Isherwood & Callins
[2023] FedCFamC2F 1628
•15 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Isherwood & Callins [2023] FedCFamC2F 1628
File number(s): PAC 4521 of 2020 Judgment of: JUDGE MURDOCH Date of judgment: 15 December 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT- De facto relationship comprising two separate periods of cohabitation – Where the respondent made greater contributions to the acquisition and maintenance of the properties owned by the parties – Where the applicant has failed to adequately disclose shares owned by him – Where the respondent has had the majority care of the two children of the relationship since separation and the applicant has made inconsistent child support payments – Contributions assessed as 60% to the applicant with a 7% adjustment for future needs. Legislation: Family Law Act 1975 (Cth) Part VIIIAB, ss 44(6), 79SM(4)(d)-(g), 90F, 90SB, 90SK, 90SM(4)(d)-(g)
Evidence Act 1995 (NSW) s140
Cases cited: Black v Kellner (1992) FLC 92-287
Fields & Smith [2015] FamCAFC 57
Horrigan & Horrigan [2020] FamCAFC 25
Kessey & Kessey (1994) FLC 92-495
Stanford & Stanford [2012] HCA 52
Weir v Weir (1993) FLC 92-338
Division: Division 2 Family Law Number of paragraphs: 95 Date of hearing: 19 – 20 September 2023 Place: Sydney Counsel for the Applicant: Ms Haughton Solicitor for the Applicant: Brydens Lawyers Counsel for the Respondent: Mr Mathews Solicitor for the Respondent: Dina Lawyers ORDERS
PAC 4521 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ISHERWOOD
Applicant
AND: MS CALLINS
Respondent
ORDER MADE BY:
JUDGE MURDOCH
DATE OF ORDER:
15 DECEMBER 2023
THE COURT ORDERS THAT:
1.By consent, leave is granted to the parties to institute proceedings for alteration of property interests out of time pursuant to section 44(6) of the Family Law Act1975 (Cth).
2.By no later than 4:00pm on 16 January 2024 the Respondent shall pay to the Applicant the sum of $142,304.
3.Simultaneously with the Respondent’s compliance with Order 2 above the Applicant shall do all such things as are necessary to transfer to the Respondent all of his right, title and interest in the following properties:
(a)B Street, Suburb C (the B Street property”); and
(b)D Street, Suburb C (“the D Street property”).
4.In the event the Respondent does not comply with Order 2 above the parties shall do all things necessary to list the D Street property for sale forthwith as follows:
(a)The D Street property shall be listed for auction with such real estate agent as is agreed between the parties and failing agreement by no later than 4:00pm on 30 January 2024 the real estate agent will be nominated by the President of the Real Estate Institute of New South Wales;
(b)The reserve price of the D Street property shall be such amount as agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer;
(c)The parties shall give such instructions as are necessary to a solicitor or conveyancer to prepare a contract for sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer;
(d)The parties shall agree to co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the D Street property at all times reasonably requested by the agent and auctioneer and ensuring that the D Street property is clean, neat and in good order at the time of any inspection and on the day of the auction;
(e)The sale price of the D Street property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached, the parties must negotiate with the highest bidder and accept any offer which is no more than 10% lower than the reserve price;
(f)That in the event the D Street property is not sold at the public auction as provided for above, the reserve price of the D Street property shall be reduced by 5% at each subsequent auction until such time the D Street property is sold.
(g)That upon agreement being reached for sale of the property parties shall execute the contract of sale and all such other documents necessary and give all such instructions as is required to complete the sale of the D Street property including all transfer documentation forthwith upon its submission to them by the agent, solicitor or conveyancer.
5.The proceeds of sale of the D Street property shall be paid in the following manner and priority:
(a)Discharge of any mortgage encumbering the D Street property;
(b)Payments of the agent’s commission and advertising or other expenses if any, payable on the sale;
(c)Payment of the legal costs and outlays relating to the sale;
(d)In payment of any amount due to the applicant pursuant to Order 2 of these Orders, but not yet paid with interest thereon calculated in accordance with Rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 being the rate that is 6 percent above the cash rate last published by the Reserve Bank of Australia before that period commenced; and
(e)The balance thereafter to the Respondent.
6.Orders 6 -10 of these Orders are binding on the trustee of Super Fund 1.
7.A base amount of $27,565 is allocated as required by s.90XT (4) of the Family Law Act 1975 (Cth) to Mr Isherwood out of Ms Callins’ interest in Super Fund 1.
8.In accordance with paragraph 90XT (1) (a) of the Family Law Act 1975 (Cth):
(a)Mr Isherwood is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)Ms Callins’ entitlement to payments out of their interest in Super Fund 1 and the entitlement of such other person to whom a splitable payment may be payable, is correspondingly reduced by force of this order.
9.The Trustee of Super Fund 1 shall do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law Superannuation Regulations 2001, the entitlement created for Mr Isherwood by these court Orders; and
(b)Pay the entitlement whenever the Trustee makes a splitable payment out of Ms Callins’ interest in Super Fund 1.
