JOBLING & SLADE
[2020] FamCA 419
•1 June 2020
FAMILY COURT OF AUSTRALIA
| JOBLING & SLADE | [2020] FamCA 419 |
| FAMILY LAW – PROPERTY SETTLEMENT – De Facto Relationship – where a just and equitable result requires alteration of the parties’ property interests – where the husband asserts that his contributions over the relationship should be assessed as greater, based on his larger initial capital contribution – where there is dispute over the appropriate method for valuing the family home – where the wife seeks spousal maintenance for a period of three years – whether any spousal maintenance should be capitalised – where both parties in this relationship of 16 years contributed equally to the relationship – where expert evidence as to the value of the property is accepted – where wife entitled to 62.5 per cent and husband entitled to 37.5 per cent of net non-superannuation assets – where superannuation assets equalised – where husband ordered to pay spousal maintenance for a period of three years – where spousal maintenance capitalised. |
| Family Law Act 1975 (Cth) Evidence Act (Cth) ss 55, 56, 76, 79 |
| Bevan & Bevan (2013) 49 Fam LR 387 Branchflower & Branchflower (1980) FLC 90-857 Burlock & Burlock [2009] FamCAFC 165 Clauson & Clauson (1995) FLC 92-395 Collingridge & Aiolfi [2019] FamCAFC 88 Commonwealth v Milledge (1953) 90 CLR 157 Davey v Lee (1990) 13 Fam LR 688 DJM v JLM (1998) FLC 92-816 Garrett v Garrett (1984) FLC 91,539 Hall v Hall (2016) 257 CLR 490 Harrell & Nesland [2016] FamCAFC 122 In the Marriage of Bevan (1995) FLC 92-600 In the Marriage of Smith RH & Smith JW (1991) FLC 92-261 In the Marriage of Wilson (1989) 13 FamLR 205 O’Brien & O’Brien (1983) FLC 91-316 Quinn v Quinn (1979) FLC 90-677 Spano & Spano (1979) FLC 90-707 Stanford v Stanford (2012) 247 CLR 108 Vaughan & Vaughan (1981) FLC 91-066 Vautin & Vautin (1998) FLC 92-827 Wilson & Wilson (1989/90) FLC 92-033 |
| APPLICANT: | Mr Jobling |
| RESPONDENT: | Ms Slade |
| FILE NUMBER: | MLC | 11526 | of | 2017 |
| DATE DELIVERED: | 1 June 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | McEvoy J |
| HEARING DATE: | 14 – 17 October 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Whitchurch |
| SOLICITOR FOR THE APPLICANT: | Argent Law |
| COUNSEL FOR THE RESPONDENT: | Mr Hall |
| SOLICITOR FOR THE RESPONDENT: | Robert Halliday & Associates |
orders
Within 7 days the parties submit an agreed minute of orders giving effect to the division of the assets of the relationship and the payment of capitalised spousal maintenance provided for in these reasons, together with the matters about which they are in agreement.
The matter be adjourned to a date to be fixed if all outstanding matters are not able to be agreed.
There be liberty to apply.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jobling & Slade has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 11526 of 2017
| Mr Jobling |
Applicant
And
| Ms Slade |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to this proceeding were in a de facto relationship for some 16 years. They separated in or about late April 2016, and there are three children of the relationship. When the trial of the proceeding commenced the parties sought parenting orders for the two younger children, now aged 11 and 13. The oldest child is now over the age of 18 years, and engaged in studies at a TAFE institute. The issues concerning the children were resolved by consent, and on 15 October 2019 the Court made parenting orders.
Remaining in issue in the proceeding are questions of the appropriate property settlement and spousal maintenance under Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).
By the conclusion of the trial the parties were in agreement as to their joint assets and liabilities, save for the valuation of the former family home in Suburb B (“the home”). The issue in relation to the home is whether it should be valued at $800,000 on the basis of the expert evidence as the husband contends, or whether, as the wife contends, the value of the home is so uncertain that it should be put on the market for sale to determine its real value, with both parties being entitled to bid at the auction of the property should they so wish. The parties also agree as to the equalisation of their superannuation interests, although there are differences in the orders that they both propose to give effect to this.
Insofar as the appropriate division of the assets of the relationship and spousal maintenance are concerned, the position of the de facto wife (“the wife”) is that the parties’ overall contributions to the relationship were equal, but by reason of the factors enumerated in s 90SF(3) of the Act, there should be an overall adjustment of 20 per cent in her favour. It is also her position that she should have an order for spousal maintenance in the sum of $2,000 per month for a period of three years, capitalised to a sum of $72,000.
The position of the de facto husband (“the husband”) at the conclusion of the trial, by contrast, was that the parties’ overall contributions to the relationship should be assessed 52.5 per cent to 47.5 per cent, in his favour. He says that he has limited means to pay spousal maintenance, and that an adjustment of the parties’ interests in the net non-superannuation asset pool of 55 per cent to 45 per cent in favour of the wife, together with the equalisation of the combined superannuation, would be just and equitable.
For the reasons which follow the $800,000 expert valuation of the home is the best evidence of the value of the home, and this is the basis on which the value of the parties’ total assets will be approached. There will be a finding that the parties have made equal contributions to the relationship, but there will be an overall adjustment of 12.5 per cent in the wife’s favour by reason of the matters to be taken into account under s 90SF(3) of the Act. The wife has demonstrated that there should be an order for spousal maintenance, however in all the circumstances it should only be in the amount of $1,000 per month for a period of three years, and it is appropriate that it be capitalised in the amount of $36,000.
In light of the fundamentally different bases upon which the parties have submitted draft minutes of proposed orders, and the variance between the parties on the orders to be made for the agreed equalisation of their superannuation interests, the Court will not make final orders upon the publication of these reasons. Instead, the Court will provide a draft minute of orders which endeavours to reconcile the competing versions of orders proposed by the parties on the basis of these reasons for judgment. The parties will be directed to submit an agreed minute of orders within seven (7) days giving effect to the division of the assets of the relationship and the payment of capitalised spousal maintenance provided for in these reasons, together with the matters about which they are in agreement. They will need to give consideration in this context to whether an order for the husband to have sole right, title and interest in the home is appropriate in circumstances where there will not be an order for sale, this not being a matter which was addressed at trial but which the wife’s proposed orders seem to contemplate may be in issue. The parties will be heard on a date to be fixed if the outstanding matters are not able to be the subject of agreement.
Background
The parties commenced their relationship in 2000 and they began living together at a house owned by the husband in New South Wales in 2001. The husband is now aged 58 years. He works as a business adviser, earning approximately $115,000 per annum gross, which figure may not include the benefits of salary sacrifice and expenses.
The wife is now aged 51 years and is self employed as a craftsperson. She earns about $38,792 per annum.
Both the husband and the wife enjoy relatively good health, although the husband accepts that he has experienced certain anxiety-based mental health issues, which he has worked to address with psychological assistance and through other means.
The husband has continued to live in the home after separation, the wife having moved into rented accommodation at the time of separation. In late 2018 the husband’s new partner moved in to the home with him. She has two children, the younger of whom lives with her and the husband in the home at least some of the time.
The wife continues to live in rented accommodation with the oldest child, and the two younger children are required to move between the parties’ respective households pursuant to the consent orders made on 15 October 2019.
