Jarrott and Jarrott

FAMILY COURT OF AUSTRALIA

JARROTT & JARROTT

[2007] FamCA 1002

FAMILY LAW – PROPERTY SETTLEMENT – disparity of contributions by or on behalf of parties – adjustments for s 75(2) factors where evidence about future economic circumstances of a party are unclear – Chattels dispute determined based on attachment rather than value

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

Hickey and Hickey and the Attorney-General for the Commonwealth of Australia (2003) FLC 93-143; 30 Fam LR 355
Robb and Robb (1995) FLC 92-555; 18 Fam LR 489

APPLICANT:

MR JARROTT

RESPONDENT:

MRS JARROTT

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER:

MLF

2006

DATE DELIVERED:

31 AUGUST 2007

PLACE DELIVERED:

ALBURY

JUDGMENT OF:

THE HONOURABLE JUSTICE CRONIN

HEARING DATE:

24 AUGUST 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MS BOYLE

SOLICITOR FOR THE APPLICANT:

ROBB & ASSOCIATES

COUNSEL FOR THE RESPONDENT:

MR O'SHANNESSY

SOLICITOR FOR THE RESPONDENT:

ADAMS LEYLAND

INDEPENDENT CHILDREN’S LAWYER COUNSEL:

MS WEARNE

INDEPENDENT CHILDREN’S LAWYER SOLICITOR:

LEGAL AID COMMISSION NSW

Orders

That on or before 5 October 2007 (or such other time as may be agreed between the parties) the wife do all acts and things required to transfer to the husband, at the expense of the husband, all of her interest in the real property at R (“the real property”).
That contemporaneously with the transfer of the real property, the husband discharge the home loan liability of the parties to National Australia Bank Limited (“the home loan”).
That from this day, the husband have exclusive occupancy of the real property and indemnify the wife in respect of all outgoings of or with respect to the real property including all liability arising out of the home loan.
That forthwith, the husband and the wife do all acts and things and sign any necessary document required to place the property at B (“the investment property”) on the market for sale on terms and conditions to be agreed and in default of agreement then on terms and conditions determined by an agreed estate agent.
If the parties do not agree on the agent referred to in paragraph 4 hereof, each of the parties shall provide to a registrar of the Melbourne Registry of this Court, a list of 3 names of agents willing to so act for the registrar to nominate the agent using the provisions of Rule 15.46 of the Family Rules 2004.
The net proceeds of the sale of the investment property together with the net proceeds of the sale of the shares referred to in the orders made 24 August 2007 after payment of all attendant sale costs, rates, taxes and outgoings shall be applied as follows:
(a)to discharge the liabilities referred to in the orders made 24 August 2007;
(b)to set aside such fund as may be anticipated to be required to pay any capital gains tax of the parties or either of them as a result of the sale of the investment property and the said shares.
That the net pool of assets referred to in the judgment this day with appropriate adjustments as a result of these orders be divided as to 57.5 per cent to the husband and 42.5 per cent to the wife.
Notwithstanding that the cash payment due by the husband to the wife may not be able to be determined by 5 October 2007 because of the forgoing orders, the husband shall pay to the wife by 5 October such sum as is reasonably expected to be due by the husband to the wife.
The parties have liberty to apply in respect of:
(a)the determination of what is reasonably expected as referred to in paragraph 8 of these orders; and
(b)any default sale clauses of these orders in respect of the real property.
Any application made pursuant to paragraph 9 of these orders shall be made to and heard by Justice Cronin.
That for the purposes of paragraph 12 of these orders, a base amount of $63,659.50 is allocated pursuant to s 90MT(4) of the Family Law Act 1975 to the wife out of the interest of the husband in the Superannuation Scheme in which the husband is recorded as member ….
That for the purposes of paragraph 11 hereof and pursuant to s 90MT(1)(a), whenever a splittable payment becomes payable in respect of the interest of the husband in the Superannuation Scheme, the wife is entitled to be paid the amount calculated according to Part 6 of the Family Law (Superannuation) Regulations 2001 and the husband’s interest in the said scheme or fund is reduced accordingly.
That for the purposes of s 90MZD of the Act, these orders bind the trustee of the said scheme or fund, the court being satisfied that the trustee has been accorded procedural fairness in relation to the orders.
That paragraphs 11 to 13 of these orders shall have effect from the operative time.
The operative time for the purposes of paragraph 14 of these orders is the fourth business day after the date of service of the orders upon the trustee of the said scheme or fund.
That the husband retain and the wife relinquish any interest in the husband’s motor car and the four motor cycles in the possession of the husband and the war medals.
That the wife retain and the husband relinquish any interest in the wedding band and diamond ring and the sapphire and diamond ring in the possession of the wife.
That by 4.00pm on 14 September 2007, each party prepare a list of all items in their possession or control save for:
(a) the items referred to in paragraphs 1 and 2 above;
(b) any item acquired by either party subsequent to their separation.
That by 4.00pm on 21 September 2007, the lists of each party be combined, such exercise be undertaken by the solicitors for the husband.
That by no later than 4.00pm on Sunday 30 September 2007, the parties arrange a meeting convened by the solicitors for the wife and unless otherwise agreed to the contrary, each choose an item on an alternate pick basis with the husband having the right to make the first choice.
That by no later than 4.00pm on 5 October 2007 each party do all things necessary to collect from the other at their own expense, the items that they have chosen from the list referred to above.
That upon the completion of such division of chattels, each party retain those items in their possession to the exclusion of the other and thereupon become the absolute owner in law and in equity of such items.
That save for any issues of costs as between the parties, all outstanding applications are otherwise dismissed and all proceedings removed from the list of cases awaiting a hearing.

