KADER & KADER
[2016] FCCA 2684
•23 March 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KADER & KADER | [2016] FCCA 2684 |
| Catchwords: FAMILY LAW – Final property adjustment – limited factual issues in dispute – finding of equality of contribution – consideration of section 75(2) factors – adjustment made in favour of the wife. |
| Legislation: Family Law Act 1975, ss.55A, 75(2), 79, 117, 117C Federal Circuit Court Rules 2001, Part 21 |
| Cases cited: Pierce & Pierce [1998] FamCA 74 Haset Sali v SPC Ltd [1993] HCA 47 Aon Risk Services & Australian National University [2009] HCA 27 Expense Reduction Analysts Group Proprietary Limited & Armstrong Strategic Managing and Marketing (2013) 303 ALR 199 I & I (No.2) (1995) FLC 92-625 Browne & Green (2002) FLC 93-115 Harris v Harris (1991) FLC 92-254 Browne & Dunn (1893) 6 R 67 (HL) Lennon & Lennon (Costs) [2012] FamCA 116 Robinson & Higginbotham [1991] FamCA 4 Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848 |
Applicant: | MS KADER |
| Respondent: | MR KADER |
| File Number: | PAC 3830 of 2014 |
| Judgment of: | Judge Harman |
| Hearing date: | 23 March 2016 |
| Date of Last Submission: | 23 March 2016 |
| Delivered at: | Parramatta |
| Delivered on: | 23 March 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Morley |
| Solicitors for the Applicant: | Reimer Winter Williamson The Lawyers |
| The Respondent appeared in person |
ORDERS
Within thirty-five (35) days of the date of these Orders, the Respondent husband shall:
(a)Pay to the wife a sum of $121,472 (comprising a payment by way of property adjustment of $110,722 together with costs to be paid pursuant to these Orders in the sum of $10,750); and
(b)Do all acts and things necessary to transfer to the Applicant wife all of his right, title and interest in the property known as, Property E being the whole of the land contained in Folio Identifier (omitted) (hereinafter referred to as “the Property E property”); and
(c)Refinance and discharge the mortgage secured against the property known as Property B, being the whole of the land contained in Folio Identifier (omitted) (hereinafter referred to as “the Property B property”) so that any mortgage encumbering that property stands in the husband’s name solely and the husband shall indemnify the wife and keep the wife indemnified as to any claim howsoever arising in relation to that debt.
Simultaneously with the husband’s compliance with Order 1 above, the Applicant wife shall do all acts and things necessary to:
(a)Transfer to the Respondent Husband all of her right, title and interest in the Property B property; and
(b)Refinance and discharge the mortgage secured against the Property E property, so that any mortgage encumbering the property stands in the wife’s name solely and the wife shall indemnify the husband and keep the husband indemnified as to any claim howsoever arising in relation to that debt.
In the event that the husband should fail to comply with any of his obligations pursuant to Order 1 hereof within thirty-five (35) days from the date of these Orders, then each of the parties shall then forthwith do all things and sign all documents necessary to cause the Property B property to be listed for sale and sold by private treaty at the earliest possible date and at a price to be agreed upon between the parties and failing such agreement, at a price to be determined by the President of the Real Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in the following manner and priority:
(a)Discharge of the mortgage encumbering that property;
(b)Payment of agent’s commission, advertising expenses and legal expenses of the sales;
(c)Payment of costs incurred (if any) in relation to the determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;
(d)The balance then to be divided:
(i)In payment to the wife in the sum of $121,472 together with interest calculated upon that sum from the date 35 days from the date of these Orders until the date of settlement of the sale and to be calculated at the rate prescribed by the Federal Circuit Court Rules 2001;
(ii)The balance to the Respondent husband.
In the event that the wife should fail to comply with any of her obligations pursuant to Order 2 hereof within thirty-five (35) days from the date of these Orders, then each of the parties shall then forthwith do all things and sign all documents necessary to cause the Property E property to be listed for sale and sold by private treaty at the earliest possible date and at a price to be agreed upon between the parties and failing such agreement at a price to be determined by the President of the Real Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in the following manner and priority:
(a)Discharge of the mortgage encumbering that property;
(b)Payment of agent’s commission, advertising expenses and legal expenses of the sales;
(c)Payment of costs incurred (if any) in relation to the determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;
(d)In payment of the balance to the wife.
That in the event that either the Property E or Property B properties are to be sold pursuant to Orders 3 and 4 of these Orders and the property to be sold has not sold by private treaty within a period of three (3) months from the date that the property is first listed for sale, then the parties shall forthwith and thereafter do all acts and things necessary, including executing all documents necessary, to cause the properties to be sold by a public auction at the earliest possible date at a reserve price to be agreed upon between the parties, and failing such agreement at a reserve price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the sale in accordance with Order 3 or 4 as applicable.
Each of the parties shall forthwith, do all things, sign all documents and give all consents, authorities and instructions as may be necessary, to transfer to the wife any interest that the parties hold, jointly and severely, or individually in the mortgage offset account with the (omitted) Bank, BSB number: (omitted) Account Number: (omitted).
Save for the Orders above and pursuant to Section 78 of the Family Law Act 1975, each party shall respectively retain all interests in and entitlement to:
(a)All personal property now in his/her respective possession or control;
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, then a Registrar of the Federal Circuit Court of Australia shall be appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to this Order in the time periods prescribed.
These Orders are made having regard to the provisions of section 81 of the Family Law Act 1975 with a view to determining for all time the financial relationship between them and avoiding further proceedings between them.
All outstanding Applications and Responses are withdrawn and dismissed and all issues are removed from the list of matters awaiting hearing.
Upon the expiration of the Appeal period and in the event that no appeal is lodged that all exhibits then be returned to the party who tendered same and that all material produced on subpoena be returned to the person or organisation who produced same or securely destroyed.
The husband shall pay as a contribution to the costs of the wife, the sum of $10,750 and such costs to be paid within two months of the date hereof and at the same time as settlement funds of $110,722 to be paid above (and being the total payment of $121,472 provided by Order 1(a) hereof).
The above costs represent a charge on the husbands interest in real estate and further:
(a)Provided costs are paid within 2 months of today’s date, interest shall not accrue;
(b)If costs are not paid within 2 months of today’s date, the wife shall be entitled to pursue payment thereof by suit in a Court of competent jurisdiction.
Vacate the return date of the Application for Divorce filed 3 March 2016 (namely, 11:00am, 27 April 2016) and make that Application returnable before me today.
THE COURT NOTES THAT:
Whilst these Orders provide for payment within 35 days of 23 March 2016, these Orders have been redrafted and reissued pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 and thus the time for compliance by each party shall be calculated as 35 days from the date of reissue of the Orders, namely 7 November 2016.
IT IS NOTED that publication of this judgment under the pseudonym Kader & Kader is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 3830 of 2014
| MS KADER |
Applicant
And
| MR KADER |
Respondent
REASONS FOR JUDGMENT
These are proceedings relating to issues of property adjustment between a husband and a wife. The proceedings are accordingly dealt with under Part VIII of the Family Law Act 1975.
The parties to the proceedings are, Ms Kader, who is the Applicant and the wife and Mr Kader, who is the respondent and the husband.
Ms Kader is legally represented. Mr Kader is not. Mr Kader has represented himself throughout the proceedings.
The matter is listed today for Trial and has proceeded to Trial. That is regrettable, as the pool of property available for division between the parties is not substantial.
The factual issues in dispute between the parties, whilst they appeared substantial at the commencement of the Trial, clearly are not and thus the matter might, through better focus, have been resolved without the need for judicial intervention. The legal principles that apply in the case are well settled and far from complex.
