloured by self-interest, I am satisfied that the husband endeavoured to give evidence in a frank way and I generally accept his evidence. I am generally satisfied that he endeavoured to tell the truth and has endeavoured to be frank in the evidence he provided albeit through his own perceptions and subjective viewpoint.
Evidence of the wife
The wife gave evidence in accordance with her affidavit sworn 3 June 2013 and her financial circumstances of the same date.
The wife had used from the balance of the proceeds of sale of the hospitality business of about between $6,000 and $7,000 on repairs to the motor vehicle.[8] She also used these monies for payment of the registration and insurance on the car on at least one occasion. She paid for some car repairs out of the credit card and sought reimbursement.
[8] Exhibit W16.
The wife was cross-examined in relation to the separation. As I indicated earlier, even on her evidence she and the husband retained a significant public appearance of being a couple.
The wife made application for a dissolution of marriage on 10 December 2010 in the Federal Magistrates Court (as it then was) and asserted that separation occurred on 15 January 2009. Further she deposed that she and the husband had lived together under the same roof since separation. The parties lived together and the wife cooked meals for the husband, they maintained relationships with the wife’s family. Having regard to the evidence and the findings to which I have alluded to earlier in these reasons I have concerns about the veracity of this part of the wife’s evidence.
Another area of the wife’s evidence caused me concern. The wife sought an add-back in relation to the money from the sale of the hospitality business. She used $5,000 for an overseas trip with her mother. The balance of $35,000 was placed in joint funds and was used to pay the lease on a car and various other debts, which included those of the wife. She was paid the balance of $20,000. She could hardly seek an allowance under s 75(2)(o) in that respect.
The wife travelled to Southeast Asia in 2011 and travelled to Europe in January 2010. Her travel may not have been as expensive as the husband’s but I make no adverse finding against either of them in that respect. They both travelled after their relationship came to an end.
The wife says she is indebted to one of her previous legal practitioners in the sum of $9,000 and to another firm of $41,000. She initially said her legal fees were paid but then said they were unpaid. I make no criticism of her evidence in that respect.
In relation to the investment for the superannuation fund, the wife asserted that she was not aware that the husband’s partner was managing the fund. She said she was surprised when the husband gave that evidence.
The wife’s evidence was not altogether impeached, however I have some reservations about some aspects of it which I deal with in various parts of these reasons.
The Relevant Legal Principles to be applied
Section 79 of the Act provides:-
Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
….
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i)either or both of the parties to the marriage; …
….
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
….
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
……
The application of s 79 has been the subject of extensive judicial interpretation and comment. In Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 the Full Court said:
39.The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
In Hickey (supra) the Court was not asked to address the aspect created by s 79(2) as to whether any order should be made. The proceedings before me do not involve any controversy about that issue. In Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70 that initial just and equitable requirement is most often clearly satisfied. In these proceedings the parties’ relationship has broken down, they live apart and they are divorced. The parties have each applied under s 79 for adjustment of property under the Act. They each asked the Court to “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”.[9] It is just and equitable that the parties have relief under s 79 of the Act.
[9] Section 81.
Once the Court is satisfied that it ought to exercise jurisdiction it should then determine just and equitable orders that may alter the interests of the parties in property. Hickey (supra) has provided some guidance but this is to be read in the context of the Full Court noting that a three or four-step approach is but one way to a just and equitable result.[10]
[10] Norman & Norman [2010] FamCAFC 66 at [60]; Bevan & Bevan [2013] FamCAFC 116.
I will address the following matters:-
(a)make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;
(b)identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
(c)identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and
(d)consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The Court was not asked to address the preliminary aspect of the requirement created by s 79(2) of the Act as to whether any order should be made. In these proceedings each party sought an adjustment of property and as such that preliminary issue was not controversial and it is clear that an order needs to be made under the provisions of the Act. In Stanford v Stanford (2012) 87 ALJR 74; 293 ALR 70 the High Court made it clear that there is a requirement for a preliminary ‘just and equitable’ determination to be made before a court can adjust property under s 79 of the Act. In this proceeding that determination was readily satisfied. Here the parties have been married for a long time, their relationship has broken down and both parties have invoked s 79, seeking property orders.
