Jefferson and Jefferson
[2015] FCCA 3350
•19 November 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JEFFERSON & JEFFERSON | [2015] FCCA 3350 |
| Catchwords: FAMILY LAW – Property proceedings. |
| Legislation: Family Law Act 1975, ss.72, 75, 79, 117 Child Support (Assessment) Act 1989 |
| Cases cited: Stanford & Stanford (2012) 293 ALR 1970 Hickey & Hickey (2003) FLC 93-143 Russell & Russell [1999] FamCA 1875, (1999) FLC 92-877 Bevan & Bevan [2013] FamCAFC 116 Bevan & Bevan (1995) FLC 600 McClusky & McClusky [2014] FamCA 93 Whitton & Whitton [2014] FamCA 110 Omacini & Omacini (2005) FLC 93-218 Vass & Vass [2015] FamCAFC 51 Rosati & Rosati (1998) FLC 92-804 Atwell & Atwell (1981) FLC 91-187 |
| Applicant: | MR JEFFERSON |
| Respondent: | MS JEFFERSON |
| File Number: | SYC 908 of 2013 |
| Judgment of: | Judge Myers |
| Hearing dates: | 1 December, 2014, 2 December 2014, 3 December 2014, 4 December 2014, 5 December 2014 & 20 January 2015 |
| Date of Last Submission: | 22 March 2015 |
| Delivered at: | Newcastle |
| Delivered on: | 19 November 2015 |
REPRESENTATION
| Solicitors for the Applicant: | MN Lawyers & Associates |
| Counsel for the Respondent: | Mr Bateman |
| Solicitors for the Respondent: | O’Hearn Lawyers |
THE COURT ORDERS THAT:
All previous orders of the Court in respect of property be discharged.
Within 21 days the wife pay to the husband the sum of $776.70.
Within 21 days the husband cause to be provided to the wife two lists that itemise in a divided fashion between the lists all of the household belongings, furniture and furnishings in the husband’s possession.
The wife, within seven days of provision of such list by the husband, elect which of the two lists of the said furniture and furnishings she wishes to obtain from the husband advising the husband of the same in writing.
The husband shall thereafter make available the furniture, furnishings and household effects for collection by the wife within 21 days of the wife providing written notice to the husband at a reasonable time as nominated by the wife.
The base amount of $119,158.28 is allocated as required by section 90MT(4) of the Family Law Act 1975 to the wife out of the husband’s interest in (omitted) Super Fund member number (omitted).
In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 the wife is entitled to be paid the amount calculated in accordance with part 6 of the Family Law (Superannuation) Regulations 2001 and the husband’s entitlement, and the entitlement of such other person to whom a splittable payment may be made to payments of the husband’s interest in the (omitted) Super Fund, is correspondingly reduced.
The trustee of the (omitted) Super Fund shall do all such acts and things and sign all documents necessary as may be necessary to calculate in accordance with the requirement of the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001 the entitlement to the wife created by clause 4 of these orders pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in the (omitted) Super Fund.
This order have effect from the operative time and the operative time is four business days after service of a sealed copy of this order upon the trustee for the (omitted) Super Fund.
After service of the payment split notice pursuant to rule 7A.03 of the Superannuation Industry Supervision Regulations 1994 the wife shall do all such things and sign all documents as may be necessary, including, but not limited to, exercising her request pursuant to rule 7A.06(1) of the Superannuation Industry Supervision Regulations 1994 for the rollover or transfer of the transferable benefits out of the husband’s interest in the (omitted) Super Fund to a fund of the wife’s choosing in accordance with rule 7A.12 of the Superannuation Industry Supervision Regulations 1994.
Otherwise as provided for in these orders each party be declared to be the sole beneficial owner of all moneys in bank accounts, motor vehicles, shares in public or private companies, businesses, chattels, superannuation policies, furniture and furnishings and the like that stand in that party’s name or in that party’s possession as at the date of these orders.
Pursuant to section 106A of the Family Law Act 1975 should either party neglect or refuse to sign any deed or document or instrument or real property transfer necessary to give effect to these orders within seven days of a written request to do so a registrar of the Federal Circuit Court of Australia Newcastle registry is appointed to execute such deed or document, instrument or real property transfer.
IT IS NOTED that publication of this judgment under the pseudonym Jefferson & Jefferson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
SYC 908 of 2013
| MR JEFFERSON |
Applicant
And
| MS JEFFERSON |
Respondent
EX-TEMPORE`REASONS FOR JUDGMENT
These are property and spousal maintenance proceedings between Mr Jefferson, herein after referred to as the husband, and Ms Jefferson, herein after referred to as the wife, pursuant to section 79 and 72 of the Family Law Act 1975.