10.Orders 6 – 10 is to have effect from the operative time and the operative time is four (4) business days after the day of service of these Orders upon the trustee of Super Fund 1.
11.Except as any provision of the paragraphs comprising this Order provide to the contrary:
(a)The Applicant hereby indemnifies the Respondent from and in respect of all actions, claims, suits and demands as may be made against the Applicant in relation to all liabilities in the name of the Applicant or in his name jointly with any other person; and
(b)The Respondent hereby indemnifies the Applicant from and in respect of all actions, claims, suits and demands as may be made against the Respondent in relation to all liabilities in the name of the Respondent or in her name jointly with any other person.
12.That each party shall do all things necessary including providing all consents to give effect to these Orders in the time periods prescribed in these Orders.
13.That save and except for these Orders each party otherwise be solely legally and beneficially entitled, as against the other party, to all property in their sole name, possession or control.
14.In the event that either party fails or neglects to sign any document pursuant to these Orders, a Registrar of the Federal Circuit and Family Court of Australia (Division 2) is hereby appointed to execute such documents in the name of the party in default so as to give validity and operation to these Orders pursuant to s 106A of the Family Law Act1975 (Cth) upon being satisfied of such failure or neglect by way of affidavit evidence.
15.Any application by a party for costs is to be made by way of filing an Application in a Proceeding together with any material to be filed in support thereof by no later than 4:00 pm on 19 January 2024.
16.Save as to the question of costs, all extant applications and responses thereto are otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
INTRODUCTION
These are proceedings for alteration of property interests pursuant to Part VIIIAB of the Family Law Act1975 (Cth) (“the Act”).
The parties lived together from 2004 to 2007 in Country E. Subsequent to their separation the respondent commenced a relationship with another person and relocated residence with them to Australia in 2008. The applicant moved to Australia in 2008. The parties commenced living together again in 2009 and separated on a final basis in November 2017.
There are two children of the relationship who are twelve and eight years of age. Both children continued to live with the respondent post separation and will continue to do so pursuant to parenting orders made by consent on 15 February 2023.
Both parties make complaint that the other has failed in their disclosure obligations. Whilst there is largely agreement as to the property of the parties, substantial issue exists as to how the court will assess the parties’ respective contributions and what adjustment, if any, should be made to such contribution findings.
JURISDICTION
The parties resided together in New South Wales from 2009 to 2017 and thus the mandatory geographical requirement pursuant to section 90SK of the Act is satisfied. The mandatory provision as contained in section 90SB of the Act is satisfied as there is a child of the de facto relationship and the parties were in a bona fide domestic relationship for more than two years.
BRIEF CHRONOLOGY
In these reasons a statement of fact is a finding of fact, unless it is obvious from the context that I am reciting the position of one of the parties. The standard of proof with respect to such findings is the balance of probabilities: see s 140 of the Evidence Act 1995 (Cth).
The applicant’s written evidence as to the parties’ relationship was brief and misleading. He deposes that the parties commenced a relationship in 2003 and cohabitation in or around 2004. He then deposes that: “The respondent and I moved to Australia in or around 2008. The Respondent and I separated on a final basis in or around 2017.” The import of the applicant’s written evidence that the parties were in a continuous de-facto relationship for a period of 13 years. The applicant conceded in cross examination that this evidence was not correct.
A brief chronology of this matter is as follows:
·The respondent was born in 1972 and is currently 51 years old.
·The applicant was born in 1980 and is currently 43 years of age.
·In 1991 the respondent married her first husband, Mr F. They separated in 2000.
·The parties commenced a relationship in 2004 and commenced living together in mid-2004 in Country E.
·In 2006 the applicant purchased an investment property in Country E.
·The parties separated on 14 July 2007 whereupon the applicant moved out of the rental apartment.
·In 2007 the respondent commenced a romantic relationship with Mr G although they did not live together.
·In 2008 the respondent and Mr G relocated to live in Australia.
·In 2008 the applicant relocated to live in Australia. At this time the respondent ended her relationship with Mr G and the parties recommenced their relationship.
·In 2009 the parties commenced living together in a rental property in Suburb H, New South Wales.
·The parties’ eldest child, X was born in 2011.
·The parties’ youngest child, Y was born in 2014.
·In approximately late 2015 the parties and the two children moved into a rental property in Suburb C.
·In 2015 the parties’ purchased a 25% interest each (thus a total of 50%) in the property situated at and known as B Street, Suburb C in the state of New South Wales (“The B Street property”). The respondent’s sister-in-law, Ms J is the remaining registered proprietor as to 50%.
·In November 2017 the parties separated on a final basis. The respondent moved into the B Street property to live with the children and has remained residing in this property since this time. The applicant remained living in the Suburb C property.
·On 31 August 2020 the applicant commenced proceedings seeking both parenting and property orders.
·On 15 February 2023 final parenting orders were made by consent that the parties have equal shared parental responsibility, that the children live with the mother and spend each alternate weekend and half of the school holiday periods with the father.