History of Proceedings
The husband originally commenced proceedings by way of an Initiating Application and supporting affidavit filed in the Federal Circuit Court of Australia on 2 November 2017. He sought interim and final orders regarding parenting matters, property settlement, and his costs of the application.
On 6 December 2017 orders were made in the Circuit Court transferring these proceedings to this Court. Interim orders were also made by consent in relation to the children.
Having regard to the settlement of the parenting issues, and the narrowing of the property adjustment issues between the parties by the conclusion of the trial, it is unnecessary to outline the progress of the matter through the two courts from the husband’s Initiating Application. The trial was conducted in the period 14-17 October 2019, and written submissions were subsequently filed by the parties on 1, 11 and 22 November 2019. By letter dated 12 March 2020 the parties confirmed that the husband had signed the intended Limited Child Support Agreement, and that this document had been forwarded to the Child Support Agency. It is said by the wife that the Limited Child Support Agreement, which had been agreed at trial, was provided to the husband’s solicitors on 17 October 2019. Why it was not signed by the husband despite several requests that he do so until, presumably, sometime in March 2020 is not explained by the husband.
Material Relied Upon
For the purposes of the property aspects of the proceeding the husband relied upon the following documents:
a)Further Amended Initiating Application filed 31 May 2019;
b)Amended Financial Statement filed 31 May 2019;
c)Trial affidavit filed 31 May 2019;
d)Affidavit of Ms C filed 31 May 2019;
e)Reply affidavit of the husband filed 8 July 2019;
f)Joint expert chattels valuation reports by Mr D dated 3 October 2019;
g)Joint expert business valuation report by Mr E dated 8 October 2019;
h)Property valuation report in relation to the home by Mr F dated 10 October 2019;
i)Case outline dated 11 October 2019;
j)Written closing submissions dated 11 November 2019.
The wife relied upon the following documents for the purposes of the property aspects of the proceeding:
a)Amended Response to Initiating Application filed 1 July 2019;
b)Financial Statement filed 1 July 2019;
c)Trial affidavit filed 1 July 2019;
d)Affidavit of Ms G filed 1 July 2019;
e)Affidavit of Ms H filed 1 July 2019;
f)Property valuation report in relation to the home by Mr J dated 4 June 2019;
g)Property valuation report in relation to the home by Mr F dated 10 October 2019;
h)Joint expert business valuation report by Mr E dated 8 October 2019;
i)Joint expert chattels valuation reports by Mr D dated 3 October 2019;
j)Case outline filed 11 October 2019;
k)Written closing submissions dated 1 November 2019;
l)Reply to husband’s closing submissions dated 22 November 2019.
The Statutory Regime and General Legal Principles
Orders under s 90SM(1) of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 90SM(3), that it is just and equitable to make such orders. The Act then identifies, in s 90SM(4), the matters the Court must take into account in considering what order, if any, should be made. It is necessary to begin that inquiry by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in property are or should be different from those that then exist, or that a party has the right to have the parties’ property divided by reference to the statutory considerations (see Stanford v Stanford (2012) 247 CLR 108 at [37]- [40], [50]).
Although the High Court was dealing in Stanford with an application between spouses for property settlement pursuant to Part VIII of the Act, the principles apply equally to applications between de facto partners pursuant to Part VIIIAB of the Act.
It is permissible for the factors prescribed by s 90SM(4) (the counterpart to s 79(4)) to inform the inquiry under s 90SM(3) (the counterpart to s 79(2)) of the Act about the justice and equity of making property settlement orders (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
If and once determined that it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 90SM(4) of the Act. The Court must necessarily identify and assess the parties’ contributions within the meaning of ss 90SM(4)(a)-(c) of the Act, and then take account of the relevant matters referred to in ss 90SM(4)(d)-(g) of the Act, which include the matters referred to in s 90SF(3) of the Act, so far as they are relevant. The process of property adjustment calls for a discretionary and holistic value judgment (see Quinn v Quinn (1979) FLC 90-677 at 78,615; Garrett v Garrett (1984) FLC 91,539 at 79,359, 79,372; Davey v Lee (1990) 13 Fam LR 688 at 689).
Insofar as spousal maintenance with respect to de facto couples is concerned, the applicable provisions of the Act are, in their material particulars, identical to those provisions governing spousal maintenance in marriages: cf the relevant sections of the Act, and see Harrell & Nesland [2016] FamCAFC 122, [42] (Murphy, Aldridge and Cronin JJ). Section 90SE of the Act provides, relevantly, that a court may make such order as it considers proper for the maintenance of one of the parties to the de facto relationship. Section 90SF(1) of the Act requires that in exercising jurisdiction under s 90SE, the Court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship –
a)only to the extent the first-named party is able to do so; and
b)only if the second-named party is unable to support himself or herself adequately, whether by reason of having the care of the child of the relationship, by reason of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason.
By operation of s 90SF(2) of the Act the matters to be taken into account are only the matters enumerated in s 90SF(3) of the Act.
The Full Court considered the operation of the there relevant spousal maintenance sections of the Act in In the Marriage of Bevan (1995) FLC 92-600 (Nicholson CJ, Lindenmayer and McGovern JJ).[1] The principles may be summarised as follows:
a)the Court must not deal with spousal maintenance applications in isolation from and as if property settlement orders were not being made: the Court must consider the proposed property orders and their effect, either on the applicant’s needs or the respondent’s capacity to pay maintenance (at 81,979-81,980)
b)the statutory prerequisites are that the party called upon to pay is reasonably able to do so, and the other party is unable to support himself or herself adequately (s 72(1); s 90SF(1) in the case of de facto relationships) (at 81,979);
c)the matters to be taken into account in deciding whether it is proper to make a spousal maintenance order under s 74 of the Act (s 90SE in the case of de facto relationships) are those enumerated in s 75(2) of the Act (s 90SF(3) in the case of de facto relationships), which factors include the disparity of income between the parties and the provision of a reasonable standard of living in all the circumstances (at 81,980);
d)although the obligation on the Court under s 81 of the Act (s 90ST in the case of de facto relationships) is to endeavour to make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them, that legislative policy must give way to the obligation on the Court under s 74 of the Act (s 90SE in the context of de facto relationships) to make such orders as it considers proper once the threshold tests are overcome (at 81,980);
e)there is no fettering principle that the pre-separation standard of living must automatically be awarded where the respondent’s means would permit this to occur (at 81,981-81,982);
f)having regard to the statutory regime, an award of spousal maintenance should not be at a subsistence level, and it should pay proper regard to s 75(2) factors (the s 90SF(3) factors in the case of de facto relationships) (at 81,980);
g)ultimately the correct approach is to determine what is “reasonable in the circumstances” (at 81,981); see also Wilson & Wilson (1989/90) FLC 92-033 (Strauss and Nygh JJ).
[1] See also Hall v Hall (2016) 257 CLR 490 at [3]-[6], where the majority (French CJ, Gageler, Keane and Nettle JJ) outlined the operation of the provisions in Part VIII of the Act.
On the subject of the respondent’s capacity to pay, it has been held that a court can take into account the respondent’s earning capacity and is not limited to that person’s actual income (see DJM v JLM (1998) FLC 92-816, at 85,272 (Baker, Kay and Morgan JJ)).