I propose to deal with the contested issues in the case briefly.
The proceedings were commenced by an Application Initiating proceedings filed 14 August 2014. The matter has reached a Trial after what, to the parties, would appear an inordinate length of time being approximately 18 months. In reality, that is most expeditious for matters before this Registry at this time.
The wife, by her Application, sought Orders prefaced upon a division of approximately 65/35 % of the total matrimonial pool in her favour.
The husband's Response proposed that all assets would stay where they were and in the hands of the party with the possession, custody or control of any asset. The nett effect of that position, by reference to the largely agreed facts as they are presented at Trial, is a little over 60/40% in the husband's favour. Notwithstanding that mathematical calculation, the husband is clear in putting his position that he would propose an equal division of all assets. Indeed, the husband's Response proposed a modest payment to the wife which would have moved them slightly closer together. But on the present pool, and its largely agreed value, the nett effect of the Orders proposed by the husband would still be something in the order of 60/40 % in the husband's favour.
There is also an Application for Divorce that has been filed by the husband. Whilst that Application is not listed today the wife has been served with the Application and does not oppose it. I propose to also deal with that Application today to avoid the parties' further cost or need to attend the Court, (noting that there are children of the relationship and, thus, an attendance would be required, one would think).
Material considered
In dealing with the proceedings today, I have read each of the documents that the parties have identified in their respective Case Outlines.
In the case of the wife that has comprised:
a)Her Application Initiating proceedings, filed 14 August 2014;
b)Her Affidavit of evidence‑in‑chief filed 5 February 2016, together with;
c)Her Statement of Financial Circumstances, filed 21 March 2016.
In the husband's case, I have read the following documents:
a)His Response filed 29 September 2014;
b)An Affidavit by the husband sworn or affirmed 10 February 2015;
c)A further Affidavit sworn or affirmed 3 February 2016, together with;
d)A statement of financial circumstances.
The wife seeks, consistently through both her Application Initiating proceedings and the Case Outline document provided by her Counsel, an Order for a cash adjustment between herself and the husband. The wife is otherwise at one with the husband that all items would remain in the possession, custody or control of the person who presently holds them.
By the Minute of Order that the wife has provided, she seeks to be paid a sum of $143,837 representing, as indicated, approximately 65 % of the nett assets as the wife described and valued them.
The husband has submitted that an equal division should occur. An equal division would still see a cash payment made by the husband to the wife, albeit somewhat less than that which the wife seeks. If one is to compare those two positions, the parties are far closer together than perhaps they seemed at the outset of the Trial.
Discussion of evidence
I do not propose to canvass the evidence in any vast detail. Each of the parties has given their evidence by Affidavit and each has been cross‑examined.
I am satisfied that the chronology of events that is set out in the Case Outline document provided by the wife's Counsel accurately or more accurately describes the relevant financial transactions relevant to the determination of these proceedings. I incorporate that chronology herein. Beyond that, however, there are some issues of significance which require address. I will deal with them briefly and with as minimal a discussion as is possible.
Date
Event
(omitted) 1970
Husband born in (country omitted)
(omitted) 1973
Wife born in (country omitted)
(omitted) 1998
Parties married in (country omitted)
(omitted) 2003
Child Y born
Aug 2004
Parties migrated to Australia
2004
Wife commenced a (qualifications omitted) at (omitted) University
@ Feb 2005
Husband commenced employment with (employer omitted)
2005
Wife graduated from (omitted) University
(omitted) 2006
Child X born
Sept 2006
Parties purchased Property B
Aug 2007
Wife commenced casual (employment omitted) positions
2009
Child Y commenced at (omitted) Primary School
Late 2007
Parties purchased a Suzuki (omitted) motor vehicle
2011
Wife obtained full time (occupation omitted) position at (omitted) Primary School
2011
Parties purchased 2 investment properties at (omitted)
2011
Parties purchased a Honda (omitted) motor vehicle
Jan 2012
Parties purchased Property E
11.1.2012
Parties separated
Feb 2012
Child X commenced at (omitted) Primary School
5.3.2012
Parties reconciled
25.4.2012
Parties separated on a final basis. Wife and both children moved from Property B to Property E property
Late 2012
Parties sold the 2 (omitted) investment properties
Sept 2012
Wife purchased a Holden (omitted) motor vehicle on finance from (omitted) Bank
2015
Wife appointed (occupation omitted) at (omitted) Primary School
The husband's case proceeds on the basis that his financial contributions vastly exceed those of the wife. Indeed, on any view of the evidence, the husband’s financial contributions are greater than the wife’s.
The husband has calculated – although it was a portion of his evidence objected to and appropriately so, but for present purposes I will refer to it as it is repeated in submissions – that he has, throughout the cohabitation of these parties, earned approximately $574,000 whilst the wife has introduced income of only $158,000.
What is inherent in that submission – indeed, it has never been an issue in dispute between these parties – is that both of the parties have worked hard. Both of the parties have contributed all of the income that has been earnt by them to the relationship and for the benefit of both parties and their children. There are two children of the relationship. Those children live predominantly with their mother, and are, Y born (omitted) 2003 and X born (omitted) 2006.
The children spend time with their father and there is no issue that the children have other than love and affection for their father and he for them. The female child spends one day and approximately one night per week with her father, as well as periods during school holidays. The young lad spends a similar period but does not generally, at least during school term, stay overnight. The children spend some time with their father each morning such is their ability to co-operate with each other – ironically in light of the parties being before this Court requiring judicial determination of their dispute.
The parties live in close proximity and they have deliberately purchased properties in close proximity so as to minimise disruption to the children (such as changing their schools), and so as to ensure that both parents are readily available to them. The father has the care of the children for a period each morning before school, which assists the wife in attending to her employment and facilitates the children's relationship with their father, who then takes them to school.
The parties are agreed as to Child Support arrangements. The father pays Child Support via the Child Support Agency and as assessed, being approximately $119 per week. There are some additional expenditures which occur in purchasing items of school clothing and the like. The parties are at odds as to how frequently or for what amount those items are purchased for. However, there is no dispute as to the general structure of arrangements.
The substantial difficulties in the evidence arise from transactions which have occurred, not so much during the relationship, but at and following separation.
The parties agree that the husband made an initial contribution to this relationship, introducing a sum of $25,000.
A further amount was paid by the wife's family early in the marriage to purchase a motor vehicle that was left with members of the wife's family when these parties emigrated from (country omitted) to Australia in or about (omitted) 2004.
The wife's family provided some assistance in accommodation when the parties first arrived in Australia, although that is not pressed as a matter of significance in relation to contribution.
The husband's initial contribution, as is submitted by Counsel for the wife, occurred some little time ago. The Full Court urges caution in describing the passage of time as an “eroding” factor. I do not do so in any event. It need only be observed that an initial contribution is nothing special. It is an initial contribution to be weighed and balanced against all of the contributions which the evidence suggests might be found. Cases such as, Pierce & Pierce [1998] FamCA 74 and Omacini & Omacini [2005] FamCA 707 are clear on that point and I will return to that issue in a discussion of the legislative pathway.
During the relationship the parties purchased a number of properties. At the time of separation, they owned two investment properties as well as the home in which the parties, at that point, jointly lived with their children, being a property in Property B.
At separation, the wife left the home. The children left with her and they have lived predominantly with her since. Arrangements have been made between these parties without the need for any intervention by Courts and so as to accommodate their needs and their children's. There is no controversy that since separation, the children have spent holiday periods with their father at least twice per year and that this has included a number of very enjoyable holidays, both domestically and overseas.