IT IS CERTIFIED

That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.
That by 4.00pm on 10 October 2007, any party wishing to make any application for costs arising out of these proceedings may make submissions to Justice Cronin in writing.
In the event that any application for costs is so made by either party, the other party shall until 4.00 pm on 17 October 2007 to provide any submission in writing in response.
That any such application for costs arising out of the said submissions shall be determined in chambers.
If no application for costs is made, the applications of the parties shall be deemed to have been dismissed.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Cronin delivered this day will for all publication and reporting purposes be referred to as Jarrott & Jarrott.

FAMILY COURT OF AUSTRALIA AT ALBURY

FILE NUMBER: MLF 67 of 2006

MR JARROTT

Applicant

And

MRS JARROTT

Respondent

REASONS FOR JUDGMENT

The husband is a 41 year old career public servant. The wife is 43 years old and works with children. For the purposes of this judgment, I shall refer to them as the husband and the wife. They have been unable to agree on division of property. They live in separate towns in country Victoria but the driving distance between them is not an insurmountable hurdle in relation to their parenting responsibilities.

Two main issues

The two main issues for determination are:
(a)what portion of an agreed pool of assets each party should receive having regard to particular contributions including:
(i)the disparity of assets at the commencement of cohabitation;
(ii)the unusual contributions made after the parties separated;
(iii)what each party did during the relationship;
(iv)the husband’s support for the wife’s son from a previous relationship; and
(v)various contributions made by extended families on behalf of each party,
and what adjustment (if any) should be made because of s 75(2) factors; and
(b)what division, if any, should be made to:
(i)the furniture of both parties;
(ii)four motor cycles;
(iii)two specific pieces of jewellery; and
(iv)some war medals;
in circumstances where there were no valuations but distinctly competing proposals.

Background

The parties began living together in 1990. At that time, the wife had responsibility for her son E who was then aged 3 years. E is now 20 years of age but to all intents and purposes, was brought up within the household as if he was the child of the husband and the wife.

Children

There are four children of the marriage as well as E. A son was born in July 1994 and is therefore 13 years of age, a daughter was born in October 1997 and is therefore aged 9 years, and twin boys were both born in May 1999 and the twins are therefore 8 years of age.
Orders have recently been made under which the parties have a week about arrangement in respect of the care of those children.

The law

The process that I intend to follow for the determination of the property issue was explained to the parties prior to the commencement of the hearing. In addition, each party was represented by experienced counsel. The process is that set out by the Full Court in Hickey and Hickey and the Attorney-General for the Commonwealth of Australia[1] where the Full Court said:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
[1] (2003) FLC 93-143 at 78,386
The provisions of s 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”) are as follows:
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)he contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;
After assessing the contributions and giving them weight, I shall turn to the examination of what is effectively the future for each party by reference to the factors set out in s 75(2) of the Act. Those factors are as follows:
a)      the age and state of health of each of the parties;
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)     any law of the Commonwealth, of a State or Territory or of another country; or
(ii)     any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party's role as a parent;
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.