THE EVIDENCE
A direction was made at the commencement of the hearing that no annexures to affidavits or exhibited documents would be read in the matter until they were individually tendered.
The applicant relied upon:
·the Amended Initiating Application filed on 17 February 2023;
·his affidavit filed on 12 April 2022 (“the applicant’s trial affidavit”);
·his Financial Statement filed on 18 September 2023;
·the Trial Document filed 9 February 2023; and
·material tendered during the hearing.
The respondent relied upon:
·the Amended Response filed on 24 February 2022;
·her affidavit filed on 13 July 2022 (“the respondent’s trial affidavit”);
·her financial statement filed on 18 September 2023;
·the case outline document filed on 9 February 2023; and
·material tendered during the hearing.
Both parties successfully objected to portions of the affidavits upon which the other relied.
THE RELIEF SOUGHT BY THE PARTIES
Both parties join in seeking leave to commence proceedings for property adjustment out of time pursuant to s 44(6) of the Act. Leave will be granted by consent.
Whilst the applicant submitted that the respondent has very little capacity to pay him a cash sum by way of adjustment without a sale of the D Street property, no formal application was made to amend the final relief sought by him. The applicant conceded that any cash adjustment can be made to the applicant from the sale of the D Street property and seeks orders in accordance with the document entitled Amended Orders Sought by the Applicant[1] and paragraph 26 of the applicant’s Trial Document that: -
·Within 28 days the respondent pay to him the sum of $215,000 (“the settlement sum”) upon which he will transfer his interest in both the B Street and D Street properties to the respondent.
·In the event the respondent is unable to pay the cash sum as ordered then the D Street property is to be sold and after discharge of the mortgage and expenses relating to the sale the applicant is to be paid $215,000 together with interest thereon together with payment to him of any amount of costs awarded in the proceedings with the respondent to receive the remaining balance thereafter.
·Pending payment of the settlement sum the parties shall retain all property in their possession or control.
·Pending payment of the settlement sum the respondent indemnify the applicant against any liability and ongoing mortgage expenses for both the B Street and D Street properties.
·The parties close the joint bank accounts and distribute any remaining balance equally between them.
·There be a super splitting order to the applicant of the respondent’s interest in the Super Fund 1 in a base amount of $57,343.
·The respondent pay the applicant’s costs of the property and child support proceedings.
[1] Exhibit H7.
The respondent seeks orders on a final basis in accordance with the Amended Response filed on 24 February 2022 that the applicant transfer to her all his interest in both the B Street and D Street properties with no payment of a cash sum and otherwise each party retain all items of property in their possession or control.
THE STATUTORY REGIME
I should only make orders altering the property interests of the parties pursuant to the Act if I am first satisfied that it is just and equitable to do so. It must not be assumed that the parties’ rights or interests should be different to that which already exists: Stanford & Stanford [2012] HCA 52 (“Stanford”). The principles as enunciated in Stanford apply equally to applications between de facto partners pursuant to Part VIIIAB of the Act.
If I determine that it is just and equitable for the property interests of the parties to be adjusted, after having made findings as to the identity and value of the property, liabilities, and financial resources of the parties and the parties’ legal and equitable interests in such property at the time of the hearing I am then required to: -
(a)consider, identify and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non-financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end;
(b)after consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to either of the parties on account of the matters set out in s 79SM(4)(d)-(g) of the Act, including any relevant considerations pursuant to s90F(3); and
(c)ensure that the orders to be made are just and equitable in all the circumstances.
NON-DISCLOSURE BY THE APPLICANT
The applicant conceded in cross-examination that he holds K Company shares. They are not an item on the Balance Sheet identifying the property of the parties. He conceded that he has not disclosed such shares in any of his financial statements, nor has he disclosed that he has disposed of them. His evidence was that he got them as a bonus one time and “I don’t know anything about it”; he was advised of the existence of these shares through his tax agent upon the submitting of his tax return. When it was put to him that he must have disclosed in his 2021 tax return the ownership of the shares it was the applicant’s response that “they told me.” He then conceded that he must have told the Australian Taxation Office that he owned K Company shares but reiterated again that: “I have no idea anything about them. I haven’t got rid of them.”
The duty of parties to provide a full and frank disclosure of all their financial circumstances is codified in Chapter 6 of the Federal Circuit and Family Court of Australia Rules 2021. This duty is absolute and is a continuing onus throughout the litigation process. It is critical to the jurisdiction and is fundamental to achieving justice and equity as between the parties. There is a long line of authorities setting out in clear and unequivocal terms the consequences of a failure to comply with this duty: Black v Kellner (1992) FLC 92-287.
It is incredulous for the applicant to assert that he does not know anything about his ownership of property when in fact he does, and has the capacity to do so. There is no suggestion in the respondent’s case that the applicant has not disclosed his last three taxation returns as required by the rules. It is implicit that the applicant’s taxation returns will record the value of the dividends that he receives. Whilst this is a fairly self-evident line of enquiry and the respondent appears to have a made a forensic decision not to pursue it, it is the applicant’s mandatory obligation to provide a full and frank disclosure of his financial position. He has failed to do so.