Again, these are parties who have been able to arrange such affairs and make proper and prudent arrangements for their children's enjoyment of life without the need for Court intervention, and certainly without the need, as far too many parents and children experience, of coming to the Court seeking permission to travel.
At separation, the parties – again, as a testament, no doubt, to their sensible child‑focused approach – determined that they would jointly purchase a property in Property E. That would become the wife's home with the children. There has been much discussion in the evidence as to the purpose or motivation for that purchase. The wife suggests that the husband had a financial interest in making further investment. The husband denies this and suggests his clear generosity in assisting the wife purchase the property, her evidence being clear that she could not obtain sufficient finance by way of mortgage without a co‑borrower.
Irrespective of which of those motivations applied – and it is entirely possible it was each to some extent – the property was purchased.
Savings had been accumulated during the relationship, although the exact amount is unclear. The husband asserts that it was $62,000. It certainly would not appear to have been less.
The $62,000 of savings were substantially expended in purchasing the Property E property. Costs with respect to the conveyance were paid from those funds, being between $1,390 and $1,632. The deposit with respect to the purchase was paid – $37,200 and stamp duty – approximately of $13,000. Thus, something over $50,000 was devoted towards this purchase. An additional amount is conceded by the wife as having been received by her from the account in which those savings were held – a joint account – but there is no doubt she received those funds, totalling $4,470. Thus, the retained savings were, on the husband's assertion – and regrettably that is as high as the evidence could be described – no more than five to seven thousand dollars held in that account.
A further allegation is made by the husband as to the provision of funds from that joint account to the wife, although that provision is denied and there is nothing which would independently establish it. Accordingly, I do not take it into account.
The parties had also maintained an (omitted) scholarship fund in relation to both of the children and there is no dispute that the wife has retained the proceeds of that fund – $7,771.72. The funds which the wife has received were deposited, at the time that the Property E home was purchased, into a mortgage offset account in the joint names of the parties. The wife's salary was also, for some time post separation, deposited to that account.
The account at some point was frozen with the consequence that the parties could not operate it other than jointly and consensually. Operate it they most assuredly have. A sum of $22,000 was withdrawn from that account. The husband's evidence suggests that the wife has received the benefit of those funds. It is ultimately clear from the evidence and the concession of the parties and each of them that the wife received $12,000 of the $22,000 and the husband received $10,000 of the $22,000. The account would appear to have a remaining balance of $3,926.90. That is established by concession and otherwise, the deposit of other funds is established by Exhibit A1, a statement with respect to a loan account in the joint names of the parties to which I will now turn.
At separation and in addition to the matrimonial home the parties also owned two investment properties. The parties agreed between them, at the time of purchase of the Property E property, that each party would be responsible for the mortgage over one of the investment properties. That led to the consequence that the husband's total mortgage liability, for the home in which he lived at Property B together with the investment property, was some $40,000 more than the mortgage liability the wife took on.
The parties agree that those investment properties were tenanted and they each received the rental from the property for which they were responsible.
The investment properties were ultimately sold. The husband annexes to his material, at annexures 6 and 7, correspondence from the (omitted) Bank with whom the mortgages were held evidencing the sale of each property.
The nett proceeds of sale, after payment out of the mortgages which substantially encumbered the properties, were paid into the mortgage offset account in the joint names of the parties, and which had been created at the time of purchase of the Property E property, being an account ending in (omitted). Those amounts would appear to total approximately $21,427.73.
It is asserted by the husband that the wife has received the entire benefit of those monies, they having been deposited in the mortgage offset account of which she retained control, and as she conceded during her cross‑examination.
The difficulty with that proposition, however, is that clearly the parties have each had the benefit of those funds. It would certainly seem that the amounts which have gone into the account, leaving aside the wife's wages and salary, have comprised:
a)The funds from the sale of the investment properties – $21,427.73;
b)The $7,771 (and some cents) withdrawn by the wife from the (omitted) fund, together with;
c)The $4,470 which came from the joint account of the parties and was deposited into that account.
These amounts add up to a little over $30,000.
It is agreed that after the $22,000 withdrawal from the offset account, that the remaining balance was something slightly in excess of $5000. Thus, a total of $27,000 of the approximate $30,000 is entirely accounted for. The wife has received $12,000 and will, as a consequence of the Orders that I will make, retain the benefit of the $3,926.90 which remains. The husband has received $10,000. There is also the possibility that the husband received the benefit of some funds, although they cannot be quantified, which remained or were held, if not still held, in the joint account.
The difference between the funds deposited to the mortgage offset account in question and that which can be accounted for, is approximately $3,000. I am not satisfied that there is any adjustment to be made by way of notional addbacks, section 75(2)(o) adjustment or otherwise. The wife has had living expenses to meet and certainly, in relation to the sum of $4,470, the husband's own evidence is that the funds were taken from the joint account and provided for the purchase of whitegoods and furniture to assist the wife in establishing her property. Accordingly, by reference to authorities such as Kowaliw & Kowaliw (1981) FLC 91-092, still perfectly good law, that expenditure could not be described as a premature distribution. It is very much meeting living or re‑establishment costs.
The parties also received funds representing an accounting by agents for the deposits in relation to the sale of the investment properties. Certainly, the deposit from one of those properties, as evidenced by Exhibit A1, would appear to have been paid with respect to one of the several loan accounts for which these parties were, at that time, liable.
I accept the submission of Counsel for the wife that one need not seek to trace that money further or determine which account or which property that application of funds relates to. It will be reflected in the present equity of these properties, and thus, as the amount is already included in the pool of property, tracing is an unnecessary and pointless exercise.
At separation the husband retained two motor vehicles. They were sold for $14,500 and $7,000 respectively, a total of $21,500. Those funds, it would appear, have been retained by the husband and placed into his savings account. The husband protests that one cannot add those amounts back, particularly if his savings are to be taken into account, they having been substantially accumulated since separation. I have no reason to doubt that which the husband asserts, but there is no evidence to establish it either. Certainly the present savings are, in all probability, comprised of those funds, together with other amounts such as that which might have remained from the prior joint account. It would have been augmented by the husband's wages and salary. But in any event, I accept that the present savings of both parties – the wife's savings reflecting that which she has received from the above figures – should be included for the purpose of division between these parties.
Curiously, there is little if any factual dispute beyond the above.
At the commencement of the Trial, the above transactions, having occurred at and following separation, were somewhat murky and difficult to follow. It is simply the nature of the evidence and how it has been filed in the proceedings. By the end of the case, and particularly following erudite cross‑examination of the husband, those issues were readily clarified and made quite clear fulfilling the very purpose of cross‑examination.
Pool of property
The pool of property that is available to divide between these parties is, I find, as set out in a schedule at page 15 of the wife's Case Outline, subject to the addition of one amount which is not referred to therein; namely, the funds remaining in the offset account – $3,927, (and I will round off all figures to avoid cents as the husband has in the balance sheet that he has provided.
The parties are agreed on all values, it would seem, and to the extent that there are protests that documents may not have been produced by one or other of the parties to corroborate an allegation, I am not satisfied that I need pursue that issue further. The figures that each produces are by and large agreed.
The only real areas of controversies are these.