Section 81 of the Act provides that as far as practicable a court should make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them. I am satisfied that it is just and equitable that the parties have relief under s 79 of the Act.
The property of the parties
To determine what orders, if any, are appropriate, the Court must make findings as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values. There was agreement as to the value of much of the property.
Property
Husband’s interest in professional practice - including loan account (agreed) – husband’s property
$675,000
Camper trailer (agreed) - husband’s property
$10,000
Motor cycle (agreed) - husband’s property
$5,000
Husband’s memorabilia (determined) - husband’s property
$4,000
Husband’s interest in his mother’s home at N (agreed)
$6,000
Husband’s 2012 motor vehicle (agreed) - husband’s property
$60,000
Husband’s household effects (agreed) - husband’s property
$10,000
Husband’s push bike (agreed) - husband’s property
$1,500
Wife’s motor vehicle (agreed) - wife’s property
$15,000
Wife’s investment in term deposit (agreed) - wife’s property
$11,375
Superannuation balance (to be retained from wife on agreed present value)
$22,000
Proceeds of sale of former matrimonial home at K - held by wife’s previous lawyers in an interest bearing trust account (agreed amount)
$343,895
Total property
$1,163,770
Liabilities
CBA line of credit as at July 2013 (determined)[11]- husband’s liability
$448,478
Macquarie Bank hire purchase/lease on husband’s Volkswagen motor vehicle (agreed) - husband’s liability
$43,000
Loan T Company (determined) - husband’s liability
$43,100
Husband’s personal loans from Mr R ($26,000) and Mr I ($25,000) - husband’s liability (determined)
$51,000
Wife’s capital gains tax liability in relation to sale of property – wife’s liability.
$1,985
Total liabilities
$587,563
[11] Exhibit W15.
Net Property
$576,207
The legal title to many of these items of property is that of one party or the other, or in the case of the money held in trust the equitable ownership is by both the husband and wife. The contributions by the parties had been continuing for many years and their property was intermingled. This continued after separation in January 2009, including the swapping of cars, the purchase of a car by the husband relying upon the wealth the parties had created during the time they contributed. In the circumstances of these parties, it serves little or no utility to work through each item of property and each liability to determine the equitable outcome. It is clear that the parties engaged in a joint endeavour to create wealth and intended it to be equal. I will treat their equitable interests as equal, subject to any adjustments which I will make under s 79 of the Act having regard to the approach I said earlier that I would adopt.
Camper Trailer and motor cycle
During the period that the reasons were reserved I asked my legal associate to contact the parties to ascertain whether there was agreement to one or the other of the parties retaining the camper trailer and motor cycle in the husband’s possession. It seemed from the wife’s case outline that she wanted these items of property and the position of the husband was not entirely clear.
The wife’s final position is that she was agreeable to the husband retaining the motor cycle and the camper trailer as long as there was adequate cash to pay her distribution. In the event that there was inadequate cash, the wife would prefer the items to be sold.
The husband’s position was that he wished to retain the motor cycle and camper trailer. Having regard to the overall orders I have adopted that course.
Memorabilia
The husband has items of memorabilia including, apparently, an item signed by a disgraced sportsman, which the husband says has now diminished in value. The husband says these items of memorabilia, which he has collected over a number of years, have a value of about $4,000. The wife says the items have a value of about $17,000. There is no evidence of the value of these items apart from the ‘guestimates’ provided by the respective parties from their polarised positions.
Counsel for the wife suggests that these items of memorabilia for the husband ought to be placed at auction and sold and the proceeds divided. In the circumstances, the amounts involved and the husband’s collection of this memorabilia I have adopted a less draconian course. There is no issue that the items are valued at least at $4,000. It was open for the wife to have these items valued but she chose not to do so. Accordingly, I will treat their value as the lesser of the sum and leave them in the possession of the husband.
Superannuation
The agreed valuation of the parties’ superannuation fund is about $22,000. As I have indicated elsewhere this has fallen from a sum in excess of $200,000. The current entitlements are about 80 per cent to the husband and about 20 per cent to the wife.