There is no evidence as to the shares held by the husband in K Company nor their value. There is no evidence as to the applicant’s attempts to ascertain same. This is a matter I will take into account by way of adjustment to contribution findings.
THE BALANCE SHEET
Grounded from the draft Joint Balance Sheet [2] and the parties’ concessions and submissions, I have constructed a balance sheet contended by the parties with those items in dispute in bold as follows:
[2] Exhibit J1.
Ownership
Description Applicant’s Value Respondent’s Value Value Found ASSETS 1. A D Street, Suburb C (35%) $227,500 $227,500 $227,500 2. R D Street, Suburb C (65%) $422,500 $422,500 $422,500 3. A B Street Suburb C (25%) $185,000 $185,000 $185,000 4. R B Street Suburb C (25%) $185,000 $185,000 $185,000 5. A Bank Account Disregard $14,001 $14,001 6. R Bank Account Disregard $3,266 $3,266 7. A K Company shares Not Known Total $1,020,000 $1,037,267 $1,037,267 SUPERANNUATION Ownership Description Applicant’s Value Respondent’s Value Finding 7. A Super Fund 2 $120,316 $120,316 $120,316 8. R Super Fund 1 $317,639 $317,639 $317,639 Total $437,955 $437,955 $437,955 LIABILITIES Ownership Description Applicant’s Value Respondent’s Value Finding 9. J Mortgage for D Street (#...85) and (#...44) $301.426 $301,426 $301,426 10. J Mortgage for B Street (#...17) $252,022 $252,022 $252,022 11. R Bank L Credit Card Disregard $15,740 Removed Total $553,448 $569,188 $553,448 NET KNOWN TOTAL ASSETS (incl. superannuation) $904,507 $906,034 $921,774 BALANCE SHEET FINDINGS
Items 5 and 6: Savings
The applicant submits that the parties’ respective savings should not appear on the balance sheet as the parties have been separated for a period of six years. The applicant acquired those savings as a result of a post separation redundancy. There is no evidence of such redundancy asserted by the applicant or the application of same. In any event, the court is to take into account the assets and liabilities of the parties as at the date of the hearing, they should not be disregarded merely because they have been accumulated post separation. The items shall remain on the balance sheet.
Item 11: Respondent’s Credit Card Liability
The applicant submits that this liability should be disregarded as the respondent has, even on her own evidence, significant income and has chosen to manage her financial affairs in this manner. The respondent submits that this liability should remain in circumstances where the respondent was not challenged on it.
The respondent bears the evidentiary burden to establish that this item should form part of the property pool. There is no evidence before the court as to the respondent’s use and application of the monies spent to incur this debt. She has not established that it is just and equitable to include this as a liability on the balance sheet and it will be excluded. It will be taken into account in the assessment of any adjustment to be made to the contribution findings.
I thus find that the value of the parties’ non-superannuation property is $483,819 plus the applicant’s K Company shares.
I find that the value of the superannuation property is $437,955.
The total value of the non- superannuation property and superannuation property of the parties is $921,774 plus the applicant’s K Company shares.
The total value at law of property held by the applicant prior to any adjusting order is $270,093 plus the K Company shares.
The total value at law of property held by the respondent prior to any adjusting order is $651,681.
WHETHER AN ORDER ALTERING PROPERTY INTERESTS SHOULD BE MADE
I find that the requirements identified in Stanford are satisfied in this matter having regard to:
·The parties in this matter, having mixed their finances as a family, have now separated. It is therefore not possible for them to continue to mutually enjoy the accumulated assets.
·Both parties invoke s90SM of the Act seeking orders for property settlement.
·The current legal interest of the parties needing to be changed or adjusted when consideration is given to the contribution and other factors identified below.
It is therefore just and equitable in all the circumstances to make orders pursuant to Part VIIIAB of the Act adjusting the financial interest of the parties.
THE ASSESSMENT OF CONTRIBUTIONS
Both parties made submissions as to how the court should approach the consideration of contributions when consideration is given to the period of separation from July 2007 to December 2009.
The applicant contends that the contributions of the parties should be assessed for the entire period of 2004 to 2017. It was submitted that the period of separation should be ignored and the parties’ contributions assessed over the entire 13 year period as the two year period of separation would not make a material difference in such assessment.
The respondent contends that a contribution finding ought to be made only for the period 2009 to 2017; being the period in which the parties were in a relationship and cohabiting in Australia. Submissions were made on behalf of the respondent that for the period 2004 to 2007 the parties were merely ‘boyfriend and girlfriend’ and the applicant’s approach of ‘panel beating’ the two periods of the parties’ relationship together ought not to be accepted. The respondent asserts that if the parties had separated in 2007 on a final basis neither party would be submitting that there would be any justice and equity in adjusting property between them.