Firstly, the husband asserts that his vehicle, a Nissan (omitted), has a value of $25,000, whereas the wife asserts it has a value of $30,000. I do not propose to include that vehicle in the pool. Accordingly, the difference in value becomes nugatory. The vehicle was purchased well after separation, indeed, three years after separation. The vehicle was wholly financed. No cash contribution was made by the husband. The finance arrangement which encumbers the vehicle is significantly more than the vehicle. I accept the submission of Counsel for the wife that it would be an injustice to the wife to thus have her contributing something between $10,000 and $15,000 towards the ultimate cost of repayment of the lease that the husband has incurred without any reference to her, and appropriately so. The parties were separated for three years when it was purchased. However, the husband will retain the vehicle and the liability as they are already in his name and there is no basis upon which the wife could be liable for suit in relation to them.
Secondly, the husband has sought to include an (omitted) Bank credit card debt of $2,629. I have no evidence in relation to the debt and there is no basis to assume that it is a liability for which the parties should each contribute. Accordingly, I propose to exclude it.
The liabilities of these parties which are included are the mortgages which encumber their respective properties.
The Property E property, which the wife seeks to retain and have transferred into her sole name (although, there is some controversy between the parties as to whether it is presently in joint names or in the wife's alone, but in any event, Orders will be made on the premise that it is jointly owned, and nothing further is required if it is not) – has a value of $500,000. It is encumbered by a mortgage of $307,876, and thus would appear to have an equity of $192,124.
The Property B property, in which the husband resides and which the husband seeks to retain, has a value of $600,000. It is encumbered by a mortgage of $300,902. Thus, the equity in that property is $299,098.
The parties are agreed that the wife's vehicle should be included at $8,000 and the wife's savings are $20,673. The parties are also agreed as to the value of the offset account at $3,927.
The husband's savings are conceded as $26,062. I do not suggest that the husband concedes that this amount should be included, but I am satisfied, for the reasons above, that it should be.
The parties each have furniture and contents which they admit, as an admission against interest, has a value of $5000, and I accept those figures for the purpose of inclusion. Each party is thus found to hold $5,000 in furniture being $10,000 in total.
The husband has superannuation which he asserts has a value of $78,699. The wife's superannuation has a value of $62,916.
Thus, the total assets available for division between these parties, including all tangible and superannuation assets together in a one‑pool approach, is an amount of $1,310, 277. If I take away the liabilities identified above, $608,778 in total, there is thus a pool of $701,499 to divide.
The wife presently holds assets and superannuation interest with a value of $288,713, comprising:
a)Equity in the Property E property – $192,124;
b)Her motor vehicle – $8,000;
c)Savings – $20,673;
d)Furniture – $5,000;
e)Superannuation – $62,916; and
f)The joint offset account – $3,927.
I am satisfied the wife should retain those assets with a value of $292,640.
Legislative pathway
The High Court of Australia has helpfully set out the approach that the Court must take with respect to issues of property adjustment in Stanford v Stanford [2012] HCA 52. I incorporate the relevant portion of the decision (footnotes omitted):
The operation of s 79
35 It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
36 The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.
37 First, it is necessary to begin 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. So much follows from the text of s 79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38 Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs "as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong: "The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down".
39 Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that "[c]ommunity of ownership arising from marriage has no place in the common law". Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses". The question presented by s 79 is whether those rights and interests should be altered.
40 Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
41 Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to "the need to preserve and protect the institution of marriage" identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
42 In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
I must be satisfied as to justice and equity at each step of the process, including in a determination as to whether it is appropriate to exercise jurisdiction. I do not interpret that which their Honours have said as requiring a determination as a preliminary step that making any particular Order is appropriate, but purely that their Honours were intending to suggest that the Court should be satisfied that it is appropriate to proceed to consider whether any Order should be made. It would be nonsensical without having addressed section 79 and section 75(2) of the Act to proceed to determine whether any specific Order were appropriate.
I am satisfied for the same reasons and based upon the same reasoning as their Honours advanced, that it is appropriate for this Court to exercise jurisdiction and to proceed to hear and determine the controversy between these parties. These parties are separated, they own significant joint assets and they no longer wish to be in a relationship with each other. Indeed, the husband has filed for Divorce, which Application will be dealt with and a Divorce Order pronounced today. On that basis, clearly the joint interests of the parties must and should be severed and some action taken to achieve that end.
I must then, as the High Court of Australia has identified, determine the present legal and equitable interests of these parties in property. I am satisfied the legal and equitable interests of the parties are as identified above.
I must then consider each of the factors in section 79(4) of the Act which section I incorporate herein.
Section 79
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) 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 must have regard to the financial contributions made by the parties directly and indirectly as well as the contributions that the parties have made other than financially, including contributions to the welfare of the family constituted by the parties and their children. I must also have regard to the effect that the making of the Orders will have and other matters as set out therein. I will deal with each briefly.
Financial contributions
I accept that the husband's calculation is, in all probability, accurate, and that his earnings have exceeded the wife's by something in the nature of a factor approaching three to one. However, that does not dictate the determination of this case in any particular way. It is not the nature of marriage that parties to said marriage become “bean counters”. The nature of marriage is that parties do what they do for their own sake assuredly, but also for the benefit of the family unit, comprising husband and wife, and if they are so blessed, their children. The efforts that were made by the husband cannot be viewed retrospectively. No doubt if he had his time again, the husband would look back and wish that he had quarantined his income or perhaps dealt with portions of it in other ways, so that he would now retain a greater proportion of that benefit for his hard work as a wage and salary earner.
The law simply does not operate in that fashion and nor should it. Certainly, there are circumstances – very short relationships, dramatic disparity in income and the like – where such a factor as a disparity of income of three to one, might have some real impact. Clearly – and it is conceded by the wife – the husband's financial contribution has been greater. But financial contribution is one of the myriad of contributions that the Court must have regard to.
The wife has indirectly contributed to the husband's overwhelming financial contribution. He could not have earnt the income he did without the wife having subjugated her participation in paid employment in favour of her role as homemaker and parent. The wife has made a significant homemaker and parent contribution. That contribution stands alone, but it also contributes to the husband's income capacity. If the husband had been, for example, a widower with two tiny preschool‑age children, he would have expended a significant portion of his income in arranging and paying for care, or he would have been precluded from earning the income that he did. That is not to mathematise or actuarially approach the wife's contributions but purely to acknowledge that the wife has provided some assistance to the husband in earning that which he introduced.
In relation to non‑financial and homemaker and parent contributions, the husband asserts equality. I do not accept that this is so. It was put to the wife – the first question she faced in the witness box – as to whether she agreed that the non‑financial contributions of the parties were equal, and she agreed. However, it is not for the wife to concede a finding of fact that the Court must make. Certainly, I accept that the wife generously advances and accepts, appropriately so, that her husband was, during the relationship, a committed and involved member of the household, and a committed and involved father. He continues, albeit with a frugality of time, to be so at present.
I accept that the contribution that the wife made as a homemaker and parent must have been greater than the husband's. The wife was clearly the predominant homemaker and parent and provider of care within the household.
I accept the husband's submission that when he was not engaged in paid work, earning a much greater income than the wife at that point in time, or engaged in other activities associated with work, such as attending to his physical fitness and the like, (that being a matter of some moment and importance in his profession), that his contribution was significant and may well have been, as he describes, equal for those periods. But if the husband is away from the home with work, travel and the like for 40 or 50 or 60 hours of the week, then they are 40 or 50 or 60 hours of the week, leaving aside sleep, that he was not contributing at all within the household, at least not directly so. The wife made the sole parenting contribution in those periods.
There is the issue of the initial contribution which the wife concedes. There is also the argument advanced by the wife that she has, since separation, made a greater contribution, in that her homemaker and parent contribution has continued on, and that it has been predominantly left to her to provide such care and to financially provide for the children. Again, I accept that argument.
