Ingram and Ingram - [2009] FMCAfam 484

FEDERAL MAGISTRATES COURT OF AUSTRALIA

INGRAM & INGRAM

[2009] FMCAfam 484

FAMILY LAW – Property – initial contribution – section 75(2) factors – non-disclosure – just and equitable order.

Family Law Act 1975 ss.75(2), 79

Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Norbis v Norbis (1986) 161 CLR 513
Pierce v Pierce (1999) FLC 92-844
Weir (1993) FLC 92-338
Williams & Williams [2007] FamCA 313

Applicant:

MR INGRAM

Respondent:

MS INGRAM

File Number:

WOC 1084 of 2007

Judgment of:

Altobelli FM

Hearing dates:

31 July & 1 August 2008, 18 April 2009

Date of Last Submission:

18 April 2009

Delivered at:

Sydney

Delivered on:

22 May 2009

REPRESENTATION

Counsel for the Applicant:

Mr Schonell

Solicitors for the Applicant:

Rossi Simicic

Solicitor-Advocate for the Respondent:

Mr Webley

Solicitors for the Respondent:

Webley Solicitors

ORDERS

I Direct the solicitors for the husband and the wife to provide to my associate a minute of order which gives effect to this judgment, or failing agreement a minute of order that identifies points of agreement and points of disagreement in implementing this judgment within

42 days.
The parties have liberty to re-list the matter on 7 days notice.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

WOC 1084 of 2007

MR INGRAM

Applicant

And

MS INGRAM

Respondent

REASONS FOR JUDGMENT

Introduction

This is an application for alteration of property interests commonly known as a property settlement. The pool of assets is relatively modest. When the proceedings first came before me there were also issues about parenting orders but the parties were able to enter into consent orders. Notwithstanding the ability of the parties to reach agreement about parenting matters, and the relatively modest asset pool, the evidence as regards property settlement and the conduct of the proceedings was characterised by the extremely high levels of distrust that exist between the husband and the wife.