The husband seeks orders that are essentially as follows:
a)the husband retain the property at Property B, New South Wales, the husband indemnify the wife in respect of the mortgage over the said property,
b)the wife retain ownership of the property at Property H, New South Wales and Property I, New South Wales and the wife indemnify the husband in respect of the mortgage over the properties;
c)the wife retain any moneys received by her for the sale of the business known as (business omitted);
d)the wife keep the husband indemnified in respect of any liabilities associated with the business known as (business omitted), including liabilities relating to taxation, superannuation payments and the like;
e)the wife pay to the husband the sum of $50,000 within 42 days;
f)in the event the wife fails to make the payment to the husband, the wife thereafter sell the property at Property H, in order to obtain the funds to pay the husband;
g)the husband be entitled to lodge a caveat over the property at Property H, to secure the payment to be made to him by the wife; otherwise, each party retain any properties in their names, including motor vehicles, money and bank accounts, superannuation and the like.
The wife seeks orders that are essentially as follows:
a)the husband pay to the wife the sum of $140,000 within 42 days;
b)should the husband fail to make payment to the wife of the said sum, he cause to be sold the property at Property B;
c)the wife be entitled to lodge a caveat over the property at Property B;
d)the husband pay to the wife the sum of $50,000 by way of superannuation split from his superannuation fund;
e)the husband make available to the wife for collection items of furniture and furnishings set out in the document marked with the letter B, attached to the wife’s amended response filed 20 November 2014;
f)the husband cause the wife’s name to be removed from the (business omitted) business;
g)otherwise, each party retain any items of property in their respective possession, including real property that has the effect of the husband retaining his interests in the property at Property B, and the wife retaining her interests in the properties at Property H, New South Wales and Property I, New South Wales;
h)the husband pay to the wife the sum of $200 per week by way of spousal maintenance, as pursuant to section 72 of the Family Law Act 1975, such order to be ongoing; the husband pay the wife’s costs.
The wife sought that notations be made to the effect that each party acknowledge their rights to make a claim under or pursuant to the Successions Act and will provide a release to one another under the Successions Act, whether made in the lifetime or after the death of either or both of the parties.
Essentially, the dispute to be determined in the matter is whether either party should make a payment to the other, and in doing so retain the real property in their respective names and possession, whether there should be a superannuation split between the husband to the wife, and whether the husband should pay to the wife spousal maintenance.
By way of background, the husband was born (omitted) 1969, and the wife was born on (omitted) 1975. The husband is a qualified (occupation omitted), and the wife is a qualified (occupation omitted). In or about (omitted) 2002, the parties commenced cohabitation, (herein after referred to as ‘commencement’), with the wife moving in to live with the husband in a property he owned at Property B. At commencement, the wife owned properties at Property H, herein after referred to as Property H, and Property I, herein after referred to as Property I, a Saab motor vehicle, jewellery, household effects, superannuation entitlements in the sum of $10,800, and a (omitted) business she operated as a sole trader under the name (business omitted).
The husband conceded that for the purposes of the proceedings that he would not challenge the valuations of the wife’s two properties that provided that the Property H property was worth $250,000 at commencement and $400,000 at the hearing, and that Property I was worth $340,000 at commencement and $460,000 at the hearing. At paragraphs 86 and 87 of the wife’s affidavits sworn 17 November 2014, she deposes that at the commencement she had liabilities totalling $367,500. Ultimately, the parties agreed as a fact in the case noted in the orders made 20 January 2015 that at commencement the wife had debts secured by way of mortgage against the wife’s properties, being $200,840.88 secured against Property I and $129,624.69 secured against Property H.
At commencement, the husband owned a property at Property B, herein referred to as Property B, a Holden Commodore motor vehicle, and had superannuation entitlements. At paragraph 12 of the husband’s affidavit sworn 15 November 2014, he deposes that Property B was worth $600,000, and at paragraph 14 that there was a mortgage over the Property B property to the (omitted) Bank securing a debt of some $425,000. The husband estimates his total net worth, taking into account his motor vehicle at $19,000, superannuation at $49,000, and other assets at $1000, were at commencement some $344,000. The court notes that page 3 of the submissions by counsel for the husband suggests the husband’s net position at commencement was $244,000. The court accepts that that figure included in the submissions was, in fact, a typographical error.
Following commencement, the wife moved in to reside with the husband. At that time, the two properties at Property H and Property I were tenanted. The parties married on (omitted) 2005. At paragraph 20 of the husband’s affidavit, he suggested he and the wife contributed equally towards the cost of the wedding. At paragraph 109 of the wife’s affidavit, sworn 17 November 2014, the wife suggests that she paid what is described as almost all of the costs of the wedding and honeymoon, spending some $15,000 on the wedding and wedding album. The wife concedes in her affidavit the husband received an amount of $2000 that was used towards spending money on the honeymoon. At paragraph 110 of the wife’s affidavit, she deposes that her mother and grandmother also contributed the sum of $15,000 towards the honeymoon.