Both parties submit that the balance of the superannuation fund should be split wholly to the wife and having regard to the request and the relatively small amount in the fund, I intend to adopt that course. I will also adopt the parties’ suggested approach and include superannuation in a single pool of property. I have considered the losses in the superannuation fund in respect of contribution and in respect of the s 75(2)(o) discussions elsewhere in these reasons.
Commonwealth Bank line of credit
As at July 2013 this line of credit was some $448,478. The wife says that of that sum a significant proportion ought to be disregarded reducing the sum to be accepted as a liability to about $338,000. The wife’s rational for this is that sums were paid into that account to which she should be given credit, namely a tax refund, a part payment from the husband’s brother and various other sums.
This includes the proceeds of sale of the motor vehicle which was paid into this account. In many respects the wife is inviting the Court to undertake some form of audit of that account. It was open for the wife to have a thorough audit of this account should she have chosen to do so, she did not.
Senior counsel for the husband submitted, and I accept, that the wife’s documents and indeed submissions in this regard were unintelligible. The process I was invited to adopt involved possible double dipping and not having regard to the normal running of that account over the period of time. It was submitted that I should adopt a piecemeal approach, picking or adopting amounts that suited the wife’s approach but ignoring other transactions in the context of the broader finances of these parties. There was no persuasive evidence that the husband operated this account other than in a way that he believed best met the financial needs of the parties, as he saw them.
There is no evidence that the money referred to by the wife was squandered or lost. It was paid into the account. There was no evidence that the husband was reckless or indifferent in that respect. He just operated the account in trying to restore the parties’ finances after the disastrous effects of the global financial crisis and the parties’ financial circumstances before, during and after that event.
Accordingly, I will be allowing the sum asserted by the husband and as is clear from Exhibit W15.
Personal loans from Mr R ($26,000) and Mr I ($25,000)
After the parties separated the husband initially retained one motor vehicle and the wife the other motor vehicle. They eventually swapped these cars and the husband sold the vehicle then in his possession for $58,000 and he cleared a debt leaving a surplus of $15,000 which sum was paid into one of his accounts to reduce his liabilities. The husband then leased a Subaru. He received about $16,000 for the sale of the Subaru which, I accept, was applied to reduce liabilities.
After selling the Subaru the husband purchased a Volkswagen motor vehicle. This purchase was funded via a loan or lease through the Macquarie Bank and a loan from the husband’s brother, Mr I. The husband still owes Mr I $25,000, and I accept that that liability remains in place.
During the course of the marriage the parties operated a Citibank account which fluctuated up and down. At one stage it had almost a nil value however, in late 2012 the amount outstanding was such that the husband needed to pay this out so he could put in place arrangements to buy a house with his new partner. He borrowed $26,000 from Mr R so this loan could be paid out. I am content to treat that loan as a liability of the husband.
Add-backs
The wife sought number of add-backs, it was not entirely clear what she was seeking, however, doing the best I can with the material before me I believe she sought the following, namely:-
(a)husband’s legal costs $25,000;
(b)$54,000 sale proceeds of G property;
(c)$135,000 (plus) X payments (not disclosed);
(d)$518,000 losses due to the husband’s share investments;
(e)if there was no add back of the share losses, the wife claims that the husband could use the sum of $518,000 as income losses;
(f)the substantial losses from the superannuation fund;
(g)the increase in the Macquarie Bank - Idoni loan account of $188,732 due the husband’s share trading;
(h)$17,000 increase in T Company debt due to the husband failing to meet interest and repayments;
(i)Loan of $20,000 by husband to Mr R;
(j)$11,500 sale proceeds on the sale of the Y Unit Trust;
(k)$13,850 settlement proceeds of hospitality business paid by brother 4 June 2009;
(l)$7,000 Westpac dividend withdrawn from Macquarie Bank on 24 December 2009;
(m)$6,000 taken from F account on 24 January 2011 to pay husband’s 2010 tax bill;
(n)two amount of $25,000 paid in 2008 for which the wife says evidence was not provided;
(o)payment to Citibank credit card in August 2008 of $20,000;
(p)payment of $4,000 from Macquarie account to F Macquarie; and
(q)deposit of $13,873 of the husband’s tax refund to reduce the liability of the Idoni Line of Credit on 4 June 2009.