The evidence

The parties agree on the valuation of all assets other than those to which I shall turn. In respect of liabilities, all were clarified however there is still some uncertainty about a tax liability arising from the disposal of assets and the parties have agreed to set aside a sum for that contingency in the pool and if there is an excess, each will share according to the divisions that I propose to make.
The husband relied upon his affidavit and a financial statement and gave oral evidence and was cross-examined.
The wife relied upon her affidavits filed on 26 July 2007 and 22 August 2007 along with a financial statement filed on 26 July 2007. She also gave evidence and was cross-examined.

THE POOL

The pool as agreed, excluding the chattels issue, is set out in Exhibit H1. It is as follows:
The R Home                 $705,000
Less mortgage                $200,200              $504,800
Husband’s car   11,000
Wife’s car   22,000
Less debt   32,809                (10,809)
Share portfolio   91,200
Loan to J P/L                    55,000
Less debt to mother           55,000                  nil
ADD BACK wife’s paid legal expenses             10,000
Queensland Unit             320,000
Less mortgage, estimated
Sale costs, tax                285,440                    34,560
$640,751
Liabilities
Husband’s debts                     10,899
Wife’s debts   2,265
Hospitality business debt          33,448
Body corporate debt               16,500
Wife’s visa card  23,132                  (86,244)
NET EQUITY  554,507
The “chattels” are not listed as I shall deal with them separately.
The parties have superannuation which is not in dispute and to be divided equally. The wife’s superannuation totals $6,584 and the husband’s is $133,903. The parties have agreed that there will be a splitting order in favour of the wife in the amount of $63,659.50.
There was also about $3,000 in a trust account arising out of previous orders and I made orders by consent on 24 August about that money. It need not be mentioned further. In discussion with counsel, I was handed a minute containing 3 paragraphs. Paragraphs 1 and 3 were consented to but not the second relating to a ring which forms part of the “chattels” that I shall return to. In respect of the ring, I do not propose to make the order for its sale.

The facts

When the parties began living together in late 1990, each was employed as a public servant. At that time, the wife owned a two bedroom unit at H into which the husband moved. The unit had been bought about three years prior to the cohabitation. At cohabitation, the wife had an equity of about $13,000 in it.
Also at the time of cohabitation, the husband had little by way of assets. He had been in the public service for about three years.
The parties had an arrangement under which the wife paid her mortgage payments and the husband paid the weekly living expenses for them both. In April 1992, the parties were married. Each was earning roughly the same income.
In 1993, the parties purchased a block of land at A. The deposit was provided by a $10,000 gift from the husband’s parents and approximately a further $10,000 which the parties had saved. They borrowed the balance of the funds to acquire the land and to pay for the construction of a home on it. It was the husband’s evidence that he received a small inheritance of $8000 from a relative and that enabled a pergola to be put on the side of the house and the purchase of a computer. Around the same time, the wife’s parents gave the parties approximately $4000 which they used for lights, blinds, drapes, a lounge and dishwasher for their new home. There were other monies provided by the wife’s parents which went towards a family holiday. That evidence of the wife was unchallenged.
Upon the completion of the new home, the parties vacated the wife’s unit which was then painted throughout in readiness for a tenant.
To that point in time therefore there was little difference between the financial contributions that each of the parties had made or that had been made on their behalf by their respective families. I do not distinguish between the husband and the wife in respect of the initial contributions.
Having moved into the new home, the families continued to assist the husband and wife in a variety of ways.
E continued to live with the parties and the wife conceded that his father did not have a lot to do with him and that the financial support he provided was sporadic.