The wife sets out in her affidavit that in about 2005, her mother and grandmother spent some $23,500 on renovations to the Property H and Property I properties. In addition, the wife asserts that she borrowed the sum of $10,000 against the Property H property to contribute towards the cost of works. The wife deposes that her cousin Mr P did some what is best described as renovation work on the property at Property H. While the wife concedes at paragraph 130 in her affidavit that Mr P received payment for his labour, the wife suggested he was paid at a reduced rate. There is no evidence available to the court to make a finding as to the effect of any monetary discount on the work completed by Mr P as a result of the reduced rate.
On either 7 or 8 September, the wife purchased a shelf company and thereafter changed the name of the company to (business omitted). The husband suggested he encouraged the wife to work for herself and that the parties went to an accountant together at (omitted) to seek assistance in setting up the company. The husband deposes to having suggested to the wife that a room in the Property B property could be converted to a (business omitted) room and then the husband thereafter put in petitioning, doors and furniture into the room. The husband deposes that the business grew and another (employee omitted) was employed in the business. Both parties agree that, ultimately, the business was moved from Property B to rented premises. The wife suggests that the new business premises were at Property O, while the husband gives an exact address of Property D. The court notes that the suburbs are in close proximity. The court makes no finding as to the exact location of the new business premises. Nothing in the case turns on the exact suburb from which the business subsequently operated.
The husband suggests that he did such things as organising builders to do the fit-out of the new business premises and was thereafter responsible for maintenance. During cross-examination of the husband, counsel for the wife sought to minimise the husband’s involvement in the business. The parties’ affidavit evidence and that given during cross-examination reveal a significant dispute as to who paid for what during the course of the marriage, including who made payments to mortgages, how much was paid by each party towards the expenses of the parties and who did what in respect of the work, both paid and unpaid, that the parties undertook, including caring for the parties’ child.
Unfortunately, the parties suffered more than their fair share of hardships during the course of their relationship, namely, the parties’ daughter, X, born (omitted) 2006, suffering significant health difficulties, and then the husband being diagnosed and treated for prostate cancer in (omitted) 2012.
The wife sets out at paragraph 118 of her affidavit that by October 2006, she was experiencing financial difficulties as she had not been working, and the husband was, in her words, “not contributing anything additional”. The wife suggested at that time she drew down on her line of credit secured against the Property H property and continued to do so to obtain funds, including doing so after she returned to work part-time.
The wife deposes that the paternal grandmother, Ms R, provided assistance with caring for X for two to three days during week days until X was about two years of age. The wife gives evidence that the maternal grandmother assisted the mother looking after X while X was in hospital for a period of two weeks with a broken leg, and then at home while X remained in a full body cast for a further four weeks.
Following X turning two years, the wife gives evidence that the maternal grandmother provided further assistance caring for X on alternate Saturdays when the wife worked. Between the ages of X being two and four years, the parties employed the services of a nanny, Ms C, to care for X. The wife suggests in her affidavit that she essentially provided for all of X’s needs and undertook domestic chores with little assistance from the husband. The wife deposes at paragraph 128 of her affidavit the maternal grandmother cared for X on alternate Saturdays because the husband had a busy social calendar and was also engaged in canvassing for the (business omitted) business.
At paragraph 133, the wife deposes that she attended to most household chores on a daily basis and that although she complained to the husband, seeking assistance, those complaints “fell on deaf ears”. At paragraph 134, the wife suggested the husband would play a computer game, Xbox Live, at least five hours a night, at least twice a week, and at paragraph 135 the wife deposes that the husband would go out cycle riding at least once a month for a whole day, either being a Saturday or Sunday, and that on those occasions the wife was left to care for X, or the maternal grandmother would care for X where the mother was working.
The wife is critical in her affidavit of what she terms a lack of disclosure by the husband in respect of the (business omitted) business. Having heard the cross-examination of the husband on the subject, the court is satisfied that the husband’s (business omitted) business, being the husband’s involvement or ownership of an entitlement in a (business omitted) scheme, and any income he might receive from the same, are such that they might be regarded as de minimis for the purposes of determining these proceedings.
The wife suggests in her affidavit in mid-2011 the parties considered moving to the (omitted) area, and thereafter the wife made preparations to sell the (business omitted) business. To this end, the wife indicated in her affidavit that she commissioned a valuation from her accountant for the business as at 30 June 2011. At paragraph 144 of the wife’s affidavit, she deposes that the valuation reported the business as having a value of $165,584 for good will and $7573 for plant and equipment, fixtures and fittings. The wife gives evidence that she subsequently sought advice from (omitted) Business Brokers about the sale including their costs.
The wife deposes at paragraph 145 of her affidavit that after receiving the broker’s quote, she decided not to instruct them and instead sought to market the business herself through what she describes as “word-of-mouth” by making contact with a number of other similar health professionals. Ultimately, the business was sold. Questions put to the wife in cross-examination on the topic of the marketing of the business were suggestive of the wife not having acted prudently in respect of the marketing of the business. The court, however, accepts the wife’s evidence as to why she chose not to engage brokers to act on the sale, namely, because of the broker’s inexperience in having previously marketed a business of the type the wife was operating, and otherwise in respect of the amount of commission payable on the sale.