Further, and relevant where there has been material non-disclosure, the Full Court observed recently in Collingridge & Aiolfi [2019] FamCAFC 88, at [38] (Ryan and Aldridge JJ) that:
There is also no doubt that the appellant’s failure to give full and frank disclosure meant that the “Court need not shy away from a robust exercise of discretion in favour of the [other party]” (Linder and Linder [2016] FamCAFC 139 at [32]) (see also Kannis and Kannis (2003) FLC 93-135 as cited by the Full Court in Gould and Gould (2007) FLC 93-333). It is evident that this principle properly informed the approach adopted by the primary judge to her assessment of the appellant’s income and earning capacity and, in particular, the inferences to be drawn from the evidence. This in turn affected consideration of the appellant’s reasonable expenses in relation to which precise findings could not be made but in relation to which the primary judge was satisfied that the appellant’s evidence could not be reconciled with other evidence as to his lifestyle. As the appellant was solely responsible for these difficulties, he cannot now complain that the findings do not have the level of detail ordinarily seen in these cases.
On the subject of whether spousal maintenance orders can and should be capitalised, a number of considerations should be taken into account. These include:
a)whether a party has been paying irregularly or whether there has been difficulty in enforcing the order (see Spano & Spano (1979) FLC 90-707, at 78,766 (Evatt CJ, Pawley SJ and Lusink J); Branchflower & Branchflower (1980) FLC 90-857 at 75,449 (Evatt CJ and Opas J));
b)whether converting the maintenance payment to a lump sum makes appropriate allowances for the vicissitudes of life and the changing factors which affect one party or the other (see Vaughan & Vaughan (1981) FLC 91-066 at 76,508-76,509 (Evatt CJ, Emery SJ and Strauss J));
c)if there is to be a capitalisation of what is considered to be appropriate periodic maintenance for a period of time, there may need to be a discount because of immediate payment (see Clauson & Clauson (1995) FLC 92-395 at 81,908 (Barblett DCJ, Fogarty and Mushin JJ));
d)the power to capitalise periodic spousal maintenance is a power to be exercised cautiously (see Clauson at 81,908; Vaughan at 76,508-76,509; O’Brien & O’Brien (1983) FLC 91-316 at 78,149 (McGovern J));
e)the need to capitalise a spousal maintenance claim is explained by uncertainty about future events, and capitalisation of maintenance will rarely be justified where there is no genuine concern about the capacity and the preparedness of the payer to comply regularly with a periodic order (see Clauson & Clauson at 81,908);
f)it may be relevant to the decision to order a lump sum payment that such an award may assist the payee in the purchase of accommodation and thus potentially reduce the ongoing need to be maintained (see Branchflower at 74,449);
g)a lump sum payment need not necessarily be tied to an amount representing the compounding of a periodical sum but may, for example, be related to the standard of living of the parties (see Branchflower at 74,449);
h)the borderline between orders under s 79 (property orders) and maintenance is a fine one (see Branchflower at 74,449).
There is a detailed discussion on the nature of maintenance and the approach to be adopted, including in relation to lump sum maintenance, in Vautin & Vautin (1998) FLC 92-827 at 85,423-85,424 (Fogarty and Burton JJ) and in Burlock & Burlock [2009] FamCAFC 165 at [29] (O’Ryan J). The applicable principles, however, are those summarised in the above paragraph.
Matters For Determination
As has been mentioned, the outstanding matters to be resolved by the Court are:
a)the appropriate method to attribute a value to the home;
b)the extent of the contributions made to the parties to the relationship, including in the post-separation period, and the extent to which there should be an adjustment in favour of the wife; and
c)whether the husband should pay spousal maintenance to the wife, and if so what the amount of such maintenance should be, and whether the amount to be paid should be capitalised.
I proceed on the basis that, for the purposes of s 90SM(3) of the Act, it would be just and equitable to make orders pursuant to s 90SM(1) of the Act altering the interests of the parties in the property of the de facto relationship. As both parties have submitted, the just and equitable requirement of s 90SM(3) is readily satisfied. The parties have lived in their de facto relationship for 16 years, and they have accumulated modest wealth over this period including in real property before separating. Both parties seek that the Court exercise its powers to determine and divide their property entitlements on a full and final basis, and it is appropriate that this be done.
Save for certain particular matters canvassed below, much of the evidence is relatively uncontroversial. It is convenient to deal with the evidence of the parties and their respective submissions by reference to each of the matters to be determined.
The relevant assets and interests
Leaving to one side the question of the value of the home, the parties are in agreement as to the value of their assets, liabilities, and superannuation.[2] During the trial the Court was provided with a table of assets, liabilities and superannuation. This table is reproduced in the wife’s written submissions, and it is reflected in the husband’s written submissions. It is to be noted, however, that the husband’s reproduction of the agreed table in paragraph 6 of his written submissions appears to contain arithmetic errors, and his assertion in paragraph 7 that the net non-superannuation assets to be adjusted between the parties amounts to $720,594 is not consistent with the agreed table. The correct non-superannuation net asset figure, on the basis of the agreed table, is $716,640. The correct version of the table, which is to say the one handed up at trial, is contained in Annexure A of the wife’s written submissions. This table is reproduced below, save that the value of the home is listed at $800,000 and on this basis the net total figure, allowing for liabilities, can be calculated to be $716,640. The total figure of $716,640 appears to be correct if the home is valued at $800,000.
[2] Wife’s written submission, paragraphs 6-7, 12; Husband’s written submissions, paragraphs 5-7, 10, 12.
ITEM
TITLE
VALUE
1.
K Street, Suburb B
H
$800,000
Non-real property items owned/ owed by the Husband
2.
Husband's L Bank Accounts $8,290+$163+$23
H
$8,476
3.
M Business bank account
H
$2,889
4.
Chattels in H's possession made available to valuer
H
$27,680
5.
Motor vehicle 1 (since valued by Mr D)
H
$10,000
6.
Sport and camping gear
H
$1,000
7.
Legal costs prepaid by Husband
H
$30,286
8.
Loan from Ms C
H
($4,400)
9.
L Bank credit card
H
($ 1,965)
Husband subtotal items 2-9
$73,966
Non-real property held, controlled or owed by the Wife
10.
N P/L ATF N Trading Trust (W to receive)
1/3 2/3
$28,552
11.
Wife's household contents and vehicle
W
$14,646
12.
Jewellery
W
$8,154
13.
Assets of Personal Nature at N Pty Ltd
W
$6,0%
14.
Wife's bank accounts
W
$2570
15.
Legal costs prepaid by Wife personally
W
$375
16.
P Bank Mastercard
W
($ 1,983
17.