When the first child of the parties was born, the wife commenced maternity leave and then left the public service in 1996. At that time, she cashed in her superannuation and long service leave entitlements obtaining approximately $58,000. The wife then began working for her mother who operated a childcare centre. Whilst her income was then less than that of the husband, she took the couple’s son and later their daughter with her where provision of care was free.
In 1996, the parties purchased a property in G. The wife’s version was that her parents offered the deposit and that it was $30,000. The husband’s version was that the wife’s parents lent the parties $50,000. The wife’s money from the superannuation and long service leave entitlements went towards the G acquisition as did a sum of approximately $220,000 that they had borrowed from the National Australia Bank.
The wife said that prior to the purchase of the G home, her parents gave the parties $18,000 to acquire a new motor car. At the same time, they gave the parties $2000 to build a carport for the home at A. The husband made no mention of the $18,000 motor car in his affidavit and when questioned about it, indicated that he had forgotten about it.
The wife said that sometime after the birth of their daughter in October 1997, her parents paid $50,000 off the G home mortgage. The husband said that that sum was in fact the money provided at the time of the deposit being paid. What was common ground between the parties was that ultimately upon the sale of the G property money was repaid to the wife’s parents. The husband said that there was one $50,000 loan and that that was the sum that was repaid. The wife’s version was that the only money repaid was the $18,000 car loan and the $30,000 that she asserted was provided for the purposes of the G property deposit. She said the $50,000 that went towards the mortgage was a gift and had nothing to do with the G property deposit or the car loan.
Both parties maintained their position when cross-examined. The husband strongly denied that the wife’s parents paid $50,000 to assist them in their mortgage as asserted by the wife. Equally, the wife maintained that the only monies that had been provided were the $30,000, the $18,000 for the car and the $50,000 that went towards the mortgage.
It will be seen that the difference between the two parties’ positions is simply that the wife says that the parties received $98,000 whereas the husband says it was $68,000. The husband says that the $50,000 was repaid. In his affidavit[2] the husband said that part of the sale proceeds went to repay “the full amount of their loan”. He did not particularise the amount that was paid. Exactly what the ultimate gift (for the purposes of determining contribution) was not clear.
[2] para 21
The husband was vague about the car loan in 1994 and gave no specific evidence about the amount that was actually repaid from the sale of the G home in 1997. The wife for her part however, produced no corroboration from her family as to what was paid and more particularly, what was gifted and what was lent. Presumably, the conveyancing documents or at least the banking records of the parties would have shown what sums of money were paid back to the parents.
In circumstances where I am obliged to determine which version I accept, the Evidence Act 1995 (Cth) requires that I determine matters on the balance of probabilities. In some circumstances, I can make a finding based upon other matters relating to the credit of parties. For reasons to which I shall turn, I have a serious concern about the wife’s evidence in relation to her current financial position as well as her prospects for the future. Taking that into account along with the absence of corroborative evidence, I accept the version of the husband.
The husband said that he was involved in a motor vehicle accident in January 1996. The wife said it was January 1997. In cross-examination, the husband conceded that it may have been January 1997 because the wife asserted that it was in the year that their daughter was born. Whichever it was, it would appear that the husband was hospitalised and then involved in considerable rehabilitation before being able to return to work. The wife’s unchallenged evidence was that during this period of time, she reduced her work hours so that she could be available to assist the husband as well as care for the couple’s son.
The parties also disagreed as to what sum of compensation the husband received as a result of the accident. The husband said that it was $16,000 and the wife said that it was approximately $12,000. His version was that the $16,000 went towards the G property whereas the wife described it as being used for various things for the home and some household bills. Neither party produced any evidence to corroborate their respective version and the issue was not subjected to scrutiny in cross-examination. Having regard to the fact that the wife assisted the husband during the rehabilitation period and the parties had a reduced income accordingly, I propose not to give the contribution of the compensation any significant weight other than to acknowledge that it was made on behalf of the husband in the same way that the wife made a contribution as a homemaker and parent at that time.
The wife’s initial H unit and also the jointly acquired A home were sold and the husband described the amount that they received from those sales as “modest”. The wife did not disagree with that however she pointed out that there was money available which was used to pay for the renovations of the G home. Those renovations were partly undertaken by the wife’s father who not only provided free labour but also building material at cost.
The gift of the labour and materials was not quantified in dollar terms but I have taken it into account as a contribution by or on behalf of the wife.
In 1997 only about a year after acquiring it, the parties sold the G property for an amount significantly more than they had paid for it. They relocated to R where they acquired a home at N Street for $180,000. This money came from the proceeds of the sale of G and a mortgage from National Australia Bank.