A distinct feature in these proceedings was the level of mistrust the parties had towards one another. The husband complains at paragraph 10 of his affidavit that on 29 May 2013, his lawyers received a letter from the wife’s solicitor that advised the business has been sold for $63,000. The husband thereafter deposes that he was, at the date of swearing in his affidavit, unaware as to what the wife had done with those funds, and further that the wife had sold the business for less than market value.
During the hearing, a considerable period of time was devoted by counsel for the husband to the issue of the sale of the business. At paragraph 11 of the husband’s affidavit, he sets out his understanding with respect to the business having been sold to the (omitted), that the trustee of the (omitted) is a person known Mr C, the son of what was then an employee of the business, and that the business was sold for well less than market value.
On the fifth day of the hearing, during the course of the wife’s cross-examination, counsel for the husband put a series of questions to the wife about the sale of the business. The exchange between the wife and her counsel during re-examination found in the transcript of 20 January 2015 at page 437 paragraphs 20 to 30 provides:
Mr Bateman: Now, ma’am, it has been put to you in various ways during cross-examination that you’ve retained an interest in the business name trading (business omitted). What do you say about that? MS JEFFERSON: I no longer have any association with (business omitted). I sold the business. The money from the proceeds of sale have all been disbursed with debts, and, in actual fact, there is still more debts that I owe from it.
Despite considerable cross-examination, the evidence in the matter does not support any contention by the husband that the wife somehow retains an interest in the business (business omitted). The Court accepts the evidence of the wife with respect to the proceeds of sale having been exhausted paying various liabilities of the business.
It is apparent, having heard the answers given by the wife during cross-examination that the relationship fell apart when the wife discovered the husband had purchased whole or otherwise shares in (omitted). Further complaints were made by the wife in respect of the husband having purchased mag wheels for his motor vehicle, and having had his motor vehicle retuned either with or without the wife’s knowledge, or, at least, without her permission.
The Court heard the husband’s cross-examination in length about the husband’s purchase of interests in (omitted), the mag wheels and the retuning of his motor vehicle.
The wife’s affidavit speaks volumes of the stress the parties suffered, and also go towards what might be described as the wife’s feelings of under appreciation by the husband. The assistance provided to the husband by the wife at paragraphs 155 to paragraph 155 of her affidavit go towards demonstrating that point.
A significant cause of stress in the parties’ marriage related to the husband having travelled overseas for the purposes of obtaining treatment to fight his cancer where perhaps treatment available in Australia would not have been sufficient. At one stage, the wife emotionally broke down during the course of cross-examination when answering questions on the topic. What is apparent is that the husband being diagnosed with cancer, and, thereafter, battling against the disease, was a harrowing experience emotionally and financially disastrous for the parties.
These are proceedings governed by section 79 and, generally, part VIII of the Family Law Act 1975. In the case of Stanford & Stanford (2012) 293 ALR 1970 the High Court, at paragraphs 78 to 79 considered the manner in which the Court should approach the determination of property proceedings, and held
“it is necessary to begin with a consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
The Court has historically determined property proceedings in accordance with well-established principles set out in the case of Hickey & Hickey (2003) FLC93-143 embarking upon a four-step process. The first step requires the Court to identify the value of the assets, liabilities and financial resources of the parties at the time of the hearing. The second step requires the Court to consider the parties’ contributions, and consider any adjustment that should be made between the parties. The third step requires the Court to consider the actual circumstances of the parties, and make adjustment for those circumstances considering a variety of factors set out section 75(2) of the Family Law Act 1975. Lastly, the fourth step requires the Court to satisfy itself that the actual effect of the orders are just and equitable.
It is the justice and equity of the actual orders the Court must consider, and, in that regard, see the case of Russell & Russell (1999) FamCA 1875 also cited as (1999) FLC 92-877.
In the Full Court of the Family Court decision in the case of Bevan & Bevan (2003) FamCAFC 116 the Full Court considered the decision in Stanford and the implications of that decision when looking at the four-step approach taken by the courts. Bryant CJ and Thackray J held, at paragraph 59:
Prior to Stanford, property applications were commonly dealt with by reference to what the trial judge called a four-step process. This process was described at paragraphs 31 and 32 of his Honour’s reasons. The jurisprudential basis for the process was well established. See a line of cases cited in Hickey & Hickey. The four stage process involves identification and valuation of the property of the parties, identification and valuation of contributions to the property, including property no longer owned by the parties, identification and assessment of the various matters in section 79(4)(d) to (g) including, to the extent they are relevant, the matters in section 75(2), consideration of the matters of justice and equity. Although the four-step process has been regularly applied the Full Court has stressed it is no more than a means to an end since the statutory obligation is to all of the existing interests only if it is just and equitable to do so. Thus, in Norman [2010] FamCAFC 66 at paragraph 60 the Full Court comprising Finn, May and Murphy JJ said:
It is the mandatory legislative imperative to reach a conclusion that is just and equitable that drives the ultimate result. For all this usefulness and merit as to a disciplined approach or structured process of reasoning the three-step or four-step approach merely illuminates the path to the ultimate result.