Loans incurred by the Wife:
a
Mr Q removalist cost, home workshop fitout
W
($3,595)
b
Mr R rent, living expenses
W
($16,730)
c
Ms H: bond, living costs, school fees, the child X orthodontics
W
($20,880)
d
Ms S - living expenses, education costs
W
($ 1,250)
f
Ms T
W
($5,200)
Wife subtotal items 10-17f
$10,755
LIABILITIES
Liability
16
Mortgage – K Street, Suburb B
H
($168,081)
TOTAL
$716,640
SUPERANNUATION
VALUE
Husband
Super Fund 1
$466,524
Super Fund 2
$3,456
Super Fund 3
$14,274
Super Fund 4
$4,367
Husband - total
$488,621
Wife
Super Fund 5
$98,491
Wife Total
$98,491
COLLECTIVE TOTAL
$587,112
BASE AMOUNT REQUIRED TO EQUALISE
$195,065
It is to be noted that the husband accepts and has admitted the wife’s loans, which now form part of the agreed net asset pool.[3] To this extent it is unnecessary to deal with the other matters submitted by the husband in relation to these debts in the balance of paragraph 12 of his written submissions, and the wife’s submissions in relation to these matters at paragraphs 13-22 of her written submissions.
[3]Husband’s written submissions, paragraph 12(f).
The value of the home
The husband continues to reside at the home, and he wishes to continue to reside there with his new partner and her daughter, and with the two younger children of the relationship when they are with him. Whether or not the wife would also have sought to keep the home is unclear and was not dealt with at trial or in the parties’ submissions, although the wife’s proposed orders provide that both parties should have the right to bid for the house at auction. This is a matter which will need to be resolved between the parties or be the subject of further submissions before final orders can be made which would give the husband sole right, title and interest in the home.
There is expert evidence as to the value of the home. Mr F, a registered valuer, valued the property on 10 October 2019, a few days before the trial commenced, at $800,000. As the husband points out, Mr F’s evidence is uncontested and he was not called to be cross examined. There is also an earlier sworn valuation which was undertaken by a Mr J on 4 June 2019. Mr J valued the property at $700,000.
The wife submits that Mr F’s report records that property values had risen 43% in the Suburb B area over the past five years, although they had decreased 10% over the past 12 months. She also submits that the husband elected not to call either of the valuers to explore their evidence further. The wife points to the fact that the husband had asserted a value of $900,000 in his trial Financial Statement which was sworn on 30 May 2019, but that he then asserted a value of $700,000 in his Outline of Case which was filed on 11 October 2019. The husband’s trial affidavit sworn 30 May 2019 estimated the value of the home at $900,000. The wife points also to the fact that it emerged during cross examination of the husband that he had asserted that the home had a value of $900,000 in a housing loan application that he had signed and submitted to V Bank home loans on 3 October 2019. The wife says that at all times she has sought orders for the auction of the property on the basis that the market is the best and fairest determinant of value.
The husband submits that, notwithstanding these matters, the Mr F valuation was made at the behest of the wife, and that it has been accepted by him. His position is that the best evidence before the Court is the Mr F valuation. The husband submits that the wife did not seek to cross examine Mr F, and that Mr F’s valuation should be regarded as uncontested. Insofar as the wife relies on the evidence of the husband having stated in his Financial Statement and in his V Bank loan application that the home had a value of $900,000, the husband says that the wife’s claim that this is relevant is without merit because the expert evidence provided by Mr F is the only admissible evidence of value before the Court. The husband submits that the only possible conclusion is that the property is valued at $800,000.
The husband submits that the Court has heard thousands of cases over the years which have required an assessment of expert evidence of the value of former matrimonial homes. He says it is not open to the wife to say that this case is different to those valuations which are typically made and accepted by the Court. The husband submits that the parties are not valuers, and that their own views as to the value of the home are irrelevant. The husband points out that the expert evidence rules apply, and he refers to Division 15.5.2 of the Family Law Rules 2004 in this regard. The husband notes that both valuers referred to Part 15.5 of the Family Law Rules, and swore that they had complied with the Rules. The husband makes the point that neither party has complained about the expert evidence that has been given, or questioned the valuation reports. He says that in particular neither party sought clarification and did not seek to cross examine the experts, and there was no objection to the valuers’ reports or to their affidavits.
The husband submits that it is for the Court to determine value based on the evidence, which will involve a common sense approach being taken. As the High Court observed in Commonwealth v Milledge (1953) 90 CLR 157, this is to be done after consideration of all relevant material. The husband’s position is that ss 55 and 56 of the Evidence Act (Cth) have been complied with in that the expert evidence is admissible and relevant, and that the opinion rule in s 76 excludes evidence of opinions save for certain specific exclusions. The husband points to s 79 of the Evidence Act which provides for the admission of opinions based on specialised knowledge, and says that there is no doubt that the valuation evidence provided by the parties themselves in their financial statements and affidavits are not based on specialised knowledge and are therefore inadmissible under the opinion rule.
The husband submits that the consequence of this is that only the two expert reports, both of which were adopted, not challenged, and duly admitted, meet the standard required to be admissible evidence of the value of the home. The husband says that the evidence in the two expert reports was based on facts observed, identified and proved, including the assumed facts, and he submits that there was a proper foundation for the opinions expressed in the reports.
The wife emphasises what she characterises as the significant and material divergence in the evidence regarding the value of the home. She relies on the decision of the Full Court in In the Marriage of Smith RH & Smith JW (1991) FLC 92-261, 78,759 (Fogarty, Baker and Rourke JJ) where the Full Court held:
The determination of values of property is a difficult and uncertain matter at the best of times, but especially in Australia in recent times because there have been frequent and marked variations in the property market. It becomes a difficult and at times hazardous task in s 79 proceedings but which, if performed, is likely to have a significant effect for better or worse on the fortunes of the parties.
Their Honours subsequently observed:
… where the state of the evidence makes the process of valuation hazardous or uncertain, or where there are wide differences between legitimate valuations because of a volatile market or peculiarities relating to the specific property or otherwise, the ascertainment of value by judicial process may become too uncertain and the preferable course is to order the sale of the property so that its real value can be revealed by market forces.
Given the significance of the home as a proportion of the divisible asset pool, and what she characterises as the persistently materially divergent evidence about its value, the wife seeks orders for sale of the property by public auction rather than have the Court proceed on the basis of valuation of $800,000. Her proposed orders do not contemplate a reserve price, but instead leave the setting of a reserve to the selling agent if the parties are not able to agree on the reserve. Perhaps at the conclusion of the trial the parties would have agreed that, in the event of an order that the home be auctioned, the reserve would be $800,000. Whether they would, in the present climate, be able to agree on a reserve price is unclear.
The husband submits that the decision of the Full Court in Smith should not be relied upon. That case concerned a commercial property owned by the husband, and both parties wanted a transfer of the property to themselves. The wife’s valuer in Smith valued the property at $1,140,000, whereas the husband’s valuer valued it at $500,000. The trial judge had difficulty determining the value of the property, but he set it at $500,000. The husband refers to the observations of the Full Court (at page 78,759) that:
The fact that each of the parties seeks a transfer of that property and neither seeks a sale is not in itself a reason for not adopting that approach: indeed it may emphasise the desirability of doing so in order to avoid the lottery effect which may be involved in choosing between one party and the other.
The husband submits that in the present case, by contrast, the state of the evidence does not make the valuation uncertain. He says there are no undue differences in the valuations, and that the ascertainment of value by judicial process is certain here, whereas in Smith, that was not the case. The husband submits that the wife’s submission that the evidence in relation to the value of the home is “persistently and materially divergent” must be rejected. He says that he should be afforded the opportunity to keep the home, that it has been the family home for some years, and that there is no reason to suppose a sale will result in a widely variable price. As has been noted, whether the wife would wish to keep the home has not been the subject of evidence or submissions.