To that point in time, in making an assessment of the contributions of the parties, I say that I have set out the facts as best I can determine them on the evidence presented by the parties. In terms of giving those contributions weight, I have formed the very clear view that to that point in time, there was little difference between the parties’ respective contributions. In saying that, I have also taken into account that up until the move to R, the husband either directly or indirectly had made a contribution towards the financial support of the wife’s son E including paying significant monies towards two years’ education expenses at G Grammar. The wife’s evidence was that her parents had always paid the private school fees for the first grandchild in each family but even if that was right in respect of the G period, I accept that there were expenses that were quite costly for the parties themselves. However, factoring in all of the various contributions from each of the parties and their respective families to that point in time, I am unable to distinguish between them and I assess their contributions accordingly as being equal.
Having settled in R, the husband continued to work in his chosen career as a public servant. E commenced private school in L. E attended school initially as a day pupil in Year 7 but boarded there in Years 8 and 9 and then ultimately completed his schooling for Years 10, 11 and 12 at a private school in Melbourne as a boarder. There was considerable debate between the parties as to who paid what towards those expenses. The wife maintained that her parents continued to pay the tuition fees for E and I accept that that happened. However, I also accept that there were other expenses associated with the education such as boarding costs, uniforms and the like and that the parties each covered those expenses. On any view, it was an expensive exercise. Having regard to the views of the Full Court in Robb[3], I accept that that was a contribution made by the husband and I propose to take that into account in my global assessment of the respective contributions of the parties.
[3] (1995) FLC 92-555, 18 FamLR 489
For some time after the parties moved to R, the wife was not engaged in employment outside of the home. However, I accept that otherwise right through the marriage, each of the parties has worked long hours and endeavoured to the best of their respective abilities to be productive economically for the benefit of the marriage partnership. At the same time, each made a significant contribution as a homemaker and parent in their own ways. As I explained to the parties, the provisions of the Act to which I have earlier referred require me to take into account and to assess and weigh these respective contributions. Mr O’Shannessy on behalf of the wife cross-examined the husband about the fact that both parties worked extraordinarily hard by not only the hours they worked in their respective careers and businesses but also when times were tough, in delivering pizzas and pamphlets. The husband was very reluctant to concede that the wife worked as hard as she asserted. However, her evidence was not challenged about the fact that she worked long hours in the business when things were not going well. It is impossible to give a mathematical evaluation of such contributions in precise terms and accordingly, I will take an overall broad brush global approach in respect of contribution.
The husband and wife then acquired a business in W for $120,000. The whole of that money was borrowed using the matrimonial home as security. I accept that the husband’s wage was relied upon by the mortgagee for the purposes of calculating the parties’ capacity to service the loan. As had always been the case, assistance was forthcoming from the respective families of the parties. Outside of his career as a public servant, the husband also assisted in not only the running of the business but also the various maintenance tasks associated with it.
In 2002 however a significant event occurred. The husband was given 97 acres of land by his father. That property is now the matrimonial home in the pool. The parties built the home. There was common ground that the land contribution was worth $75,000.
The parties sold the N Street property and used the limited balance left over and borrowed money from the National Australia Bank to build their new home on the land given to the husband.
As part of the operation of the business, the parties acquired vehicles and paid them off. Those vehicles are in the pool of assets.
There can be little doubt that the business for which both parties worked extremely hard was very successful. Having paid $120,000 for it in 2000, they sold it in 2003 for $650,000. Those funds after the discharge of any liabilities were then applied for the acquisition of shares. The shares remained in the name of the wife.
Having sold the business, the wife cared for the children at home for a period of about 12 months.
The parties then engaged in some investment exercises including the acquisition of units in D and a unit in B in Queensland. As investments, those were secured with significant borrowings and were generally not successful.
In 2005, the wife purchased a hospitality business for $200,000. All of that money was borrowed along with the provision of an overdraft facility and the husband guaranteed the loan. This business was also an unsuccessful investment. The wife sold a one half interest in it during the very first year of operation but the encumbrance that was attached to the home enabling the parties to borrow the funds, was not paid off. On the wife’s version of the evidence which was not challenged, she had to work long hours as a result of what seemed to be an incompetent commercial partner. There was no suggestion of any impropriety on the part of the wife and as the parties tendered a document setting out the agreed pool of assets, it was not put that there had been any inappropriate investment or wastage. The pool is what it is.
The remaining one-half interest in the hospitality business was sold by the wife to the commercial partner subsequent to separation but that gave rise to tax implications some of which are still being determined. There is also an outstanding balance on the business loan subsequent to the sale as the proceeds were insufficient to discharge it. That debt is in the pool.
The separation of the parties occurred on 1 January 2006. The wife left the home taking E but the husband who was then on sick leave from his employment remained in the home and cared for the children. Subsequent to the wife leaving the business in the middle of 2006, she was not engaged in employment until early 2007. Accordingly, all of the responsibilities for the short fall on the investment units fell to the husband. I accept that his financial problems were compounded by the fact that the wife applied for child support and the parties then began the merry-go-round of assessments and arguments. The wife conceded that during this frustrating time, she was asked to agree to sell the Queensland unit but had refused. The debt continued to accrue. The wife had no capacity to pay from income and the responsibility fell to the husband.