To like effect, in discussing the four-step approach in a joint judgment in Martin & Newton (2011) FLC 93-490 we said:
That the approach is not legislatively mandated, and, as the Full Court in Hickey said, it is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determination of the asset pool, consideration of the contributions and assessment of the relevant section 75(2) factors. But, in our view, there is no requirement that justice and equity of the orders is prescribed by section 79(2) must only be considered at the fourth and last stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision-making process, and it is not impermissible to consider it at an earlier possible point if particular cases require it. We consider this to be such a case.
In McClusky & McClusky (2014) FamCA 93 at paragraph 8 Forrest J stated:
Furthermore, neither party submits that the Court’s determination of appropriate orders dividing the property of the parties or either of them in a manner that the Court considers just and equitable should not be undertaken pursuant to the four-step process that has been authoritatively accepted as the generally appropriate method for doing so. The continued use of this approach to illuminate the path to determining the just and equitable orders to be made does not, in my view, offend any of the reasoning in Stanford. I consider that the Full Court accepted as much in Bevan & Bevan. I intend to follow the four-step process.
In Whitton & Whitton (2014) FamCA 110 Johnson J stated:
In our view it will be less likely that the separate issues arising under section 79(2) and 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage and monetary terms until they have first determined that it would be just and equitable to make an order.
The question in this case is should an adjustment be made? This is a case where the assets of the parties are not evenly divided between them. The Court takes the view that, in this case, the Court ought to make an initial finding as to whether it is just and equitable to make an order. Accordingly, when identifying, according to the ordinary common law and principles of equity, the existing legal and equitable interests of the parties in the property the Court finds that the contributions made by the parties are not necessarily reflected in the way in which the parties hold their assets.
In this case, the husband holds superannuation assets of a substantially greater value than those held in the name of the wife, and it is, therefore, the view of the Court that it is just and equitable to make a property settlement order adjusting the parties’ property interests in the proceedings.
During the hearing the court will sometimes utilise the evidence of experts such as that from a valuer, or agreement between the parties, or the making of findings upon the evidence presented to identify and value the property, liabilities and financial resources. During the course of the proceedings counsel for the wife tendered a balance sheet that forms exhibit B in the proceedings.
The Court has considered the evidence filed by way of affidavit in the proceedings, and heard and considered the cross-examination of the parties in respect of the moneys borrowed by the wife from her mother post-separation, and by the husband from Ms S. The Court has considered the sum expended by the parties on legal fees, and the transactions the husband undertook including drawing down some $72,000 from his then existing mortgage over Property B, and thereafter redepositing those funds, save for about $10,000, less than a month later.
The parties have borrowed moneys to fund their legal costs and have paid legal costs. Add-backs are sought to be included in the balance sheet by both parties.
In Omacini & Omacini (2005) FLC 93-218 the Full Court classified three categories in which add-backs might occur namely:
a)When parties have depleted funds to meet their own legal fees.
(The Court is conscious, that section 117(1), of the Family Law Act 1975 provides, subject to various subsections, parties to proceedings shall bear his or her own costs.)
b)Where there has been a premature distribution of assets; or
c)Where one party has been found to have wasted funds.
This approach was generally followed until the decision in Stanford (2012) HCA 52 which effectively created much doubt and uncertainty about whether add-backs could be warranted. This evolved from findings made in Stanford that section 79 of the Family Law Act 1975 deals with the alteration of the parties’ existing current legal and equitable interests in property. The issue of existing assets caused some to conclude that add-backs should not form part of the asset pool because the parties no longer had an existing interest in that specific asset.
This approach was later confirmed in the case of Bevan & Bevan (2013) FLC 93-545 which stated at paragraph 79:
It appears to most that the matter was settled, and that no notional property should be included in the matrimonial property pool. Instead, it would be dealt with as a relevant consideration when the Court decided that adjustment would be in one party’s favour the current net asset pool.
This approach created disquiet when some argued the Court’s power to make parties accountable for expenditure and disposal of money had been diminished. However, in the recent case of Vass & Vass [2015] FamCAFC 51 the issue of add-backs was addressed at paragraphs 138 to 139 of the judgment which set out as follows:
There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & or, more particularly, the decision of the High Court in Stanford & Stanford is authority for any necessary contrary solution. Some statements made by the High Court may lead to the conclusion that references to notional property, as have been referred to in decisions of this court and at first instance, may need to be reconsidered.