In all the circumstances I accept the husband’s submissions that the best evidence of the value of the home is Mr F’s valuation of $800,000. He prepared an expert valuation report, which neither of the parties sought to challenge at trial. The fact that the husband might, at various times, have had a personal view that the home might be worth $900,000 is not to the point and cannot properly, in all the circumstances, be regarded as some sort of admission on his part. As the husband has submitted, Mr F is the expert, not the husband.
Although it may be accepted that, as was the case in Smith, there will sometimes be occasions where the justice and equity of the situation requires the sale of a property so that its real value can be revealed by market forces, this is not such a case. There are not wide differences here between legitimate valuations. The two expert valuations value the home at $700,000 and $800,000 respectively. The husband is prepared to accept the higher valuation. The wife’s preference for a higher valuation still is ultimately based on no more than the husband’s speculation in his financial statement, his trial affidavit, and in a home loan application, that the property might be worth $900,000. This is not admissible evidence of the value of the property. Unlike the trial judge in Smith, the ascertainment of the value of the home by judicial process, which is to say on the basis of the expert evidence, is not too uncertain. When one factors into the exercise the costs of the repair work which the wife’s draft orders would require before any sale, advertising costs in whatever amount, and the selling agent’s commission, the utility of ordering a sale of the property on the basis that it might be worth somewhat more than $800,000 seems highly questionable in the present climate. For these reasons the home is to be regarded as having a valuation of $800,000, in accordance with the expert evidence of Mr F. The value of the parties’ total assets will be approached on this basis.
Contributions made by the parties: relevant s 90SM(4)(a)-(c) matters
The husband’s ultimate position was that he had equity in a home in New South Wales at the time the parties commenced cohabitation in 2001 to the value of $46,000, as well as a motor vehicle, furniture, and superannuation to the value of $7,000. The husband says that the wife had minimal assets at the commencement of cohabitation, and she makes no contrary submission.
The husband says that the value of the New South Wales property increased over time, and that this was not as a result of any financial contribution made by the wife. He does, however, admit that the wife made non-financial contributions, particularly as the oldest child was born during the period the parties lived at the home in New South Wales. The husband says that the sale of the New South Wales property in 2002 provided “another springboard” that enabled him (that is to say the parties) to purchase the Suburb B home.
The husband’s evidence is that during the course of the relationship while the parties were residing at the Suburb B home he paid the mortgages, services, rates and other expenses. The husband admits, however, that there were improvements made to the Suburb B home, and that the wife’s parents paid some $20,000 for the installation of the spa and that other members of her family assisted in making improvements to the property. The husband says that the wife’s brother-in-law was paid for work that he carried out, and that he was not called by the wife to rebut evidence given by the husband in this regard.
The husband contends that, contrary to what was put to him in cross examination, the maternal grandmother did not care for the children to the extent claimed by the wife, nor did the wife’s brother-in-law or any other family members carry out improvements that substantially increased the value of the Suburb B home. He says also that both parties cared for the children during cohabitation.
It was the husband’s evidence that after separation both parties continued to care for the children, however he concedes that the wife has been the primary carer. Nonetheless, the husband contends that both parties contributed financially and non-financially post-separation, and that while he has continued to live in the Suburb B home, he has made all loan and other payments.
The husband submits that the parties’ respective overall contributions during the relationship and after separation were 52.5:47.5 per cent, in his favour. I take this to be put essentially on the basis that he made the capital contribution in the form of the New South Wales property at the commencement of the relationship.
The wife draws attention to the husband’s admissions in cross examination that:
a)all of the works done to the New South Wales property were done following the birth of the first child of the relationship;
b)the child was an infant at the time and was therefore highly dependent on his carers;
c)if the wife was not assisting in works preparing the New South Wales property for sale, it was because she was occupied looking after the child; and
d)had the wife not been taking care the child, the husband would not have had his hands free to carry out the works on the New South Wales property in order to ready it for sale.
The wife submits that s 90SM(4)(a) and (b) of the Act requires the Court to have regard to financial and non-financial contributions made directly or indirectly to the acquisition, conservation or improvement of the property of the parties. She says further that s 90SM(4)(c) of the Act recognises contributions to the family in the role of homemaker and parent. The wife submits that either way, the husband’s admissions that the works to the New South Wales property all occurred during cohabitation and following the first child's birth all point to the conclusion that those works were the product of the parties’ joint efforts. The wife’s evidence is that she contributed through her labour, through the labour contributed by her family members, and through her care for the infant first child of the relationship.
The wife’s position is that it is untenable for the husband to seek to receive sole credit for the net proceeds of the sale of the New South Wales property. She submits that having regard to her contributions to the readying of the property for sale, and her contribution by way of the care of the parties’ first child at the relevant time, the husband’s position reflects a superficial analysis of the parties’ respective contributions which is legally incorrect. Insofar as the husband’s initial superannuation entitlement of $7,000 is concerned, the wife says that this is nominal, and it is why the parties agreed that their respective superannuation entitlements ought to be equalised.
The wife also points to the fact that the husband stated in cross examination that there was no significance to the fact that the Suburb B home was registered in his sole name, and that her evidence of her own contributions was not the subject of any challenge by the husband.
The wife invites the Court to find that during cohabitation the parties’ labour contributions were equal, whether by way of paid employment, or in the role of homemaker and parent, or otherwise. The wife points out that there was no challenge to her evidence, or that of her sister and her mother, regarding extraneous contributions during the relationship such as:
a)the $20,000 which the husband admitted was advanced by the wife’s parents and applied to the installation of a spa at the Suburb B home;
b)the maternal grandmother's significant contributions to the care and upbringing of the children of the marriage; and
c)the wife’s sister’s and brother-in-law’s contributions to the improvement of the Suburb B home, and the family more broadly.
The wife draws a distinction between this evidence, and the fact that there was no evidence from the husband suggesting that his family of origin had made contributions on his behalf towards the development of the asset pool or the welfare of the family. The wife says that the husband claimed to work full time, yet he also claimed equal contribution as a homemaker and parent. She submits that this is a position which is not internally consistent. The wife submits that she was the primary caregiver during the marriage, and the Court should accept her evidence in this regard.
Insofar as the post-separation period is concerned, the wife points out that:
a)the husband admitted that overall the wife had cared for the children most of the time;
b)the husband had the benefit of living in an established home with a modest mortgage payment of some $340 per week, while the wife incurred greater rental costs of approximately $555 per week; and
c)the husband paid no child support for the first 18 months after separation.
It does not appear to be contested by the husband that he did not pay child support for the first 18 months after separation. The circumstances in which such an omission could have occurred were not adequately explained by the husband.
The wife submits that her post-separation contributions were greater than the husband’s. She says that having regard to all forms of contribution in the context of a lengthy relationship producing three children, the Court can find that both parties contributed to the best of their ability in their respective spheres of endeavour and the parties' overall contributions were equal.