I accept that because of the husband’s fixed salary, the shortfall on the investment rentals together with the obligations of support for the children, the husband has made not only a significant financial contribution but one that was greater than the wife. The financial dilemma of the husband subsequent to separation is clearly set out in the affidavit of the wife[4] in which she describes the period as an extremely difficult one in respect of personal finances.
[4] para 93
The financial position was not made easier by the fact that the couple’s son had commenced private school in L. The husband said that the wife told the school to split the bill into two parts. He said that she had not paid any portion of the fees. In respect of the future, there is a dispute about whether the child should attend the school. The wife says the parties cannot afford it. The husband says that he will continue the child’s education and be responsible for payment. Having regard to the fact that the child had been in the school and the parties had (albeit with the wife’s parent’s assistance) committed the wife’s son E to private education, I will take the husband’s obligations into account in my deliberations under s 75(2). This issue may become relevant for future child support questions as the husband has been claiming some non-agency payments but also obtaining assistance from his parents. Because the couple’s son is not a first born grandchild of the parties, I have presumed that no assistance is being provided by the wife’s parents. Whether or not the obligation to pay school fees entitles the husband to some allowance for child support is a vexed question having regard to the fact that the whole child support system is currently changing. For my purposes, I see it as part of an obligation of the husband to support the child and accordingly, it is a matter that I should take into account under s 75(2).
The difficult financial position subsequent to separation and even the private school fees issue has to be taken in context of what has occurred in relation to the wife’s personal financial circumstances. The wife’s position was that she had no employment subsequent to separation and thus no income. She said that at separation, the Visa card which had been used to pay her son’s school fees as well as other expenses was almost at its limit. She said she struggled to service the minimum payment on the account which ultimately was referred to a debt collection agency. Interest has accrued on the debt to the extent that it is now beyond the credit card limit.
Between the date of separation and July 2006, the wife remained in R working in the hospitality business whilst she reorganised her commitments. From July 2006 until March 2007, she was not in paid employment because as she said, she was trying to sort out her business affairs. She also indicated that she wanted time for herself following the stress of being involved in the hospitality business. Whilst that was clearly her choice and to some extent there was an obligation to sort out the hospitality business, it placed a large burden upon the husband particularly in circumstances where as I was told, he suggested a sale of at least the Queensland property and that was rejected.
The period from the start of 2007 onwards creates more of a problem. The wife said that in February-March 2007, she heard of an opportunity to purchase a business but she was not in a financial position to acquire it. Her then partner, Mr T, purchased the business in which the wife is currently employed. In her affidavit, she said:
I believe [Mr T] purchased business (sic) using a company he owns. I believe the company is called [J] Pty Ltd. I have worked in this business as an employee since May 2007.
What the wife did not say at that time was that she had an interest by way of an investment in that property. In a subsequent affidavit filed 24 August 2007, that is, after this judicial circuit began, she rectified that position by indicating that she had not disclosed the investment in her affidavit sworn less than a month before. She indicated that she had borrowed the sum of $55,000 from her mother which she had lent to J Pty Ltd and the company then purchased the business. She went on to say that the company was “completely owned” by Mr T but that she was an office holder.
I have great difficulty with this evidence having regard to what I have just set out above in relation to the husband’s financial difficulties in endeavouring to make ends meet but it also concerns me as to what evidence I should generally accept from the wife.
That position is made more difficult by the wife’s recent affidavit indicating that her relationship with Mr T had “soured” and that it was not likely that they would ever recommence a personal relationship. She said she was not sure what would happen to the business. In evidence, she said she was not receiving any income now from the business but that she was in receipt of some government benefit. Furthermore, she said the reason she was continuing to work in the business was because it would otherwise simply close. I presumed from that that she meant that in the event that she did not attend there, she would lose her investment. It is also clear on the evidence that the wife is the person with the relevant legal accreditation that enables the business to operate. Mr T has no hands-on role.
The concession by the wife that she had invested $55,000 by way of a loan from her mother into the business is also difficult to understand because she did not make any mention of it in her financial statement. Counsel for the husband elicited from the wife that she was the person who did all of the organisation of the purchase of the business through the solicitors. The invoice for the work done by the solicitors also refers to her. Accordingly, even paragraph 2 of the affidavit filed 24 August 2007 is hard to accept.
In cross-examination, the wife conceded that it was possible for her to receive benefits from the business such as food but again, she made no reference to those benefits in any financial statement or affidavit.
All of this leads to my reservation about two things. The first relates to the financial contribution in the period subsequent to separation. The second is the wife’s own economic future. If she was in such dire financial circumstances, having the capacity to borrow $55,000 from her mother, it seems to suggest to me that she had the capacity to make a much greater contribution towards the maintenance of the debt position subsequent to separation. The second issue is that it is likely that the wife will be in some form of business or employment in the future or, if her financial circumstances are not strong, she has the support of family to assist her as had occurred on a number of occasions during the marriage.