I do not accept the import of either of the parties’ submissions. The court is required to consider and assess all contributions made by the parties as provide for in the Act up to a final hearing; contributions can continue to be made post the separation of the parties. This includes contributions made during the period of separation and for the period of time the parties cohabited together from 2004 to 2007.
At the commencement of the parties’ relationship in 2004 the applicant had nominal assets and no liabilities. There is no evidence as to the assets and liabilities of the respondent. The applicant moved at this time into an apartment rented by the respondent in City M, Country E. The applicant does not provide any evidence as to the contributions by each of the parties during this period of cohabitation. I accept the respondent’s unchallenged evidence that during the parties’ cohabitation in Country E the parties each contributed towards the daily living expenses. The parties did not operate a joint bank account nor intermingle their financial affairs.
Whilst not deposed to in any way by the applicant in his affidavit, it is uncontested that in 2006 the applicant purchased an investment property in Country E. There is no evidence as to the acquisition costs or source of funds to purchase this property save that in cross examination it was the applicant’s evidence that he thinks it was acquired for the sum of approximately 280,000 euro. He did not have a deposit saved. He came to acquire this property because of the financial assistance provided to him by his mother. The respondent deposes that she recalls conversations with the applicant’s parents to the effect that they wanted to provide the applicant and his sister with funds by way of an early inheritance to invest in property.
The applicant conceded in cross examination that it was only during the exchange of disclosure in the proceedings that he advised the respondent that the property had been sold in 2017 for 165,000 euros with the applicant and his sister receiving a net balance in total of 60.75 euro.[3] The disposal of this property was not deposed to in his affidavit nor his financial statement.
[3] Exhibit H3.
There is no evidence as to any other property owned by the parties at the time of their separation in July 2007.
There is no evidence as to the non-superannuation and superannuation property of each of the parties as at 2009 when they recommenced their de-facto relationship save that the applicant still had an unknown interest in the investment property in Country E and the respondent’s evidence that “after a few months of settling into Australia, we decided it would be best to open a joint account…I had my own accounts with about $15,000 in savings that I continued with and the applicant had his own.” [4] This was not the subject of challenge and is accepted. There is no evidence as to either party migrating any superannuation entitlements from Country E.
[4] Respondent’s trial affidavit, paragraph 31.
The parties each contributed to a joint bank account for household expenses including rent and groceries.
A significant area of dispute between the parties is the use and application of the sum of $165,000 received by the respondent in 2010 by way of financial adjustment of property from her first husband. Such sum was placed by the respondent into a term deposit for a period of three months with Bank N in early 2010. I accept that the respondent would draw on such funds as and when required; for example the sum of $10,000 was applied towards the purchasing of furniture for the parties’ home. A capital sum was continually rolled over by the respondent into consecutive three-month term deposits. The respondent conceded in cross examination that she made additional contributions to the capital sum, some of which may have come from work related bonuses. At maturity in 2013 the savings had grown to $213,000.
In approximately late 2014 the parties purchased a motor vehicle for the sum of $30,000.00. The loan repayments for this motor vehicle came from the parties’ joint bank account until late 2015 when the respondent paid out the remaining loan of between $18,000 - $19,000 from her savings. Upon separation this motor vehicle was transferred into the applicant’s sole registered name. It was written off in 2018 due to storm damage and the sum of $15,000 was paid to the applicant. Each of the parties have purchased themselves a car either shortly prior to or subsequent to separation. The parties agreed that neither of these motor vehicles would form part of the property pool for the purposes of these proceedings.
The applicant was employed in various positions as a professional during the second period of cohabitation with an income of between $80,000 to $100,000 per annum. It was not challenged that there were periods of time during the second period of cohabitation where the applicant was not engaged in paid employment including a period of seven months from mid-2016 to late 2016. In mid-2016 the applicant received a redundancy payout from O Company for approximately $45,000 and he applied such funds towards his share of household expenses for this period of time and a family holiday to Country E for three weeks.[5]
[5] Applicant’s trial affidavit, paragraph 20.
The respondent was employed throughout the second period of cohabitation as a professional earning approximately $180,000 per annum save for periods when she was on maternity leave.
The written evidence of each of the parties as to the acquisition of their legal interest in the two items of real property acquired by them during the course of the second period of cohabitation and the ongoing financial arrangements with respect to them is vague and unsatisfactory.
The applicant deposes that in or around late 2015 the respondent’s sister Ms J, himself and the respondent purchased the B Street property for the benefit of the respondent’s parents so that they had a home to live in. It was agreed between the parties that the respondent’s parents would be solely responsible for the mortgage payments and council rates and any shortfall would be paid for by the respondent and her siblings. After settlement the respondent’s parents moved into another property that was purchased for them by the respondent’s brother.
In cross examination the applicant conceded that: -
·The respondent and her sister-in-law were responsible for the mortgage.
·He could not recall whether he had made any mortgage payments from the date of acquisition to the parties’ separation.
·He made no contribution to the payment of the deposit.