Background

The applicant husband is 38 years old and is a self-employed [occupation omitted] living in a suburb near Wollongong in New South Wales. The respondent wife is 37 years old and she lives in the former matrimonial home located in another suburb near Wollongong. She lives there with the two children of the marriage, [X] aged ten years and [Y] aged eight years. Also in the former matrimonial home is the wife’s daughter from a previous marriage, [L], who is seventeen years old.
The husband and wife commenced living together since mid to late 1996, and married in October 1997. It was the husband’s first marriage, and the wife’s second marriage. The marriage ended on 5 September 2007 when the husband left the former matrimonial home, leaving the wife and children in occupation.
Throughout the course of the marriage the husband has been self-employed in businesses conducted by him, in each case through his company [C] Pty Ltd. Initially the company traded as a business known as [S], and more recently as [E]. The wife has not worked outside of the home, during the marriage.
Both the husband and the wife came into the marriage with assets of their own. The husband had commercial premises at [F], a suburb near Wollongong. He also had his business which was then trading as [S] as well as some motor vehicles. The property at [F] was encumbered by a mortgage to Westpac and the business had some debts. At the commencement of the marriage the wife had the proceeds from a property settlement of $60,000. One of the issues in this case is to identify precisely the respective values of the assets that each of the husband and wife brought into the marriage, and to then assess what impact those assets had on the overall assessment of contribution during the marriage.
During the marriage the parties, either in their sole names, joint names, or through the company [C] bought and sold properties. The properties they own today, as reflected in Exhibit X, the joint balance sheet of assets and liabilities, largely represents the product of their joint endeavours during the course of the marriage enhanced by the initial contribution that they each made. In addition, during the marriage, the wife received an inheritance of $8000 from her parents and a gift of $10,000 from her grandmother.
In other respects the contributions that the husband and wife made, although different to the contribution the other made, would nonetheless be assessed as being equal and it was common ground between the parties, during the submissions made by their legal representatives, that apart from the “external” contributions to which I have alluded above, contributions should be treated equally.
There is an issue between the parties about whether Exhibit X, the agreed joint balance sheet, is the complete list of assets on which an alteration of property interests should be based. For example, the wife alleges that the husband has not properly disclosed his assets, for example his superannuation entitlement. In addition the wife seeks to add back into the property pool the proceeds of sale of a boat, Volvo truck, another truck, insurance claims received, and rent received from the properties. It now seems common ground between the parties that they probably still have cattle on a property which should be sold, and with the sale proceeds divided in accordance with any orders that I make. From the husband’s perspective he argues that there should be an add back of interest that was unnecessarily incurred on their Westpac mortgage as a result of the wife declining to agree to use moneys held in a controlled money account to reduce the mortgage liability. These are all issues that I will need to determine.
There is a further issue between the parties about the extent to which a section 75(2) adjustment should be made in favour of the wife.
The orders that the wife sought at the hearing was that all assets be sold and that she receive 75 per cent of the net sale proceeds, as well as being given the opportunity to retain the former matrimonial home if possible. Notwithstanding the orders that she sought, the submissions made by her legal representative indicated that contributions should be assessed, overall, at 50:50 and that there should then be a further adjustment in the wife’s favour of 15 per cent under s.75(2), thus leading to an entitlement on her part of 65 per cent.
At the final hearing the husband sought an order that the wife be paid $130,000 from the controlled moneys account and that she thereafter vacate the former matrimonial home and transfer the same to the husband. In addition he seeks orders that the wife transfer to him her interest in all other properties, that he refinance all debts that might involve the wife as a borrower or guarantor, and that she otherwise retain her motor vehicle and the contents of the former matrimonial home. From the husband’s perspective, because of his greater initial financial contribution at the commencement of the marriage, contribution should be assessed at 70:30 in his favour. He submitted that a s.75(2) adjustment should then be made in favour of the wife to the extent of 10 per cent, thus resulting in a 60:40 property settlement in his favour.
I will then, of course, need to make an order that is just and equitable in the circumstances of this case.

Issues

Having regard to the above, and to the evidence as presented during the hearing, the issues in this case appear to be as follows:-
a)What is the pool of assets, resources and liabilities having regard to the joint balance sheet, and the assertion that each party made about add-backs? Furthermore, is the pool of assets complete having regard to the allegations that the wife makes about non-disclosure?
b)What were the assets that each party had at the time of cohabitation and marriage and what value can be attributed to them?
c)What were the other external contributions made through either the husband and the wife during the course of the marriage?
d)Having regard to my findings above, what is the conclusion about contribution during the marriage?
e)To what extent should there be an adjustment in favour of the wife under s.75(2) of the Act?
f)What is the just and equitable order to make in the circumstances of this case?

Applicable law

The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution of the parties in bringing property into the marriage. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:
26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:
…respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
A significant issue in this matter was the alleged non-disclosure of the husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759, and Mezzacappa and Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.

Pool of assets, resources and liabilities

I reproduce below Exhibit X, a joint tender by both parties made on the final day of this hearing, 16 April 2009. The joint balance sheet was tendered subject to the right of each party to argue about add-backs. I reproduce Exhibit X, as amended, below.