In relation to the respective contributions, I now turn to what weight should be given to them.
I am balancing the husband’s income over the life of the relationship, his contribution as a homemaker and parent and the contribution of the land against the wife’s role as a homemaker and parent and her income from the various sources. I have dealt with the other contributions along the way.
I find that the husband’s contribution exceeds that of the wife to a significant degree. Percentages mean little depending on the size of the pool of assets. It is important to look at the underlying value in this assessment as much as it is in the overall justice and equity determination. For example, a 10 per cent “loading” to one party creates a difference of 20 per cent between them. It is that difference that matters.
Having regard to the findings I have made, there is a justification for a 20 per cent differential to recognise the greater contribution of the husband. Accordingly, I assess the contributions at 60 per cent to the husband and 40 per cent to the wife.
Before turning to the third step, I return to the unusual issue of what I have loosely called the “chattels” dispute. As I pointed out above, apart from an insurance valuation in respect of the rings at or about the time that one of them was acquired there was no evidence about valuation of any of the items that I was asked to adjust between the parties. Very little evidence was also led in respect of contribution to these chattels and realistically, without any indication of their value, the factors under s 75(2) of the Act can hardly be said to be relevant.
In reality, I have to determine their division based on concepts of fairness and as I explained to the parties, that is very subjective.
One of the options open to me was to order a sale of all of the items and indeed, each of the parties in various submissions and evidence sought that in respect of some of these chattels.
In respect of the four motor cycles, the evidence was that three of them were specifically acquired for use by the children and the fourth for the two adults but that the couple’s son is now sufficiently capable of riding what was otherwise described as the adults’ bike. I canvassed with each counsel that one of my options was to devolve the property upon the children pursuant to s 79 of the Act but having regard to the lack of communication between the parties and the very fact that I was being asked to determine these emotive issues, I am convinced that even if the bikes belonged to the children, the parties neither had the transportation equipment nor the goodwill to enable the machines to be transported from one household to the other. In addition, the children currently ride those motor cycles on the property which will be retained by the husband. The wife has indicated it is her desire to acquire a rural property in due course but she does not have that opportunity at the moment. I also have the wife’s evidence to the effect that she did not accept that the children used the motor cycles a lot. Her rather cynical view was that the children had begun to ride them recently so that some sort of argument could be raised by the husband about the use of the motor cycles during this hearing. I find that hard to accept.
In respect of what was described as the furniture, the parties also differed about not only what each retained but also what proportion each retained was, of the total household contents. To a very large degree, that was caused by the definitional problem of what was household contents. Both parties referred to “furniture” but it was clear in cross-examination of the husband that he was excluding “white goods” from those contents. In respect of the motor cycles, I propose to order that they be retained by the husband and be deemed to be his property. He will no doubt have to face the children in future and deal with the controversy if one or other wishes to take the motor cycles to the premises of the wife. But to avoid conflict between the husband and the wife, pursuant to my orders, those motor cycles will henceforth belong to the husband.
The rings and the war medals will remain where they currently are. The wife will retain the rings to the exclusion of the husband and the husband will retain the war medals to the exclusion of the wife. I have made that determination on the basis as best I can on a principle of attachment to the items. I accept that the sapphire and diamond ring is a dress ring and the wife in evidence indicated that she was more interested in that than in the gold band wedding ring and what might loosely be called an engagement ring. Ironically she was still wearing those in the witness box and took them off to display them as having been joined to one another indicating that they could be sold. However, it is clear that the sale would bring an unknown amount and I suspect apart from marginally increasing the value of the pool, there would be little point in that course. The wife has always had the rings and they were acquired from funds of either of the parties. In the same way, the war medals were acquired a number of years ago from funds of either of the parties. The fairest and the logical solution is for each party to retain those items. Accordingly, the wife will retain the rings and the husband will retain the war medals.