All things considered, I do not accept the husband’s position that his contributions over the course of the relationship were greater than the wife’s. Although the husband brought the New South Wales property into the relationship, his equity in it was relatively modest and his position does not give appropriate recognition to the fact that the work done on that property to prepare it for sale was done after the birth of the first child of the relationship. It does not recognise that the wife contributed significantly by completing some works herself and by caring for that child, and that had the wife not been caring for the child during this period the husband would not have been as free to carry out the works on the New South Wales property that were done prior to it being offered for sale. Given the length of the parties’ relationship and all of the contributions to it (including in relation to the care of the children) that I accept the wife and her extended family made, I do not accept the husband’s submission that his initial contribution should be regarded as materially greater than the wife’s. Insofar as the husband seeks to diminish the contributions made by the maternal grandmother to the care of the children throughout the relationship, I do not accept this submission either. The evidence of the contributions made by the maternal grandmother were not challenged by the husband, other than by contrary assertion. The maternal grandmother was on affidavit and present at Court, but she was not called by the husband for cross examination.
Further, I accept the wife’s submission that the evidence is that her post-separation contributions exceeded those of the husband to a considerable extent. In particular, I regard it as significant that the husband did not pay child support for the first 18 months after separation, or contribute anything towards the wife’s higher housing costs while he continued to reside in the home and the wife remained principally responsible for the care of the children. The fact that the husband asserts that he too made contributions does not mean that the parties’ respective contributions can be regarded as equal. As the wife submits in her reply submissions, the comparative point is the real issue. Post-separation contributions are especially significant given that the time between separation and the final hearing was some three and a half years.
Taking everything into account the husband’s submission that he can be regarded as having made a slightly higher contribution to the relationship should be rejected. Both parties contributed equally to the relationship in their respective spheres, and I accept the wife’s submission that there should be an overall finding of equality of contributions.
Section 90SF(3) matters
The wife’s position is that the main s 90SF(3) matters to be taken into account in making orders altering the interests of the parties to the relationship in the property of the parties are:
a)the parties’ income earning disparity– s 90SF(3)(b);
b)the need to care for minor children – s 90SF(3)(c);
c)the care of a financially dependent adult child – s 90SF(3)(e);
d)the fact that the husband has re-partnered – s 90SF(3)(b) and (m); and
e)the size of the asset pool – s 90SF(3)(n)(i).
Insofar as the income earning disparity of the parties is concerned, the wife draws attention to the fact that the husband is in stable full-time employment earning approximately $116,000 per annum.[4] By contrast the wife earns approximately $38,000 per annum, which comprises $600 per week as a craftsperson and $7,000-$8,000 per annum teaching craft classes. The wife says that there is a significant and enduring income earning disparity between the parties, and that this is a significant s 90SF(3) factor.
[4] It is to be noted that the evidence suggests the husband’s income is in the range of $113,000 to $115,000 per annum, but the difference is not material.
Insofar as the care of minor children is concerned, the wife points out that pursuant to the final parenting consent orders the daughter lives about 65 per cent of the time with her and 35 per cent of the time with the husband. The younger son is required under the terms of the orders to spend equal time with each parent. The orders require each parent to do all things necessary to ensure compliance with the orders, consistent with the recommendations of the children’s psychologist. Having regard to these matters the wife says that the Court should find that she has the majority care of the minor children of the relationship.
Insofar as her responsibility to maintain the oldest child of the relationship, now an adult, is concerned, the wife’s evidence is that this child was completing VCAL in 2019 and is seeking an apprenticeship which would be of 3 to 4 years duration. The wife says that this child continues to live with her and that the husband has not had a relationship, financial or otherwise, with him since August 2018. The wife says that it is likely that she will need to provide housing and meet a large part of this son’s living costs for the next 3 to 4 years.
Insofar as the husband’s re-partnering is concerned, the wife points out that it is the evidence of the husband’s new partner that their relationship began in September 2016, and she expects that it will continue into the future. The husband’s evidence is that his new relationship is “going from strength to strength”. The wife says that this is a serious relationship and that its seriousness is apparent from the V Bank home loan application form and the husband’s evidence in cross examination that his new partner will become a co-borrower and co-owner of the Suburb B home if the husband is able to buy out the wife’s interests.
The wife also points out that the husband has conceded that:
a)his new partner works full time and earns $4,000 gross per month;
b)she has savings of $138,000, a motor vehicle, and superannuation of some $160,000; and
c)his new partner’s daughter from her previous marriage has only stayed at the home for 3 or 4 nights in the previous month.
The wife says that the husband’s new partner can and should be expected to contribute to the costs of the household with the husband, and that she represents a financial resource to him which is a factor that favours the wife.
Insofar as the size of the asset pool is concerned, the wife points out that it is modest, with a net value of approximately $800,000 (assuming that the sum of $900,000 would be able to be realised on the sale of the Suburb B home). This net value is overstated by the wife having regard both to my finding that the home is valued at $800,000, and taking into account the parties’ liabilities. The net value of the parties’ non-superannuation assets, after allowing for liabilities, appears in fact to be $716,640. The wife submits that, accordingly, any settlement she might receive would be modest. She says that she will need to re-enter the property market in order to provide housing for herself and her three dependent children. The wife submits that this factor places upward pressure on her needs pursuant to s 90SF(3)(n)(i), and that the Court must consider the actuality of the proposed property settlement as against her needs in assessing this factor. She seeks an adjustment of 20 per cent on account of the s 90SF(3) factors.
The husband’s position in relation to the s 90SF(3) matters is, as might be expected, somewhat different. He says that the parties now share the care of the two younger children and he observes that the younger boy is living with him, notwithstanding the orders for shared time. In relation to this submission the wife says that it is improper for the husband to invite the Court to assume that the younger boy will be living with him given the parenting orders which were consented to at the final hearing which provide for shared care.
I accept that it is not open to the husband to invite the Court to proceed on the basis that the younger boy will be living with him having regard to the orders for shared time to which the husband consented on the first day of the trial. If the younger child is not living with the wife consistently with the orders, it is the husband’s responsibility to ensure compliance with the orders. I therefore do not regard the husband’s submission that this child is living with him on a full time basis as supportive of his position.
Insofar as the wife’s asserted income disparity with the husband is concerned, the husband says that the wife’s business has a strong revenue flow and the Court should accept that the wife has materially understated her income over a number of years. The wife’s response to this is that she relies on her Financial Statement and that it is not open to the husband to assert financial non-disclosure in closing in circumstances where it was acknowledged by his counsel in open Court that the wife had agreed to meet with the husband in the presence of her solicitor to help him understand the books of her business, and that during cross examination of the husband he admitted to not even having studied the wife’s financial disclosure.
I accept the wife’s submissions in this regard. I am not satisfied on the evidence that there has been material non-disclosure on the part of the wife, and I do not accept that the husband’s submissions on this point have a proper basis. The husband appears to have been given the opportunity to look more closely into the accounts of the wife’s business, but he does not seem to have availed himself of the opportunity. I proceed on the basis that the wife’s position is as recorded in her Financial Statement.
The husband also draws attention to the fact that the wife receives income from child support and from Centrelink in the form of family allowances and that pursuant to her Financial Statement she has income of $1,122 per week. The wife points out in response that pursuant to s 90SF(4) of the Act the Court is required to disregard income tested pensions, allowances and benefits when determining a spousal maintenance applicant’s income.
The husband also seems to adopt the position that some of the wife’s claimed expenses in relation to education have not been established, and that in the year 2020 she would not be paying $200 per week. However the wife points out that she gave evidence of other educational expenses that the husband’s submission in this respect had overlooked.