ASSETS	Ownership	VALUE ($)
* Property H	J	$400,000.00
*Property Y	J	$125,000.00
*Property C, [T]	J	$85,000.00
*Property O, [T]	J	$85,000.00
*Property Z, [T]	J	$110,000.00
*Property V, [T]	H	$70,000.00
Ssanyong motor vehicle	W	$19,800.00
Quad Bike	J	$5,200.00
Furniture and Furnishings Property H	J	$8,540.00
Money in DGB controlled Money Account	J	$164,067.66
[C] Pty Ltd	H	NIL
Tools and Equipment removed from Property H	W	$6,450.00
Tools and Contents of Property Y	J	$10,190.00
4,000 Sydney Gas shares @ $0.425	H	$1,700.00
Add-Back- Interest on Mortgage	W	TBA
ING Super (as at 8/8/08)	H	$13,403.00
TOTAL	1,104,350.66
LIABILITIES
Westpac Rocket Loan * Secured against all real estate marked * above.	J	$628,167.00
ATO husband’s tax	H	$7,044.06
Yamaha Finance Quad bike	J	$6,665.00
Westpac Mastercard	J	$12,715.00
Westpac cheque account	J	$767.00
Land rates [T] and Property Y	J	$1,159.00
CGT [T] Properties (Est)	H	$3,150.00
Property H outstanding rates	J	2,766.00
TOTAL	662,433.06
TOTAL NET ASSETS	441,917.60

The wife asserted that there should be added back into the balance sheet a number of items which, she says, the husband disposed of either during the marriage, or after separation. Firstly, the wife asserts that there should be added back to the property pool $10,000 that had been provided to her by her grandmother. In evidence the husband denied taking the same, though he agreed that it was kept in the safe in the former matrimonial home. He repeatedly denied using this money for the purposes of buying equipment for his business. There was little evidence that went directly to this issue. I am unable to make a finding as to the existence or otherwise of this money. I note, however, the concession made by the husband’s Counsel in closing submissions that the $10,000 should be treated as a contribution made by the wife. Under the circumstances that is an appropriate concession to make even though I can make no findings about where the money presently is.
Secondly, the wife asserts that there should be added back into the property pool an insurance claim received in relation to one of the rental properties, totalling $8,000. In cross-examination the husband agrees that, in the first instance, he received these moneys and only partly used them for the stated purpose of effecting repairs to a property that had been damaged by tenants. I am satisfied from the husband’s evidence, however, that the entire $8,000 was either used to pay joint borrowings or the wife had available to her an appropriate share. Accordingly, the evidence does not justify adding back this money into the property pool.
Thirdly, the wife asserts that the husband received $4,000 representing two months rental for one of the properties. The husband agreed in cross-examination that he did in fact receive this money, but I accept his evidence that he used it to pay the mortgage to Westpac.
Fourthly, the wife seeks to add back into the property pool the proceeds of sale of a Volvo tip truck. A photograph of the truck was in evidence as Exhibit W2. In cross-examination the husband agreed that he had sold the truck to a man by the name “[Mr F]”. In cross-examination he could not say how much he had sold it to [Mr F] for because “it was sold a long time ago.” He could not say whether the vehicle was referred to in the depreciation schedule of the [C] financial statements. He then agreed that the vehicle was in fact sold in the latter part of 2007. In re-examination, however, the husband’s Counsel was able to tender via the husband a document that he identified as a bank deposit slip for the company which purported to represent the sale proceeds of the truck in question. The document in question, Exhibit H2, bears the date of 21 December 2007 and refers to a cheque drawn by [M] Pty Limited for $5,000. Someone, presumably the husband, has then written on a photocopy of the deposit slip the words “Volvo, sale details.” Apart from the handwriting, there is nothing on the face of the deposit slip which would corroborate the husband’s assertion that he received $5,000 and deposited this into the company’s bank account. Clearly, it was a part of the husband’s case that the Volvo truck was a company asset and that its sale proceeds were applied for company purposes. The difficulty with the husband’s evidence is that the company financial statements for 2006, 2007 and 2008 were in evidence, as exhibit W5. There is no reference to a Volvo truck in the depreciation schedules in any of the said accounts. I am not satisfied that the husband has provided an adequate explanation or disclosure about the sale of this vehicle.