Counsel for the husband submitted at the final paragraph of page 2 of the husband’s submissions that the husband prepared, in effect, two lists that detailed all of the furniture and furnishings and household contents located within his possession, and has, thereafter, provided to the wife the opportunity to choose one of the lists. It is submitted by counsel for the husband that this occurrence should, in effect, settle the issue of household contents, and no amount for contents of the parties should be included in the balance sheet. The Court finds favour with this approach, and will make a final order with respect to the division of furniture and furnishings and household contents within the husband’s possession between the parties.
Some argument was advanced by counsel for the wife to the effect that the court order take into account potential capital gains tax of the wife’s properties pursuant to the decision of Rosati & Rosati (1998) FLC 92-804. No evidence was advanced that the wife intended to sell the properties in the foreseeable future. The Court does not accept argument by counsel for the wife that a capital gains tax liability ought to be taken into account. The Court finds the following assets and liabilities of the parties:
a)In the name of the husband Property B - $800,000.00
b)In the wife’s possession Property H - $400,000.00
c)In the wife’s possession Property I - $460,000.00
d)In the wife’s possession Volkswagen Tiguan – $25,000.00
e)In the wife’s possession (omitted) – nil.
f)Husband’s interest in (business omitted) business – nil.
g)Wife's (omitted) Bank account with account number ending (omitted) - $355.00
h)Wife's (omitted) Bank account with account ending number (omitted) - $3.00
i)Wife's (omitted) Bank account with account ending (omitted) - $33.00
j)Husband's (omitted) Bank account with account number ending (omitted) - $1000.00
k)The wife’s jewellery - $2000.00
l)Wife's (omitted) Bank shares – 194 shares at $6.40 per share - $1241.60
Total - $1,689,632.60
m)Wife’s paid legal fees as add-back - $106,030.22.
n)Husband’s paid legal fees as add-back - $30,000.00
Pool including add-backs of $136,030.22 - $1,825,622.82.00
Liabilities:
a)Husband mortgage Property B - $465,000.00
b)Wife’s mortgage Property H - $185,345.00
c)Wife’s mortgage Property I - $188,745.00
d)Wife's (omitted) Bank credit card - $4155.00
e)Wife’s HECS fees - $9000.00
f)Wife’s personal loan from mother post-separation - $78,565.39
g)Husband’s personal loan from Ms S post-separation - $22,000.00
Total of liabilities - $952,810.93
Net pool less liabilities - $872,852.43
Superannuation:
a)Husband’s superannuation – $225,988.00
b)Wife’s superannuation $44,467.00
Total superannuation - $270,455.00
Section 79(4) of the Family Law Act 1975 provides that in consideration of what order, if any, should be made under this section in property settlement proceedings the court shall take into account the following:
a)The financial contributions made directly or indirectly by or on behalf of a party to the marriage or child of the marriage to the acquisition, conservation or improvement of any property of the parties to the marriage or either of them or otherwise in relation to any of the 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.
The Court finds that the initial financial contribution made by the wife at the commencement of the relationship was marginally greater than that made by the husband. It is disappointing in these proceedings the parties found it necessary to attempt to itemise near on every dollar they spent during the relationship in an attempt to demonstrate that one had paid more than the other or one’s parents provided greater financial assistance than the other.
During the course of the relationship the parties were working, in the view of the Court, to the best of their capacity, and the wife was significantly critical of the husband’s leisure at times. This took place with a background where the husband had, on the face of the evidence, struggled against what appeared to be a serious form of cancer.
The Court finds that the parties’ post-separation contributions were equal.
The Court must take into account the contributions, other than 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.
Considerable cross-examination was undertaken of the husband in respect of what work, such as building or fit out work the husband did, preparing his home, and then the commercial business premises for the operation of the wife’s (omitted) business from the same. In reality, the parties undertook their work together. The Court finds that the parties’ contributions, other than financial contributions, were equal.
The Court must consider the contributions made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children to the marriage including any contribution made in the capacity of homemaker or parent.
The Court finds that the contributions made by the wife 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, were greater than those of the husband noting there was substantial primary care by the wife to the parties’ child following separation.
The Court finds an adjustment for contributions in favour of the wife as to 52.5 per cent and 47.5 per cent to the husband.
The Court must consider the effect of any proposed order upon the earning capacity of either party to the marriage. Neither party suggests that the other party’s business venture might be sold depriving either party of income from such business however modest such venture might be. The orders for property settlement proposed by either party will not, in the view of the Court, have any effect on the earning capacity of the parties.
The Court considers those matters set out at section 75(2) as far as they are relevant. The Court considers the age, state and health of the parties. The husband is some six years older than the wife, however, given the relative young age of both of the parties, this factor does not lend the Court to make an adjustment because of the disparity. The husband has historically suffered cancer whereas the wife’s health, by comparison, has been relatively good. There is no expert evidence available upon which the Court might rely that suggests the husband’s future needs based upon health factors are greater than those of the wife.