I am not satisfied in all the circumstances that the husband’s submissions in relation to the wife’s income and expenses have merit. It is clear on the evidence that the husband is in a materially advantageous position when compared to the wife. The husband concedes as much, and his attempts to minimise the significance of this disparity at paragraphs 26 to 32 of his closing submissions do not withstand scrutiny.
The husband submits that both parties have a continuing responsibility to maintain the children, and that insofar as the oldest child is concerned, because he is working part-time or will soon be doing an apprenticeship there will be minimal, if any, financial impact on the wife for his care. The wife’s position in relation to this is that the husband underestimates the extent of the oldest child’s continued reliance upon her. She says that there is no evidence that the husband would assist with expenses associated with caring for the eldest child. Once again, I accept the wife’s submissions in this regard. It is clear that the older child will need some assistance while he is engaged in education and training, and there is no evidence that the husband will support the wife in doing this.
Insofar as his re-partnering is concerned, the husband attempts to minimise the significance of this also. He says there is evidence of his new partner’s income and resources, and that his new partner’s daughter lives with them much of the time. The husband says that while his new partner contributes financially to his household, she has a very modest income. The wife’s position is that this submission is at odds with the evidence as to the new partner’s employment, her income, her assets and the extent to which her daughter lives with them in the Suburb B home. The wife says that the husband has admitted that his new partner's contribution to the household would be “reviewed” after the case was finished, and that she is able to pay her own way, including paying her share of fixed overheads. The wife says that this significantly impacts on the husband under s 90SF(3) of the Act, and she points out that she herself has not re-partnered.
To the extent that the husband draws attention to the wife’s business interests, which he says produce a good income, the wife says that the single expert valued the business on a net asset backing basis, and that the husband has exaggerated the profitability of the business. I accept the wife’s submissions in this regard. The evidence is that her income from these businesses is, in both relative and absolute terms, modest.
The husband’s position is that an adjustment of 55 per cent in favour of the wife and 45 per cent to him of the net non-superannuation pool would be appropriate in all the circumstances. He says this is the result of the s 90SF(3) factors which would be in the order of 5 to 7.5 per cent adjustment in the wife’s favour. Insofar as the net asset pool is concerned, he points out that, on a valuation of the home at $800,000, the net non-superannuation asset pool is $720,594. As I have said, the husband is not quite correct in this respect: having regard to my finding as to the valuation of the home, and taking into account the parties’ agreed assets and liabilities, the net non-superannuation asset pool appears to be $716,640. The husband’s position is that an adjustment of 20 per cent in favour of the wife (an additional amount of $143,328 over and above a half share of $358,320) would be excessive and unjustified.
Taking all the relevant s 90SF(3) matters into account, I consider that the adjustment in favour of the wife should be not 20 per cent but 12.5 per cent (an additional amount of $89,580 over and above a half share of $358,320). This would mean that the wife’s total “share” of the net non-superannuation assets of the relationship would be $447,900, and the husband’s total “share” of the net non-superannuation assets of the marriage would be $268,740. Of the wife’s $447,900 (62.5 per cent) share, she is already holding $60,393 worth of assets and has to discharge liabilities of $49,638. Accordingly, her “net” position in terms of assets actually held by her is $10,755. Her share of the non-superannuation assets of the relationship has to be reduced by this amount, resulting in an amount payable by the husband to the wife of $437,145.
The husband is holding assets of $880,331, and liabilities of $174,446. Accordingly his “net” position in terms of assets actually held by him is $705,885. Of this, he will pay $437,145 to the wife, leaving him with a balance of $268,740.
My principal reason for coming to the adjustment figure of 12.5 per cent is that there is a significant disparity in the parties’ ability to earn income which I accept will likely be ongoing, and the evidence discloses that the husband earns approximately three times what the wife earns. I also regard it as significant that if the husband refinances the mortgage and retains the home, as he seeks to do, the wife will need to re-enter the property market in order to provide housing for herself and her three dependent children. Also relevant is the fact that the husband has re-partnered and that his new partner, who is working, has moved in with him. This gives the husband an ability to share expenses which is not available to the wife, and this is also a consideration of significance.
Spousal maintenance
Insofar as spousal maintenance is concerned, the wife submits that s 90SF(1) provides that spousal maintenance is payable following a relationship breakdown where two criteria are met: the applicant is able to demonstrate a need (that is a deficit of income against reasonable needs), and the respondent is able to demonstrate a capacity to pay (meaning a surplus of income as against reasonable needs). As has been observed, s 90SF(4) requires the Court assessing a spousal maintenance claim to disregard the entitlement of an applicant to any income-tested pension, allowance or benefit.
The wife submits that having regard to her Financial Statement and her evidence in cross examination, the Court should find that her weekly income amounts to $600 plus $134-$153 per week ($7,000 - $8,000 per annum) for teaching. This, she says, is an average of $744 per week. Although there was some lack of clarity, it was the wife’s evidence that she received $340 per week by way of child support. This, she said, means that in the aggregate she has an income of about $1,088 per week (the correct arithmetic would seem to be $1,084).
The wife says that her needs of $1,783 per week were not challenged, except for the education costs of $200 per week. In this regard she points out that in 2020 the daughter's education fees would be at least $3,300 per annum ($63.50 per week), which she would have to fund, together with half of uniforms, books and the like. The wife says that her younger son’s fees in 2019 were $2,000, plus extras including a musical instrument charge of $1,200. The wife says that a reasonable allowance for education costs paid by her would be some $150 per week. She says that her weekly outgoings could therefore be said to be about $1,733 per week, which would give rise to a net shortfall as against income of $1,088 (actually $1084) in the sum of about $645 (actually $649) per week. I accept the wife’s figures, and that she has a shortfall in the sum of about $649 per week.
The wife submits that by contrast the husband deposes to income of $2,178 per week, but in circumstances where he shares the home and outgoings with a gainfully employed adult earning some $923 per week gross. The wife says this combined household income is in excess of $3,000 per week.
The wife submits that although the husband declared Part N expenses in his Financial Statement of $714 per week, his application to V Bank indicated that the combined monthly expenses of the husband and his new partner (when reduced to a weekly basis) were only $458 per week. The wife observes that this document was signed with an acknowledgement that false statements constitute an offence under various applicable statutes, and that during cross examination the husband admitted the accuracy of the figures in the V Bank application “as estimates”.
The wife submits that allowing for the existing mortgage ($340 per week), tax ($606 per week), rates ($61 per week), registrations ($31 per week), credit card payments ($20 per week) and child support as asserted ($406 per week), the total expenses before the Part N expenses in the husband’s Financial Statement amount to $1,464 per week. The wife submits that assuming that Part N expenses are in fact $458 per week, shared between two people at $229 each, the husband’s total weekly outgoings would be $1,693 per week. The wife says this leaves a surplus income of $485 per week against his own total income of $2178 per week. This is before the husband’s new partner contributes to the existing mortgage payments or any other fixed outgoings. It does not, however, take account of any additional mortgage repayments which the husband would need to pay if, as he asserts, he will have to refinance the home loan to pay the wife her adjusted cash figure and keep the home. The husband has not, however, sought to lead evidence about the likely costs of extending the mortgage and the extent to which this will impact on his weekly expenses.