Fifthly, the wife asserts that there should be added back into the property pool various parts from a Volvo prime mover which was unregistered. In cross-examination the husband revealed that the truck was no longer in parts, but was registered and on the road. He agreed it is not on the company’s depreciation schedule for 2008 and asserted that it was no longer part of the assets of the company. He disclosed that the vehicle now operates as a tip truck through a partnership conducted with a company operated by his sister. He explained that he didn’t have the money to do anything with the vehicle, but his sister, through her company, put money to get the vehicle back on the road and working. He explained that he was receiving one third of the income from the operation of this truck. The husband has not, at any stage, made previous disclosure about the Volvo prime mover which was initially valued as parts but which is now on the road and working as a tip truck and providing an income stream to the husband.
Sixthly, the wife asserts that there should be added back into the property pool the proceeds of sale of a boat, photos of which are part of exhibit W4. The boat in question appears to be a family fishing boat or runabout. The husband gave evidence that he purchased it in 2006 for $12,000 and then in December 2006 or January 2007 purchased a new trailer for the boat, but could not say how much he spent for the trailer. He then sold the boat, but he could not say when, or for how much and he could certainly not say to whom. When pressed, he indicated that he thought he sold it for $3,000 or $4,000, and that he needed to sell it on the day because he was under pressure to do so. In re-examination the husband’s Counsel showed him paragraphs 250 and 251 of his affidavit sworn 10 July 2008. His memory duly refreshed he confirmed that he had sold the boat to a gentleman for $3,000 and used the money to pay an American Express account. The said American Express account was Annexure X to his affidavit. Whilst these documents confirm payment of $3,000 into an American Express card account, there is nothing to confirm that $3,000 represented the full sale proceeds or that it was the proceeds of sale of the boat that was used to pay the account. I am not satisfied with the husband’s explanation about the disposal of the boat. It is hard to believe that in October 2007, less than a year after he purchased the boat for $12,000, he would sell it for only $3,000 in the manner he suggests.
Seventhly, the wife also originally asserted that cattle which the husband had not previously disclosed should be added back into the balance sheet. Indeed, in cross-examination the husband did concede that after separation he sold some cattle, but not all of the cattle and that there could be about ten remaining. The husband had hitherto failed to disclose the existence of these other cattle and whilst the husband’s Counsel quite sensibly suggests that an order should be made for the sale of the remaining cattle and division of the sale proceeds, perhaps the more significant issue is that the husband, who was clearly responsible for the financial management of the financial affairs during the marriage, has once again failed to disclose the existence of an asset.
Summarising the wife’s claim about add-backs, it is not possible on the evidence to quantify what, exactly should be added back. What is quite clear from the evidence, however, is that there are other assets that have not been disclosed by the husband and that he has dealt with including the sale proceeds of the boat, the cattle, the Volvo truck sold to [Mr F], and the Volvo prime mover parts that have morphed into a tip truck which is now on the road and providing to the husband one third of the income that it earns.
The wife raises a further issue about superannuation entitlements that the husband has not disclosed. During cross-examination on 1 August 2008 the husband was taken to an application for finance that was made to Westpac in order to raise finance to complete the purchase of one of the properties at [M] Street. He was shown where, at page 7 of the form, he had disclosed the existence of an MLC superannuation entitlement of $22,300 held by him. After being quite evasive about whether or not he had the entitlement he certainly agreed that he had indicated to Westpac that he had it, and he agreed that he had not disclosed the same in any of his evidence. He sought to attribute the responsibility for this to the wife who, according to the husband, did all the paperwork about this. He said he did not know whether the company paid superannuation on his behalf. I note that the very nature of superannuation is such that it cannot be easily disposed of. Included in the agreed balance sheet is an ING superannuation entitlement in the husband’s name to the value of $13,403. But neither the Court, nor the wife, knows whether this is part of, in substitution for, or in addition to the MLC entitlement referred to above. Again, the husband’s disclosure is found wanting and it is becoming increasingly difficult to conclude that the balance sheet is a true and accurate one.
It must be remembered that an important submission in the wife’s case is that the husband has not properly disclosed his assets. That is a finding that is available on the evidence. The manner in which the husband presented his evidence in cross-examination does not assist him at all in this regard. He was evasive and unresponsive in cross-examination. His most common response to questions was that he did not know even when he was being asked about matters that occurred in recent years. The husband’s evidence about financial matters, and by way of disclosure, has to be regarded with much caution. It is quite likely that he has not disclosed his true income and asset position and that the balance sheet is not complete.
For the husband it was also asserted that there should be an add back, specifically in respect of interest that was incurred on the Westpac loan in circumstances when, had the wife agreed to use credit funds in a controlled moneys account to reduce the mortgage, the interest would have been much less. The husband asserts that the add back should be $20,366 with the calculation thereof set out as an aide memoire which comprises part of Exhibit H4. The wife was cross-examined about why she refused to use the moneys available to pay down the Westpac loan and thus save interest. She agreed that it would have been better to pay less interest on the loan and she agrees that despite repeated requests she declined to do so. Her explanation for her refusal, given in re-examination, really came down to lack of trust. She explained that she saw the reduction of the Westpac loan as something that would benefit the husband and she was concerned that the only cash funds would be lost.
Should any part of the interest incurred be added back in the circumstances of this case, arising out of the wife’s refusal to use available cash to reduce an indebtedness that was clearly joint by nature? The first issue that arises is whether the add back falls within the recognised categories of add-backs as discussed in the authorities. It probably does, but as it turns out nothing turns on this. The next consideration, however, is whether or not under the circumstances the wife was reasonable in her apprehension about lack of trust of the husband. I believe she was. I refer to my findings above about the husband’s non-disclosure, and the unsatisfactory nature of his evidence about financial matters. Certainly insofar as financial matters are concerned, the wife’s distrust of the husband seems appropriate in this case. There is another important consideration referred to by the wife’s solicitor in closing submissions. He suggested that allowing this add back potentially opens up a Pandora’s box of related issues. It goes to the question of the reasonableness of parties conduct during the proceeding, including negotiations some of which would clearly be privileged. Moreover, if reducing the interest burden was a consideration, was it reasonable for the husband not to agree to sell some of the investment properties? Indeed, in cross-examination, he agreed that he had been requested to sell one of the [T] properties by the wife, in order to reduce the mortgage liability, but he had declined to do so. His evidence was to the effect that the sale was not a favourable thing to do.
Under the circumstances I decline to allow the add-back as submitted on behalf of the husband. To even entertain the argument for an add back does, indeed, open up a Pandora’s box about the conduct of parties during litigation, and the reasonableness thereof. These are matters that are best dealt with after the conclusion of a hearing, and in the context of a costs application, but not as part of an add-back argument.
The only other matter that arises in the context of Exhibit X, the joint balance sheet, is that it includes as a liability capital gains tax in the event of sale of the [T] properties. I have no evidence about how this is calculated and, in any event, on the husband’s application he wishes to retain these properties. On that basis, if there is to be a reasonable likelihood of realisation triggering a capital gains tax liability, that will be dealt with as a s.75(2)(o) consideration rather than as an actual liability on the balance sheet.
I therefore conclude in relation to the pool of assets, resources and liabilities that it is in accordance with Exhibit X with the exception of any reference to added back interest and capital gains tax. I reproduce that balance sheet here with the caveat that I have already made findings that the husband has not made proper disclosure and thus the balance sheet is not complete.