The question of add backs was discussed by the Full Court in Beven & Bevan [2013] FamCAFC 116 where the majority observed at paragraph 79:-
79.We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
In the same decision Finn J observed:-
160.These reminders that the jurisdiction under s 79 is a jurisdiction to alter individual interests in title to property and that there is no community of property in this country, might also call into some question the current practices in relation to the treatment of property which is no longer in existence but which one party has had the use of (the so called “addbacks”), and perhaps also of the unsecured liabilities of one or both parties. It may well be that these matters should more strictly be considered in making findings under s 79(4)(e) (i.e. s 75(2)), or in an extreme case, when considering the question under s 79(2) as to whether it is just and equitable to make any order under s 79. But these questions do not arise in the present case, and are thus for another day.
That being the present state of the law I will deal with each individually, although from the evidence none seem to be amenable to be constituted as property. That does not of course prevent me from considering them in terms of contribution or s 79(4) of the Act.
Legal costs
It is an agreed fact that the husband applied funds, from the Commonwealth Bank Line of Credit, in the sum of $25,000 towards payment of his legal costs. The wife and husband have both incurred significant other legal costs, but the husband’s costs would have greater but for this payment. It would be unjust if the wife were left to pay a portion of those legal costs by virtue of the outcome of these proceedings.
In those circumstances I have made an adjustment under s 75(2)(o) in favour of the wife in the sum of $12,500 which will provide equality for her in terms of the legal costs paid by the husband out of funds to which the parties were entitled.
Investment of part of proceeds of sale of hospitality business
The husband and wife owned an interest in a hospitality business which was sold after separation but before the hearing of these proceedings. The wife used $5,000 of this sum to travel overseas with her mother shortly after her father’s death.
The balance of $35,000 was placed into an account and was used, in part, to meet expenses of both the husband and the wife and the lease payments on one of the parties’ motor vehicles.
Eventually the wife placed the sum of $20,000 into a term deposit and has applied part of these funds for normal living expenses in terms of running her motor vehicle and other living expenses.
There is an amount of $11,375 remaining in that account. The husband seeks that the amount be treated as an adjustment under s 75(2)(o) as $25,000 comprising of the $20,000 in the wife’s term deposit plus the $5,000 which the wife used for the overseas travel. Both the husband and wife have travelled since separation and I have considered those expenses in the context of the contributions of the parties. As such I do not intend to adopt the course suggested by the husband’s senior counsel. I will treat the funds as are in existence at the present time.
Increase in T Company Loan
The husband had involved himself in this investment which had some tax advantages. That scheme failed and the husband was left with a liability of about $20,000.
The investors in that scheme were invited to take class action against the promoters of that scheme and the husband chose to do so. As part of the ultimately unsuccessful litigation the husband and other investors were advised not to make any further payments on the amount outstanding.
The husband, acting in accordance with that advice, ceased making payments and the amount now outstanding is $43,100. The wife says the amount to be allowed for that liability should be the lesser of those.
I do not adopt that course. The husband entered into what he considered a legitimate investment which would have positive tax implications. That scheme failed and on legal advice he participated in a class action, which involved not making payments. The husband acted on that advice, and there is no evidence that such advice was other than prudent at the time it was given. If the litigation was untimely successful the wife and husband would have both benefited from that outcome.
There is apparently an appeal and the husband is waiting for the determination of that litigation. That may involve a reduction of the amount outstanding. The husband concedes that an amount ought to be made so that if any monies are available the wife gets a proportion of that sum. I intend to do so. Otherwise I will accept that the debt is $43,100.