The wife invites the Court to conclude that the husband has and will have the capacity to pay some $485 per week to her by way of spousal maintenance. Accordingly, the wife seeks an order for spousal maintenance in the sum of $2,000 per month for a period of 3 years. Capitalised, she says this equates to a sum of $72,000.
The wife submits that it is open to the Court to capitalise the spousal maintenance payments in the sum of $72,000 in order to allow a severance of ties, and to avoid the prolongation of the financial relationship between the parties. The wife says that capitalised spousal maintenance will also avoid any potential issues of enforcement relating to periodic payments and the associated stress and cost to the parties of needing to return to Court after lengthy proceedings.
The husband’s position is that he has limited means to pay spousal maintenance. He submits that the wife has not demonstrated a need for spousal maintenance, and that there is little evidence that she has a deficient income against her reasonable needs.
I do not accept the husband’s submission that he has insufficient means to pay spousal maintenance, and that the wife has not demonstrated a need for it. The wife has demonstrated a weekly shortfall and need of approximately $649. I do not regard any of her stated expenditure as extravagant or unreasonable in all the circumstances, nor do I consider that she is understating her income. It is also apparent on the evidence that the husband will have a surplus of income over expenditure, especially once his new partner’s income is taken into account, although such a conclusion does not factor in the need to refinance the home loan to pay the wife her adjustment figure, if this is what he does. It is important to appreciate, however, that the husband’s claim that he will need to refinance the home loan to pay out the wife is predicated on his desire to stay in the former family home, rather than downsize to a smaller and more affordable home, as he would have the wife do.
Whatever be the husband’s plans, and whether he decides to refinance the home loan and stay in the home or move to cheaper accommodation, there is a level of uncertainty surrounding the contribution to expenses which the husband’s new partner will make. In this respect it is to be noted that the husband elected to ignore the contribution being made, or able to be made, by his new partner in the completion of his Financial Statement. Insofar as his expenses are concerned, the husband says his claims in the V Bank loan application were merely estimates of his expenses. Implicitly he asks the Court to proceed on the basis that his expenses stated in the V Bank home loan document were understated. The husband’s position is that his liability to pay the wife out her share of the home will substantially curtail his ability to pay spousal maintenance.
The wife’s answer to this is that the husband will have the ability to pay spousal maintenance because his new partner will be able to contribute to fixed housing overheads in the form of mortgage payments. The wife, not having re-partnered, will have needs that are significantly greater.
I accept the wife’s submission that the husband’s new domestic situation gives him access to a resource that she does not have. It is apparent, all things considered, that the husband will have a greater capacity to pay spousal maintenance than he is prepared to countenance. If it be the case that the husband is able to stay in the home, rather than move to more affordable accommodation, the husband’s argument that he will not have the means to pay spousal maintenance is really an argument that he will not have the means to pay spousal maintenance because he wishes to refinance the home loan to an extent which would enable him to remain living in the home. This argument is advanced in circumstances where the husband is content to have the wife live in smaller and more affordable accommodation, which she will either need to go on renting, or re-enter the property market to acquire. The husband’s claim that he will not have the means to pay spousal maintenance needs to be understood in this context, and it must be assessed in circumstances where he has neglected to make full and frank disclosure of the contributions which will be made by his new partner, and the costs of him refinancing the mortgage.
Having regard to the evidence of the husband’s surplus of income over expenditure and the real basis of his claim that he will not have a surplus of income over expenditure, together with the financial support the husband will be able to derive from his new partner, and bearing in mind the wife’s significant shortfall of income as against expenditure and her likely need to re-enter the property market, I consider that payments of spousal maintenance by the husband to the wife would be appropriate. The husband should not be heard to say that he cannot afford to pay in circumstances where he chooses to remain in the home, he has omitted to include his new partner’s income in his financial statement or give evidence of what contribution she will make, and he has failed to give any indication of the costs of extending the mortgage. As the Full Court observed in Collingridge & Aiolfi, the Court should not shy away from a robust exercise of discretion in favour of the other party where full and frank disclosure has not been made.
However doing the best I can on incomplete information, and recognising the substantial figure which the husband will need to pay to the wife which will require the refinancing of the mortgage, I am not satisfied that an amount of $2,000 per month is the appropriate figure to be paid by the husband to the wife by way of spousal maintenance for the next three years. Taking everything into account, including the need for both parties to maintain themselves in a manner which is reasonable in all the circumstances and the relatively small asset pool, I consider that a fairer and more realistic amount for the husband to pay to the wife would be $1,000 per month for the next three years, capitalised to $36,000.
Although I have hesitated to capitalise this amount because capitalisation can make insufficient allowance for the vicissitudes of life and changing factors affecting both parties, I consider that in the present case it is necessary to do so. The parties’ financial relationship needs to be brought to a close, the wife needs to secure her own accommodation, and it would seem that the husband has been slow to make payments which he ought properly to have made. The fact that the husband did not sign the agreed Limited Child Support Agreement until several months after the trial, and that he apparently did not pay child support for the first 18 months after separation, does not engender confidence that monthly payments of spousal maintenance would be paid without incident if they were not capitalised. I consider that a payment at this rate goes some way to meeting the wife’s needs, but accommodates also the fact that the husband’s mortgage expenses will likely increase as a consequence of the payment he will need to make to the wife to pay her out, albeit that it is his wish to stay in the home rather than move to more affordable accommodation.
I note, finally, that the parties have been critical of the candour which they have each displayed in giving their evidence. On the whole it has not been necessary to make particular findings about either of them in this respect. I should record, however, that I have some sympathy for the wife’s submission that the husband took longer than might have been necessary to make obvious concessions, and that it should not have taken until cross examination at final hearing for him to concede many of the points that were ultimately conceded. I have in mind, in particular, the husband’s concession that his 5 December 2017 Financial Statement was inaccurate, his understatement of his superannuation balances, the issue of his equity in the New South Wales property after the property settlement in his first marriage, and the paucity of detail in his 31 May 2019 Financial Statement concerning contributions being made to the household by his new partner. There is substance to the wife’s submission that the property aspects of this litigation were unnecessarily prolonged as a result of the husband’s attitude. Ultimately the husband’s failure to be forthcoming, primarily in relation to the contributions able to be made by his new partner, have supported the wife’s application for a payment of spousal maintenance on a capitalised basis.
Conclusion
There will be orders that the husband shall pay the wife $437,145, together with the sum of $36,000 by way of capitalised spousal maintenance. There will also need to be orders dealing with the ancillary division of the parties assets and liabilities, certain outstanding chattels, and the equalisation of their superannuation. However as I have indicated at the outset, the significantly different forms of the parties’ proposed minutes of orders require reconciliation, and it is desirable for the parties to have the opportunity to do this on an agreed basis. I will therefore direct that the parties submit an agreed minute of orders within seven (7) days giving effect to the division of the assets of the relationship and the payment of capitalised spousal maintenance, together with the matters able to be agreed. In the interests of a speedy resolution of outstanding matters there will be provided with these reasons a draft minute of orders which may reflect an appropriate reconciliation of the competing drafts provided by the parties. The matter will be fixed for mention within the next week if there remain outstanding issues between the parties.
I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McEvoy delivered on 1 June 2020.
Associate:
Date: 1 June 2020
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