ASSETS	Ownership	VALUE ($)
* Property H	J	$400,000.00
*Property Y	J	$125,000.00
*Property C, [T]	J	$85,000.00
*Property O, [T]	J	$85,000.00
*Property Z, [T]	J	$110,000.00
*Property V, [T]	H	$70,000.00
Ssanyong motor vehicle	W	$19,800.00
Quad Bike	J	$5,200.00
Furniture and Furnishings Property H	J	$8,540.00
Money in DGB controlled Money Account	J	$164,067.66
[C] Pty Ltd	H	NIL
Tools and Equipment removed from Property H	W	$6,450.00
Tools and Contents of Property Y	J	$10,190.00
4,000 Sydney Gas shares @ $0.425	H	$1,700.00
ING Super (as at 8/8/08)	H	$13,403.00
TOTAL	1,104,350.66
LIABILITIES
Westpac Rocket Loan * Secured against all real estate marked * above.	J	$628,167.00
ATO husband’s tax	H	$7,044.06
Yamaha Finance Quad bike	J	$6,665.00
Westpac Mastercard	J	$12,715.00
Westpac cheque account	J	$767.00
Land rates [T] and Property Y	J	$1,159.00
Property H outstanding rates	J	2,766.00
TOTAL	659,283.06
TOTAL NET ASSETS	438,767.60