There is also an argument which, if the husband were legally represented, he would no doubt have advanced from the outset, and which he has spoken to with some passion, albeit not by reference to settled authority. That is a Calvary & Green (1984) 155 CLR 242 contribution.
It is an extraordinary thing that these parties, (notwithstanding that they have not been able to resolve this dispute, and have required the Court to do it for them), have been able to sensibly arrange their affairs so that each is housed, each is able to accommodate themselves and the children at such times as they are in their care, and that each is able to acquire an asset rather than to expend their funds in an ever‑increasing Sydney rental market. It is entirely to their credit, irrespective of their motivations, that it was so. It is a generous accommodation by the husband, whether he had a pure or impure motive or a combination of the two. He has exposed himself to financial risk. He has put himself forward as a party to a mortgage. He has exposed not only himself but his own home to the potential of suit by a mortgagee if the mortgage is not appropriately attended to.
I am satisfied by authorities such as Calvary & Green that that is, and should be, a contribution which I recognise.
I am not satisfied and do not find that I should recognise or make any adjustment, whether by reference to section 79(4) or section 75(2) of the Act for the distribution of funds that the parties have had since separation. The husband has, in reality, had cash funds equal to if not in excess of those of the wife. He had the $10,000 from the offset account, and has had the benefit of the $21,500 from the sale of cars. Both of these parties have had (and they should be entirely thankful based on whatever belief system or structure they believe in, as well as each other), the good luck, post‑separation, to survive as well as they have financially so that each will now be accommodated and each will have income and capital. It is a position regrettably far too few within this Court's jurisdiction experience and certainly very few across the world.
That being said, however, all of the contributions identified above must be balanced.
The wife submits that there should be an adjustment in her favour of 7.5 %. The husband would appear to submit that there should be no adjustment and that the parties should have equality of contribution as well as an absence of adjustment for section 75(2) of the Act. I am with the husband as regards contribution. That is not to dismiss the arguments that are made by the wife. As is clear from the above, I accept them. The wife has made a greater contribution post‑separation as a homemaker and parent, but it must be offset against the husband's Calvary & Green contribution, as well as the contributions at all other points in the relationship of these parties.
Thus, I make a finding of equality of contribution.
Section 75(2)
I am required to have regard to each of the factors in section 75(2), as a consequence of section 79(4)(e) of the Act. I am also required to have regard to the level of Child Support that is paid and the general provisions that are made between the parties, that being expressly directed by section 79(4)(g) of the Act as well as being one of the factors to be considered in section 75(2) of the Act. I propose to touch briefly upon each of those factors as regards the evidence in this case.
(a) Age and state of health of the parties
Both parties are, very thankfully, in good health, of similar age, and perfectly able to meet their daily needs without assistance.
(b) Income, property and financial resources of the parties and their physical and mental capacity for appropriate employment
The parties are both in full‑time paid employment. They assist each other to ensure that they are able to continue in those arrangements, and have organised their child caring and parenting arrangements to accommodate that. Their level of co-operation and communication is extraordinary. Quite frankly, if one small percentage of the parties who came before this Court with parenting cases could engage with each other in the way that these parents have, the Court's backlog of up to four years would evaporate overnight, as it is the petty squabbling and stupidity that many parties bring before this Court, as well as – in some cases regrettably – an absence of competence of those who represent them – certainly not so in this case – as well as the absence of resources in the Court, which cause those delays.
These parties have a very real focus upon their children.
Their income, property and financial resources are not dramatically divergent at this point, although as indicated, if things stay as they are, and as things presently are, the husband's property is more than the wife's by approximately 20 %.
The parties' incomes are remarkably similar. Certainly, as is complained by the husband, the wife earns more than he, at least by reference to their respective statements of financial circumstances. However, that is about $90 per week. I am not satisfied any adjustment is required in the husband's favour to accommodate that modest disparity.
The husband's financial resources are slightly greater than the wife. He has slightly more superannuation, although these parties are both such a distance from retirement, absent total and permanent disability, that this is hardly relevant. The wife, again, highly unusually, is accumulating superannuation at a greater rate than the husband, it would seem and is likely to reach him if not overtake him shortly.
The husband complains that the wife is cohabiting and thus has the resource of a partner. There is no evidence to establish that allegation at all and the wife denies it.
(c) The care and control of children under the age of 18 years
The two children of this relationship have some years left to be parented. They are rapidly approaching a period where their expenses will exponentially increase, not only because of their ages, but because of all that comes with it as they enter adolescence – the obsession with consumerism promoted by society and the media, the desire to ensure that their consumption is at a visible and high level.
Some significant time was spent discussing arrangements or at least the considered arrangements to purchase iPads for each of the children, a luxury which children 20 years ago were not even aware of and, yet, they seem to have done quite well in life without them. In any event, that gives a window into the level of the standard of living that each of these parties proposes for their children in the future and, thus, the expenses will be greater.
The preponderance of care, substantially so, falls with the wife and, thus, her ongoing need to subjugate her life, her participation in employment, her potential to accept promotion, transfer or earn greater income, will be more limited than the husband's. That favours the wife's case.
(d) The commitments of each of the parties necessary to support themselves and the children in their care
Neither of these parties have any commitments to support anyone other than themselves and their children. They each do so. However, the preponderance of cost falls with the wife.
It is true that the husband pays Child Support as assessed and his payments are up to date. I wholly accept that evidence. There is no complaint to the contrary. $119 a week is not a vast amount of money. The wife accommodates the children far more substantially than does the husband. That is not to suggest the husband does not wish to do so. However, it is a reality and, thus, a greater cost that the wife will bear.
The wife has the care of the two children for the vast majority of time – the young lad every night and the young girl all but one night per week. She spends far more money, thus, in housing, clothing and feeding these children. She asserts that she meets all of the children's other expenses and there is no doubt that it is so.
It must also be remarked in this regard that whilst I have accepted that the wife's income is greater than the husband's by approximately $90 per week, that is only because the wife receives a modest stipend by way of family tax benefit and receives Child Support. Absent payment of those amounts, the wife earns less than the husband by way of salary and wages and her income earning capacity in the future is potentially, if not in reality, impacted by her caring duties and responsibilities. These factors favour the wife's position.
(e) The responsibilities of either party to support any other person
Neither has any such responsibility.
(f) The eligibility of either party for an income‑tested pension or benefit
As indicated, the wife receives a modest stipend of approximately $100 a week by way of part family tax benefit. She is entitled to those funds. She receives them, and I accept they are applied in meeting the costs of these children. Those costs need not be specifically applied to the children. Everything that the wife expends in running her household provides benefit to these children.
Both parties have superannuation funds. Neither is yet receiving or likely to receive in the foreseeable future any pension or allowance which is a consequence thereof.
(g) The standard of living of the parties that is reasonable in the circumstances
I accept that both parties will maintain a reasonable standard of living on either set of Orders as proposed.
It is a significant thrust of the submissions put by the husband that the children should not be disadvantaged or deprived of the opportunities that they receive in his care, including overseas travel, and as he has described, memories that they will recall all of their life, and which bring them great joy, happiness and benefit.
I accept that any Order for payment of funds by the husband to the wife will potentially limit the opportunity for those experiences, at least in the husband's household. They will increase the opportunity for those experiences in the mother's household. These are not parties who will be pernickety in meeting expenses for their children, even though there is some complaint by the wife that it is so.
I am satisfied in those circumstances that the wife's entitlement as may be determined under Part VIII of the Act will enhance not only her standard of living, but that of the children whilst they are with her. I accept that it may have some impact on the capacity of the husband to engage in the range of activities that he desires with the children, but not to such an extent as to render his standard of living unreasonable in all of the circumstances or less than the wife’s.