·He did not know the source of funds for the payment of the deposit.
The totality of the respondent’s written evidence is not only vague and unsatisfactory, it is misleading. She deposes that “I” bought this property. She refers to both the B Street and the D Street property throughout her affidavit as “my” properties. No mention is made in her written material that anyone other than herself has any legal interest in this property. The certificate of title evidencing the legal owners of the property is not in evidence. Only the parties’ financial statements indicate the legal interest in this property by each of the parties. The respondent provides no evidence as to the intention of the property originally being purchased with the intention of having her parents live there. The respondent deposes that she was unable to obtain a loan on her own behalf as she had only recently returned from maternity leave to paid employment. The respondent conceded that the loan was only able to be acquired at that time as the applicant provided security and the parties were able to obtain an employee benefit as the applicant was working for O Company at that time.
The respondent’s written evidence as to the arrangements between herself and her sister-in-law is scarce. Her written evidence in total is that: -
The property was a brand new two-bedroom house that [P Company] built for me. After the build, I had to pay additional costs on landscaping, gardening, fencing. The ongoing costs for this property are the back and front lawns, gardening, water and council rates.
The respondent deposes that she and her brother were primarily responsible for the maintenance, conservation and improvement of the two properties. She attended to hiring tradespeople and gardeners for help in maintaining the property and paid the council rates being 50% for the B Street property and 100% for the D Street property.
In cross examination the respondent conceded that: -
·There is no evidence to suggest that her sister-in-law contributed financially to the purchase costs.
·Her sister-in-law is not a witness in her case despite the fact that it would have been easy for her to give evidence.
·She paid the deposit for the property.
The respondent asserted that her sister-in-law repaid her the deposit monies. It is not clear as to what sum was allegedly repaid, nor is there any evidence to support this assertion. The respondent denied that she has gifted to her sister-in-law and brother a half interest in the B Street property.
The applicant deposes that in or around late 2015 a vacant block of land in D Street was purchased by the parties for the sum of $370,500. The respondent and he intended to build a house on this block of land through Q Company and a deposit of $15,000 was paid to them for this. Following separation, he directed that the repayment of the deposit be transferred to the respondent’s bank account.
This is the totality of the applicant’s written evidence with respect to the acquisition of this property. The applicant otherwise deposes that he applied the income from his employment to “mortgage repayments” and the respondent requested that all his income be deposited into the joint bank account whilst her income continued to be deposited into her sole bank account.
In cross examination the applicant:
·Conceded that settlement of the property took place in late 2016.
·Conceded that respondent was responsible for managing the conveyance on this property. The applicant asserts that this was because he was responsible for B Street.
·Conceded that the sum of $97,000 was paid by the respondent and that it was the respondent who paid the deposit.
·Could not speak to the proposition that the source of the $97,000 was the monies received by the respondent from her property settlement.
·Conceded that the $45,000 received by him by way of his redundancy was not applied towards the purchase costs.
·Conceded that he had never made a mortgage payment as all his money was applied towards paying rent, groceries and bills.
·Stated that he directed Q Company to refund the $15,000 deposit to the respondent as she had paid it originally.
It is the respondent’s written evidence that again “I” purchased this land in late 2016 for the sum of $387,500.00. A loan was secured by way of mortgage over the property in the sum of $280,000. It was purchased as an investment property. The respondent spent approximately $4,000 to have a metal fence erected around the block and $1,600 for rubbish to be cleared. The respondent was also responsible for ongoing costs relate to grass cutting and council rates. That is the totality of the respondent’s evidence as to this property during the parties’ second period of cohabitation.
In 2016 the respondent was advised that the parties had been overpaid Family Tax Benefits in the sum of $11,946.17. From 1 July 2016 to 30 June 2017. The Centrelink debt accumulated during the second period of cohabitation was repaid from the joint account by way of small repayments which totalled the sum of $1,577.04. The applicant concedes that the monies through the Family Tax Benefit Scheme were applied to the benefit of the whole family.
At the time of separation, the respondent purchased a motor vehicle for the sum of $38,000.00.
I accept and find that both parties have contributed financially to the household during the course of this second period of cohabitation. I accept that the respondent’s earnings were higher during this second period of cohabitation than the applicants. I am satisfied and find that during periods of time when each of the parties were not engaged in paid employment outside of the home savings were required to be utilised to meet household expenses.
The respondent concedes that the parties made equal parenting and homemaker contributions during this second period of cohabitation, and I accept that this was so.
There is no evidence as to the value of the real property as at separation. There is no evidence as to the value of the parties’ superannuation property as at separation.
Subsequent to the parties’ separation there were long periods of time when the children did not spend any time with the applicant and as between the parties the respondent was solely responsible for their care. The most time the children spend with the applicant during the school terms is two nights a fortnight and for one half of the school holidays. I accept and find that post separation the respondent has borne the majority of the responsibility for the care of the children.