Assets at cohabitation

At paragraph 208 of the husband’s affidavit he asserts that at cohabitation he had a commercial property at [F], his business of [S] conducted through the company, [C] Pty Ltd, and three motor vehicles. There is evidence to indicate that the value of the [F] property at about the time of cohabitation was $315,000 and there was no challenge to the husband’s evidence that he owed $116,000 on the property at the time, meaning he had a net equity of $199,000. The [F] property was subsequently sold for a greater price, and so I am comfortable in accepting that its value was as stated in the valuation. There was no evidence in admissible form about the value of the husband’s motor vehicles, and so I disregard the same. The business known as [S] was not valued as at the date of cohabitation and there is no evidence in admissible form about this. I accept that in 2003 it was sold for $30,000 but that does not establish its value at the time of cohabitation. Accordingly, from the husband’s perspective, I find that he had assets at cohabitation to the value of $199,000.
From the wife’s perspective she had $60,000 being the proceeds of the property settlement from her prior marriage. There is little dispute about this. This money was applied towards the purchase of one of the properties, namely one of the homes in which they occupied, but which they bought and sold over the period of the marriage.
Accordingly, at cohabitation, the husband’s initial contribution was substantially greater, namely $199,000 as opposed to $60,000. In assessing this contribution I need to take into account the fact that none of the assets which they brought into the marriage are still intact. I also need to take into account the length of the marriage and the myriad contributions made by both parties over that period. Nonetheless, it is a substantial contribution by the husband.

Contribution throughout the marriage

The evidence indicates, and is uncontroversial, that the wife received an inheritance of $8000 as well as $10,000 from her grandmother. Also the husband’s business known as [S] was sold in 2003 for $30,000 though I am not prepared to attribute too much weight to that so far as assessment of contribution is concerned because it occurred so many years after the marriage.
The parties otherwise agree that apart from these external contributions, even though the respective contributions they made throughout the marriage were different, their contribution should nonetheless be assessed as equal in an holistic sense. This is a commonsense, pragmatic approach to contributions which I endorse.

Conclusion about contribution

On behalf of the husband his Counsel submitted that contribution should be assessed as to 70 per cent in his favour, to reflect the substantially greater initial contribution that he made. This would give to the husband an additional 20 per cent of a net matrimonial asset pool of about $450,000, namely $90,000. The difficulty with this approach is that it would, in effect, “give back” to the husband almost the entire net difference between the contribution made by himself, and the total contributions made by and through the wife. I am not satisfied that this is appropriate because it fails to take into account the passage of time, the myriad other contributions that each of them made in their own capacities over the period of the marriage, and the co-mingling of contributions that occurred as a result of the parties joint endeavours in their marriage. Under the circumstances a figure of 60 per cent is more appropriate.
For the wife it was submitted that contribution should be assessed as being equal, principally because, according to the wife, her injection of $60,000 into the marriage was the foundation for the subsequent acquisition of assets because she provided the equity in respect of which moneys could later be borrowed again. The difficulty with this submission is that it places too much weight on her contribution, and minimises the greater financial contribution made by the husband. I cannot accept the wife’s submissions in this regard given the substantially greater contribution made by the husband. An assessment of contribution at 60 per cent in favour of the husband is appropriate.