The $54,000 sale proceeds of the G property
The wife asserts that the proceeds of sale of this property were used for unknown purposes. The husband’s evidence was that in about 2006 he and the wife purchased an interest in the land at G and that they sold their interest in the land in April 2008. His evidence was that the proceeds of sale were paid towards a line of credit facility that existed at that time, having regard to the circumstances deposed by the husband at that time, I am satisfied of his evidence in that respect.
There was no evidence that this money was applied other than as the husband asserted and as such there is no need for an add-back or other adjustment.
The X Payments
The wife asserted in paragraph 77(a) of her affidavit[12] that there had been “[X]” payments amounting to $33,828 which were not disclosed. In her case outline she seeks the sum of $135,000 (plus) for the X payments – not disclosed.[13]
[12] Filed the 3 June 2013.
[13] Page 17 of wife’s case outline document.
Despite cross-examination, there is no evidence that these funds were other than funds paid in the ordinary course of business transactions of the husband and as such the wife’s claims in this respect are not established.
$518,000 losses due to the husband’s share investments
The husband’s evidence was that in late 2007 early 2008, he decided to invest in “blue-chip” shares. He arranged to borrow money from Macquarie Bank which was secured upon his mother’s home. The bank allowed him to buy shares on a margin basis, provided the margin was kept at 90 per cent of the value of the shares. The first loan was taken out in August 2007 and was in the name of the Trust and the details are contained in the loan application (Exhibit W2). The second loan was taken out in December 2007 with Mr R and is contained in the loan application at that time.[14] At the same time his friend Mr R agreed to invest in a similar transaction, however soon after they agreed, Mr R changed his mind.
[14] Exhibit W2.
The husband alone traded both the accounts. However, with the Global Financial Crisis in 2008, the husband was required to make payments to keep the shareholding within the margin limits.
At one stage the husband tried some small amount of share trading to assist him through this crisis, but without success.
The husband did not notify the wife or inform the wife of these transactions.
Whilst in hindsight the investment by the husband in the share market by way of margin loans caused the parties to suffer a significant loss, it was in the context of the time (rather than through hindsight) seen by the husband as appropriate and relatively safe (keeping in mind his skills and experience and investment). Neither the husband nor the broader community could have reasonably foreseen the scope and impact of the Global Financial Crisis.
Both the husband and wife assert that the contributions as at separation (in the case of the wife excluding the margin loans and associated share trading) were equal. I am also satisfied that this is the case, and for the reasons set out elsewhere I am satisfied that whilst the husband did not tell the wife about the large margin loans it was the way their relationship operated that he would undertake many of the business decisions. He was neither reckless, negligent nor wanton in this approach. The investments were in so called “blue chip” shares and although their margin was high and the husband was warned by Macquarie Bank in the context of his studies of the shares over the previous twelve months or so were such that whilst he was caught, as were many others, in the global financial crisis, it did not amount to reckless negligence on his part.
I am satisfied that the share trading losses, whilst unfortunate, were simply the vicissitudes of life. I do not intend to add that sum back as some form of notional property, as sought by the wife, nor make any adjustment in respect of contributions or under s 75 or under the other factors.
If there was no add-back of the share losses, the wife claims that the husband could use the sum of $518,000 as income losses
The detail of the share dealings was produced in a schedule.[15] All in all there were not a large number of share transactions. Some of the larger purchases were ordered in large numbers that involved a number of deals on one day although they account to one trade.
[15] Exhibit W3.
Earlier in these reasons I dealt with this claim. Having regard to the evidence before me I am not satisfied that he was a share trader. I accept the husband’s evidence in that respect and that the share loses could not be treated as income losses.
The substantial losses from the superannuation fund
The wife was quite properly concerned about the substantial losses from the superannuation fund. Both the husband and wife were directors of the trustee company which managed the fund. The husband relied upon a partner to invest the monies in options and did not, as he did with the share investments, draw a line in the sand. As a consequence, the assets of the superannuation fund have been emasculated.
Post-separation it was open for the husband to discuss this fund (in which the wife had a significant interest) with her. He did not do so. It was also open for the wife to become involved in the management of the fund. She did not do so. I have dealt with the husband’s continuing support of his partner’s disastrous investment strategy in the fund in relation to the adjustments under s 75(2) of the Act.