The husband's standard of living at present is equal to if not directly comparable with that previously enjoyed prior to separation. The wife's is slightly less but not dramatically so. Any Order that is made, and any adjustment in the wife's favour, will bring the parties to a greater equality or at least parity. That favours the wife's position.
(h) The extent to which the payment of maintenance is under consideration and how that would affect the earning capacity of either party
This factor is not under consideration. Both of these parties are able to work. They are not proposing further courses of education.
(ha) The effect of any proposed order on creditors
This factor is not relevant.
(j) The extent to which each party has contributed to the income, property and earning capacity of the other
Whilst certainly I have commented that the wife has, in the past, contributed to the husband's earning capacity, and thus, indirectly financially contributed to the husband's position, I do not accept that any further adjustment need be made. The wife would be compensated, as it were, for her past contributions through the adjustments that are already made by reference to section 79(4) of the Act.
(k) The duration of the marriage and the extent to which it has affected the earning capacity of either party
I am not satisfied that the relationship has detrimentally affected the earning capacity of either party. The parties are now both able to earn the same income that they have earnt since they emigrated to Australia, and in the wife's case, it has increased. It has increased partly because she was able to complete tertiary qualifications for her present career, but all the more so as the children have grown up, and she is at a point, including with the assistance of the husband each morning in caring for the children and taking them to school, whereby she is able to go to work, whereas previously she could not, and the parties clearly would appear to have agreed that this was the best arrangement for their children.
It would be inequitable and unjust for the wife to be punished, having entered into such an accord, as part of the marriage contract, as it were, that she would subjugate her participation in work to be a full‑time carer for these children, and so that they might be parented as both parents desired, to then place additional weight upon the financial contribution with respect to which the wife was impeded. However, no further adjustment for the future is necessary.
(l) The need to protect either party’s wish to continue their role as a parent
That lends some little support to the wife's case. If she is able to meet the children's needs and receive capital by reference to an adjustment, she will be better able to continue the role that she presently plays of the children's predominant parent, a role that she wishes to continue to play.
(m) If either party is cohabiting, the financial circumstances of that cohabitation
There is no evidence to suggest that either party is.
(n) The terms of the order and their effect upon other creditors and particularly in bankruptcy
This factor is not relevant. Similarly, nor is the requirement to consider the impact of any Order that might be made upon a party to the marriage, another person to a relationship or other interested third parties.
(na) Child support
The rate of Child Support that is paid is assessed by the Agency and payments are up to date.
As the Child Support legislation acknowledges in its objects and principles, a contribution towards the financial support of the children. Ordinarily, it is a contribution that would be significantly augmented by the provision of care for the children on a substantial and significant basis. The assistance that is provided with respect to the children is certainly valuable. It continues their relationship with their father. It aids in a great many ways. However, I am not satisfied that it provides any substantial financial assistance or alleviation of the financial costs which the wife incurs.
(o) Other facts and circumstances
I am satisfied that there is no substantial adjustment to be made in this regard. Each of these parties will continue to be able to maintain a reasonable standard of living in all of the circumstances as a consequence of their income and their qualification to earn income at a not insignificant rate, but not at a rate of earning that is vastly greater than average weekly earnings. They will each have a roof over their head. They will each have a mortgage. The mortgage that the wife presently has is comparable with that of the husband. It is inevitable that the husband's mortgage will increase as a payment must be made by him if even to achieve equality as the husband submits should be the case.
Conclusion
Taking all of the above into account, I am satisfied that there should be an adjustment pursuant to section 75(2) of the Act. The adjustment that is sought is seven and a half per cent. I am satisfied that this is an entirely appropriate adjustment.
Lest there be any confusion as to whether a fourth step that continues to exist as an independent step, (or whether, as the High Court of Australia has described in Stanford v Stanford, justice and equity must infuse all that is done, and accordingly justice and equity has been considered by me throughout), I will, in any event, consider it as a fourth and independent step. There is no harm to either party in doing so and it is abundantly cautious.
If I am to consider justice and equity as a fourth step, I make clear that I am abundantly satisfied that the Orders I propose to make are just and equitable. By reference to that consideration and possibly also section 75(2)(o) of the Act, I must have some regard to the disparity in property holding that would result from such an adjustment.
An adjustment of 7.5 % for section 75(2) in the wife's favour is, as a matter of double‑entry bookkeeping, a deduction of 7.5 % from the husband's “ledger”. Thus, the disparity between them at the conclusion of the relationship would be 15 %.
I am conscious that this will be seen by the husband, as he has submitted, as punishment and that it will place him in a position where his mortgage will increase, will be significantly greater than the wife's and will impact upon his weekly budgets. He will need to find extra funds to service extra borrowing.
However, I am not satisfied that such disparity is unjust and inequitable. Indeed, I am satisfied that it is just and equitable.
The adjustments that the wife seeks, particularly to assist her in improving her lifestyle and her capacity to provide lifestyle for the children whilst in her care is appropriate. The husband is critical that the wife does not provide for the children the same rewarding and exciting experiences such as overseas travel that he does. One basis for that may well be that she has not been able to afford it, struggling to meet the children's day‑to‑day and mundane living expenses, and thus, expending her income in that fashion and not able to save for the more enjoyable expenses.
In any event, that adjustment, I am satisfied, is appropriate and is just and equitable and accordingly I will make it.
If the wife is to receive 57.5 % of the total pool of property as it is described above, then she must receive $403,361.93. The wife already holds $292,640, made up of the items described above. Thus, a cash adjustment would be necessary of $110,721.93 (which I will round up to $110,722). That is, thus, the Order that I propose to make.
It will be necessary to make ancillary Orders to ensure that the wife retains all of the items which I have counted as already in her possession, the only one of which that requires any specific Order is to declare the wife the sole owner of the offset account, and, to make Orders which require and compel the husband to do all things, sign all documents and give all consents, authorities and instructions necessary to ensure that those funds are, as it were, unfrozen, and paid out and made available to the wife.
I propose to adopt a one‑pool approach rather than to make an Order for superannuation splitting and for a number of reasons.
Firstly, neither of these parties are likely to be able to access their superannuation interests for some little time. On its face, that would suggest the more just and equitable approach would be to divide that property in specie so that the wife was to receive a slight top‑up to her super. Ordinarily, there would be great merit to that, particularly if the wife's superannuation was substantially less than that of the husband. It would, as it were kickstart her superannuation. However, I am conscious that no such Order is pressed at Hearing, even though it is sought in the Initiating Application.
I am also conscious that the superannuation interests of the parties are of much closer value than was perhaps apprehended at the time these proceedings were commenced. It may, in fact, be that the wife’s apprehension was accurate at the time the proceedings were commenced.
I am also conscious that I do not have, as both the Family Law Act 1975 and Federal Circuit Court Rules 2001 would require, proof of procedural fairness having been afforded to the Trustee of the affected fund and, thus, I am satisfied it is preferable for the adjustment to be made from capital.
Costs
At the conclusion of these proceedings, an Application is made for costs. The Application for costs is resisted.
The jurisdiction to deal with an Application for costs is set out in section 117 of the Act, and I incorporate herein subsections (1), (2) and (2A) thereof.
Section 114
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Subsection (1) creates what is often referred to as a “general rule”, being that each party to proceedings under the Act shall pay his or her own costs.
Subsection (2) reserves to the Court a discretion to make an Order for costs, notwithstanding the general rule, and provided that the Court is satisfied that there is both a justifying circumstance to do so and that it is just and equitable to do so (see, Re JJT & Ors; Ex Parte Victoria Legal Aid [1998] FLC 92-812 for a discussion thereof).