Section 75(2) considerations

On behalf of the husband it was submitted that the s.75(2) considerations favoured the wife by 10 per cent at its highest and this would reflect the husband’s greater capacity for employment, a higher capacity for employment than the wife is prepared to acknowledge, the shared care parenting arrangement that existed for the children, as well as recognising that an appropriate s.75(2) consideration was the financial and other care provided for the wife’s daughter from a previous marriage, [L], over the entire period of the marriage.
From the wife’s perspective the issues of s.75(2) considerations is more complex. In this regard the wife’s submissions were poorly constructed and articulated. I have previously adverted to the fact that she seeks an order by which she would receive 75 per cent of the net proceeds of sale of the assets, but her closing submission only accounted for

65 per cent, 50 per cent based on contribution, and 15 per cent based on s.75(2) considerations. The Court recognises the difficulty that the wife’s solicitor was in given that he had to complete the hearing of this matter after the wife could no longer afford to have the senior Counsel representing her during the initial two days of hearing. In the circumstances, I am going to accept that the broad parameters of the wife’s claim remains at 75 per cent inclusive of considerations under s.75(2) of the Act.
The first part of the wife’s submissions refers to the issues of non-disclosure and add-backs, matters that I have referred to above. I have already found that, on the balance of probabilities, the husband has not given proper disclosure, and the balance sheet as I have found it is probably not complete. I am satisfied, on the balance of probabilities, that the husband has other assets that he has not disclosed to the Court or to his wife. The wife’s solicitor submits, and I accept, that this is a relevant s.75(2) consideration
On behalf of the wife it was submitted that whilst the parties did agree to a shared care arrangement, on balance the majority of care was still provided by the wife so that, typically, during the school term she would be responsible for the care of the children nine days a fortnight, and the father five days a fortnight. She is not receiving child support at the moment on the basis that the husband’s child support is in advance. In effect, there has been an overpayment and, according to the evidence of the husband, and the material before the Court, he is currently being assessed on the basis that his income for child support purposes is $2284 per annum. The most recent child support assessment appears to be dated 8 December 2008 and is part of Exhibit W6. To the extent that I can make sense of this assessment the husband has been provisionally assessed as having a child support adjusted taxable income of $2284 per annum. The resulting assessment is that he is to pay support at the rate of $2356 per annum, or $45 per week. This, of course, takes into account the fact that he has the care of the children 34 per cent of the time. As indicated above, however, it appears that as at 8 January 2009 the husband was at least $888 in advance and, thus, the wife would not be receiving child support until the overpayment had been offset by accrued but unpaid child support. One of the documents that comprises exhibit W6 tends to indicate that the husband’s income for the 2006/2007 year was $30,000 and this must form the basis for the subsequent assessment of child support. I must express my surprise at the low level of child support that is being paid in the circumstances of this case. Whilst the net pool of assets is modest, and there is some complexity to the financial affairs of the parties having regard to the numerous properties they own, as well as the businesses that were operated, they do appear from the evidence to have enjoyed a reasonable lifestyle, and one which is somewhat inconsistent with the husband’s stated income for child support purposes. Nonetheless, I am not dealing with an application for departure from the child support assessment, though it is clearly an important s.75(2) consideration that such a low level of support is being provided for the benefit of the children.
The wife gave evidence that her only source of income is Centrelink benefits and allowances, but she was not otherwise not working.