The increase in the Macquarie Bank - Idoni loan account of $188,732 due the husband’s share trading
I have dealt with the increase in the liabilities with the share-trading elsewhere. Whilst it is unfortunate it was, as I said earlier, one of the vicissitudes of life.
Loan of $20,000 by husband to Mr R
The wife alleges in her case outline that the husband advanced to Mr R $20,000 on 24 April 2008 and that the sum was repaid in April 2009. This add-back was not the subject of final submissions but seems to be part of the putative joint venture with Mr R which did not go ahead. In any event on the wife’s case the $20,000 was repaid[16].
[16] See wife’s case outline chronology 6 January 2009.
$11,500 sale proceeds on the sale of the Y Unit Trust
The wife deposes that Unit Trust shares for the Y Unit Trust were paid out in October 2008 and December 2009. She asserts that these payments were deposited to accounts controlled by the husband. There is no evidence that these funds were applied other than towards the significant liabilities of the husband arising from share transactions at that time.
$13,850 settlement proceeds of the hospitality business paid by brother 4 June 2009,
The husband was cross-examined in relation to money he allegedly received in relation to the sale of the hospitality business. The husband said he had not personally received any money from that sale however he said that he had paid $13,100 to Great Southern being a tax investment for his brother and that, together with another small amount, was reimbursed to him, by his brother, on about 4 June (a deposit of $13,850). I accept his evidence in that respect.
$7,000 Westpac dividend withdrawn from Macquarie Bank on 24 December 2009
After the sale of the shares, a dividend was paid into the Macquarie Bank totalling about $7,000. These funds were transferred to other loan accounts reducing the liabilities arising out of the share transactions. This was not other than in accordance with the ordinary course of financial transactions of the husband at that time.
$6,000 taken from F account on 24 January 2011 to pay husband’s 2010 tax bill
There is no issue that this money was applied to pay the husband’s tax bills. The husband was applying as much of his income as he possible could to reduce liabilities. When a tax bill came in, he paid it out of the accounts that were available to him. Again, this seems it was no more than the husband continuing to operate his accounts in an appropriate manner.
Two amount of $25,000 paid in 2008 for which the wife says evidence was not provided
I am not satisfied that there was any evidence that these funds were applied other than appropriately.
Payment to Citibank credit card in August 2008 of $20,000
I am not satisfied that this payment was other than an appropriate payment made by the husband during these financial circumstances.
Payment of $4,000 from Macquarie account to F Macquarie
I am not satisfied that this payment was other than an appropriate payment made by the husband during these financial circumstances.
Deposit of $13,873 of the husband’s tax refund to reduce the liability of the Idoni Line of Credit on 4 June 2009
It is not clear why the wife claims this amount. The husband received a tax refund and applied it towards a reduction of the husband’s liabilities at that time. I am not satisfied that this transaction was other than a transaction to improve the financial circumstances of the parties.
Contributions
Each of the parties asserts that the contributions up to the date of separation (albeit the wife’s view of the separation was early 2007 and the husband’s early 2009) were equal.
Having regard to the evidence of each of the parties set out in their affidavits and notwithstanding that the wife had a larger amount of capital at the commencement of cohabitation, I am satisfied, over the years, that the contributions of the parties were equal up to at least January 2007.
In 2007, 2008 the husband engaged in share trading. I have made comment in relation to that share trading elsewhere in these reasons. Unfortunately the parties lost a significant amount of money and the investments were done without the wife’s knowledge.
However, the investments were not done in a way other than that to which I have eluded earlier in these reasons. It is just one of the vicissitudes of life that befall people from time to time. I am satisfied that up to the date of separation, in January 2009, the parties’ contributions were equal.
Since that time, each of the parties has applied the funds in particular ways.
The wife complained that the husband spent more money on overseas travel and other expenses. She sets this out in detail in her affidavit. The husband travelled overseas to China on a number of occasions for work and was reimbursed for the business parts of that travel, but not the private part. He travelled on a number of occasions to Southeast Asia to visit his family living in that region. The husband clearly spent more on his personal overseas travel than did the wife.