In approaching those tests and in exercising discretion generally, the Court must have regard to each of the factors under subsection (2A). Subsection (2A) is not exhaustive of relevant considerations.
The exercise of costs jurisdiction must occur within the context of High Court authorities such as, Haset Sali v SPC Ltd [1993] HCA 47, Aon Risk Services & Australian National University [2009] HCA 27, Expense Reduction Analysts Group Proprietary Limited & Armstrong Strategic Managing and Marketing (2013) 303 ALR 199, etcetera, that parties should endeavour to seek a resolution of their issues rather than require Court intervention and, thus, avoid the cost that is generated thereby – to the parties at first instance, to their family and the functioning of the family unit and its sustainability, and importantly, in the use of scant Court resources. The use of the Court's resources in hearing disputes which could be resolved and should, in this case, have been resolved, the law being clear, settled and resolved, deprives other litigants of the use of those resources.
I am also conscious and have regard to Full Court authorities such as, I & I (No.2) (1995) FLC 92-625, Collins & Collins (1985) 9 Fam LR 1123, Browne & Green (2002) FLC 93-115 and Harris v Harris (1991) FLC 92-254 regarding the weight which might be attached to each of the subsection (2A) factors, particularly in relation to offers.
As the Full Court was clear in I & I (No.2):
…the other relevant matters referred to in sec 117(2A) must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of a costs order.
As was observed in Fitzgerald (As Child Representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor, there is nothing that prevents one factor becoming a sole or substantial determinant of the issue of costs or perhaps more correctly, greater weight being applied to one factor more than others. It is, however, the interaction of them all together which is of fundamental importance.
I propose to touch upon and deal with each of the factors in subsection (2A).
(a) The financial circumstances of the parties
The findings that are made above clearly inform this decision. The parties are on relatively similar incomes. The husband protests that the wife earns greater than him and that she has been less than candid and truthful in her Financial Statement. However, she has not been challenged with respect to her Financial Statement and thus, I accept it. It is evidence on oath, it is not tested, and thus, Browne & Dunn (1893) 6 R 67 (HL) permits – indeed, compels – me to accept it, lest it is implausible evidence or clearly contradicted by other independent sources. It is not.
Each of the parties is in a position whereby, if an Order for costs were made, they would be able to meet it, albeit no doubt through borrowing rather than income. An Order for costs would impose an impost upon the husband and the running of his household, I clearly accept.
Correspondingly, however, the wife should not be deprived of the fruits of her litigation. She has obtained Orders at least in part based upon the submissions that she has put and it is only through a finding in relation to contribution that deprives her of the entirety of that which she seeks.
The position that the wife advanced was not fanciful. It was not other than supported by the evidence and supported by appropriate previous and settled Appellate Court authority. If the wife is required to meet all of her costs, the same and corresponding, albeit diametrically opposed, interference with her household funding will occur.
(b) Whether any party is in receipt of a grant of Legal Aid
Clearly neither is.
(c) The conduct of the parties in relation to the proceedings
There is no substantial criticism by either party that the other has failed to provide disclosure. Indeed, each has asserted that they have exchanged voluminous material in relation to the factors that are in dispute. The only minor criticism which might be raised is that the husband's material has irresistibly inferred, if not directly suggested, matters which he has not ultimately been successful in establishing, and perhaps more germanely, has made concessions (albeit appropriately) which has irresistibly meant that he could not establish certain facts.
The husband had asserted in his material, subject to the objections that were made – and those paragraphs were either struck out or admitted on the basis of provisional relevance and ultimately found wanting either as to relevance or probative value – that the wife has received significant funds, which clearly I have accepted that she has not. Whilst it was one of the portions of the husband's material that was struck out on objection – paragraph 11 of the Affidavit filed 3 February 2016 – the husband had asserted, “Ms Kader has already received $88605.00 & a House”.
It was, as the evidence ultimately has fallen, perhaps beneficial to the husband that this was omitted from his evidence through redaction. What it does point to, however, and whilst it was not admitted for the purpose of the Hearing, I am satisfied it is relevant to consider it in relation to costs, that the husband has advanced his case on what might be suggested to be a “false premise”. The wife had not received $88,605 and a house, and the evidence could never have established that she had. Certainly, funds of $50,000 or possibly a little more were applied from joint savings towards the acquisition of the home which the wife lives in and now will retain. That, thus, reduces the amount of $88,605 that could be suggested to have been received by the wife, let alone suggested to have been received by her in addition to the house. Inherently, the majority of that sum was invested in the house.
To the extent that the wife was suggested to have received the entire nett proceeds of the sale of two investment properties, again, that was not borne out on the husband's evidence. The wife received that which was accounted for on sale, that which remained after payment out of mortgage and expenses and representing the 90 % paid on settlement. The deposits were not received by the wife at all. Thus, she did not receive the totality of those funds.
To the extent that the wife received even those funds – $20,400 approximately – the husband received $10,000 of those funds or other funds which the parties had available. It was conceded through questions put by the husband to the wife in cross‑examination that the $22,000 withdrawal that the husband had asserted the wife had effected and retained had been divided between the parties and thus, in effect, a joint withdrawal.
All of those matters in relation to conduct have impeded the focus upon a resolution of the case. The adjustment that was ultimately made in the wife's favour pursuant to section 75(2) of 7.5 % was a modest adjustment, and in light of the evidence as it fell, irresistible. It was, however, resisted and no adjustment agitated. On any view of the evidence and application of the law thereto, the adjustment was irresistible and the resistance futile.
(d) Whether the proceedings are necessitated by the failure of a party to comply with a previous order
This is not relevant.
(e) Whether a party has been wholly unsuccessful
This is not relevant or, at least, not germane.
It is difficult in a financial case such as this, where the parties have advanced different positions factually and as to outcome, to determine what might be validly meant by that phrase “wholly unsuccessful”. However, to the extent that it is asserted by the husband that the wife has also failed to achieve that which she sought, there is some merit thereto.
The Full Court has been clear that whilst the section specifically refers to “unsuccessful”, a consideration of success might also be considered relevant under subsection (g) if nothing else.
Neither party has been wholly successful or wholly unsuccessful, although I am satisfied the wife has perhaps been more successful than the husband. That would not create a justifying circumstance or add any substantial weight to other factors which might point towards it.
Offers in writing
What perhaps is germane is subsection (f) – offers in writing. In that regard, as I have already referred, there is real weight to be attached to an offer of settlement, by reference to that opined by the Full Court at paragraph 57 of Browne & Green as follows:
We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given. It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.
What the Full Court would appear to signal to litigants at large through the above decision is that not only will offers of settlement become highly relevant in costs determinations, but that parties are, in fact, thus encouraged as their Honours opine, to make offers of settlement or compromise, and in the full knowledge that they can expect that full and appropriate weight will be given to such offers as might have been made if they are not accepted.
Murphy J in Lennon & Lennon (Costs) [2012] FamCA 116 opined in similar terms as follows:
Litigation in this Court is expensive and, it seems, increasingly so. The consistent emphasis of the procedures of this Court and indeed the Rules [whilst his Honour is clearly discussing is the Family Court and the Family Law Rules, I am satisfied it equally applies to the Federal Circuit Court] is to encourage – at every stage of the proceedings – conciliation and the resolution of disputes by agreement. Further, and to that end, separate from the Court processes and procedures, the Court encourages actively the use of private alternative dispute resolution processes. Where negotiation – whether formal or informal – fails, for whatever reason, there is, as a matter of practical reality, but one method by which parties can seek to avoid for themselves the cost of litigation. That is by making a written offer to settle demonstrating their bona fides and asserting clearly and unequivocally what they consider to be (relevantly) a just and equitable outcome of the proceedings the subject of their dispute. Bona fide offers made in this way can be seen as involving significant peril if litigation is pursued in rejection of them.