In cross-examination she gave evidence that she was undertaking voluntary work at [S] School in [D], and [omitted] Restaurant in [D], but her evidence in this regard was quite unconvincing. She explained that both of these positions were voluntary positions organised through one of the Centrelink sponsored work placement firms and was part of her transition back into employment. The evidence she gave about the nature and extent of her employment seems quite inconsistent with this proposition and whilst I accept that these positions may have started as entirely voluntary and, indeed, may still be partly unpaid, I do not accept the wife’s evidence that she receives no income at all from these positions. Clearly, the wife has some capacity for employment but she is still unskilled, is unlikely to find full time employment, and has nowhere near the earning capacity of that of her husband. In cross-examination the wife was criticised, quite appropriately, about non disclosure in this regard. She was also criticised for her actions in unilaterally transferring the Ssanyong motor vehicle she drives, from the company to herself. Her evidence was certainly not flattering of her. At the end of the day it must be recognised, however, that her non disclosure is not on the same par as that of her husband. As I have indicated, her earning capacity is greater than that which she asserts, but I do not have any doubts about the pool of assets which are attributable to the wife. Any doubts I so have are attributable entirely to the husband.

It is also important to note that the husband clearly has a resource available to him through his company [C] Pty Ltd. In Exhibit X, the agreed joint balance sheet, the company has a nil value. This is an agreed document so the Court must accept it but it is curious that the first joint balance sheet that was submitted to me when the hearing commenced on 31 July 2008 referred to the plant and equipment of [C] as having a value of $117,950. Indeed, Exhibit W5, the financial reports of the company for the years 2006-2008 lists the balance sheet assets of the company for 30 June 2008 at $92,891 with the written down value of plant, equipment and motor vehicles at $86,691. There is obviously a good reason not known to the Court for not including these assets on the joint balance sheet but the fact remains that the company is a valuable financial resource available to the husband, and not to the wife. For one thing it gives him a flexibility with his finances that is not otherwise available.
I conclude that a s.75(2) adjustment assessed at 25 per cent in favour of the wife is, on the facts of this case, appropriate. I allow 15 per cent for the matters referred to above, even taking into account the s.75(2) factors operating in favour of the husband for his provision of care towards [L]. I allocate a further 10 per cent on account of the husband’s non-disclosure and the findings that I have made that the pool of assets is not complete as a result of the husband’s non-disclosure.

A Just and Equitable Order

The outcome of the assessment of contribution is 60:40 in favour of the husband, but there is to be a 25 per cent adjustment under s.75(2) to the wife, thus meaning a final property settlement in her favour of 65:35. Assuming that the net pool of assets is $438,767 this means that she will receive 65 per cent of the same, or $285,200. Assuming she retains only the items attributed to her in the joint balance sheet, namely her motor vehicle agreed value $19,800, and the tools and equipment removed from Property H, agreed value $6,450, this means she would be entitled to a cash payment of $258,950.
Alternatively, there is a slight possibility that she might be able to retain the former matrimonial home, and she has expressed the desire to be given the opportunity to do so. If she retains the former matrimonial home, and the items referred to in the previous paragraph, she would have to pay to the husband $141,050. Quite frankly, on the evidence, I doubt that she has the capacity to do so but she may be able to prevail on the generosity of friends or family. In the interests of providing stability for the children, I intend to give her the opportunity see if she can retain the home.
Obviously both the husband and the wife need to factor into their consideration of theses issues the very high level of debt owed to Westpac. Even if all of the moneys presently held in the controlled moneys account were to be applied to reduce the loan, its balance would still be $463,000. The parties must consider whether the existing properties would support borrowings of this nature.
The missing cattle need to be rounded up and then sold with the sale proceeds to be divided in accordance with these orders. The responsibility for doing so is a joint one.
I will give to the husband and wife one month as an opportunity and consider, seek advice, and hopefully agree on how best to implement these orders. Within 42 days the solicitors for the husband and the wife must submit a minute of order that reflects their agreement or, failing agreement, a minute of order that clearly identifies points of agreement and points of disagreement in terms of implementing this judgment. The parties otherwise have liberty to restore on seven day’s notice.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Associate: Monique Robb

Date: 22 May 2009