The husband paid significant monies towards the support of the wife through 2009.
I have considered the superannuation fund both in the context of contribution and s 75(2)(o) factors. As to contribution the husband put aside a relatively large sum and the wife a lesser sum. That arose from the different, but agreed, paths the parties took during their relationship. As indicated earlier I have treated those, as part of a holistic approach, as equal. As to the disastrous post-separation superannuation investments, it was open for the husband to discuss this fund (in which the wife had a significant interest) with her. He did not do so. It was also open for the wife to become involved in the management of the fund, she did not do so. I have not made an adjustment in favour or against either party in the context of contributions. I have included a modest percentage (3 per cent) in the overall adjustment in favour of the wife under the section 75(2) factors.
Having regard to all of the evidence, overall I am satisfied that contributions are equal.
The other factors
The husband and wife are both in good health. They are aged 44 and 45 respectively.
The wife works part time in hospitality and has no vocational training. The wife earns about $35,000 per year. She applied herself as homemaker and spouse over many years. She is unlikely to earn an income similar to that of the husband. The husband is a professional whose income in the current financial year is likely to be well in excess of $200,000. That is a significant factor.
That is a significant difference in earning capacity as between the husband and the wife. The husband has a salary package in excess of $200,000 and the wife is able to earn far less.
I have, as indicated earlier, included in the adjustment is a percentage in favour of the wife under s 75(2)(o) in respect of the husband’s failure to properly monitor the investments of the fund, and having regard to the wife’s responsibilities to that end.
There are no children of the parties’ marriage and neither party has the responsibility to care for other children.
The husband has re-partnered and that partner seems financially self-sufficient. The wife has not re-partnered.
These were the only factors argued by the parties, other than the question of the legal costs drawn by the husband. I have referred to those events earlier. The husband drew $25,000 and I intend to make a particular adjustment under s 75(2)(o) in favour of the wife in the sum of $12,500. This will provide equity for her in terms of the legal costs paid by the husband out of funds to which the parties were entitled. I have done this on the basis of equality.
Having considered all of the other relevant factors exercising the broad discretion I have with regard to property and this particular adjustment under s 75(2)(o) I am satisfied that there ought to be an adjustment, in favour of the wife, to the extent of 18 per cent, plus the $12,500 for legal costs.
Just and Equitable
In determining the whole of the property, and as I have addressed each of the steps, I have considered what is just and equitable in all of the circumstances. If the property were adjusted on the basis of 68 per cent to the wife plus $12,500, and 32 per cent to the husband less $12,500.
That being the case the net pool of property is $576,207, and the wife would be entitled to $391,821 plus $12,500 making a total of $404,321. The husband would be entitled to $184,386 less $12,500 making a total of $171,886.
The outcome would be:
HUSBAND’S PROPERTY
Property
Husband’s interest in professional practice $675,000
Camper trailer $ 10,000
Motor cycle $ 5,000
Memorabilia $ 4,000
Interest in mother’s home $ 6,000
Motor Vehicle $ 60,000
Household effects $ 10,000
Pushbike $ 1,500
Total property $771,500
Liabilities
CBA line of credit $448,478
Macquarie Bank hire purchase lease $ 43,000
T Company liability $ 43,100
Husband’s personal loans from Mr R & Mr I $ 51,000
Payment husband to wife $ 14,036
Total Liabilities $ 599,614
NET $ 171,886
WIFE’S PROPERTY
Property
Proceeds of sale of former matrimonial home
at K $343,895
Superannuation $ 22,000
Wife’s investment in term deposit $ 11,375
Wife’s motor vehicle $ 15,000
Payment husband to wife $ 14,036
Total property $ 406,306
Liabilities
Wife’s capital gains tax liability in relation to
sale of property $ 1,985
NET $404,321
Having regard to all the relevant factors, the findings of fact and the particular circumstances of these parties I am satisfied that this result is just and equitable.
I certify that the preceding one hundred and sixty (160) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 30 October 2013.
Associate :
Date : 30 October 2013
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Family Law
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Property Law
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