The Court considers the income, property and financial resources of each of the parties, and the physical and mental capacity of them for appropriate gainful employment. The Court considers the parties’ income. It is the view of the Court that the wife’s income has historically been at times curtailed by virtue of the fact she has had the greater share of caring for the parties’ daughter despite utilising the services of gratuitous and non-gratuitous help to care for the parties’ daughter. The parties are both well qualified and intelligent, resourceful people who have a significant physical and, more particularly, mental capacity for appropriate gainful employment.
The Court considers whether parties have had available to them financial resources that the Court might take into account when adjusting property between the parties. The Court finds the parties do not have available to them financial resources of the type that would persuade the Court to make an adjustment in either party’s favour.
The Court considers whether either party has the care or control of a child of the marriage who has not attained the age of 18 years of age. Whilst the father does spend time with the parties’ daughter, X, the Court finds that the wife has the superior care and control of the parties’ daughter who has not yet attained the age of 18 years.
The Court considers the commitment of each of the parties that are necessary to enable that party to support himself or herself, or a child or another person that a party has a duty to maintain. The Court has considered the commitments of the parties to support themselves and the duty to maintain X as disclosed in the parties’ expenses set out in their financial statements.
The Court has considered whether either party has the responsibility to support another person. The Court finds that neither party has the responsibility to support another person.
The Court considers the parties’ eligibility for a pension, allowance or benefit under any Commonwealth, state or territory law, or any superannuation fund or scheme whether that scheme was established or operates within or outside of Australia, and the rate of any such pension, allowance or benefit.
The Court considers as the parties have separated that they have afforded to them a standard of living that, in all the circumstances, is reasonable. Based upon the evidence the settlement proposed by either party will afford both parties a standard of living that, in all the circumstances, is reasonable.
The Court must consider 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 in order to establish himself or herself in a business or otherwise obtain an adequate income. The Court finds that that section is not relevant for the purposes of determining the property proceedings today.
The Court must consider the effect of any proposed order on the ability of a creditor of a party to recover creditor’s debts so far as the effect is relevant, and the Court finds that that factor is not relevant.
The extent to which each of the parties whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the parties. The Court has considered the history of the parties’ relationship with respect to the parties’ contributions.
The Court considers the duration of the marriage, and the extent to which it has affected the earning capacity of the parties whose maintenance is under consideration. The Court finds the duration of the parties’ marriage has not affected the earning capacity of either party.
The Court considers the need to protect a party who wishes to continue their role as parent. The Court considers the wife’s desire to continue her role as a parent and that of the father’s.
The Court must consider if either party is cohabiting with another person, and the financial circumstances relating to that cohabitation. The Court finds neither party is cohabiting with another person.
The Court must consider the terms of any order made, or proposed to be made, under section 79 in relation to the property of the parties, vested bankruptcy property in respect to a bankruptcy, or the terms of any order made or a declaration made or proposed under part VIIIAB in relation to the party of a marriage, a person who is a party to a de facto relationship, or the property of a person covered by subparagraph (i) or a person covered under subparagraph (ii) or either of them or vested bankruptcy property in relation to a person covered under subparagraphs (i) and (ii). The Court has considered those issues including the proposed property orders sought by both parties.
The Court must consider any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide or might be liable to provide in the future for a child of the marriage. The Court has considered the history of the husband’s payment of child support.
The Court must consider any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account. The Court considers no further matters.
The Court must consider the terms of any financial agreement that is binding on the parties to the marriage. The court finds that there is no financial agreement between the parties.
The Court must consider the terms of any part VIIIAB financial agreement that is binding on the parties of the marriage. The court finds that there is no binding financial agreement between the parties.
The Court finds an adjustment pursuant to section 75(2) as to 58 per cent to the wife and 42 per cent to the husband.
The Court must go back to those matters set out at section 79(4)(f), being a consideration of any other order made under this Act affecting a party to the marriage or a child of the marriage. The Court finds that this consideration is not applicable.
The court must consider any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide or might be liable to provide in the future for a child of the marriage. The Court considers the child support provided by the husband to the wife.
Having taken into account the parties’ contributions, having taken into account those matters set out section 79(4), having taken into account the factors set out section 75(2) the Court finds that it is just and equitable to make a property settlement adjustment between the parties as to 60.5 per cent to the wife and 39.5 per cent to the husband.
The Court has considered section 79(2) and does not propose to make any further adjustment between the parties on the basis that it is just and equitable to do so.
Having considered the evidence of the parties in their affidavit material, having considered the parties’ applications and responses, their financial statements, having read and considered the documents tendered during the course of the proceedings, having read and considered the parties’ submissions, having considered the parties’ outline of case documents, having heard the parties’ considerable cross-examination the Court finds that the following orders are just and equitable and the Court makes final property orders set out at the commencement of this decision.