The respondent deposes that subsequent to separation she entered into a payment plan with Centrelink to pay off the remainder of the debt in the sum of $100 per month. The applicant deposes that for a year he paid the sum of $100 per month. It was put to the applicant that it was not in fact “him” making the repayments but rather that the payments were being made from the parties joint account between mid-2016 to late 2017. The applicant’s evidence was that he did not know the source of funds for these payments. In those circumstances I accept the respondent’s evidence that for a year the outstanding debt was paid from joint monies and thereafter the respondent paid the balance outstanding in the sum of $10,369.13.
The applicant conceded that subsequent to the parties’ final separation the respondent has met all the outgoings with respect to the D Street property. There is no evidence as to the value of the respondent’s contribution in this regard.
The respondent’s evidence as to the financial arrangements with respect to the B Street property is confusing. It was her oral evidence that she pays $450 a week rent to her brother for living in the house and that this sum of money had been deposited into her brother’s bank account. This is not disclosed in the respondent’s financial statement. She does not depose as to this arrangement in her affidavit. In cross examination the respondent conceded that she has paid $1,950 a month rent to her brother for occupation of the property – being the sum of $450 a week to her brother and sister-in-law. Bank statements in evidence record the sum of $1,950 a month being paid to the respondent’s brother (being $487.50 a week) and then every month the sum of $975 (being $243.75 a week) is paid back to her with the description of the transaction being “rent return.”. It was the respondent’s evidence that for the past six years she and her brother have shared the mortgage and the rent; thus she pays the full sum of rent and then receives half of it back as she is the part-owner of the property. During the course of cross examination, the respondent:
·Denied that the reason she is not only paying $225 a week in rent is because she is paying all the mortgage payments and trying to make it look like she is only paying half.
·Conceded that she does not disclose in her affidavit that she is paying any rent on the property.
·Conceded that she pays her brother $1,950 a month and thereafter his wife pays the sum of $1,880 a month toward the mortgage.
·Denied again that in truth she is giving her brother and sister-in-law the money to appear as if they are paying their half of the mortgage.
·Denied that she is paying the whole mortgage and trying to create the impression that she is only paying half so that her brother gains some form of financial advantage.
·Conceded that she has at times missed making mortgage payments and has at times put a moratorium in place due to hardship. There have also been times when she has been late in her mortgage payments.
The financial arrangements as set out above are difficult to distil. The respondent has an obligation to provide a clear and transparent understanding of her financial circumstances. The circumstances she reposes to and the evidence she gave during cross-examination in this regard is illogical. Her taxation returns might be probative as to the reasons for what seems to be a highly unusual arrangement. The respondent did not call her siblings who are obvious natural witnesses in her case. In those circumstances, I find that the guidelines provided to trial judges to not be unduly cautious in making findings of fact in favour of the innocent party as identified by a range of cases considered by the Full Court including Black v Kellner (1992) FLC 92-287 and Weir v Weir (1993) FLC 92-338 ought to be applied as against the respondent.
The applicant deposes that from the date of separation until approximately March 2019 the parties had an informal agreement whereby he would pay half of the children’s expenses including school uniforms and apparel. This was not challenged by the respondent, and I accept it. Each of the parties assert that they contacted the Child Support Agency to obtain an assessment after the parties’ informal agreement failed. From approximately April 2019 the applicant paid $700 per month in child support. From September 2019 to June 2020 this decreased to $240.50 per month. From September 2020 to September 2021 this again decreased to $132.33 per month. From 10 September 2021 to August 2023 the applicant’s child support assessment was nil. A child support assessment dated 11 August 2023 records the applicant’s ongoing child support is $605.83 is per month.
Prior to the separation of the parties the eldest child was, by agreement, enrolled in private school. Both children are now attending this school although the applicant’s oral evidence was that he “could not recall” executing the enrolment form for the youngest child to attend. It is uncontested that the applicant paid for the costs of the private school fees for the first year after separation but not thereafter; thus the last time he paid was in 2017. The applicant’s oral evidence as to his approach to the children’s school fees was that: “if you can’t afford to take them there then you have to do what you have to do.”
Whilst the applicant deposes that he has financially supported the children during the two years he did not pay any child support by way of buying a laptop, sports shoes and musical instruments, I accept and find that the respondent has borne the majority of the financial burden of the children post separation. I place no weight on the applicant’s evidence that he purchased each of the children a tablet as their Christmas present in 2021.
Both parties submitted findings of contribution as against a single pool of property of both superannuation and non-superannuation property.
The Full Court in Horrigan & Horrigan [2020] FamCAFC 25 reinforced the holistic approach espoused in Fields & Smith [2015] FamCAFC 57 and stated that the proper approach to the assessment of contributions is:
[35] …established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment…
All contributions are to be weighed collectively and not by way of compartmentalising one contribution against another or the remainder, with such weight as the court determines: Kessey & Kessey (1994) FLC 92-495.
The applicant submits that a finding should be made that the parties have made equal contributions.
The respondent submits that a contribution finding should be made of 70% in her favour.