That leaves the “furniture”. The husband’s argument was that the wife had two “bites of the cherry” and had taken what she had wanted. He was cross-examined at some length about the fact that the wife only took basic items. A number of the items which the husband recorded as having been taken were in fact old items that had been replaced by the parties themselves and had in fact either been stored or were used by the wife’s oldest son E. In cross-examination, the husband made clear that the white goods had not been included in the definition of furniture. Furthermore, when one examines the list that the husband prepared as the wife took items on the second occasion, it is clear that it covers a number of items that were really used by the children. When the wife gave evidence about these household goods, it became clear to me that there were a number of items that the husband had retained which had never been recorded nor contemplated as being part of the division. I was left with a very strong impression that the wife did only take basic items and that the husband had retained a significantly greater amount. The parties had ample opportunity to make an adjustment in respect of that issue but for whatever reason, chose to have me determine it for them. I reiterate that in my remarks directed to the parties prior to the case commencing, I warned them about the subjectivity of the role that I had to play. As I have indicated, without significant evidence in respect of the furniture issue, it seems that I can only subjectively determine the issue on the basis of what I see is fair. There being no clear delineation as to how these items could otherwise be divided, I propose to order that each party provide a comprehensive list of every item in each of their respective residences, including sadly, furniture used by the children and that each party choose one item at a time on an alternating basis. If there are items that neither party wants, they shall remain in the possession of the person who has control of them at the time that this division occurs. Needless to say, I exclude from those items for division, the rings, war medals and the motor cycles. I also exclude all items that can be firmly established to have been acquired by the parties subsequent to their separation. Any items of that nature must however be established by some credible evidence to have either been acquired by payment or gift. Notwithstanding my orders, if the parties can come to rational decision by agreement otherwise, they obviously should be encouraged to do so.
I now turn to the third step of considering the matters in s 75(2) of the Act.
The husband and wife equally share the responsibility for the children. The husband has income of around $81,000 per annum and importantly, it is secure. The wife’s evidence is that she has a modest earning capacity but as I have set out, I am not at all comfortable about that. I do however find that her income is not likely to be as high and certainly not as secure, as the husband. I also take into account that by my contribution assessments and the orders I propose to make, the husband will also be in a stronger capital position than the wife. I am also not comfortable about the wife’s relationship with Mr. T. Her evidence was that the personal and business relationship is at an end but for the reasons I have set out, I have doubts. The husband as a result of his greater income will now have the financial responsibility of supporting the children in the wife’s care through child support and he has the financial responsibility of paying private school fees for the couple’s son which I take as a serious obligation. As such, the apparent disparity of income will be reduced.
The husband has the home and although the dollar value is reflected in the division, clearly if the wife desires to have a property as she said in evidence, she will have to pay the setting up expenses. That is a real cost that the husband does not have to bear.
There are no age or health factors affecting the husband.
The wife’s evidence about her health problems with skin cancer was unchallenged but also little evidence was provided about the ramifications of all of that.
Overall however, I have taken into account that this is a small pool to be divided.
The husband therefore is in a stronger position than the wife and that justifies a small adjustment in her favour which I fix at 2.5 per cent.
Accordingly, applying those percentages, I propose to divide the pool as to 57.5 per cent to the husband and 42.5 per cent to the wife.

I certify that the preceding Seventy Six (76) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:

Date: 31 August 2007

[2007] FamCA 1002

31 August 2007

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