The Court considers the wife’s application for spousal maintenance. The application for spousal maintenance is made pursuant to section 72 of the Family Law Act 1975. Section 72(1) provides:
A party to a marriage is liable to maintain the other party to the extent that the first mentioned party is reasonably able to do so if, and only if, that other party is unable to support himself or herself adequately:
(a) by reason of having the care or control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment;
having regard to any relevant matters set out at section 75(2).
Having determined the property orders the Court must now consider the wife’s application for spousal maintenance.
In Bevan & Bevan (1995) FLC 92-600 the process for assessing a maintenance claim firstly requires a threshold finding under section 72(1) that the husband is reasonably able to do so if, and only if, the wife is unable to support herself adequately whether by reason of having the care and control of a child of the marriage, by reason of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason.
In Atwell & Atwell (1981) FLC 91-187 Nyah J stated:
I have defined inability to support oneself as depending on the question of whether the wife can generate funds from her own resources or earning capacity to supply her own needs. The next question is whether there is any evidence she lacks the resources to produce that income herself either through her earning capacity or from her assets.
The Court considers those matters set out at section 75(2). The Court considers the age and state of health of each of the parties. The husband is some six years older than the wife, however, given the relative young age of both of the parties, this does not lend the Court to considering that either party is unable to generate income or otherwise support themselves as a result of age.
The Court considers the income, property and financial resources of each of the parties, and the parties’ physical and mental capacity for appropriate gainful employment. The Court had made final property orders in the proceedings. The wife will receive some $528,000 in non-superannuation assets, and the husband some $344,000 in non-superannuation assets. The Court has considered the income of the wife and the parties’ financial resources. The parties are both well qualified and intelligent, resourceful people who have a significant physical and, more particularly, mental capacity for appropriate gainful employment. The Court does not consider that the parties have financial resources available to them other than the property the parties will receive as a result of orders made by the Court.
The wife does have the care and control of X who is under the age of 18 years. The Court has considered the commitments of each of the parties that are necessary to support themselves having regard to the parties’ financial statements.
The parties do not have a responsibility to support any other person other than themselves or really X.
The Court has considered the mother’s eligibility to receive a government benefit including such rate of a benefit.
The Court considers the property orders the Court has made, and considers that the parties have separated, and the Court considers the parties are able to provide a standard of living that, in all the circumstances, is reasonable with or without the payment of spousal maintenance.
The Court must consider 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 to establish himself or herself in a business or otherwise to obtain adequate income. The wife is well qualified in these proceedings. She is able to generate an income. She does not need to undergo a course of retraining or training that would increase her earning capacity. She had historically been able to run a business, and earn income as a result of her training and qualifications.
The Court must consider 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. The Court has considered those matters in the determination of the final property proceedings between the parties, and considers it for the purposes of the spousal maintenance proceedings.
The Court must consider the duration of the marriage, and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration. The length of the parties’ marriage has not adversely affected the earning capacity of the wife in these proceedings.
The Court considers the need to protect a party who wishes to continue her role as a parent. The wife desires to continue her role as a parent. The wife has historically been able to work, and utilise services such as childcare, or rely upon gratuitous and non-gratuitous childcare services. It is the view of the Court if the Court does or does not make an order for spousal maintenance against the wife, particularly if the Court does not, the wife will continue to be able to fulfil her role as a parent.
The Court finds that neither party is cohabiting with another person.
The Court considers the terms of the order to be made pursuant to section 79 of the Family Law Act 1975, and the moneys, both non-superannuation pool and superannuation pool, the parties will respectively receive.
The Court considers the child support historically paid by the father to the mother in the proceedings.
The Court finds that there are no other fact or circumstances which, in the opinion of the Court, the justice of the case requires it to be taken into account.
There is no binding financial agreement between the parties.
There is no binding financial agreement between the parties pursuant to part VIIIAB.
Counsel for the father submitted that, in the wife’s evidence, she agreed that she had job, that she had indicated that she earns moneys as a (occupation omitted) working, although not fulltime, some three days per week doing private work, and that her work with (omitted) that she has undertaken pays $40 per hour, and, in (omitted), she charges $130 an hour, and $160 per hour for (omitted), and then, in addition, she charges either $150 or $160 for an initial consultation.
Counsel for the husband submitted that the wife is being paid child support by the husband, that she has two investment properties that are positively geared, and that she may well move back to her mother’s place after the court case is concluded. It was submitted by counsel for the husband that her mother may not charge her any board as previously, and that she may even use her Property H property to house a new business.
It was submitted by counsel for the husband that, furthermore, X attends school, and it is the wife’s evidence in her affidavit that her own mother lives nearby and cares for X when the wife is not able to do so.
The Court considers the wife is not unable to support herself by reason of having the care or control of X. The Court considers that the wife is not unable to support herself by reason of her age or physical or mental incapacity for appropriate gainful employment.
The Court finds that the wife is adequately able to support herself and the application for spousal maintenance is dismissed.
The court makes the following orders set out.
I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of Judge Myers
Date: 22 December 2015
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