In this matter a global approach to the assessment of the contributions made by each of the parties to the asset pool is appropriate to be applied to a single pool of property of both superannuation and non-superannuation. There is no evidence as to the value of the parties’ superannuation entitlements prior to the parties commencing cohabitation nor at the conclusion of the relationship. There is no evidence that their superannuation entitlements are different in their nature, form or characteristics.
A significant issue throughout the hearing of this matter was the approach to be taken to the respondent’s financial contribution by way of her property settlement in the sum of $165,000. The applicant submits that the court should undertake a forensic accounting exercise with the respondent only to be given credit for the sum of $165,000 received by her if she can prove exactly how much of that sum was applied towards the acquisition costs of the items of real property. I reject this contention.
Doing the best I can taking into account the significant deficiencies in the evidence of each of the parties, I find that the parties’ contributions during the first period of cohabitation were equal. I find that the respondent has made superior financial contributions both throughout the second period of cohabitation and subsequent to the parties’ separation. Such superior financial contributions included the property settlement monies received by the respondent in the sum of $165,000, her higher financial earnings throughout the relationship and, as between herself and the applicant, her higher financial contributions to both items of real property and the children’s financial needs. Whilst the parties equally applied their efforts as homemaker and parents during the second period of cohabitation, the respondent has borne a significantly higher responsibility for parenting the children subsequent to separation. I do not accept in those circumstances that a finding of equal contributions as sought by the applicant is appropriate and reflect a just and equitable outcome.
Adopting the same holistic approach as that adopted by the parties, I assess the parties’ contributions to the known property pool of both superannuation and non superannuation as 40% to the applicant and 60% to the respondent.
By way of cross check in dollar terms this equates to property to the value of $368,710 to the applicant and $553,064 to the respondent. That is a differential of $184,354.
RELEVANT MATTERS PURSUANT TO S90SM(4)(D) – (G) AND 90SF(3)
The applicant is aged 43 years and is currently employed by R Company as a professional. His assessable income for the 2023 financial year was $76,649. Whilst his employment is on a contractual basis, he chooses this form of employment as it derives him a higher income, if not a consistent one. Thus whilst the applicant’s liability to pay child support will “catch up” with him when he re-engages in paid employment, there will be periods of time when the respondent will be required to meet all the financial needs of the children. The applicant has property the value of which is not known.
The respondent is aged 49 years and is currently employed with S Company as a professional. Her fortnightly salary now is $5,789 net and she earns a higher income than the applicant. As between the parties the respondent will bear the majority of the care giving of the children. She will continue to bear the full responsibility for private school fees despite the applicant’s agreement that at least the eldest child would attend this form of education. The respondent has a credit card liability of $15,000 that is not on the balance sheet. The respondent’s financial dealings with respect to the B Street property are not transparent.
There is no evidence that either party has any health issue that affects their capacity to earn an income.
The applicant concedes that an adjustment of 5% to the contribution finding should be made in the respondent’s favour. The respondent submits that an adjustment of 10% should be made. Weighing all of the above considerations on the available evidence including the failure of the applicant to disclose the K Company shares and the unclear evidence as to the wife’s financial dealings relating to the B Street property, I am satisfied that an adjustment should be made to the respondent of 7%. That equates to the respondent receiving a further $64,524.
JUST AND EQUITABLE
In the event the applicant receives 33% of the parties’ known property he would receive property to the value of $304,185.
In the event the respondent receives 67% of the parties’ property she would receive property to the value of $617,589.
That is a differential of $313,404.
The applicant will retain his savings and superannuation entitlements to the value of $134,317. Thus an adjustment of $169,868 is required.
One of the objects of the introduction of Part VIIIB of the Act was to provide a mechanism in which both parties might have superannuation to be used to maintain and improve living standards in retirement. In circumstances where the value of the superannuation property is almost equal to the value of the non-superannuation property, I am satisfied that this should be made by way of a payment of a cash sum and a superannuation splitting order. I am satisfied that a superannuation splitting order to the applicant of $27,565 is just and equitable. Thus the applicant will receive a further cash sum of $142,303.
I am satisfied that it is just and equitable to afford the respondent the opportunity to pay the applicant the cash sum required so as to retain the two properties. If she is unable to do so the D Street property will be sold.
Thus the applicant will receive:
Description Value (a) Bank Account $14,001 (b) Super Fund 2 $120,316 (c) Cash payment from Respondent $142,303 (d) Superannuation Splitting Order $27,565 TOTAL $304,185
The respondent will receive the following:
Description Value (a) D Street, Suburb C $650,000 (b) B Street Suburb C $370,000 (c) Bank Account $3,266 (d) Super Fund 1 $290,074 (e) Mortgage for D Street (#...85) and (#...44) $301,426 (f) Mortgage for B Street (#...17) $252,022 (g) Cash payment to applicant $142,303 TOTAL $617,589
Standing back and looking at the distribution of assets on an overall basis, I find that this distribution achieves a just and equitable alteration of the property interests of the parties.
Orders will be made accordingly.
I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 15 December 2023
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