Similarly in Robinson & Higginbotham [1991] FamCA 4 it was opined that the reasons that offers must be treated seriously and weighted heavily is:
…to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the cost of litigation is avoided, the workload of this Court is lightened.
Similar comment and discussion on such topics has flowed, for example, from Sackar J in Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848, expressing, in rejecting an Application for costs that was otherwise, on its face, and in a jurisdiction involving costs following the cause, highly probable of success, a view supportive of conduct with respect to settlement generally being considered relevant. In that case, his Honour rejected an Application for costs as the Plaintiff, notwithstanding that the Plaintiff had a somewhat irresistible claim for relief, had refused to discuss matters, had refused to participate in mediation, and had rejected an offer for settlement which would have been far more advantageous than that which followed; being a contested Hearing of the motion, significant costs to the parties and the community.
Again, germanely, Fitzgerald JA in Studer v Boettcher [2000] NSWCA 263 has commented upon the unpredictable nature of litigation and, thus, the desirability of parties to seek to find a compromised resolution of disputes to avoid cost.
The insertion of section 117C of the Act would also appear a clear indication of the desire of Parliament to encourage parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled or compromised.
I raise those matters and weigh upon them at some length, as they all impact upon the consideration of costs and, particularly, the offers that have been made.
The wife tenders Exhibit A2, an offer of settlement suggested to be made pursuant to Rule 10.02 of the Family Law Rules 2004. It is to be remembered that these proceedings were commenced in the Family Court of Australia and, thus, the Family Law Rules 2004 did apply for some little time, although the proceedings were transferred to this Court by an Order made 16 December 2014 after both a Case Assessment and Conciliation Conference conducted by the Family Court Registrar under the Family Law Rules 2004. I do not raise that issue to be critical, but purely to make clear that the Family Law Rules 2004 might, thus, have some application in this case, the proceedings having been before that Court and, even though transferred at the date of the offer, the matter having not yet come before the Federal Circuit Court of Australia.
Irrespective of the Rules under which the offer is made, the offer is set out clearly within the text of that offer. The wife indicated clearly that she was prepared to compromise the proceedings by a payment to her of $75,000 together with a superannuation splitting Order of approximately $11,000, thus $86,000 in total, approximately $30,000 less than the wife received and a significant amount in light of the costs which the parties would have incurred.
The husband refers the Court to an offer of settlement not before the Court, but I accept its terms, in all probability accurately recited, whereby the wife indicated she would accept a 60/40% resolution of the dispute. The wife has achieved a 57.5% adjustment in her favour – 2.5% than that which she offered on that occasion, and, having made that further offer, no doubt on the basis that the earlier offer referred to in Exhibit A2 had been rejected or not responded to.
The difference between that which was offered, 60/40%, accepting that such an offer was made, and that which the wife obtained is relatively minor and whilst not identical to, remarkably close, to the amount of costs which, if calculated by reference to Schedule 1 of the Federal Circuit Court Rules 2001, is in dispute in this case. Thus, that which is the difference is that which has been expended.
The husband's Application in this case, as set out in his Response, had been that he would pay the wife a sum of $40,000 and otherwise achieve that which the Orders that I have made will achieve. The husband was, thus, out by some $70,000 from that which ultimately occurred, a much greater distance from the ultimate conclusion than the wife was with her 60/40% offer and, indeed, much further than the husband could have achieved if he had accepted the January 2015 offer of an $86,000 adjustment.
I am satisfied that those factors must have some real weight attached to them. Full Court authority dictates that it is so. For those reasons, I am satisfied that those offers would, consistent with Fitzgerald (As Child Representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor [2005] FamCA 158 and the other authorities discussed above, be of sufficient weight to found a justifying circumstance by and of itself.
There is then the issue of whether it is just and equitable. That is, to my mind, largely an issue of the wife being entitled to the fruits of her litigation, and being, at least in part, deprived of those fruits if required to bear all of her own costs.
I accept that the costs that would be ordered by reference to the indicative scale in Schedule 1 of the Federal Circuit Court Rules 2001 will still leave the wife somewhat out of pocket. That must be set against the additional cost to the husband if he is required to pay such an amount. That must also be balanced against the reality that the husband’s refusal to take legal advice as to likely outcome has not only caused him to be somewhat misguided in his approach towards, at least, section 75(2) of the Act but to pass some of his avoided cost to the wife and the Court through his misguided approach to those considerations.
I am satisfied that it is just and equitable that an Order for costs would be made. I am satisfied it would be unjust and inequitable in those circumstances for an Order not to be made.
As to the quantum of costs, I must have regard to Part 21 of the Federal Circuit Court Rules 2001 and, thereby, Schedule 1. I must have regard to the Schedule, although I am not bound by it. The Schedule can be departed from. I am not satisfied that I need depart from it, either by increase or decrease.
The costs that I am satisfied the wife would be entitled to by reference to Schedule 1 comprise:
a)Item 1, initiating or opposing an Application up until the completion of the first Court date – $2048;
i)Even though I propose to consider costs from the date of the offer, 25 January 2015, and the proceedings were clearly commenced prior to that date, I am satisfied that it is appropriate to include provision for the commencement of the proceedings;
b)Since the offer on 25 January 2015, there have been two mentions, and I am satisfied they should each be dealt with by reference to item 13 as short mentions. It is regrettable that there were two mentions. The second mention was only necessary as, the matter having been transferred, (regrettably the Registrar having referred to the listing as being “…for the purpose of allocating a hearing date”, even though the proceedings had not previously been before this Court), there were no dates to allocate for Hearing and the matter was thus adjourned to a date for call over to allocate a date for Hearing. Both mentions should be included, however, as they both occurred. It is a cost to the parties jointly as a consequence of the absence of resources. Two mentions at $278 each totalling $556;
c)The wife is entitled to the costs of preparation for this one‑day Hearing. That is addressed by item 6 – $4365.
d)The wife is entitled to the costs of the Hearing itself. Counsel has appeared, together with an instructing solicitor. I am satisfied that I should include the daily hearing fee at $2048, (item 13), and the advocacy loading, (item 12), being an additional $1024 and a total of $3,072).
e)The wife as the Applicant has been responsible for the Hearing fee – $590, and I am satisfied that is a disbursement that can and should be included (see item 14).
Those amounts total $10,631, and I am satisfied there should also be some adjustment for other appropriate and claimable disbursements (see item 15), and that that would increase the amount $10,750.
I propose, thus, to make an Order for costs in that quantum.
In relation to time to pay, I am satisfied that the same time period should apply as settlement of the substantive proceedings in compliance with the Orders made therein, namely, 35 days from today’s date.
In relation to the Application for Divorce, I find marriage proved; I find service proved; I find jurisdiction established by the husband's domicile. I note that there are two children under the age of 18 years.
I make a declaration pursuant to section 55A of the Act that I am satisfied in all the circumstances that appropriate arrangements are made for their care and welfare. The Divorce will become final one month from today's date.
Accordingly, Orders are made in the following terms (see Orders).
I certify that the preceding one hundred and eighty-seven (187) paragraphs are a true copy of the reasons for judgment of Judge Harman
Date: 21 October 2016
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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Charge
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Appeal
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Procedural Fairness
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Statutory Construction
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